00 SENATE BILL NO. 83 01 "An Act relating to the Protective Occupation Retirement Council; relating to 02 participation of certain employees in the defined benefit and defined contribution plans 03 of the public employees' retirement system; and providing for an effective date." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05  * Section 1. AS 37.10 is amended by adding a new section to read: 06 Sec. 37.10.222. Protective occupation employees cost-of-living allowance. 07 (a) The board shall authorize a monthly cost-of-living allowance under 08 AS 39.35.480(a), for protective occupation employees who first participate in the 09 defined benefit retirement plan under AS 39.35.095 - 39.35.680 after June 30, 2006, 10 for each year in which the board determines that the trust fund of the defined benefit 11 retirement plan does not have an unfunded liability. 12 (b) The board may not establish a monthly cost-of-living allowance amount 13 that, for an individual, would exceed the greater of $50 or the dollar amount equal to 14 10 percent of the individual's monthly benefit under AS 39.35.370. 01  * Sec. 2. AS 37.10.390 is amended by adding a new paragraph to read: 02 (5) "protective occupation employee" has the meaning given in 03 AS 37.10.490. 04  * Sec. 3. AS 37.10 is amended by adding new sections to read: 05 Article 8. Protective Occupation Retirement Council.  06 Sec. 37.10.450. Protective Occupation Retirement Council. (a) The 07 Protective Occupation Retirement Council is established in the Department of 08 Administration and shall carry out its duties and powers in a manner consistent with 09 standards of prudence and the state's obligation to meet the liabilities and pension 10 obligations of the plan. 11 (b) The Protective Occupation Retirement Council consists of nine members. 12 The governor shall appoint 13 (1) six protective occupation employees who are members of the 14 defined benefit retirement plan under AS 39.35.095 - 39.35.680, including 15 (A) one member of the Public Safety Employees Association; 16 (B) one member of the Alaska Correctional Officers 17 Association; 18 (C) one member of the Alaska Professional Fire Fighters 19 Association; 20 (D) one member of the Anchorage Police Department 21 Employees Association; 22 (E) one employee who is employed as a firefighter by a 23 municipal fire department; 24 (F) one employee who is employed in a position other than a 25 peace officer or firefighter position; 26 (2) one member of the public at large; 27 (3) before July 1, 2033, two retirees who participate in the defined 28 benefit retirement plan under AS 39.35.095 - 39.35.680 for terms that end after three 29 years or on June 30, 2033, whichever occurs first; and 30 (4) after June 30, 2033, two retirees who were first hired after June 30, 31 2006, and who participate in the defined benefit retirement plan under AS 39.35.095 - 01 39.35.680. 02 (c) Subject to (b)(3) of this section, members of the Protective Occupation 03 Retirement Council shall serve for staggered terms of three years and may be 04 reappointed. 05 (d) The governor may remove a member for cause by providing written notice 06 to the member. After a member receives the notice, the member may not participate on 07 the Protective Occupation Retirement Council. 08 Sec. 37.10.455. Per diem and travel expenses. Members of the Protective 09 Occupation Retirement Council are entitled to per diem and travel expenses authorized 10 for boards and commissions under AS 39.20.180. 11 Sec. 37.10.460. Powers and duties. (a) Subject to AS 37.10.450(a), the 12 Protective Occupation Retirement Council shall 13 (1) make recommendations to the Alaska Retirement Management 14 Board concerning the board's investment policies, strategies, and procedures that 15 affect the retirement benefits of protective occupation employees; 16 (2) determine the amount of a contribution under AS 39.35.160(h); 17 (3) determine an assumed variable benefit as required under 18 AS 39.35.370(m) and (n); 19 (4) reduce the amounts of annual stipends for a benefit recipient who is 20 65 years of age or older as required under AS 39.35.535(g). 21 (b) Subject to AS 37.10.450(a), the Protective Occupation Retirement Council 22 may 23 (1) enter into contracts for actuarial services that are necessary to carry 24 out the powers and duties of the council under this section; 25 (2) establish employee contribution rates under AS 39.35.160(e) and 26 (f); 27 (3) adjust the amount of the increase in benefits payable under 28 AS 39.35.475 to a protective occupation employee who first becomes a member after 29 June 30, 2006; 30 (4) adjust annual stipends for purchasing major medical insurance 31 under AS 39.35.535(h). 01 Sec. 37.10.490. Definitions. In AS 37.10.450 - 37.10.490, "protective 02 occupation employee" means 03 (1) a peace officer as defined in AS 39.35.680; 04 (2) a firefighter as defined in AS 39.35.680; or 05 (3) an administrative, professional, or clerical employee of 06 (A) a municipal police or fire department; 07 (B) a University of Alaska police or fire department; or 08 (C) the Department of Public Safety. 09  * Sec. 4. AS 39.35.095 is amended to read: 10 Sec. 39.35.095. Applicability of AS 39.35.095 - 39.35.680. The following 11 provisions of this chapter apply [ONLY] to members first hired before July 1, 2006,  12 and, regardless of the date of hire, members who are protective occupation  13 employees: AS 39.35.095 - 39.35.680. 14  * Sec. 5. AS 39.35.160(a) is amended to read: 15 (a) Subject to (e) of this section, beginning [BEGINNING] January 1, 1987, 16 each peace officer or firefighter shall contribute to the plan an amount equal to seven 17 and one-half percent of the peace officer's or firefighter's compensation. Except as 18 provided in (d) and (e) of this section, beginning January 1, 1987, each other 19 employee shall contribute to the plan an amount equal to six and three-quarters percent 20 of the employee's compensation. [THE CONTRIBUTIONS SHALL BE DEDUCTED 21 BY THE EMPLOYER AT THE END OF EACH PAYROLL PERIOD. THE 22 CONTRIBUTIONS SHALL BE DEDUCTED FROM EMPLOYEE 23 COMPENSATION BEFORE COMPUTATION OF APPLICABLE FEDERAL 24 TAXES, AND THE CONTRIBUTIONS SHALL BE TREATED AS EMPLOYER 25 CONTRIBUTIONS UNDER 26 U.S.C. 414(h)(2). A MEMBER MAY NOT HAVE 26 THE OPTION OF MAKING THE PAYROLL DEDUCTION DIRECTLY INSTEAD 27 OF HAVING THE CONTRIBUTION PICKED UP BY THE EMPLOYER.] 28  * Sec. 6. AS 39.35.160 is amended by adding new subsections to read: 29 (e) Except as provided in (a) of this section, a protective occupation employee 30 who is employed as a peace officer or firefighter and who first participates in the plan 31 after June 30, 2006, shall contribute to the plan an amount equal to nine percent of the 01 employee's compensation, excluding overtime compensation. The Protective 02 Occupation Retirement Council may, from time to time, adjust the employee 03 contribution under this subsection to an amount that is 04 (1) not less than eight percent of the employee's compensation, 05 excluding overtime compensation; and 06 (2) not more than 12 percent of the employee's compensation, 07 excluding overtime compensation. 08 (f) Except as provided in (a) of this section, a protective occupation employee 09 who is not employed as a peace officer or firefighter and who first participates in the 10 plan after June 30, 2006, shall contribute to the plan an amount equal to eight percent 11 of the employee's compensation, excluding overtime compensation. The Protective 12 Occupation Retirement Council may, from time to time, adjust the employee 13 contribution under this subsection to an amount that is 14 (1) not less than seven percent of the employee's compensation, 15 excluding overtime compensation; and 16 (2) not more than 11 percent of the employee's compensation, 17 excluding overtime compensation. 18 (g) Contributions under (a), (e), and (f) of this section shall be deducted by the 19 employer at the end of each payroll period. The contributions shall be deducted from 20 employee compensation before computation of applicable federal taxes, and the 21 contributions shall be treated as employer contributions under 26 U.S.C. 414(h)(2). A 22 member may not have the option of making the payroll deduction directly instead of 23 having the contribution picked up by the employer. 24 (h) In addition to other employee contributions required under this section, a 25 protective occupation employee who first participates in the plan after June 30, 2006, 26 and who earns overtime compensation shall contribute to the member's individual 27 account in the defined contribution retirement plan established under AS 39.35.700 - 28 39.35.990 an amount, determined by the Protective Occupation Retirement Council 29 under AS 37.10.460(a), that is 30 (1) not less than seven percent of the employee's overtime 31 compensation; and 01 (2) not more than 12 percent of the employee's overtime compensation. 02  * Sec. 7. AS 39.35.255 is amended by adding a new subsection to read: 03 (i) The requirements of this section are in addition to the requirements under 04 AS 39.35.257. 05  * Sec. 8. AS 39.35 is amended by adding a new section to read: 06 Sec. 39.35.257. Employer contributions for protective occupation  07 employees. (a) An employer that employs a peace officer or firefighter who first 08 participates in the plan after June 30, 2006, shall contribute monthly to the plan a per 09 capita amount that is equal to 14 percent of the total monthly compensation, excluding 10 overtime compensation, that the employer pays to all protective occupation employees 11 combined. 12 (b) An employer who employs a protective occupation employee who is not 13 employed as a peace officer or firefighter and who first participates in the plan after 14 June 30, 2006, shall contribute monthly to the plan a per capita amount that is equal to 15 12 percent of the total monthly compensation, excluding overtime compensation, that 16 the employer pays to all protective occupation employees combined. 17 (c) In addition to other employer contributions required under this section, an 18 employer of a protective occupation employee who first participates in the plan after 19 June 30, 2006, shall contribute an amount equal to 14 percent of the employee's 20 overtime compensation to the employee's individual account in the defined 21 contribution retirement plan established under AS 39.35.700 - 39.35.990. 22  * Sec. 9. AS 39.35.370(a) is amended to read: 23 (a) Subject to AS 39.35.450, a terminated employee who first became a  24 member before July 1, 2006, is eligible for a normal retirement benefit 25 (1) at age 60 with at least five years of credited service; 26 (2) with at least 20 years of credited service as a peace officer or 27 firefighter; or 28 (3) with at least 30 years of credited service for all other employees. 29  * Sec. 10. AS 39.35.370(c) is amended to read: 30 (c) Except as provided in (m) and (n) of this section, the [THE] monthly 31 amount of a retirement benefit for a peace officer or firefighter is two percent of the 01 average monthly compensation times the years of credited service through 10 years, 02 plus two and one-half percent of the average monthly compensation times the years of 03 service over 10 years. For all other employees, it is 04 (1) two percent of the average monthly compensation times all years of 05 service before July 1, 1986, and for years of service through a total of 10 years; plus 06 (2) two and one-quarter percent of the average monthly compensation 07 times all years of service after June 30, 1986, over 10 years of total service through 20 08 years; plus 09 (3) two and one-half percent of the average monthly compensation 10 times all years of service after June 30, 1986, over 20 years of total service. 11  * Sec. 11. AS 39.35.370 is amended by adding new subsections to read: 12 (l) Subject to AS 39.35.450, a terminated employee who first becomes a 13 member after June 30, 2006, is eligible for a normal retirement benefit 14 (1) at age 63 with at least five years of credited service as a protective 15 occupation employee; 16 (2) at age 55 with at least 20 years of credited service as a peace 17 officer or firefighter; or 18 (3) at age 60 with at least 30 years of credited service as a protective 19 occupation employee who is not employed as a peace officer or firefighter. 20 (m) Subject to (o) of this section, the monthly amount of a retirement benefit 21 for a protective occupation employee who first participates in the plan after June 30, 22 2006, is two percent of the employee's average monthly compensation, excluding 23 overtime compensation, times the employee's years of credited service plus an 24 assumed variable benefit calculated under (n) of this section by the Protective 25 Occupation Retirement Council established under AS 37.10.450. 26 (n) The Protective Occupation Retirement Council established under 27 AS 37.10.450 shall actuarially calculate the assumed variable benefit under (m) of this 28 section for each eligible employee individually based on a percentage of the 29 employee's annual compensation rate in the year the employee is appointed to 30 retirement, the employee's age, and the employee's credited service on the date the 31 employee is appointed to retirement. The employee shall have a vested right to the 01 assumed variable benefit that is calculated in the year in which the employee is 02 appointed to retirement and may not receive an assumed variable benefit that is 03 calculated before then. 04 (o) A protective occupation employee's monthly retirement benefit under (m) 05 of this section may not exceed the monthly retirement benefit the employee would be 06 eligible to receive under AS 39.35.370(c) if the employee first participated in the plan 07 before July 1, 2006. 08  * Sec. 12. AS 39.35.375(c) is amended to read: 09 (c) A member is entitled to receive a public service benefit under this section 10 if the member has at least a total of five years credited service under AS 39.35.095 - 11 39.35.680 and credited service from the teachers' retirement plan under AS 14.25.009 12 - 14.25.220 claimed under this section. A public service benefit shall be calculated 13 using the higher of the average monthly compensation for service in this plan or the 14 average base salary for service in the teachers' retirement plan under AS 14.25.009 - 15 14.25.220. The amount of the benefit shall be calculated in accordance with 16 AS 39.35.370(c) or (m). 17  * Sec. 13. AS 39.35.385(d) is amended to read: 18 (d) The monthly amount of a conditional service retirement benefit shall be 19 calculated on the years of fully paid credited service in accordance with 20 AS 39.35.370(c) or (m), except that the member may irrevocably elect to substitute 21 one-twelfth of the "average base salary" as defined in AS 14.25.220(5) in place of 22 average monthly compensation. 23  * Sec. 14. AS 39.35.400(d) is repealed and reenacted to read: 24 (d) The monthly amount of the nonoccupational disability benefit 25 (1) for a disabled employee who first became a member before July 1, 26 2006, shall be determined in accordance with AS 39.35.370(c), based on the 27 employee's credited service and compensation before termination of employment; 28 (2) for a disabled employee who first becomes a member after June 30, 29 2006, shall be determined in accordance with AS 39.35.370(m) and (n). 30  * Sec. 15. AS 39.35.400(f) is amended to read: 31 (f) A disabled employee's nonoccupational disability benefit terminates when 01 the employee first attains eligibility for normal retirement. At that time, retirement 02 benefits will be calculated under AS 39.35.370(c) or (m). 03  * Sec. 16. AS 39.35.410(h) is amended to read: 04 (h) A disabled employee's occupational disability benefit terminates when the 05 disabled employee first attains eligibility for normal retirement. At that time, if the  06 employee first became a member before July 1, 2006, the employee's retirement 07 benefit shall be calculated under the provisions of AS 39.35.370(c). 08  * Sec. 17. AS 39.35.410(i) is repealed and reenacted to read: 09 (i) Notwithstanding (h) of this section, a peace officer or firefighter who first 10 became a member before July 1, 2006, and who is receiving occupational disability 11 benefits under this section at the time the peace officer or firefighter first attains 12 eligibility for normal retirement shall, within 30 days after attaining eligibility for 13 normal retirement, irrevocably elect to receive benefits in an amount calculated as 14 (1) the monthly occupational disability benefit calculated under (d) of 15 this section; or 16 (2) the employee's retirement benefit calculated under the provisions of 17 AS 39.35.370(c). 18  * Sec. 18. AS 39.35.410 is amended by adding a new subsection to read: 19 (k) Notwithstanding (h) of this section, a protective occupation employee who 20 first becomes a member after June 30, 2006, and who is receiving occupational 21 disability benefits under this section at the time the employee first attains eligibility for 22 normal retirement shall, within 30 days after attaining eligibility for normal retirement, 23 irrevocably elect to receive retirement benefits in the amount calculated as 24 (1) the monthly occupational disability benefit calculated under (d) of 25 this section; or 26 (2) the employee's retirement benefit calculated under 27 AS 39.35.370(m) and (n). 28  * Sec. 19. AS 39.35.430(g) is amended to read: 29 (g) The monthly survivor's pension in (b) of this section for survivors of 30 employees who were not peace officers or firefighters is 40 percent of the employee's 31 monthly compensation in the month in which the employee dies. The monthly 01 survivor's pension in (b) of this section for survivors of employees who were peace 02 officers or firefighters is the greater of 03 (1) 50 percent of the monthly compensation in the month in which the 04 employee dies; or 05 (2) 75 percent of the employee's retirement benefit calculated under 06 the provisions of AS 39.35.370(c) or (m) if the employee had survived to normal 07 retirement age. 08  * Sec. 20. AS 39.35.475(a) is amended to read: 09 (a) Subject to (g) of this section, once [ONCE] each year the administrator 10 shall increase benefit payments to eligible disabled members, to persons age 60 or 11 older receiving benefits under this plan in the preceding calendar year, and to persons 12 who have received benefits under this plan for at least five years who are not 13 otherwise eligible for an increase under this section. 14  * Sec. 21. AS 39.35.475(b) is amended to read: 15 (b) Subject to (h) of this section, the [THE] increase in benefit payments 16 applies to total benefit payments except for the cost-of-living allowance under 17 AS 39.35.480. The amount of the increase is a percentage of the current benefit equal 18 to 19 (1) the lesser of 75 percent of the increase in the cost of living in the 20 preceding calendar year or nine percent, for recipients who on July 1 are at least 65 21 years old and for members receiving disability benefits; and 22 (2) the lesser of 50 percent of the increase in the cost of living in the 23 preceding calendar year or six percent, for recipients who on July 1 are at least 60 but 24 less than 65 years old or for recipients who are less than 60 years old on July 1 but 25 who have received benefits from the plan for at least five years. 26  * Sec. 22. AS 39.35.475 is amended by adding new subsections to read: 27 (g) A person who receives a benefit under AS 39.35.370(l) is not eligible to 28 receive an increase in benefits under this section. 29 (h) Annually, the Protective Occupation Retirement Council may reduce the 30 amount of the increase under (b) of this section that is payable to a protective 31 occupation employee who first becomes a member after June 30, 2006. At any time, 01 the Protective Occupation Retirement Council may terminate a reduction made under 02 this subsection. 03  * Sec. 23. AS 39.35.480(a) is amended to read: 04 (a) While residing in the state, a person receiving a benefit under 05 AS 39.35.095 - 39.35.680 who is 65 years of age or older or who is receiving a 06 disability benefit, other than a protective occupation employee who first  07 participates in the plan after June 30, 2006, is entitled to receive a monthly cost-of- 08 living allowance in addition to the basic benefit. The amount of this allowance shall be 09 $50 or 10 percent of the basic benefit, whichever is greater. A protective occupation  10 employee who first participates in the plan after June 30, 2006, is entitled to  11 receive a monthly cost-of-living allowance if authorized by the board under  12 AS 37.10.222, in an amount determined by the board. 13  * Sec. 24. AS 39.35.485(a) is amended to read: 14 (a) An employee who is eligible for a benefit calculated in accordance with 15 AS 39.35.370(c) or (m) is entitled to a benefit of at least $25 a month for each year of 16 credited service, not including adjustments made under AS 39.35.340 for military 17 service, AS 39.35.360 for credit for earlier service, AS 39.35.370(c) or (m) for early 18 retirement, AS 39.35.420 for nonoccupational death benefits, AS 39.35.450 for the 19 survivor's option, former AS 39.35.460 for the level income option, AS 39.35.475 for 20 the post-retirement pension adjustment, and AS 39.35.480 for the cost of living. 21  * Sec. 25. AS 39.35.535(c) is amended to read: 22 (c) A benefit recipient may elect major medical insurance coverage in 23 accordance with regulations and under the following conditions: 24 (1) a person who became a member before July 1, 2006, or the  25 surviving spouse of the person, other than a disabled member or a disabled member 26 who is appointed to normal retirement, shall [MUST] pay an amount equal to the full 27 monthly group premium for retiree major medical insurance coverage if the person is 28 (A) younger than 60 years of age and has less than 29 (i) 25 years of credited service as a peace officer under 30 AS 39.35.360 and 39.35.370; or 31 (ii) 30 years of credited service under AS 39.35.360 and 01 39.35.370 that is not service as a peace officer; or 02 (B) of any age and has less than 10 years of credited service; 03 (2) a person who became a member before July 1, 2006, or the  04 surviving spouse of the person, is not required to make premium payments for retiree 05 major medical coverage if the person 06 (A) is a disabled member; 07 (B) is a disabled member who is appointed to normal 08 retirement; 09 (C) is 60 years of age or older and has at least 10 years of 10 credited service; or 11 (D) has at least 12 (i) 25 years of credited service as a peace officer under 13 AS 39.35.360 and 39.35.370; or 14 (ii) 30 years of credited service under AS 39.35.360 and 15 39.35.370 not as a peace officer;  16 (3) a benefit recipient who is a protective occupation employee and  17 who first becomes a member after June 30, 2006, or a benefit recipient who is the  18 surviving spouse of a person who is a protective occupation employee and who  19 first becomes a member after June 30, 2006, shall receive as an annual stipend  20 for the purpose of purchasing major medical insurance coverage, an amount  21 subject to (h) of this section, and not to exceed 100 percent of the full annual  22 premium, that  23 (A) if the employee has 10 years or more of service as a  24 peace officer or firefighter, is equal to four percent of the full annual  25 premium in 2013 for retiree major medical insurance, multiplied by the  26 employee's years of service as a peace officer or firefighter;  27 (B) if the employee is not a peace officer or firefighter, is  28 equal to three and three-tenths percent of the full annual premium in 2013  29 for retiree major medical insurance, multiplied by the employee's years of  30 service;  31 (4) a benefit recipient who is a protective occupation employee and  01 who first becomes a member after June 30, 2006, shall receive an annual stipend  02 for an amount equal to the full annual group premium for retiree major medical  03 coverage, subject to (h) of this section, if the recipient  04 (A) is a disabled member; or  05 (B) is a disabled member who is appointed to normal  06 retirement. 07  * Sec. 26. AS 39.35.535 is amended by adding new subsections to read: 08 (g) If a benefit recipient is 65 years of age or older, the Protective Occupation 09 Retirement Council established under AS 37.10.450 shall reduce the stipend payable 10 to a benefit recipient under (c)(3) of this section by a percentage determined by the 11 council under AS 37.10.460(a)(4). 12 (h) The Protective Occupation Retirement Council may adjust the annual 13 stipend payable under (c)(3) of this section based on the percentage increase in the 14 Consumer Price Index for urban wage earners and clerical workers for Anchorage, 15 Alaska, during the previous calendar year, as determined by the United States 16 Department of Labor, Bureau of Labor Statistics. 17  * Sec. 27. AS 39.35.620 is amended by adding a new subsection to read:  18 (l) Notwithstanding the provision under (k) of this section that limits employer  19 participation of a previously terminated employer that returns to the system, an  20 employer who terminates participation for one or more protective occupation  21 employees and later returns to the system may participate in the defined benefit  22 retirement plan under AS 39.35.095 - 39.35.680 and defined contribution retirement  23 plan under AS 39.35.700 - 39.35.990. 24  * Sec. 28. AS 39.35.680(18) is amended to read: 25 (18) "employer" means 26 (A) the State of Alaska; 27 (B) a political subdivision or public organization of the state 28 that participates in the plan based on a resolution to participate in the plan that 29 was approved by the administrator 30 (i) on or before July 1, 2006; or 31 (ii) for protective occupation employees; or  01 (C) a political subdivision or public organization of the state 02 that assumes liability for participation in the plan by another political  03 subdivision or public organization of the state [,] as a result of consolidation 04 or reorganization that occurs 05 (i) at any time, with respect to protective occupation  06 employees;  07 (ii) on or after July 1, 2006, with respect to employees  08 who are not protective occupation employees [ASSUMES 09 LIABILITY UNDER THE PLAN OF A POLITICAL SUBDIVISION 10 OR PUBLIC ORGANIZATION DESCRIBED IN (B) OF THIS 11 PARAGRAPH]; 12  * Sec. 29. AS 39.35.680(26) is amended to read: 13 (26) "normal retirement" means retirement for a member who is 14 eligible to receive benefits under AS 39.35.370(a) or (l) or under 39.35.385(a) or (f); 15  * Sec. 30. AS 39.35.680 is amended by adding a new paragraph to read: 16 (44) "protective occupation employee" has the meaning given in 17 AS 37.10.490. 18  * Sec. 31. AS 39.35.700 is amended to read: 19 Sec. 39.35.700. Applicability of AS 39.35.700 - 39.35.990. The provisions of 20 AS 39.35.700 - 39.35.990 apply only to members first hired on or after July 1, 2006, 21 to members who are employed by employers that do not participate in the defined 22 benefit retirement plan established under AS 39.35.095 - 39.35.680, to former 23 members as defined in AS 39.35.680, [OR] to members who transfer into the defined 24 contribution retirement plan under AS 39.35.940, or, subject to the limitations and  25 requirements of AS 39.35.705, to members of the defined benefit retirement plan  26 established under AS 39.35.095 - 39.35.680 who earn overtime compensation as  27 protective occupation employees. 28  * Sec. 32. AS 39.35 is amended by adding a new section to read: 29 Sec. 39.35.705. Limitation on applicability of AS 39.35.700 - 39.35.990. 30 Notwithstanding AS 39.35.700, the benefits and requirements under AS 39.35.890 - 31 39.35.894 and 39.35.960 - 39.35.970 do not apply to an employee who contributes to 01 an individual account under AS 39.35.700 - 39.35.990 solely as required by 02 AS 39.35.160(h). 03  * Sec. 33. AS 39.35.720 is amended to read: 04 Sec. 39.35.720. Membership. Except as provided in AS 39.35.095 and  05 39.35.705, an [AN] employee who becomes a member on or after July 1, 2006, shall 06 participate in the plan set out in AS 39.35.700 - 39.35.990. 07  * Sec. 34. AS 39.35.730(a) is amended to read: 08 (a) Each member shall contribute to the member's individual account 09 (1) an amount equal to eight percent of the member's compensation 10 from July 1 to the following June 30; or  11 (2) the amount required under AS 39.35.160(h) if the member is a  12 protective occupation employee and a member of the defined benefit retirement  13 plan established under AS 39.35.095 - 39.35.680. 14  * Sec. 35. AS 39.35.750 is amended by adding a new subsection to read: 15 (f) This section does not apply to contributions made under AS 39.35.257(c) 16 and does not require an employer who makes a contribution for an employee under 17 AS 39.35.257(c) to make another contribution for that employee. 18  * Sec. 36. AS 39.35.870 is amended by adding a new subsection to read: 19 (h) Except as provided in (c) of this section, a protective occupation employee 20 who makes contributions under AS 39.35.160(h) is not eligible for benefits under this 21 section. 22  * Sec. 37. AS 39.35.880 is amended by adding a new subsection to read: 23 (l) Except as provided in AS 39.35.870(c), a protective occupation employee 24 who makes contributions under AS 39.35.160(h) is not eligible for benefits under this 25 section. 26  * Sec. 38. AS 39.35.990 is amended by adding a new paragraph to read: 27 (28) "protective occupation employee" has the meaning given in 28 AS 37.10.490. 29  * Sec. 39. The uncodified law of the State of Alaska is amended by adding a new section to 30 read: 31 TRANSITION: APPOINTMENTS TO PROTECTIVE OCCUPATION 01 RETIREMENT COUNCIL. (a) The governor shall appoint as members of the first Protective 02 Occupation Retirement Council established under AS 37.10.450, enacted by sec. 3 of this Act, 03 the following: 04 (1) six protective occupation employees who are members of either the 05 defined benefit retirement plan under AS 39.35.095 - 39.35.680 or the defined contribution 06 retirement plan under AS 39.35.700 - 39.35.990, including 07 (A) one member of the Public Safety Employees Association; 08 (B) one member of the Alaska Correctional Officers Association; 09 (C) one member of the Alaska Professional Fire Fighters Association; 10 (D) one member of the Anchorage Police Department Employees 11 Association; 12 (E) one employee who is employed as a firefighter by a municipal fire 13 department; 14 (F) one employee who is employed in a position other than a peace 15 officer or firefighter; 16 (2) one member of the public at large; and 17 (3) two retirees who participate in the defined benefit retirement plan under 18 AS 39.35.095 - 39.35.680. 19 (b) In this section, 20 (1) "peace officer" or "firefighter" has the meaning given in AS 39.35.680; 21 (2) "protective occupation employee" has the meaning given in AS 37.10.490, 22 enacted by sec. 3 of this Act. 23  * Sec. 40. The uncodified law of the State of Alaska is amended by adding a new section to 24 read: 25 RETIREMENT PLAN ELECTION. (a) A protective occupation employee who was 26 first hired after June 30, 2006, and before the effective date of this section and who is a 27 member of the defined contribution retirement plan of the public employees' retirement 28 system under AS 39.35.700 - 39.35.990 may, within 90 days after the effective date of this 29 section, make a one-time election to participate in the defined benefit retirement plan under 30 AS 39.35.095 - 39.35.680 and to transfer all contributions that have been made or should be 31 made to the defined contribution retirement plan for service the member completes before the 01 effective date of the member's participation in the defined benefit retirement plan. The 02 transferred contributions shall be used to purchase credited service in the defined benefit 03 retirement plan on an actuarial equivalent basis determined by the Protective Occupation 04 Retirement Council established under AS 37.10.450, enacted by sec. 3 of this Act. 05 (b) In this section, 06 (1) "peace officer" or "firefighter" has the meaning given in AS 39.35.680; 07 (2) "protective occupation employee" has the meaning given in AS 37.10.490, 08 enacted by sec. 3 of this Act. 09  * Sec. 41. The uncodified law of the State of Alaska is amended by adding a new section to 10 read: 11 RETIREMENT PLAN ELECTION PROCEDURE; REGULATIONS REQUIRED. 12 (a) An election made under sec. 40 of this Act to participate in the defined benefit retirement 13 plan under AS 39.35.095 - 39.35.680 must be made in writing on one or more forms and in 14 the manner prescribed by the administrator. Before accepting an election to participate in the 15 defined benefit retirement plan, the administrator shall provide the employee who plans on 16 making an election to participate in the defined benefit retirement plan with information, 17 including calculations to illustrate the effect of moving the employee's retirement plan from 18 the defined contribution retirement plan to the defined benefit retirement plan as well as other 19 information that informs the employee of potential consequences of the employee's election. 20 (b) An election made under sec. 40 of this Act to participate in the defined benefit 21 retirement plan is irrevocable. On the effective date of the election, an eligible employee who 22 makes the election shall be enrolled as a member of the defined benefit retirement plan, and 23 the employee's participation in the plan shall be governed by the applicable provisions of the 24 defined benefit retirement plan. The employee's enrollment in the defined benefit retirement 25 plan is retroactive to the date of hire. An election made by an eligible employee who is 26 married is not effective unless the election is signed by the employee's spouse. 27 (c) When an eligible employee makes a one-time election under sec. 40 of this Act, 28 the administrator shall cause the total amount of the employee's employee and employer 29 contributions, with investment earnings and losses through the day of the employee's election 30 to participate as a member in the defined benefit retirement plan, to be actuarially calculated 31 and, subject to (d) of this section, transferred to the pension fund in the defined benefit 01 retirement plan. On the effective date of the employee's participation in the defined benefit 02 retirement plan, the employee shall be credited with service in the defined benefit retirement 03 plan that may be purchased under an actuarial equivalent purchase formula as determined by 04 the board. The board shall establish transfer procedures by regulation, but the actual transfer 05 may not occur later than 30 days after the date the administrator receives the employee's 06 completed forms under (a) of this section, unless the major financial markets for securities 07 available for a transfer are seriously disrupted by an unforeseen event that also causes the 08 suspension of trading on any national securities exchange in the country where the securities 09 were issued. In that event, the 30-day period may be extended by a resolution of the board. A 10 transfer is not commissionable or subject to other fees and may be in the form of cash or a 11 security as determined by the board. A security shall be valued on the date of receipt in the 12 employee's account. 13 (d) If the value actuarially calculated under (c) of this section is insufficient to pay for 14 service credit equal to the employee's actual service, the administrator shall allow the 15 employee the option of creating an indebtedness up to the amount needed to eliminate the 16 insufficiency; however, if that value exceeds the amount needed to pay for a service credit 17 equal to the employee's actual service, the administrator shall cause the excess to remain in 18 the employee's retirement plan established under AS 39.35.700 - 39.35.990. An excess under 19 this subsection may not be used to purchase service credit in a retirement plan administered 20 under AS 39.35. 21 (e) The provisions of this section are subject to the requirements of the Internal 22 Revenue Code and the limitations under AS 39.35.115, 39.35.678, 39.35.710(c) and (d), and 23 39.35.895. 24 (f) In this section, 25 (1) "administrator" means the commissioner of administration or the person 26 designated by the commissioner of administration under AS 39.35.003 for a public 27 employees' retirement plan; 28 (2) "board" means the Alaska Retirement Management Board established 29 under AS 37.10.210; 30 (3) "defined benefit retirement plan" means the retirement plan established 31 under AS 39.35.095 - 39.35.680 for a public employee; 01 (4) "defined contribution retirement plan" means the retirement plan 02 established under AS 39.35.700 - 39.35.990 for a public employee; 03 (5) "Internal Revenue Code" has the meaning given in AS 39.35.990. 04  * Sec. 42. The uncodified law of the State of Alaska is amended by adding a new section to 05 read: 06 ADOPTION OF REGULATIONS. The commissioner of administration shall adopt 07 regulations necessary to implement the changes made by this Act. The regulations take effect 08 under AS 44.62 (Administrative Procedure Act), but not before the effective date of the law 09 implemented by the regulation. 10  * Sec. 43. Sections 41 and 42 of this Act take effect immediately under AS 01.10.070(c). 11  * Sec. 44. Except as provided in sec. 43 of this Act, this Act takes effect July 1, 2015.