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What started with a simple math error has become a cautionary tale for public employers, some Alaska officials say.
The state is grappling with the after-effects of switching to a defined contribution plan from a defined benefit plan several years ago for its first responders, public service employees, health care workers and teachers, according to legislators advocating for pension reform in Alaska. The switch to a DC program happened after an actuary's mathematical mistake resulted in a recommendation to the state legislature not to contribute to the state's pension fund for two years. This was followed by a plummeting funding ratio for the pension plan and a desperate attempt to right the ship by transitioning to a defined contribution plan in 2006.
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