Alaska Legislature Passes Pension Revival Bill, Eyes Dunleavy Veto

JUNEAU — The Alaska Senate approved House Bill 78 on April 29, 2026, by a 12-8 vote, marking the first time since 2006 that legislation reinstating pensions for state and local government employees has cleared both chambers. The House concurred with Senate amendments the next day, sending the measure to Gov. Mike Dunleavy's desk. Proponents argue the switch from 401(k)-style defined contribution plans — adopted amid a $10 billion pension debt in 2006 — will stem chronic vacancies and high turnover in public sectors like education and public safety, exacerbated by Alaska's exclusion from Social Security.

The state's actuary, Gallagher, estimates the new system will cost an average $89 million annually for the first 13 years, fully funded at launch with adjustable contributions to maintain 90% funding even in extreme scenarios like three years of zero returns. Senate tweaks raised non-state employer contributions to 22.5% — up from the current defined contribution rate — while allowing cities, boroughs and housing authorities to opt out. Sen. Anna Giessel, R-Soldotna, championed the reforms, but opposition came from Sens. Bert Stedman, R-Sitka, and Lyman Hoffman, D-Bethel, alongside the Republican minority.

Local governments, from Anchorage to rural bush communities, raised alarms over affordability, prompting the Senate Finance Committee's 5-2 approval of higher local shares before floor debate. Backers counter that turnover costs — including recruitment and training — exceed the price tag, addressing a 'revolving door' blamed for experience gaps statewide. Dunleavy's office has not committed, and with past rulings citing his administration's 'anti-union animus,' a veto looms likely given the bill's narrow 21-19 House passage last year and inability to secure a two-thirds override.