State says Hydaburg school district owed about $400,000 in retirement contributions

The Hydaburg City School District owed about $400,000 in unpaid contributions to the state's Public Employees' Retirement System, plus interest, and was scheduled to enter mediation over the debt, a state retirement official told trustees in September.

Christopher Novell, chief financial officer of the state Division of Retirement and Benefits, described Hydaburg's as a long-standing delinquency at a Sept. 14 meeting of the Alaska Retirement Management Board's Audit Committee, according to minutes of the meeting. The committee discussed collection options under state law with the board's lawyer, and the minutes say any action "would need to occur at a higher level of government."

The district, in the Haida community of Hydaburg on Prince of Wales Island, had missing payroll reports from March 2023 through August 2025, though it had reported more recent payrolls, Novell told trustees in March.

Nearly all of the district's workers in the system, 36 of 38, are in its defined-contribution plan, according to a state membership list from earlier this year. In that plan, workers put 8% of their pay into individual retirement accounts and employers add 5%. Bob Williams, who chairs the board's Defined Contribution Plan Committee, raised concern in March about employers with large defined-contribution exposure, since missed contributions directly affect members' retirement savings, according to minutes of that meeting. He asked for a follow-up on Hydaburg's missing payrolls and unpaid interest.

Hydaburg was one of 12 employers behind on payroll reports to the system as of Aug. 26. The list doesn't show which of them owe money.

Four cities are also behind on a different kind of bill. The same report lists Noorvik at an estimated $1.06 million and St. George at about $558,000, both going back to fiscal 2009, along with Nenana at about $358,000 and Allakaket at about $20,000.

Those bills are for interest and the state's "salary floor." Under state law, employers pay 22% of whichever is greater, their current payroll or their payroll in fiscal 2008, so a city can owe based on a payroll it no longer has. Employers stay responsible for those costs until the system's unfunded liability is paid off, now projected for fiscal 2039, even if they leave the system, Novell told the committee in June.