AFP–Alaska Urges Governor Dunleavy to Veto Costly Defined Benefit Pension Bill

JUNEAU, AK — Americans for Prosperity–Alaska (AFP–AK) today called on Governor Mike Dunleavy to veto legislation that would reinstate a defined benefit pension system in Alaska, warning it could saddle the state with billions in new liabilities and leave a lasting negative fiscal legacy. The governor must act on the bill by May 18. 

Returning to a pension model the state abandoned in 2005 would reverse hard-earned fiscal progress and expose taxpayers to the same risks that previously generated more than $6.1 billion in unfunded pension liabilities.  

AFP President and CEO Emily Seidel issued the following statement: 

“Governor Dunleavy has a clear choice: protect Alaska’s fiscal future or risk leaving office with a legacy of reopening the door to massive pension debt. This bill threatens to bankrupt the state over time and force difficult choices like new taxes or reduced dividends for Alaskans. Alaska is already struggling to meet existing obligations. Adding billions in new liabilities is not just irresponsible—it’s unsustainable. 

“Alaskans deserve a stable, sustainable retirement system—not a return to the policies that created billions of debts. We urge Governor Dunleavy to veto this legislation and protect the state’s financial future.” 

Analysis shows the proposal could add up to $7 billion or more in additional costs over the coming decades, driven by overly optimistic investment assumptions and market uncertainty. Additionally, Alaska’s pension systems have historically underperformed projections—earning about 5.8% annually since 2001, well below the assumptions required to keep the new plan solvent. 

In Alaska, most public employees do not remain in their positions long enough to benefit from a traditional pension structure, meaning the policy could disproportionately benefit a small subset of long-tenured workers while reducing flexibility for the broader workforce. 

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