Teachers who retired at the end of the 2023-2024 school year are supposed to start receiving pension payments around July 1, but the Alaska Division of Retirement and Benefits says it will take eight to 10 weeks from that date.
“I thought the wage war ended when I retired,” said Amy Gallaway, who taught civics and history at West Valley High School for 21 years. “I set my pension every year. This is my money.
The payment delays are the result of staff shortages, the division said on its website. But recently retired Fairbanks educators, the state’s largest teachers union and at least some state lawmakers say that’s still unacceptable.
“I just 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 helpful, but it’s so worrying not knowing when my next paycheck will come. I have had a salary for 40 years of my life. I’m really worried.
Teachers – as well as other state employees – who were employed before 2006 receive pensions after they retire. Workers who started after that year are in a defined contribution plan, which means their retirement funds are kept in a 401k until they retire. Alaska state employees do not pay into federal Social Security.
Additionally, the threat of delayed pension payments — combined with cuts to public education funding — makes teaching jobs in Alaska less attractive, Gallaway said.
“I love my job,” she said. “But it has become much more 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 control. Imagine if 20% of Alaskans received their PFD checks late. The governor would move heaven and earth to make sure those checks came out on time.â€
Thomas Kennedy, a 20-year history teacher with the Fairbanks North Star Borough School District, said he even put more money into savings in anticipation of delayed pension payments, but it’s still not enough.
“I knew it would be cut,” said Kennedy, an avid firearms collector. “I prepared for this and it’s still too long. Some people have real estate or stocks. I have guns. I’ll be selling guns all fall to pay my mortgage.
KTA-Alaska, which represents more than 12,000 current and retired teachers, is exploring ways to ensure retirees are paid now and in the future – whether through legal action or otherwise.
Tom Klaaymeyer, president of NEA-Alaska, said the Pension and Benefits Division told NEA that they are working to hire more people to receive payments as quickly as possible.
“The devil is in the details,” Klaaymeyer said. “I don’t think they have much confidence from pensioners. Even if they reduce the delays by August, everything seems too little, too late.â€
Article 12 Section 7 of the Alaska Constitution states, “Membership in the employee retirement systems of the state or political subdivision thereof shall constitute a contractual relationship. The accrued benefits of such systems shall not be diminished or impaired.”
“We think anything longer than the normal processing time is a detriment to those benefits,” Klaaymeyer said. “When they say a week, it makes it sound like less time, but eight to ten weeks is still two and a half months.”
Additionally, money earmarked for pensions is accruing interest while payments are processed, Klaaymeyer said. But so far none of this interest will be paid to retirees, which is one of the reasons why KTA is considering a lawsuit.
“This is the nuclear option,” Klaaymeyer said. “The far better scenario is for the state to demonstrate 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 have their benefits compromised.”
On June 19, Alaska Sens. Scott Kawasaki, D-Fairbanks, and Jesse Kiehl, D-Juneau, sent a letter to Gov. Mike Dunleavy asking him to find a solution to delayed pension payments.
“Few public servants in Alaska have the resources to live for a quarter of the year before they start receiving the pension checks they’ve earned,” the senators wrote. “VF [fiscal year] 25 The budget asks 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 don’t have that much time.
In the letter, the senators suggest paying retirees 66% of their benefits while the pension division waits to catch up on payments. They write that this is an action that is taken “only in complex cases or in those that need extensive research.”
“The situation today is so dire that the executive branch must send these payments to all those facing wait times of more than nine weeks,” Kiehl and Kawasaki wrote.
The Division of Retirement Benefits continues to say it’s working to get the payments, but in the meantime, Alaska’s latest retirees are stuck in limbo.
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