Pigs & Salmon Pigs & Salmon February 24, 2023 Dear Friends and Neighbors, We're finally getting some decent snowfall again! I hope you get to have some winter fun. We're having nothing but fun in the legislature, of course. Read on for pensions and field trips! Speaking to the Juneau Chamber with Reps. Hannan & Story Feeding the Pig On Thursday, the Division of Retirement and Benefits walked the Senate Finance Committee through a presentation comparing Alaska's pension system to the "new" defined contribution 401(k)-style system. We've long known pensions generally deliver better benefits for less money, but the side-by-side was stark: the DC plan is kind of a pig. Not only does more money go in to the DC plan on the front end for most employees, but there's less to live on when it's time to retire. (Can I say there's less bacon? Ham? This metaphor is challenging when you don't eat pork...) For most Alaska public employees with a pension plan, the employee puts in 6.75% of their salary and the employer puts in the rest of the "normal cost" (that's pension speak for how much you need to save today to fully fund the pension checks when retirement comes.) That's 2.64% from the employer. With the defined contribution plan, the employee puts in 8% of pay and the boss puts in 5%. So a state worker making $75,000 a year has a combined total of $7,042 go to fund a future pension, versus $9,750 under the defined contribution plan. In case you thought that extra $2700 per year pays off in the end, think again. In almost every comparison they ran, workers could expect better retirement income under the (cheaper) pension plan. How much better? A public employee making $100,000 per year when she retired after 30 years of service would get $63,980 under the pension plan and $60,770 under the defined contribution plan—about a 5% difference in retirement income. The prospects were even dimmer for public safety folks, who stared down the barrel of 20% lower income after 25 years of work. Does putting more money in to get less money out sound bad? It is. But it gets worse. When you do these kinds of comparisons, you have to plug in some assumptions where you don't have real numbers. The assumptions they used raised my eyebrows until they disappeared into my hairline. Friendly reminder here—I'm bald: For instance, they assumed a DC participant would average a 7% return on their investments. But individuals managing their own money in DC plans rarely do. How rarely? The state looked at roughly 7700 accounts from relatively high earners and found fewer than 1 in 10 broke that line. And how did they estimate the amount a DC plan retiree could take from their account each year without outliving their money? By plugging in annual withdrawals of more than 7% of the account value at retirement. Investment gurus recommend closer to 4%. Higher earnings than reasonable and bigger withdrawals? These DC numbers were apparently run by Ms. Rose E. Scenario, and even then the defined contribution plan delivers less value to Alaska teachers, Troopers, and other public servants. There was a suggestion at the end of the presentation that you could shovel more cash in at the front end to put more weight on a defined contribution account. But with money tight everywhere, it doesn't make sense to use the less effective, less efficient retirement tool. Add feed to a pig and it might get a little fatter, but the same thing comes out the back end. Touring operations at DIPAC Seeing Some Salmon! Last weekend, Juneau legislators got to host a tour of DIPAC's Macaulay Salmon Hatchery. Hatcheries are a hot topic lately, so Reps. Hannan, Story, & I thought legislators and their staffs ought to actually see one. Understanding the basics is a first step to understanding the policy nuances, and there's nothing like seeing it for yourself. It's easy for those of us in coastal Alaska to assume all Alaskans understand how hatcheries work. But many don't know their role in adding fish to both common-property commercial fisheries and individual Alaskans' freezers. The tour last weekend (coordinated by my legislative intern Caleb Yabes) had a good turnout. DIPAC Executive Director Katie Harms showed off the operation, from egg room to otolith lab. Her years at the hatchery helped her answer questions on topics as basic as salmon lifecycles (several folks brought their kids) and as complex as the ocean interactions of hatchery and wild stocks. And if all of that wasn't enough, the aquarium tanks in the visitor's center had spiny lumpsuckers—one of my all-time favorite weird fish! Pacific spiny lumpsuckers All my best, Did someone forward you this newsletter? Did you fall into it through the series of tubes? Want more? SUBSCRIBE Events & Happenings Around District B Skagway Story Time Remember story time with Ms. Anna! It's perfect for kids up to age 3—a fun romp with songs, books, and more. Each Wednesday at the library, 10:30am. Skagway Late Night Library Friday nights at 6pm, come to the library for a different activity each week! Crafts, games, and more for ages 10-18! Gustavus Cornhole Tournament Find a teammate and register by Mar. 1. The competition is at the Community Center Mar. 4! Haines “Backstage Stories” Seven speakers, seven stories, seven minutes, at 7 o’clock, and for only seven dollars! River Talk is at the Chilkat Center for the Arts March 16! Juneau Art Workshop Come attend a workshop for grades 6-12 on March 4 at 4pm in the Alaska State Libraries Archives and Museums to explore the idea of healing through art! Juneau 2023 Women of Distinction Join me at the 26th annual gala honoring four Alaska women of extraordinary accomplishment in serving our communities! At the Elizabeth Peratrovich Hall Mar. 4 at 5:30 pm! Juneau Fly Fishing Film Tour The 17th annual Fly Fishing Film Tour (F3T) is back in Juneau on March 3 at the Elizabeth Peratrovich Hall! Enjoy top notch selections of short films featuring locations across the world! Haines Story Time Stories and songs for the children and young-at-heart! Every Monday and Friday in the library at 11:00 am. Haines First Friday Event Neighbors, galleries, museums, and artist exhibits! First Friday is Mar. 3 starting at 5 pm! Skagway Buckwheat Ski Classic Experience “Pure Ski-magination” on March 11 at the Log Cabin Ski Society! Registration closes Friday, March 10! Is there an event in our district I should know about? Please call or email! Snail Mail? Alaska State Capitol Room 419 Juneau, AK 99801 Call: 800 550 4947 907 465 4947 Email Me! ‌ ‌ ‌ Contact My Staff, the people who power the work: Aurora Hauke 907 465 5051 [email protected] Caleb Yabes 907 465 4947 [email protected] Ella Adkison 907 465 6419 [email protected] Cathy Schlingheyde 907 465 6827 [email protected] Senator Jesse Kiehl | Alaska State Capitol, Rm. 419, 4th Avenue & Main Street, Juneau, AK 99801 Unsubscribe [email protected] Constant Contact Data Notice Sent by [email protected]