Teachers retiring at the end of the 2023-2024 college year should start getting their pension bills around July 1, although the Alaska Section of Departures and Benefits says it will take 8 to 10 weeks off that generation.
“I thought fighting for pay would end after I retired,” said Amy Gallaway, who has taught civics and history at West Valley Primary School for 21 years. “I deposit my pension every year. That’s my money.
The department said on its website that the delay in payments is a result of staff shortages. But newly retired Fairbanks teachers, the state’s largest teachers union and at least some state legislators say it’s still unacceptable.
“I don’t know what’s going to happen,” Gallaway said. “Will I have enough money to pay my bills? I have money in savings and my husband is really supportive, but it’s very frustrating not knowing when my next paycheck will come. I’ve had a pay check for 40 years of my life. I’m really worried.”
Teachers – as well as substitute status employees – who were hired before 2006 receive a pension when they leave the job. Employees who have an upcoming start that year are on a defined contribution plan, meaning their departure finances are saved in a 401k until they leave. Alaska state employees do not pay into federal Social Security.
Additionally, the ultimatum of overdue pension bills — coupled with cuts to public education investments — makes teaching jobs in Alaska much less attractive, Galloway said.
“I like my job,” she said. “But it has been very difficult because of what I see as baseless attacks on public education and the failure to properly fund us. Imagine if this was our PFD check. Imagine if 20% of Alaskans were getting their PFD checks late. The Governor will move heaven and earth to ensure that those checks come on time.”
Thomas Kennedy, a school teacher with more than 20 years in the Fairbanks North Big Borough Faculty District, said he put more money into savings because of the possibility of delayed pension payments, but it’s still not enough.
“I knew there was something to wait for,” Kennedy, an avid gun collector, said. “I prepared for this and there is still a lot of time. Some people own real estate or stocks. I have guns. I’ll be selling guns throughout the fall to pay my mortgage.
NEA-Alaska, which represents more than 12,000 veterans and retired lecturers, is exploring ways to ensure retirees are paid now and in the future – whether through criminal action or some alternative means.
NEA-Alaska President, Tom Kleimeyer, referred the department to the section and Advantage informed NEA that they were hiring additional networks to foot the bill as temporarily as possible.
“The devil is in the details,” Kleemeyer noted. “I don’t think they have a lot of confidence in retirees. Even if they are reducing the delay by August, it all seems too little, too late.
Article 12 Division 7 of the Alaska Charter states, “Membership in the employee retirement systems of the State or a political subdivision thereof shall constitute a contractual relationship. The benefits accrued from these systems shall not be diminished or impaired.”
“We feel that anything longer than normal processing time is a loss of those benefits,” Klemeyer said. “When they say it in weeks, it seems like less time, but eight to ten weeks is still the equivalent of two and a half months.”
Plus, cash earmarked for pensions is earning interest as the bills are processed, Klemmer noted. However, no part of that interest can be paid to retirees yet, which is why the NEA is considering a lawsuit.
“This is the nuclear option,” Kleymeyer noted. “The better scenario is that the state demonstrates that it respects its employees and former employees who have dedicated their lives to public service and that it respects the Constitution that says they will not embezzle benefits. “
On June 19, Alaska Sens. Scott Kawasaki, D-Fairbanks, and Jesse Kiehl, D-Juneau, sent a letter to Governor Mike Dunleavy urging him to find a way to delay pension payments.
“Few Alaska public servants have the resources to go a quarter of the year before receiving their earned pension check,” the senators wrote. “The (FY) 25 budget calls for the executive branch to return to reasonable wait times by the end of the fiscal year, but thousands of former law enforcement officers, teachers, biologists, and others are not having that time.”
Within the letter, the senator advises retirees to pay 66% of their benefits as the departing category waits for bills to be offset. He wrote that this is a proposal that is taken up “only in complex cases or cases requiring extensive research”.
“The situation is so dire today that the Executive Branch should send these payments to everyone facing a wait period of more than nine weeks,” Kiehl and Kawasaki wrote.
The benefits department section continues to mention that they are rushing to foot the bill, however in the meantime, Alaska’s new retirees are stuck in limbo.
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