A almost perfect pension is based on your three highest pay years, percentage based on years worked (percent increases with more years), vested after 5 years, partial inflation protection, offers a 10% COLA if you remain in the state, full medical paid and retirement age is 55 (early retirement at 50). They also offer dental, vision and auditory coverage and a LTC insurance for a monthly cost. It can be taken lump sum, but you'd lose the medical coverage.
Pretty easy to recognize an Alaskan.
I have an Alaska State pension--Tier I. The best thing about it is the benefits are written into the state constitution. Lessening benefits would require an amendment to the constitution.
I'm not an Alaskan (even though it's cold enough here right now to qualify!), but my pension is similar. It's DB, 3% COLA, based on your highest 4 years out of the previous 10, vested at 8 years (though they are working on changing that to 5 years). To qualify for the full pension you have to be 55 years old with at least 35 years service, unless the employer offers the Early Retirement Incentive (ERI) which allows the employee to "buy" 5 years of service if they are 50 years old or older. If you don't meet those specs, then full retirement age is 62, but pension will be reduced by (IIRC) 1% for each year less than 40 years of service that you have. (i.e. if you are 62 with 20 years service, your pension would be reduced by 20%)
I got the ERI when I was 50, with about 32 years service, and I bought 5 years service, giving me about 37 years service credit...and qualifying me for the full pension amount. Yippee!!!
Although our pension plan doesn't include the medical, dental, prescription, or LTC insurance, retirees are able to keep the employer's medical/dental/prescription plan by paying 25% of the monthly premiums (we paid 20% while employed). And LTC is offered through a pension plan endorsed company at reduced rates.
And as
bosco stated about the Alaskan pension being protected by the state's constitution, ours is also and cannot be changed with out the opening of the state's constitution, and that can't be done without the voters in the state voting for a constitutional convention....that got shot down last election. And although our pension plan is regulated by the state constitution, it is administrated by a board of 8 trustees elected by the employers (4), the employees (3), and the retirees (1). And can't be touched or raided by any of our (less than) illustrious politicians....Thank God!!!
Before the economy took a royal dump, our plan was about 96% or 97% funded. It dropped down to about 81% at the lowest point, but has since rebounded to just over 90%, and continuing the upswing. So while our pension plan may not be the absolute best one out there....it sure ain't too dang shabby in my book!!!
