Alaska's unfunded pension debt fell about $1.2 billion last year, draft statements show

The gap between the pensions Alaska's two main public retirement plans have promised and the money they hold shrank by about $1.2 billion in the fiscal year that ended June 30, according to draft financial statements. Investments in both plans earned about 14%, nearly double the 7.25% the plans assume each year.

The plans are the Public Employees' Retirement System, which covers state, city and other public workers, and the Teachers' Retirement System. The pensions are for people hired before 2006, when Alaska stopped offering pensions to new public employees. The state and other employers are still paying down the gap.

The employees' plan's unfunded debt fell to about $4.26 billion from $4.96 billion, according to the drafts prepared for the Alaska Retirement Management Board's audit committee. Its assets now cover about 76% of its pension liability, up from 71% a year earlier.

The teachers' plan's unfunded debt fell from $1.55 billion to a little over $1 billion, and its assets cover about 87%, up from 81%. Its draft gives slightly different figures in different places, from about $1.03 billion to $1.08 billion.

The state also makes extra payments to both plans each year. In the 2026 fiscal year, it put $79.8 million into the employees' plan and $139 million into the teachers' plan.

In May, Gov. Mike Dunleavy vetoed a bill that would have let certain public employees and teachers choose a pension again. He wrote that it would "return long-term investment, actuarial, and unfunded liability risk to the State." The Legislature fell seven votes short of overriding him.

The statements are marked as drafts, and the auditors' opinions in them are unsigned. The board's audit committee is scheduled to review the final audit with KPMG on Dec. 1. New actuarial assumptions the board adopted in June take effect with a valuation that isn't reflected in these figures.