Public sector unions are actively recruiting and funding candidates this year to push a new defined benefit pension bill in the 35th Legislature. We blocked the latest version in the 34th. House Bill 78 carried somewhere between $2.1 billion and $11.4 billion in new pension liability over 30 years. The governor vetoed it. The unions did not stop. They went looking for legislators who would vote differently next time, and they found some.

Here is what that bill costs you, in dollars you can put on a calculator. Every $1 billion in new pension liability works out to roughly $1,500 less per Alaskan in future Permanent Fund Dividends. Under the realistic scenario in the Reason Foundation analysis, it lands at about $17,000 per Alaskan over the life of the obligation. That is on top of the $46,000 per Alaskan we already owe on the last defined benefit system, the one we closed in 2006 because it nearly bankrupted us.

Before any candidate gets your vote in 2026, they should have to explain that math to you. In dollars, not in the abstract.

Here’s the Math

Alaska has roughly 660,000 PFD-eligible residents. The Permanent Fund’s POMV draw is capped at 5% of the fund’s five-year average value, and it is the only flexible revenue source the state has. Every dollar coming out of that draw goes to one of two places. It goes to state government, or it goes to your dividend. There is no third option.

Spread $1 billion across 660,000 Alaskans and you get about $1,515 per person. Discount it for time value at 5% and the number comes down to about $700. I will take either figure. Both show up on a check.

Run the same conversion through the HB 78 range:

• $2.1 billion (the optimistic case, assuming 7.25% returns): about $3,200 per Alaskan

• $5 billion (a likely midpoint): about $7,600 per Alaskan

• $11.4 billion (the realistic case, using Alaska’s actual 23-year pension return of 5.8%): about $17,300 per Alaskan

Reason Foundation, which ran the actuarial work, pointed out that the 7.25% return assumption in HB 78 is one of the five highest in the country. Our pension fund has actually returned 5.8% per year since 2001. Why would they use 7.25%? The optimistic case is not the likely case. It is the case, however, that the bill sponsors needed in order to make the numbers look acceptable on the day of the vote, so they did.

The standard answer from union lobbyists and the legislators they back is, “We will pay for it from somewhere else.” Really? Pension costs come from the operating budget, they say, not the PFD. In a state without an income tax, their distinction does not exist.

The POMV draw funds both. One pool, one hard ceiling. Every new obligation that comes out of that pool, whether you call it a pension contribution, a BSA increase, or Medicaid growth, is a dollar that does not reach an Alaskan family. That is the structure the Legislature put in place in 2018 when it capped the draw at 5% and converted the PFD from a transfer into an annual appropriation.

If a candidate tells you we can afford a full statutory PFD and a reopened defined benefit system at the same time, they are counting on you not doing the math. The Legislature took $1.66 billion out of the statutory PFD this fiscal year because there is not enough room in the POMV draw to do both. Adding $11 billion in new pension promises does not make more room. It guarantees deeper cuts to your dividend and your kids’ dividend, for the next 30 years.

Every candidate in this election cycle is going to tell you they support the PFD. Some of them mean it. Some of them have a six-figure independent expenditure landing in their race from public sector unions, and union donors did not write those checks because they want a full statutory dividend. They want your dividend to fund their retirement in Arizona.

The way you tell the difference is by asking specific questions and refusing to settle for vague answers.

The old system did not work. The bill the unions are pushing would rebuild this monstrosity.

Four questions. Ask all four:

1. If forced to choose between a full statutory PFD and reopening defined benefit pensions, for which would you vote?

2. Will you vote against reopening defined benefit pensions?

3. Will you vote against any defined benefit pension expansion that is not fully prefunded, meaning the money is on the table before the obligation is created and not borrowed against future dividends?

4. Will you vote to put the statutory PFD formula in the constitution?

The right answers are PFD on the first question and yes on the other three. Do not accept the dodge when they say, “I support defined benefits if we can afford them.” That is not an answer. Under our current structure, “if we can afford DB” means taking it out of your dividend. “We will find the money” means the same thing. The money has to come from somewhere, and right now that somewhere is the same pool of dollars that funds the PFD. After that pool is fully tapped, the next “somewhere” is a tax.

A candidate who gives you the right answers on all four is willing to take on their union donors. A candidate who hedges on any of them is not. Hedging means the bill passes and your dividend pays for it. And the union dollars are well spent.

Alaska closed its defined benefit pensions in 2006 because the last system left $7.5 billion in unfunded liabilities. Working Alaskans are still paying that down through smaller dividends. State unions have been trying to get it back since then. And since 2015, the state has put another $5 billion into PERS and TRS, and the unfunded liability has actually gone up, not down. The Division of Retirement and Benefits says another $3.8 billion will need to be injected over the next 14 years just to keep the existing system above water.

The old system did not work. The bill the unions are pushing would rebuild this monstrosity.

The legislators, many of the prior union officials who will vote for the next version of HB 78, know exactly where the money comes from. Your dividend. They are counting on Alaskans not following the conversion. It is not hard. $1,500 per billion. Roughly $17,000 per Alaskan in the realistic scenario.

Your dividend. Funding somebody else’s retirement. For the next three decades.

Ask the four questions. Listen carefully. Vote accordingly.

The views expressed here are those of the author.

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