Public pensions build workforce and keep older Alaskans in Alaska

By Madeline Holdorf, AARP Alaska volunteer state president, and Teresa Holt, AARP Alaska state director

Madeline Holdorf is an urban sociologist from Anchorage, Alaska where she has resided for over 40 years.  Madeline continues her lifelong community activism pursuits with volunteer commitments to organizations including AARP, the Anchorage Senior Activity Center, Alaska Rainbow Elders, and St. Mark Lutheran Church. Her current work showcases strategies for age-friendly communities, healthy aging, and enhancing the quality of life for older Alaskans who desire to live at home and stay active.  She has been an AARP member since 1996.

Teresa Holt has been the State Director of AARP Alaska for the last four years. Prior to that, she worked as the Long-Term Care Ombudsman for Alaska. She has lived and worked in Anchorage, Alaska since 1972.

Alaska has the fastest growing senior population per capita of all 50 states for the tenth consecutive year because the workforce that came to build a modern Alaska are now retiring and staying in state, many of them with public employee pensions. That’s good for Alaskan communities.

In Alaska, retiree pension spending supports 8,778 jobs and $1.6 billion in total economic output. For example, when retired public employees receive their pensions, they spend the pension check on goods and services in the local community. They pay mortgages and purchase food, clothing, medicine, and more at local stores. These purchases, combined with those of other retirees with pensions, create a steady economic ripple effect throughout Alaska’s economy. Older Alaskans contribute to our economy and our communities by spending more than half of all dollars in state and by volunteering and providing care for our loved ones.

We need to ensure that Alaska has the public programs and services in place for people to continue living in the last frontier so that generations of Alaskans can afford to stay here, and that takes public employees. Pensions for public service are key to rebuilding our public service workforce, from the local public safety officers who protect Alaskan communities and the teachers who care for our children to the state office staff who license our healthcare workforce and get people paid salaries and benefits.

Public workers earn up to 14% less than private-sector workers and providing a defined benefit pension helps to bridge that wage gap in the long term. Alaska’s inability to offer retirement security to our public employees through a defined benefit plan has put us at a significant disadvantage as compared to other states in recruiting and retaining a qualified workforce. As a result, that diminished public workforce has hindered our ability to provide reliable public services, including those that support older Alaskans.

For most Americans, Social Security income is the foundation of financial security in retirement. However, many of Alaska’s public employees do not get to participate in Social Security so their reliance on the state’s retirement system for financial security is even greater. Older households without a pension are nine times more likely to live in poverty, which has increased from six times greater in 2006 (National Institute on Retirement Security, 2020). Without a modest lifetime retirement benefit, more of Alaska’s valued public employees may come to rely on public assistance. Greater reliance on government subsidies increases costs for all, and it chips away at retirees' ability to live with dignity and self-sufficiency.

A defined benefit pension will give our firefighters, police officers and teachers a predictable retirement benefit and save state money by reducing state retiree reliance on public assistance. Senate Bill 88 can help solve Alaska’s public service crisis. Let’s make Alaska a great place to work, live, age and retire. Let’s keep Alaskans in Alaska.