House Finance, 5/15/26, 6pm

Okay. Okay. Can I call House Finance Committee to order and let the record reflect that the time is currently 6:11 PM on Friday, May 15th, 2026. And present today, we do have Representative Bynum, Representative Kocher-Shraggi, Representative Jimmy, Representative Galvin, Representative Hannon, Representative Moore, and myself, Co-Chair Foster.

And before we start, just a reminder, folks can mute their cell phones. And we will be hearing Senate Bill 21 today. That is the Alaska Work and Save program. And I would like to invite Senator Wielechowski as well as his staff, Ms. Maxine LaBerge. LaBerge?

You're welcome to come up to the table. Also Representative Costello, looks like you'll be also coming up. I'd like to recognize that we also have in the audience Representative Sadler. Are you also coming up as well? Okay, you're more than welcome.

All right, we're batting adding a pretty all-star team here. We also have with us Representative Underwood in the audience. Thanks for being here. And we also have Representative Josephson. And so with that, Senator Wielechowski, if you could put yourself on the record.

You, Mr. Chairman, for the record, Bill Wielechowski, state senator for East Anchorage. And I will let the other two representatives introduce themselves. I'm Mia Costello, a representative for District 15 in Anchorage. And Representative Sadler, Dan Sadler, House District 24, Chugach, Eagle River, Birchwood, Thunderbird Falls. Okay, welcome.

Great, thank you. They'll answer the tough questions. Perfect. Um, Mr. Chairman, I appreciate you bringing this up. We'll be very brief.

This is an important piece of legislation that will really impact tens of thousands of Alaskans and Alaskan businesses. It establishes an auto IRA program for all Alaskan employees who qualify. It creates an option to allow PFD checks go towards retirement. It allows Alaska to join a multi-state partnership program to keep costs low, allows Alaskans to start saving for retirement earlier, offers a portable benefit that will allow workers who change jobs or work seasonally, adds Alaska to the list of 17 other states who have passed similar legislation.

And the newest version of this bill, Version T, allows Alaskans to directly deposit their PFD into, into an investment account of their choice. Why do we need this? Well, over half of Americans have no retirement savings at all. Over 20% of Alaska's population is retirement age or older. We know that the average cost of Social Security payment in 2026 is $2,000 and $2,071.

It's not nearly enough to cover the cost of living. And the problem is that 64% of small businesses in Alaska don't offer any retirement of any kind. And the big reason that they cite is cost. It's costly, it's complex. A study done by AARP shows that 70% of these businesses would support a savings plan if it were provided as an option.

But the problem is, again, the cost. It's— the provider fees can vary from $4,800 to $17,000 per year for a business to start a program like this on their own. This is the state providing this option for small businesses at no cost to the businesses at all. Businesses want to offer these benefits to make their jobs more competitive in the job market and attract highly qualified candidates, but it's just often very complex and costly. And I'll stop right there.

I'll turn it over to Representative Costello, see if she would like to add anything. Thank you. Representative Costello. Thank you, Mr. Chair, members of the committee.

I think what's appealing to me about this program is that it's shocking that so many Alaskans enter retirement age and they really don't have the savings that, that is required for them to maintain a quality of life that they're used to. And it's something that everyone wants, but they perhaps didn't know how to go about it. And this program is, I think, very easy for employers.

Employers. They are not paying anything for it and the employee has 5% of their paycheck deducted automatically and it is invested into an individual retirement account. I really appreciate Representative Sadler's amendment in the committee which allows for a permanent fund dividend checkoff and so he will be talking about that. But I think that it is incumbent upon us as lawmakers to look at how we can support small business because often they cannot offer this for their employees. And this actually offers a very easy route to achieve that.

And it was brought to me by the Alaska Association of Retired Persons and they asked me to carry this in this body. Great. Thank you. Representative Sadler, did you have any comments? Thank you, Mr. Chairman.

For the record, Representative Dan Sadler. I've long been interested in the issue of having Alaskans provide for their own financial security instead of looking to the state to do so. Investing early, regularly, most important, automatically is one of the keys to financial strength so people can take advantage of the magic of compound interest, which Einstein said was the most powerful force in the universe. I was pleased to offer an amendment to bring my Pick Click Save into SB 35. The Work and Save program is a new investment program.

It's a very good thing, and I support it. My amendment, which is incorporated in Section 1 of SB 21, allows people to deposit their dividends into other existing investment accounts. In addition, it will also allow that the PFD applicant must— application form must remind people that they bear the risks, not the state, which comports with the bill. And the Department of Revenue may not use money from the dividend fund to pay for implementation. It's the same thing as I introduced in the 34th Legislature as House Bill 245.

I didn't get a zero fiscal note, but I'm glad to be here to support this. So I do support the overall goal of this bill, which is to help Alaskans save for their own financial future.

Future. And I think that my amendment adds that, and I appreciate the sponsor accepting it. Great. Okay. Let's see, before we go to questions, I'll probably go to invited testimony and public testimony.

But Senator Wielechowski, did you have anything else to round out the introduction? I did not. Thank you, Mr. Chairman. Okay. Okay.

So with that, I'm going to jump right into invited testimony. We only have 2 people who will be testifying, and the first is Ms. Marge Stoneking. If you can put yourself on the record. It looks like you are calling in from Anchorage.

Thank you, Co-Chair Foster and members of the committee. My name is Marge Stoneking, and I serve as Advocacy Director for AARP Alaska. AARP is a nonprofit, nonpartisan organization dedicated to empowering people 50 and over to choose how they live as they age. And in doing so, we support policies that enable Americans nearing or currently retired as well as future generations who will retire to become financially secure. And retirement insecurity is a real threat in this country and in this state.

More than half of U.S. households are at risk of being unable to afford the basic necessities like food, utilities, and healthcare in retirement. Nearly 60% of households have no retirement savings at all. And people are falling behind due in large part to lack of access to a workplace retirement plan. Yes, there's a marketplace where people can go out and get— and start their own, but fewer than 5% of Americans without a workplace retirement plan do so. But workers are 15 times more likely to save when they can do so through payroll deduction and 20 times more likely when they're automatically enrolled.

This access gap has been addressed in a number of states through state-facilitated retirement savings programs. To date, 17 states have enacted state-facilitated auto IRAs, and the results are extremely compelling. Workers across all income levels and ages are saving and have saved a cumulative $3 billion, demonstrating that when people are given a simple, accessible way to save through their paycheck, They do. Some of the best practices included are automatic enrollment, voluntary participation where workers are free to opt out at any time or change their investment level or selections, and portability, allowing savings to follow workers throughout their careers. All Alaskan workers deserve a chance at a secure retirement, but right now half of Alaska's private sector workers, most of them at small businesses, don't have access to that retirement savings plan on the job.

And though many business owners want to provide their employees with a plan, as the Senator mentioned, a complex administration and high costs of company plans put that out of reach. Without access to retirement savings at work, nearly all workers fail to save, and that puts them at risk of poverty and reliance on public assistance as they age, which costs the state. When workers can't save, the consequences don't stop with that individual. Insufficient retirement savings lead to greater reliance on state-funded public assistance programs later in life, increasing long-term costs for the state. If this access gap is not addressed, it's estimated that Alaska will save $708 million in increased reliance on state-funded programs like SNAP and Medicaid.

Through 2040. Older Alaskan households without adequate retirement savings will face an average annual income shortfall of $3,840. But if Alaska households saved an average additional $920 per year, just $75 per month, they could erase that projected public assistance burden and improve their own retirement security. Preliminary analysis from a forthcoming report done by the Georgetown Center for Retirement Initiatives highlights another critical best practice for program participation and growth: compliance requirements. They looked at how long it took different state programs to hit numbers of funded accounts.

Colorado's program took 5 months to hit 10,000 funded accounts. Maryland's, in contrast, took 27 months to hit that number. The key difference between the two state programs—Colorado has compliance included in their statute while Maryland does not. States don't always choose to enforce, but the ability to, to do so in statute is hugely important to ensuring access to retirement savings for all eligible workers. One other important piece to note about compliance is that two multistate partnerships exist, one, uh, where Colorado serves as the hub and host, and the other with Connecticut.

Partnerships greatly reduce the overall cost, time to launch, and administrative burdens on these state programs. And both of these partner states include provisions for enforcement and compliance. A state that doesn't choose to include this piece may well find themselves not eligible to join these partnerships. For the reasons stated, AARP urges you to restore some compliance language for employers so that every eligible Alaskan worker has a chance at a secure retirement. And as the Senator mentioned, this approach is not controversial among Alaska small businesses.

7 Out of 10 support a privately managed, ready-to-go retirement savings program like Alaska Work and Save. And support is high across the political spectrum—71% of Republicans, 70% Democrat, and 76% of independent small business owners surveyed. And there are more than 50 letters of support from small businesses. Despite early fears from the retirement plan marketplace, state auto—IRA programs are not crowding out private retirement plans. In fact, they appear to encourage or complement them.

In 2023, states with auto IRA programs often had equal or higher rates of new private retirement plan creation compared to the national average. Nearly all states with auto IRA programs saw increases in new plan formations even years after their programs launched. Nationally, the share of new plans declined, but many auto IRA states maintained strong or rising. Rate. Alaska Work and Save fills a clear gap, helping workers save for their own retirement, their own funds, supporting small businesses, and protecting the state from higher costs down the road.

It's a win-win-win. And I thank you, I thank you genuinely for hearing this bill at this busy time, and I respectfully urge your support and movement of Alaska work and save so that Alaska workers can have a chance at a secure retirement. Thank you. Great, thank you very much, uh, Ms. Stoneking. Actually, we'll go ahead and go to questions.

Representative Galvin, for these—. Thank you, Co-Chair Foster. Appreciate the opportunity to speak with Ms. Stoneking. Ms. Stoneking, I'm so proud to have you as a deeply engaged constituent. Thank you.

And I want to thank you also for your suggestions that you've made. I will be having more conversations with the maker of the bill using your ideas. I will be raising your voice. This is such important work and I appreciate your testimony. Thank you.

Thank you. And questions for Ms. Stoneking? Representative Hannon.

Thank you, Chair Foster. Ms. Stoneking, you've referenced other states having them.

I presume the accounts, because the, you know, the genius is that it's mobile with the employee, but across the nation. So if someone leaves Alaska, moves to another state, the program goes with them with no financial limit or Do you know? Ms. Stoneking?

That's— the funds are certainly their own and they are portable. They wouldn't be able to continue to contribute if they weren't in Alaska or in another one of those partnership states in a multistate partnership. But the funds are theirs and accessible to them.

Through the chair, Ms. Stoneking, are they set up so that like in IRA, the tax— are there tax penalties if someone cashed out their account prior to being of retirement age, or are those things that each individual needs to work out when they set up their account? Ms. Stoneking.

Thank you for that question. The state-facilitated auto IRAs default into a Roth account, and so then there are not penalties for early withdrawal and people can do so for emergencies. However, there are investment options including a traditional IRA, so that would come with the IRS rules around penalties for early withdrawal. Okay. Thank you.

Okay. And thank you very much, Ms. Stone King. Next, we're going to go to Mr. John Weddleton calling in from Anchorage for invited testimony. Mr. Weddleton, if you can put yourself on the record, your name, your affiliation.

Hi there, I'm John Weddleton and I am out here on Chester Creek Trail at Gorilla Park with my grandson enjoying a beautiful Bike to Work Day. And I'm also really happy here to have an opportunity to speak in support of Work and Save. I've got a small retail business and we've been marketing 42 years this year and have got about 34 employees and over the decades hundreds of people we've hired. And I would think the very small fraction of them have ever really pondered saving for retirement. It's just not been in their action plan.

And at this point I've got several employees who've been with me 30 years. You know, a dozen or so, you know, 10 or 15 years or more. And time comes, they need to be thinking and be ready for retirement. And I think with the exception of the managers, it's just not something that people are saving for. And it's become a real worry of mine just as I see my staff age and they need some— you know, relying on Social Security is not an option.

For anyone, really. So this Work and Save, not only does it provide a really simple mechanism for saving, but it's also a reminder that they should be. You know, with every paycheck, it's like, hey, this is the thing, you need to pay attention to it. And, and that's something that's really been compelling me to support this. You know, as a small business, um, making it work is actually very simple.

You know, we so many deductions already, you know, just in QuickBooks. It's designed for these things, you know. Of course, you've got, you know, Social Security, Medicare, Medicaid, and all those things that we pull out, unemployment. And, you know, for some employees, you're pulling out, you know, child support. And adding these things on is actually very simple.

And once they're initiated, it's just automatic. It's not a hard thing. So I think for— I think the current status is Bill has kind of newer businesses aren't included. And within a year or two, if you have an employee, you've established a system for dealing with these things. So it's not hard.

It sounds like from what Marge Stonking said that the— there's a bit of an issue on is it opt-in or opt-out. And, you know, if opt-in, automatic opt-in is, you know, gets more people involved, I certainly support that. You know, when you hire someone and you onboard them, you're going through so many different options of what's going on in company policies and so on. You know, adding in, do you want in or out? It's super simple.

I mean, that's just not— shouldn't be a barrier. So if, you know, automatic opt-in, you know, sounds like something that I, you know, should be in there. If it was— it sounds like Mark said it might have been taken out or so on. But I do support it. I hope you'll pass it.

And I really look forward to implementing it with my staff. Thank you. Okay. Representative Galvin. Thank you, Co-Chair Foster.

Through the chair, Mr. Weddleton, thank you for coming on board here and sharing your thoughts. I do have a question with you with regard to the compliance piece and how, how burdensome it would be for you to, to set aside time with your employees to let them know that this is an option. What would that look like for you? And if we were to require that, what— that you take the time, what would that look like for you?

Oh, you know, initiating, it's really simple. I do a monthly newsletter for the staff. So when something— should this pass, I would let them know right away. And then I assume there'd be some period that would be prior to implementation of it, would be some months later. So they have some notion.

But we have, you know, minimum twice a year meetings with the entire store, and my stores have meetings, you know, just with themselves, you know, more frequently. So it'd just be one of many topics, you know, policy changes, you know, whatever things going on with the company, that would be on there. And I think they'd be pretty excited about it, you know. That aspect's very easy to deal with. Representative Galvin.

Thank you. So can I speak with you putting your former councilman hat on and also having engaged so much with other businesses through chamber and other places? Would you help us appreciate what policy would look like? Should we require all businesses to highlight this for employees to know that this choice is an opportunity? Would that look like a burden?

Yeah, I think it's an opportunity. It's not a burden. It's like, hey, we got this new program for you guys to be in to, you know, save for your retirement. I mean, this is positive messaging for your employees. It's not— it's a good thing.

It's, you know, I like telling my employees, hey, this good thing happened. So, and I think most businesses that would be the case. And business in my size just this stuff, you know, we just don't do the retirement plans, you know. It's just, you know, I mean, I think my business is probably getting the size where, you know, I could do it. But most businesses, you know, smaller than mine and even my size, it's difficult.

So to have this, this is like a gift dropped on our lap. Thank you so much, Mr. Weddleton. I appreciate that perspective. And I, uh, Mr. Chair Foster, I'm not sure if I have opportunity to ask one question of Ms. Stoneking as well.

Thank you. Ms. Stoneking, this is a similar question to you. I don't know if you have data around this, but really what I'm trying to get my head wrapped around is I think this— I also think this is a gift and I thank the makers. And given that, I'm trying to imagine if you know I think this bill was modeled after Colorado perhaps, and with of course add-ons because they dropped in PFD and other wonderful things that Alaska has. But in light of where you know this came from, do you see a need for any enhancements in this bill?

And if you have any data that would show us that this would bring more participation if we did have something in there around requiring employers to let the employees know that this is a benefit that they may or may not take advantage of. Do you have anything to respond on that? Ms. Stoneking. Are you still there?

She may not be. That's okay. I have something via email from her. I just wanted to have her put it on record, but thank you very much, co-chair. Okay, uh, Mr. Weddleton, thank you very much for your invited testimony.

I'm going to jump right into public testimony, and so Public testimony for Senate Bill 21, Alaska Work and Save, is open. And if folks watching would like to submit written testimony, they can do so by emailing us at [email protected]. One more time, that is [email protected]. And I believe we have a Jamie Hansen online calling in from Fairbanks. If you would like to state your name and your affiliation.

Yes, my name is Jamie Hanson. I am a small business owner in Fairbanks.

Okay, and please give us your testimony.

Yes, so, um, and I'm sorry, I can't hear you very well. Um, I'm calling in support of SB 21. Uh, right, as I said, I'm a small business owner. Um, been doing that for 6 years, and in this fall the firm will celebrate 30 years in business. And I think I'd really like to emphasize that being able to offer critical benefits is really hard.

It's costly in terms of money and time. And right now my firm is able to offer both, but every year we take a really hard look at what we can keep offering without cutting staff time. And I'm not exaggerating. Every single year. And I think for me, that's where the Alaska Working Day Program comes in.

It fills a gap, right? It provides a service that will, for what I can see, it will open up access and make this a, for lack of a better word, like a permanent benefit for the private sector, right? For both nonprofits and for-profits. Instead of like a firm like mine having to be on the chopping block every year. And kind of like that, that doesn't encourage trust or expectations from my staff, right, in terms of actually putting into that retirement program.

And I will say having those benefits and being able to say that those will be there, right, for an extended period of time, it's a benefit to me as an employer. It helps me keep good people. And honestly, it just makes sense as far as I can see for the state to step in and provide this service to really support the private sector. And, you know, I see the state having done this before really well. I'm a mom and our household uses the Alaska 529 program and for our kids' education savings.

And when I think about the Alaska Working Safe, that's what I'm thinking of. I'm thinking about the state program where there's a platform, right, that's like privately managed, um, and it provides access, um, and then each individual kind of like once they're opted in has a choice, right, how much they want to set aside in there. And I think that for me is just absolutely critical. It's having that support from the state just really will make a difference. And I will say, you know, I'm pretty active in Fairbanks talking to other small business owners and have been really engaged and interested in this legislation.

And as I've been talking to folks, I mean, some are like, "This is amazing. I can't believe I've never heard of this before. I totally support." And then other people are kind of don't believe me, right? It's like, "Look, I'm never going to retire." I'm going to be working at McDonald's after I finish my executive directorship at some nonprofit. And I think that really, that's the two responses I'm hearing, right?

There's support from it, support for it, but there's just kind of a sense that there's nothing, either this is great and it will make a big difference, or this must be a joke, this can't possibly be happening because I've already given up on the trans. And that's just— that's not okay. And so I really appreciate that this committee is taking this seriously. And I ask that you really consider passing this so it can move along and potentially become a new, I think, really critical program that will support private sector employers and employees. Thank you very much.

Great, thank you very much, Ms. Hansen, for your testimony. And next we have, uh, Jennifer, uh, Sheppard, I believe, calling in from Glennallen. If you can put yourself on the record, proceed with your testimony.

Hi, my name is Jenny Sheppard and I have a small business in the Copper River Basin. I live in Glennallen, Alaska.

Okay, please proceed. Can I— can you hear me okay? Uh, yes, we can hear you great. Thanks. Um, I am just calling also, um, like a caller before me, in support of House Bill 21.

We have a very small business. It's a general store, uh, out near the edge of the Wrangell-St. Elias National Park and Preserve.

My husband and I with a business partner have owned this store for about 4 years. Coming from nonprofits, which is what my background is in, owning my own business has made it really hard for us to offer benefits to our employees. We have under 15 employees most of the time, and half of those people are very part-time people. And so our business just hasn't qualified or else it is too consuming for us to even look at a retirement plan for something as small as we are. We don't have the staff to maintain it, but we would love to be able to offer something like this for the folks that work for us.

Our clientele is kind of divided between summer tourists that come out to the national park and to go dip netting in the Copper River for salmon. And then our year-round business is pretty small. And a lot of our customers and our employees are people who are kind of living on the edge of financial security or living outside the edge of financial security and rely a lot on public programs. And so being able to offer something like this that will help the, you know, the younger folks that work for us safe so that they don't have to live through kind of what their parents or their grandparents that they see do. Um, it just, it just really makes sense, and we are in full support of something like this.

Great, thank you very much. I am looking to see if we have any questions. I don't see any, so appreciate your calling in. Is there anyone else in the room or online who would like to testify? Seeing none, I'll go ahead and close public testimony.

On SB 21.

And if anyone would like to submit written testimony, they can do so by emailing us at [email protected]. And, um, the last item before we go back to questions is just a review of the fiscal notes. And so if we could have Ms. Genevieve Wachusik, if you can put yourself on the record, read the control code and walk us through the fiscal notes.

Good evening, Chair Foster and members of the committee. Genevieve Warkusik, PFD Division Director. I've got the zero fiscal note up here with the control code NGJGC, and as noted, that's a zero fiscal note for the Permanent Fund Dividend Division for Senate Bill 21. Okay, I don't see any questions of the committee. Appreciate you staying online at this late evening.

And so we will next go to, uh, Ms. Pam Leary, if you can put yourself on the record.

This is Pam Leary, the Treasury Division Director. I have a fiscal note with a code of T-Z-A-I-R. Uh, it is not a zero fiscal note. Um, there is an appropriation request of $660,000 for fiscal year '27 and lowered to approximately $355,000 going from 2028 to 2032.

Included in those costs are 2 individuals, associated travel expenses, as well as regular office expenses. In addition, there is a startup fee We have presumed in our analysis that we would be joining a system similar to Colorado's system. Their vendor is Vestwell, and based on discussions that I've had with Vestwell over the past couple of years, we've estimated about $300,000 as a base fee for that first year.

Okay. We have a question from Representative Galvin. Thank you, Ms. Leary. Appreciate hearing from you. I do have a question because what we have been hearing from testimony and from many of these letters is that it is likely that some of the costs that we have as a state, whether it is our portion of Medicaid or SNAP or other things, that there may be— well, SNAP I guess we we pay less for, but still there is a sense that some cost shifting may be taking place so that the state of Alaska will be incurring fewer costs now that— with Work and Save— because there will be more independent, so to speak,.

Alaskans with their savings intact. Is, is that something that you contemplated? Ms. Leary, through the chair, Representative Galvin, we did not assume any impact in terms of the fiscal well-being of state residents. We did take into account the fact that there may be some revenue that can be generated to offset the costs, but not an associated benefit to the state in terms of lower costs related to expenses that the state outlays.

Thank you. A quick follow-up. Representative Galvin. I appreciate that, and I'm sure in the short run that may be hard also since it will take a bit before we see I think the fruits of this, so to speak. So I appreciate that, but I just thought I would make mention of that just for members to be mindful that there are some multiplier effect, if you will, that I think may be very positive down the line.

Thank you, Ms. Leary. Any further questions for Ms. Leary? Seeing none, thank you very much, Ms. Leary. And so that is the entirety of our fiscal note process. And this takes us back to questions for the sponsor or either of the representatives.

Any questions on the bill itself? Representative Bynum? Yes, just briefly. Thank you, co-chair. Wait for the bill sponsor to approach.

Thank you, Senator Wiekowski, for being here today. I think this is a phenomenal program. I'm glad that you brought it to us in the committee here, and I'm hoping to see it move quickly. One of the questions I had had to do with the employer component. I think this is a great opportunity for employees, but I looked through the bill and I didn't see in the bill that the employer would have an option to allow for a match.

I do know that there are potential issues when we talk about employer-sponsored plans, and I don't think we want to try to mess with this to make that— make this employer-sponsored. But I was hoping that there might be an opportunity for the employer to match if they so chose. I was wondering what your thoughts might be on that. And if you can put yourself on the record, I think is it Ms. LaBerge? LaBerge, yep.

Maxine LaBerge, staff to Senator Wilkowski. In the Colorado State Partnership, there is no opportunity for an employer contribution. That is due to the fact that the accounts are Roth IRAs and there are federal laws about employer contributions going directly into Roth IRAs. Representative Bynum? I appreciate that.

I know there are some safe harbor rules and definitely employer creative plans could create a problem. There, there probably is a legal way that we could allow an employer to opt in, but it's probably more complex than we have time for here, and I don't want to get involved with trying to slow this down at all. So maybe it's something we think about for the future as a way to make it better if this is successful— is a successful plan. So thank you very much. Representative Hannan.

Thank you, Co-Chair Foster. Instead of asking the Department of Revenue about their cost, ongoing cost of operation, I figured I would ask you guys, which is in the out years after setup, do you see the cost differentiating at all depending on how many people participate? So Mr. Chairman, through the chair, Senator Wielekowski, we think the fiscal note is a little bit on the high end and we worked with the department to get the number lowered. So it is lower than what they had previously come out with.

But we know that in Delaware, for example, they do this for around $170,000 per year. We also know that in some other states they have fees where where the participants are charged a fee to help offset some of the costs, and it could be as low as $5 a month or something like that. So we do think that there is an opportunity to get that fiscal note lower. I think it is a little bit high.

May I also add? Sure. Maxine Laverge, staff to Senator Wielekowski. I just would note that most other states are working on a trajectory to get the program set up and then within 10 years have the program pay for itself with the number of people who are participating in the program. So it's a little bit more of a longer-term goal, but that is the goal.

Representative Hannon. Follow-up. So does the bill as it's written now, does it incorporate that, that there would be fees so that it becomes self-funded and there is no UGF demand needed? Ms. LaBerge. Through the chair, in our most recent fiscal note that we have here, I do believe that that was factored in.

If we take a little bit of a look at the explanation, I believe that they, they did factor that in. Follow-up. I saw that in the fiscal note, but I didn't see it in the bill. So does the bill say that— and, and I guess I'm— it's creating an IRA, but that's The state is setting it up; individuals opt in. Am I understanding it correctly?

Ms. LaBerge. Yeah, through the chair, you are correct. It is not explicitly stated that there is a fee in the bill. Most other states do implement a fee. The idea of this is that our legislation allows the Department of Revenue to enter into a contract with a multistate partnership.

So we specifically have looked at the Colorado State Partnership since they are the largest one in the U.S. And they work with a third-party vendor that implements the program and does the money side of things. So I hope I'm kind of addressing your question by answering that way. People are offered this program when they start their job in your hiring paperwork. You would have something that says, you know, you're going to be part of the Alaska Work and Save program and you have an opportunity to say whether you want to be a part of it or not. And then you— your employer doesn't have to do anything other than submit that paperwork to the third party that is running the program.

Okay, and then one more. Representative Hannan. So when the program's up and operational and I apply for my PFD and I want to have that go into my account, I assume that the rules over maximum IRA contribution on an annual basis— it doesn't matter whether it comes out of my paycheck or whether it's my PFD— that that remains in total, right? Just because it's state money coming across doesn't change that all that, that in essence, this bill is just setting the state up to be able to offer IRAs to people who out of their workplace check who wouldn't otherwise have that option. Ms. LaBerge.

Through the Chair, that is correct. The goal is to be able to reach people who maybe have a job that doesn't normally offer a retirement plan. And I know we just heard from some business owners, but to cover that gap. And then one more. Representative Hannan.

And is your perception from the fiscal notes and the bill intersecting our initial operational costs are the same for the state to set this up whether 10 people enroll, 1,000 people enroll, or 10,000 people enroll? Or do they vary? Ms. LaBerge. Through the Chair, in our discussion with the Department of Revenue, we were— we did not have any specific number of enrollees in our discussion. I think that perhaps, perhaps the maker of the fiscal note might be able to speak a little bit more to that.

In our discussions with our office, we didn't talk about any particular number of people being in the program the first year, the second year, the third year.

Thank you. OK, Representative Bynum. Thank you, Co-Chair Foster. Through the Chair, Senator Wilkowski, the I think I would like to know a little more about the portability of the plan. I mean, obviously, if I'm a commercial fisherman, maybe I'm fishing in the summer and then I go do carpentry for a business, how easy is it going to be for— I mean, I'm going to get my plan and then just portably move it with me to employer and employer.

Ms. LaBrouche, through the chair, that's exactly right. It will follow you. And, um, yeah, in, in talking about this bill with a lot of people, I have I have talked about some employers will offer a short-term— or a retirement savings plan like this, but as soon as your employment with that organization ends, you are no longer allowed to stay in that account, and so you are told, hey, you have 30 days to either establish an account with whatever entity is running it, or you need to roll it over, or you will— essentially, they will send you a check for what you had in your account minus fees and penalties. So kind of the beauty of this bill is that savings account.

Follows you no matter what your job is in Alaska. Okay, thank you. Representative Galvin.

Thank you, Co-Chair Foster. Through the chair, Ms. LaBerge, firstly, is Delaware also using, I think it's Vestwell that Colorado is using? Do you know if it's the same subcontractor? Ms. LaBerge. Through the chair, yes.

The Colorado partnership is Colorado, Delaware, Maine, Minnesota, Nevada, and Vermont. Okay, so, okay, thank you. I was wondering, I did get some email related to partnership and I wasn't sure what that was, so now I know those are the states. Great, thank you. And there seems to be some concern that And I don't think it's really a deep concern, but some wishes that there be an opportunity for the state to encourage participation by way of asking the employers to be sure to offer this to their employees as an option or to let them know.

I guess it would be more of an educational experience. Do you have any thoughts about that? Ms. LaBerge. Through the chair, we've had this conversation as this bill has been moving through the legislature, and I've spoken with our partners in Colorado who we've, we've worked with quite a bit on this, and they, they mentioned that participation happened. 95% Of their businesses complied.

Without any further follow-up. So I don't have any data like that for any of the other states, but I'm sure we could look further into that. But I believe that most businesses, like we heard from the testimony, are pretty excited to be able to offer this as a, as a benefit. I appreciate that. I also understand that Alaska is a little different than other states and maybe we're not as practiced.

And I guess the one piece that I'll share, the story, is that there have been so many teachers I've spoken to, and after about 10 or 15 years, they say, did you know, I just found out that I haven't been putting into Social Security. They didn't know for over 10 years. They didn't— they weren't aware. And they weren't aware, you know, really anything related to— because when they're young and all they want to do is serve their mission of teaching, and I don't think that as with many younger employees, they don't have their head around saving, which is why I really appreciate this. And with that in mind, I think Alaska may be a little bit unique in that there may be quite a few workers out there who haven't been educated or even thought about savings.

And so I do bring that up, especially given that my constituent who has done research in this area is concerned about that. So I guess what I would like to do quickly is ask if you would consider it a friendly amendment if there were to be something around asking for employers to offer this as part of their educational experience for employees. Senator Bullockowski. Through the Chair. Be happy to work with you on language.

We're trying to make this as light a touch as possible for the business community. I would add businesses will be required to offer this. We did take out the penalty provision, and because there was concern that we did not want to penalize businesses. I think a call from an employer saying— or employee saying, hey, you've got to offer this, hopefully would be sufficient. And employees, I want to mention, would be automatically enrolled in this.

In this provision. Once their employer has this set up, employees would be automatically enrolled in this. So we would work with you, but I— we want to keep this as light a touch as possible for the business community. Understood. Maybe it's something for down the road to contemplate, should that feel like it would be helpful later.

I appreciate that. I really wanted to find out what your thoughts were, and I appreciate your thoughts. Thank you. Representative Hennan. Thank you, Chair Foster.

I guess I hadn't been aware in my reading of this, but it's— we've had a lot of late nights here in the House, especially in Finance, that it was mandatory for employers. So now that— a couple questions that it generates in my mind. Is there a minimum amount that employees must contribute? Ms. LaBerge. Yep, through the chair, um, the plan will— I believe right now, yeah, it's set at 5% is what you will start with if you make no other choice.

You will be given the choice of how much, but if you don't make any decision, it would be 5%. Okay, so 5% is the minimum. Follow-up. Follow-up. And, uh, what about seasonal employees in Alaska?

So all employees, all people working in Alaska will have to have their— their employer will have to offer this plan unless they already have some other retirement plan options for them. Ms. LaPurge, through the chair, I'll just make one note to that is in the— in the other body when we were looking at this bill, one of the changes that we made was an exemption for businesses with 5 or fewer employees. And businesses that are younger than 3 years in operation. So if you're just getting started, you're, you're within your first 3 years of operation, you're not required to offer this to your employees. And if you have 5 or fewer employees, which is a pretty significant amount of businesses, you also would not have to offer it.

To the rest of your question about seasonal employees, yes, they would need to be offered this. Yes. Okay. And then one follow-up. Representative Hannon.

So trying to understand the state's obligation and our cost to operate it. I happen to live here in this community where we have a whole lot of seasonal businesses. Now many of them come back and have the same crew each year selling diamonds and emeralds and gems that you are all buying, I'm sure. But does the cost increase if that employee is opting in and then they are leaving and they are maybe not going to another state and then next year they come back and they are here again for 4 or 5 months. Does that drive up our operational costs by people washing in and out of the system?

Ms. LaBerge. Through the chair, typically no. These programs are usually more cost effective when there are more people participating in them and more people saving through them. I think also to add to that, if you're a seasonal employee who's coming to Alaska every summer, this account again isn't going to kick you out. So every summer when you come and you go and you work for the same, you know, store in downtown Juneau, while you're working there, you will be contributing to your retirement.

And when you are— when you're out of state, you can still contribute to this on your own if you would like. It won't be automatic through your employer if you're not in Alaska, but then, you know, if you're coming and going every summer and you're saving up for retirement, It's, it's adding up and it's also compounding when you're not here. Okay. Further questions? Seeing none.

Senator Wilkowski, before I set an amendment deadline, anything you'd like to add? Nothing further, Mr. Chairman. Thank you. Representative Costello. Okay.

Okay. So with that, I will go ahead and set an amendment deadline for Saturday, May 16th at 5 p.m. Saturday, May 16th at 5 PM, and that is for SB 21, Work and Safe. So with that, very much appreciate you being here tonight. And to announce, tomorrow at our 9 AM meeting, we're going to be taking up amendments for both Senate Bill 24, that's the tobacco bill, as well as Senate Bill 23, civics education. So we'll be seeing Senator Stevens a lot in the morning, hopefully.

And with that, we're going to be adjourned at 7 4 PM.