Campaign Ad Puts Pensions In Play In Alaska Senate Race

 

A new campaign ad has been released in the Alaska’s Senate race between Mark Begich (D) and Dan Sullivan (R).

In the ad (which can be viewed above), Begich claims that Sullivan put Alaska’s general budget at risk when he and the state’s pension fund struck a $500 million settlement with Mercer over allegedly botched actuarial calculations.

Begich says that Sullivan left billions on the table as a result of the settlement, and Alaskan citizens will likely have to pay for it. But is that claim true? FactCheck.org did the legwork and investigated the claim:

A new Begich ad, called “Reprise,” deals largely with the differences between Begich and President Obama. But at one point in the ad, the narrator says Sullivan “let Alaska’s pension fund get ripped off by a New York financial firm, putting the permanent fund at risk.”

Alaska Sen. Mark Begich exaggerates the impact of a $500 million settlement that his Republican opponent, Dan Sullivan, reached as state attorney general in 2010.

The Alaska Retirement Management Board sued its former actuarial firm, Mercer Inc., in December 2007 for erroneous calculations that the board claimed caused the state to underfund its pension system by $2.8 billion. The state sought $2.8 billion in damages and settled in June 2010 for $500 million.

The ad suggests that all residents — not just teachers and public employees — may have to pay for Sullivan’s settlement when it claims that his decision to settle is “putting the permanent fund at risk.” That’s an exaggeration.

Gov. Sean Parnell in June signed legislation that transferred $3 billion from the state’s rainy day fund, known as the Constitution Budget Reserve, into the state’s pension funds. In signing the legislation, Parnell said the infusion of cash will allow the state to reduce future annual pension payments and help preserve the state’s AAA bond rating. Fitch Rating indeed affirmed the state’s AAA rating for its general obligation bonds on Aug. 11.

Parnell notably did not tap the Alaska Permanent Fund. And there was no legislation proposing to take money from the permanent fund to cover pension costs, according to Laura Achee, the director of communications for the Alaska Permanent Fund Corporation.

The conclusion: Alaska’s “Permanent Fund” was not damaged as a result of the Mercer settlement. Begich’s campaign ad, according to FactCheck, is an “exaggeration”.

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