New retirees face months of delays in collecting state pensions; state says it is moving to clear backlog

The state inserted this slip of paper into letters sent to new retirees warning that they would have to wait for up to three-and-a-half months to get their first pension check they are owed by the state.

The essential job of the chief executive in Alaska is to manage the daily operations of state government and keep the machinery of the bureaucracy in working order.

But the food stamp backlog, chronic delays in processing payroll forms, and the 15,000 people waiting for action on Medicaid applications are prime examples of how the administration of Gov. Mike Dunleavy has stumbled over the basics.

Now add another program where the state is falling short—getting new retirees the pension payments they are owed by the state. There are also delays in paying new death benefit payments to survivors.

There is an upswing in teacher retirements at the end of the school year and many of the new retirees facing delays they hadn’t expected have just concluded decades of public service in education.

The state Division of Retirement and Benefits sent form letters to retirees in the spring saying that anyone who retires can expect the typical delay of about six weeks after retirement before getting their first pension check. (I don’t understand why anyone would expect a six-week delay to be a standard of good service, but that apparently has been regarded as normal in years past.)

Rather than update the letter, however, the division included a slip of paper saying that the delay would last much longer, perhaps three-and-a-half months, because of “critical staff shortages” at the division.

This should have been made a major issue during the legislative session.

And the governor, who wastes a lot of time on culture wars and federal overreach lawsuits, should have made it a priority to prevent this shabby treatment of retirees and survivors.

Amy Gallaway, who was the state teacher of the year in 2020, is a newly retired teacher who has been warned that she won’t get her pension on time. She wrote to legislators this week that there are hundreds of other people in her position and they shouldn’t be treated this way.

“I have contacted the entire Interior delegation, as well as NEA- Alaska. Everyone agrees it's bad, but no one has come up with stopgap solutions so that we can actually pay our bills and put food on the table. In fact, I'm not even sure if it's constitutional to be that late paying us. I have asked NEA-ALASKA to research the legal implications. And, with no paycheck, I certainly cannot be hiring a lawyer,” she said.

Administration Commissioner Paula Vrana said that since the warning about the 14-week delay went out, the state has made progress in cutting the backlog. She blamed the backlog on 14 vacancies in the division, a “system outage” that slowed down processing and the seasonal increase in retirements.

The number of job vacancies has been cut to 5 now and the “system outage that resulted in delayed processing has been resolved, which has eliminated the delays caused by system limitations,” Vrana said.

“Current processing times are approximately 8-10 weeks and are being reduced to closer to 4-6 weeks by August,” she said.

On Monday evening, before I emailed Vrana to ask about this, the division website still said there were delays of 12-14 weeks because of “increased volume and staff shortages.”

The state website was updated Tuesday to say the delay is now 8-10 weeks.

In a comment on one social media platform, a reader said the delays in getting death benefits to survivors could created a personal financial crisis.

“My father (91) was drawing retirement benefits until the beginning of April when he died. I immediately informed the retirement system of his death because I knew there was going to be a bit of paperwork and such before my mother (90) could receive spousal benefits. We received a letter in May stating they were working on files from December.”

“At this point, she is only receiving benefits through Social Security. If it weren’t for her savings, I don’t know what I would do, her monthly care costs are around $7,000 a month. It’s not like the facility where she lives is going to accept the excuse that the check is coming in four months.”

I am sure there is truth to the claim that has been made repeatedly in the past couple of years that staffing shortages are a big problem in state government. And there is truth to the claim that the Dunleavy administration has not been aggressive enough in pursuing solutions.

As I said, the governor has not made dealing with staff shortages and improving service to Alaskans a priority.

Vrana said her department is doing what it can.

“I am in regular contact with Division leadership, who keep me apprised of any issues or challenges faced by their teams. The cyclical influx of spring and summer retirees is simply the way things work and the division has been able to shift resources to address the influx as well as possible. Staffing challenges have been an issue across the state system for a couple years now and the Division of Retirement and Benefits has been no exception. That said, and as mentioned before, the division has reduced their vacancy rate considerably and is gaining processing capacity as they continue to train new staff,” she said.

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