This is a reprint of an article which we posted on May 17, 2010. Today, it is even more relevant because the CEO of the Alaska Municipal League, Kathy Wasserman, is arguing against recently filed legislation shifting more of the PERS costs to local governments. These are the same government interests she represents in lobbying.
Despite huge liabilities, the Public Employees Retirement System funds the pensions of several non-government employees as well.
Director of Retirement and Benefits Pat Shier said his division, along with the Attorney General’s office, has been investigating the Alaska Municipal League’s inclusion in the pension system but is unsure if they will be removed from the state-funded pension plan.
“The league has a long history and their form has changed over time, it’s possible there may be a legal dispute or questions or something, and we’re trying to understand fully the position the organization’s taking before we render a decision,” Shier said. “We’ve been trying to get to the right conclusion.”
The League, incorporated in January 1972 but founded in the 60’s, employs five full-time employees and contributes into PERS. They are also registered with the Alaska Division of Corporations, Business and Professional Licensing as a non-profit corporation.
The most recent biennial report categorizes it as a civil and social organization, and the league’s website includes a page devoted to legislative advocacy and a bold admonishment to “stop the gag law; vote no on ballot measure one.”
Executive Director Kathie Wasserman said the group does not receive any State funds, but the State of Alaska website lists $264,165.22 in grants and benefits paid to the League from the Department of Commerce, Community and Economic Development and the Department of Environmental Conservation.
Bert Cottle, AML President and Mayor of Valdez, said the league was originally included in PERS because the staff worked closely with state and city employees and were themselves eventually classified as state employees.
“They considered the staff to be a subsidiary of a state agency,” Cottle said. “The state went around and wanted everyone to jump on this retirement wagon, and then they came back around and said they don’t want us anymore and this is a number of years later.”
Wasserman said the league is classified with the IRS under Section 115, which includes affiliates of government groups and quasi-governmental organizations. The league has been a member of PERS since its inception more than 40 years ago, Wasserman said, but critics argue the league’s registration as a non-profit organization in 1972 made it ineligible for inclusion in the government retirement fund.
“All of us who worked there are ex-municipal employees, and so we all stayed with PERS and thought nothing of it,” Wasserman said. “The ruling body is the board, who are all elected officials and they’re doing nothing differently then their duties as officials. Maybe indeed we should not be in PERS, but my contention right now is, maybe some of us should have thought of that earlier.”
Wasserman said the league was unaware its inclusion in PERS was threatened until bookkeeper Sarah Geary tried to enter a new employee into the system and was declined. When Geary called the State to inquire, she was informed the league was no longer a member of PERS.
The investigation into the League’s status is ongoing, and Wasserman said a meeting with Department of Administration officials is scheduled for June.
“Politics are dirty and ugly and I knew when I got into the that it would dirty and ugly,” Wasserman said. “Right or wrong, my goal is to protect my employees.”
So, are we paying a nonprofit to lobby for more money for local governments? Shame!