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Alaska was close to bringing back defined-benefit plans. Then the governor stepped in.

By Rachel Molina Lodoen

When my mother retired in 2004 after working for 31 years as a senior accountant for the Anchorage School District, she earned a guaranteed monthly pension and one of the best health insurance plans in Alaska thanks to the state’s defined-benefit plan for public employees. As a retiree, under the Alaska Public Employees Retirement System, she never really worried about finances. She had the money to travel with my father and had most of her medical costs covered.

Inspired by my mother’s dream to live a stress-free life in retirement, I decided to participate in Alaska’s defined-benefit plan too when I started working for the school district as an administrative assistant in 1997.

But, unfortunately, not all Alaska public employees will reap the same benefits as my mother and I.

In 2005, Alaska ended its defined-benefit plan for public employees. Now, state workers who were hired after July 1, 2006, are forced into a defined-contribution plan. Under this retirement model, workers and employers both contribute a percentage of wages into a 401(k) account. But unlike a defined-benefit plan, their retirement income isn’t guaranteed. Instead, their savings are dependent on market performance, and a major economic downturn can erase years of investment. For workers nearing retirement, that kind of loss is not just financial — it can mean delaying their retirement, cutting back on basic needs, or facing the future with uncertainty instead of dignity.

I have seen how the shift from a defined-benefit plan to a defined-contribution plan has changed the ASD and Alaska. Employees don’t stay long with the district anymore. Wages are not competitive enough, and a defined-contribution system does not tether new employees to stay for the long term. Alaska public employees are forced to try to build careers without the basic retirement foundation available to most across the country. If I were to talk to any new public employee, I don’t think I could look them straight in their face and say that the state’s defined-contribution plan is good for them.

If I were to talk to any new public employee, I don’t think I could look them straight in their face and say that the state’s defined-contribution plan is good for them.

Arguably, two of Alaska’s best teachers are leaving because of the lack of investment, lack of competitive retirement benefits and continual budget cuts. Longtime educators Benjamin and Catherine Walker received the Alaska Teacher of the Year award in 2018 and 2024, respectively. When discussing retirement benefits, he asserts that Alaska’s defined-contribution retirement plan is not advantageous to recruiting and retaining educators, as well as all new public sector employees because retirement benefits are more competitive in other states. It is no longer financially viable for public employees to justify staying in Alaska for their career.

The defined-contribution retirement plan continues to exacerbate the current recruitment and retention crisis in Alaska. We longtimers hire fresh, new faces. We train them to be future leaders of our public organizations. And eventually, they stay long enough to realize they have just enough experience to apply somewhere else. So, they go. And we must do it all over again. Wash, rinse and repeat.

I’m a member of the executive board of the Anchorage Council of Education; we’ve been fighting for four years to bring back a defined-benefit plan for newly hired employees. We’ve partnered with our state federation, the Alaska Public Employees Association, and have lobbied members of our state Legislature to work on a viable defined-benefit plan.

In May, a sliver of change seemed to be coming to Alaska’s retirement system — at least I thought.

Lawmakers passed House Bill 78 that month, which would’ve given Alaskans the opportunity to choose between defined-benefit and defined-contribution plans of the public employees’ retirement system and the teachers’ retirement system. It’s a bill that rested on the heels of nearly two decades of work by previous legislative bodies to write legislation to bring back a defined-benefit plan. This time, we were hopeful that this legislation would cross the finish line and stop the brain drain that Alaska has been experiencing, especially within Alaska’s education system.

But Republican Gov. Mike Dunleavy, who has a defined-benefit plan from his time as a teacher, vetoed the bill, stating that it would bring “unfunded liability risk to the state and participating employers.”

The truth is H.B. 78 was not a bill to simply bring back the same pension plan. The new plan was designed to be fully funded by employee and employer contributions. Enrollees could adjust their contributions, if needed, to reduce risk and keep the plan solvent. Essentially, a refined, shared-risk model.

Now that H.B. 78 has been killed, state employees hired after July 1, 2006, will be vulnerable to yet another year of a market-dependent retirement system. A system that will continue to worsen the recruitment and retention crisis. A system that denies public employees from retiring with dignity.

But even with this setback, we continue to fight. The message is clear that a stable public workforce not only requires adequate wages but also stable retirement benefits. Alaska needs to become competitive again if we want to retain our best and brightest employees. I only hope this is a temporary stall, and our elected leaders will craft a stronger defined-benefit bill next year.

The future of Alaska depends on it.

Rachel Molina Lodoen was born and raised in Anchorage, Alaska. She is a graduate of the Anchorage School District and the University of Alaska Anchorage. She began working at the ASD in 1997, joining TOTEM, and in 2005 joined the Anchorage Council of Education, Local 04425. She has served on the ACE executive board as treasurer since 2012. She has been a volunteer with Special Olympics Anchorage Community and Special Olympics Alaska since 2005 and volunteered at the 2026 Special Olympics USA Summer games. She enjoys traveling with her husband and young daughter, and they share their home with three Chihuahua-fox terriers.

She currently is the project support supervisor in the Planning and Construction Department of the Anchorage School District. In this role, she oversees project budgets and provides administrative and financial support for the district’s capital improvement and construction projects, helping ensure that school modernization and safety initiatives are delivered effectively. She works as part of the leadership team supporting the district’s planning and construction efforts, ensuring that students are safe and secure, while adapting to changes in educational programs.

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