The House Finance Committee unanimously approved House Bill 385 Tuesday. The bill is awaiting a full vote on the House floor.

Gov. Sean Parnell’s bill calls for withdrawing $3 billion from the state’s Constitutional Reserve Budget for up-front payments on the state’s $11.9 billion unfunded pension liability.

"We would be putting $1.1 billion into the TRS (Teacher Retirement System) trust account, and $1.8 billion into the PERS (Public Employees Retirement System) trust account,” said Revenue Commissioner Angela Rodell. “We have provided for a reduction in the annual payments to 500 million dollars total for each year.”

Rodell says if the state doesn’t take any action, it could be forced to pay almost a billion dollars in annual payments.

“Between active employees, retirees, and their dependents, there are about 120,000 people who benefit from the PERS and TRS trust fund, that the state manages,” Rodell said.

Kathrin McCarthy, a former University of Alaska Southeast professor, is one of those retired employees.

"I really think they should overhaul the retirement system, and really look at what people need to live in a place like Alaska, where the cost of living is high,” McCarthy said.

Parnell administration officials presented their plan to the Senate Finance Committee Tuesday. Some lawmakers on the panel were concerned about pulling so much money out of savings.

“We're considering what we want to do with PERS and TRS, which is a big liability that we know we want to address, but we are going to need the (proposed natural) gas line out past 2024,” said Sen. Lyman Hoffman (D-Bethel).

According to the Department of Revenue, the Constitutional Budget Reserve’s balance is $12.3 billion.

At least 30 House members and 15 senators -- three-quarters of each legislative chamber -- would have to vote yes in order to authorize a withdrawal from the CBR. That could only happen after HB385 becomes law.

The Senate version of the bill was held in the Finance Committee until Wednesday.