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CSSB 232(STA): "An Act relating to federal tax requirements for and other provisions of the teachers' retirement system, the public employees' retirement system, and the judicial retirement system; removing village public safety officers from the public employees' retirement system; requiring the public employees' retirement system to refund contributions under $1,000 to inactive employees; limiting service credit for village public safety officer service in the public employees' retirement system to five years; and providing for an effective date."

00                       CS FOR SENATE BILL NO. 232(STA)                                                                   
01 "An Act relating to federal tax requirements for and other provisions of the teachers'                                  
02 retirement system, the public employees' retirement system, and the judicial retirement                                 
03 system; removing village public safety officers from the public employees' retirement                                   
04 system; requiring the public employees' retirement system to refund contributions                                       
05 under $1,000 to inactive employees; limiting service credit for village public safety                                   
06 officer service in the public employees' retirement system to five years; and providing                                 
07 for an effective date."                                                                                                 
08 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
09    * Section 1.  The uncodified law of the State of Alaska is amended by adding a new section                         
10 to read:                                                                                                                
11       PURPOSE.  The purpose of this Act is to                                                                           
12            (1)  ensure that the teachers' retirement system, the public employees'                                      
13 retirement system, and the judicial retirement system continue to meet governmental plan                                
01 qualifications set by the Internal Revenue Service so that those plans may qualify for                                  
02 favorable federal tax treatment; and                                                                                    
03            (2)  implement changes in those retirement systems so that members can take                                  
04 advantage of changes in federal tax laws and better plan their retirement.                                              
05    * Sec. 2.  AS 14.25.010(b)  is amended by adding a new subsection to read:                                         
06            (c)  An amendment to this chapter does not provide a person with a vested                                    
07       right to a benefit if the Internal Revenue Service determines that the amendment will                             
08       result in disqualification of the plan under the Internal Revenue Code.                                           
09    * Sec. 3.  AS 14.25.050(a) is amended to read:                                                                     
10            (a)  Except as provided in (c) of this section, beginning January 1, 1991, each                              
11       member [TEACHER] shall contribute to the system an amount equal to 8.65 percent                               
12       of the member's [TEACHER'S] base salary accrued from July 1 to the following                                  
13       June 30. The employer shall deduct the contribution from the member's                                         
14       [TEACHER'S] salary at the end of each payroll period, and the contribution shall be                           
15       credited by the system to the member contribution account.  The contributions                                 
16       shall be deducted from employee compensation before the computation of applicable                                 
17       federal taxes and shall be treated as employer contributions under 26 U.S.C. 414(h)(2).                           
18       A member may not have the option of making the payroll deduction directly in cash                                 
19       instead of having the contribution picked up by the employer.                                                     
20    * Sec. 4.  AS 14.25.060(a) is amended to read:                                                                     
21            (a)  If a member first joined the system [SERVICE] before July 1, 1990, and                              
22       has military service or Alaska Bureau of Indian Affairs (BIA) service, or if a member                             
23       joined the system before July 1, 1978, and has creditable outside service, the member                         
24       may claim this service.  If the member claims the service, the member is indebted                             
25       to the system as follows:                                                                                         
26                 (1)  at [AT] the time of first becoming a member of the system, the                                 
27       arrearage indebtedness is seven percent of the base salary multiplied by the total                                
28       number of years of creditable outside, military, and Alaska BIA service; the [.  THE]                         
29       administrator shall add compound interest at the rate prescribed by regulation to the                             
30       arrearage indebtedness beginning July 1, 1963, or at the time the member first                                    
31       becomes eligible to claim the service, whichever is later, to the date of payment or the                          
01       date of retirement, whichever occurs first; [.]                                                               
02                 (2)  if [IF] a member terminates from the system and is subsequently                                
03       reemployed as a member, the arrearage indebtedness to the system for outside,                                     
04       military, or Alaska BIA service accumulated in the interim is seven percent of the base                           
05       salary upon reentering membership service, multiplied by the number of years of                                   
06       interim outside, military, and Alaska BIA service; compound [.  COMPOUND]                                     
07       interest at the rate prescribed by regulation shall be added to the arrearage                                     
08       indebtedness beginning July 1, 1963, or the date of reemployment as a member,                                     
09       whichever is later, to the date of payment or the date of retirement, whichever occurs                            
10       first.                                                                                                            
11    * Sec. 5.  AS 14.25.062 is amended to read:                                                                      
12            Sec. 14.25.062.  Reinstatement indebtedness.  A member [TEACHER] who                                   
13       has received a refund of contributions in accordance with AS 14.25.150 forfeits                               
14       corresponding credited service under this chapter.  A member may elect to                                     
15       reinstate credited service associated with the refund by repaying the total amount                            
16       of the refund.  If an election is made under this section, an indebtedness [IS                                
17       INDEBTED] to the system in the amount of the total refund shall be established.                               
18       Compound interest at the rate prescribed by regulation shall be added to the                                      
19       reinstatement indebtedness from the date of the refund to the date of repayment or the                            
20       date of retirement, whichever occurs first.                                                                       
21    * Sec. 6.  AS 14.25.070 is amended to read:                                                                      
22            Sec. 14.25.070.  Contributions by employer.  An employer shall contribute to                               
23       the system an amount equal to the percentage, as certified by the administrator, of the                           
24       sum total of the base salaries of all members [TEACHERS] that is required in                                  
25       addition to member [TEACHER] contributions to provide the benefits of this chapter                            
26       times the sum total of the base salaries paid to members [TEACHERS], including any                            
27       adjustments to contributions required by AS 14.25.173(a), by the employer.                                        
28    * Sec. 7.  AS 14.25.075(a) is amended to read:                                                                     
29            (a)  A person [AN EMPLOYEE] who is eligible to purchase credited service                                 
30       under AS 14.20.345, AS 14.25.047, [OR] 14.25.048, 14.25.050, 14.25.060 [A                             
31       MEMBER WHO IS ELIGIBLE TO PURCHASE CREDITED SERVICE UNDER                                                         
01       AS 14.25.060], 14.25.061, 14.25.062, [OR] 14.25.100, [OR A TEACHER WHO IS                                     
02       ELIGIBLE TO PURCHASE CREDITED SERVICE UNDER AS 14.20.345,                                                         
03       AS 14.25.050, OR] 14.25.105, or 14.25.107 is a member for purposes of this section.                           
04       A member, in lieu of making payments directly to the system, may elect to have the                                
05       member's employer make payments as provided in this section.                                                      
06    * Sec. 8.  AS 14.25.075(b) is amended to read:                                                                     
07            (b)  A member may elect to have the employer make payments for all or any                                    
08       portion of the amounts payable for the member's purchase of credited service through                              
09       a salary reduction program as follows:                                                                            
10                 (1)  the amounts paid under a salary reduction program are in lieu of                                   
11       contributions by the member making the election; the electing member's salary or                                  
12       other compensation shall be reduced by the amount paid by the employer under this                                 
13       subsection [SECTION];                                                                                         
14                 (2)  the member shall make an irrevocable election under this                                       
15       subsection [SECTION] to purchase credited service as permitted in AS 14.20.345,                               
16       AS 14.25.047, 14.25.048, 14.25.050, 14.25.060, 14.25.061, AS 14.25.062, 14.25.100,                            
17       [OR] 14.25.105, or 14.25.107 before the member's termination of employment; the                               
18       irrevocable election must specify the number of payroll periods that deductions will                          
19       be made from the member's compensation and the dollar amount of deductions for                                    
20       each payroll period during the specified number of payroll periods; the deductions                            
21       made under this paragraph cease upon the member's termination of employment                                   
22       with the employer;                                                                                            
23                 (3)  [A MEMBER WHO MAKES AN ELECTION UNDER THIS                                                         
24       SECTION TO HAVE THE EMPLOYER MAKE PAYMENTS FOR LESS THAN                                                          
25       ALL OF THE AMOUNTS PAYABLE FOR THE MEMBER'S PURCHASE OF                                                           
26       CREDITED SERVICE MAY SUBSEQUENTLY ELECT TO HAVE THE                                                               
27       EMPLOYER MAKE PAYMENTS FOR ALL OR ANY PORTION OF THE                                                              
28       REMAINING AMOUNTS PAYABLE FOR THE MEMBER'S PURCHASE OF                                                            
29       CREDITED SERVICE;                                                                                                 
30                 (4)]  amounts paid by an employer under this section shall be treated as                                
31       employer contributions for the purpose of determining tax treatment under 26 U.S.C.                               
01       (Internal Revenue Code); the amounts paid by the employer under this section may not                              
02       be included in the member's gross income for income tax purposes until those amounts                              
03       are distributed by refund or retirement benefit payments.                                                         
04    * Sec. 9.  AS 14.25.075(f) is amended to read:                                                                   
05            (f)  The [TO THE EXTENT THAT A PAYMENT UNDER THIS SECTION                                                
06       DOES NOT ALTER, AMEND, OR REVOKE ANY ONE OR MORE CURRENTLY                                                        
07       EFFECTIVE ELECTIONS MADE BY THE EMPLOYEE, THE] board may accept                                                   
08       rollover [EMPLOYEE] contributions from a member, and direct transfers as                                  
09       described in the subsection, for the purchase, in whole or in part, of credited                               
10       service under this section for the reinstatement, in whole or in part, of service                             
11       under AS 14.25.062.  Contributions made under this subsection may not be                                      
12       applied to purchase service being paid under (b) of this section.  A rollover                                 
13       contribution or transfer as described in this subsection  [, WHICH] shall [ALSO]                              
14       be treated as employer contributions for the purpose of determining tax treatment                                 
15       under the Internal Revenue Code and may be made [, FOR THE PAYMENT FOR                                        
16       CREDITED SERVICE PURCHASES MADE UNDER THIS SECTION IN WHOLE                                                       
17       OR IN PART,] by any one or a combination of the following methods:                                                
18                 (1)  subject to the limitations prescribed in [26 U.S.C. 401(a)(3) AND]                                 
19       26 U.S.C. 402(c), accepting eligible rollover distributions directly from one or more                             
20       retirement programs of another employer that are qualified under 26 U.S.C. 401(a) or                              
21       accepting rollovers directly from a member [AN EMPLOYEE];                                                     
22                 (2)  subject to the limitations prescribed in 26 U.S.C. 408(d)(3)(A)(ii),                               
23       accepting from a member [AN EMPLOYEE] conduit rollover contributions that are                                 
24       received by the member [EMPLOYEE] from one or more conduit rollover individual                                
25       retirement accounts previously established by the member [EMPLOYEE];                                          
26                 (3)  subject to the limitations prescribed in 26 U.S.C. 403(b)(13),                                     
27       accepting direct trustee-to-trustee transfers of all or a portion of the accounts of the                          
28       member [EMPLOYEE], on or [AND] after January 1, 2002, from a tax sheltered                                
29       annuity described in 26 U.S.C. 403(b);                                                                            
30                 (4)  subject to the limitations prescribed in 26 U.S.C. 457(e)(17),                                     
31       accepting direct trustee-to-trustee transfers of all or a portion of the accounts of the                          
01       member [EMPLOYEE], on or [AND] after January 1, 2002, from an eligible deferred                           
02       compensation plan of a tax-exempt organization or a state or local government                                     
03       described in 26 U.S.C. 457(b);                                                                                    
04                 (5)  accepting direct trustee-to-trustee transfer from an account                                       
05       established for the benefit of the member in AS 39.30.150 - 39.30.180 (Alaska                                     
06       Supplemental Annuity Plan).                                                                                       
07    * Sec. 10.  AS 14.25.075(i) is amended to read:                                                                  
08            (i)  On satisfaction of the eligibility requirements of AS 14.20.345,                                        
09       AS 14.25.047, 14.25.048, 14.25.050, 14.25.060, 14.25.061, 14.25.062, 14.25.100,                               
10       [OR] 14.25.105, or 14.25.107, the requirements of this section, and the administrative                        
11       filing requirements specified by the board, the system shall adjust the member's                                  
12       credited service history and add any additional service credits acquired.                                         
13    * Sec. 11.  AS 14.25.110(k) is amended to read:                                                                  
14            (k)  For system fiscal years beginning after December 31, 1975, and                                      
15       notwithstanding [NOTWITHSTANDING] any other provision of this chapter, the                                    
16       projected annual benefit provided by this chapter and the benefit from all other defined                          
17       benefit plans required to be aggregated with the benefits from this system under the                              
18       provisions of 26 U.S.C. 415 may not increase to an amount in excess of the amount                                 
19       permitted under 26 U.S.C. 415 at any time. In the event that any projected annual                                 
20       benefit of a member exceeds the limitation of 26 U.S.C. 415 for a limitation year, the                            
21       system shall take any necessary remedial action to correct an excess accrued annual                           
22       benefit. The provisions of 26 U.S.C. 415, and the regulations adopted under that                                  
23       statute, as applied to qualified defined benefit plans of governmental employers are                              
24       incorporated as part of the terms and conditions of the system. This subsection applies                           
25       to any member of this system.                                                                                     
26    * Sec. 12.  AS 14.25.165(h) is amended to read:                                                                    
27            (h)  Unless otherwise specified, the provisions of this section apply to calendar                            
28       years beginning on or after January 1, 1983 [1989].                                                           
29    * Sec. 13.  AS 14.25.220(2) is amended to read:                                                                    
30                 (2)  "actuarial adjustment" means the adjustment necessary to obtain                                    
31       equality in value of the aggregate expected payments under two different forms of                                 
01       pension payments, considering expected mortality and interest earnings on the basis of                            
02       assumptions, factors, and methods that clearly preclude employer discretion in                                
03       the determination of the amount of any member's benefit [TABLES REFERRED                                      
04       TO IN THE INFORMATION HANDBOOK PUBLISHED UNDER                                                                    
05       AS 14.25.030(5)];                                                                                                 
06    * Sec. 14.  AS 22.25.011 is amended to read:                                                                     
07            Sec. 22.25.011.  Contributions of judges and justices.  Each justice and                                   
08       judge appointed after July 1, 1978, is a member under the judicial retirement                                 
09       system as of the date of the justice's or judge's appointment and shall contribute                            
10       seven percent of the base annual salary received by the justice or judge to the judicial                          
11       retirement system. Contributions shall be made for all creditable service under this                              
12       chapter up to a maximum of 15 years. This contribution is made in the form of a                                   
13       deduction from compensation, at the end of each payroll period, and is made even if                               
14       the compensation paid in cash to the justice or judge is reduced below the minimum                                
15       prescribed by law. The contributions shall be deducted from the justice's or judge's                              
16       compensation before the computation of applicable federal taxes and shall be treated                              
17       as employer contributions under 26 U.S.C. 414(h)(2). A member may not have the                                    
18       option of making the payroll deduction directly in cash instead of having the                                     
19       contribution picked up by the employer. Each justice and judge is considered to                                   
20       consent to the deduction from compensation. Payment of compensation less the                                      
21       deduction constitutes a full discharge of all claims and demands for the services                                 
22       rendered by the justice or judge during the period covered by the payment, except as                              
23       to the benefits provided for under this chapter. The contributions shall be credited to                           
24       the judicial retirement fund established in accordance with AS 22.25.048.                                         
25    * Sec. 15.  AS 22.25.012(a) is amended to read:                                                                  
26            (a)  An administrative director of the Alaska court system appointed under art.                              
27       IV, sec. 16 of the state constitution is a member under the judicial retirement                               
28       system as of the date of the administrative director's appointment and is entitled                            
29       to retirement benefits under this chapter on the terms and conditions applicable to a                             
30       superior court judge appointed after July 1, 1978, except that an administrative                                  
31       director may receive retirement benefits only with service as administrative director                             
01       for 10 or more years.                                                                                             
02    * Sec. 16.  AS 22.25.025 is amended by adding a new subsection to read:                                            
03            (b)  An amendment to this chapter does not provide a person with a vested                                    
04       right to a benefit if the Internal Revenue Service determines that the amendment will                             
05       result in disqualification of the plan under the Internal Revenue Code.                                           
06    * Sec. 17.  AS 22.25.048(i) is amended to read:                                                                  
07            (i)  If the judicial retirement system is terminated,                                                    
08                 (1)  a member whose contributions have not been refunded,                                           
09       regardless of the member's employment status at the date of the termination of                                
10       the system, shall be considered fully vested in the member's adjusted accrued                                 
11       retirement benefits as of the date of the termination of the system; and                                      
12                 (2)  if [IF, UPON TERMINATION OF THE SYSTEM,] all liabilities                                       
13       are satisfied, any excess assets arising from erroneous actuarial computation shall                               
14       revert to the employer.                                                                                           
15    * Sec. 18.  AS 22.25.900(1) is amended to read:                                                                    
16                 (1)  "actuarial equivalent" means the adjustment necessary to obtain                                
17       equality in value of the aggregate expected payments under two different forms of                                 
18       pension payments, considering expected mortality and interest earnings on the basis of                            
19       assumptions, factors and methods that clearly preclude employer discretion in                                 
20       the determination of the amount of any justice's, judge's, or member's benefit                                
21       [TABLES REFERRED TO IN THE INFORMATION HANDBOOK PUBLISHED                                                         
22       UNDER AS 22.25.025];                                                                                              
23    * Sec. 19.  AS 39.35.010 is amended by adding a new subsection to read:                                            
24            (d)  An amendment to this chapter does not provide a person with a vested                                    
25       right to a benefit if the Internal Revenue Service determines that the amendment will                             
26       result in disqualification of the plan under the Internal Revenue Code.                                           
27    * Sec. 20.  AS 39.35.120 is amended to read:                                                                       
28            Sec. 39.35.120.  Commencement of participation.  (a) An employee of the                                    
29       state shall be included in this system upon commencement of employment with the                                   
30       state, or on January 1, 1961, whichever is later. Unless an employee has elected to                               
31       participate in the optional university retirement program under AS 14.40.661 -                                    
01       14.40.799, an employee of a political subdivision or public organization that becomes                             
02       an employer shall be included in the system on the effective date of the employer's                               
03       participation or the date of the employee's commencement of employment with the                                   
04       employer, whichever is later. [UNLESS THE VILLAGE PUBLIC SAFETY                                                   
05       OFFICER WAIVES COVERAGE UNDER AS 39.35.127, A VILLAGE PUBLIC                                                      
06       SAFETY OFFICER EMPLOYED UNDER THE VILLAGE PUBLIC SAFETY                                                           
07       OFFICER PROGRAM ESTABLISHED IN AS 18.65.670 IS INCLUDED IN THIS                                                   
08       SYSTEM ON THE EFFECTIVE DATE OF THIS BILL SECTION OR UPON THE                                                     
09       OFFICER'S COMMENCEMENT OF EMPLOYMENT WITH THE EMPLOYER,                                                           
10       WHICHEVER IS LATER.]                                                                                              
11            (b)  Inclusion in the system is a condition of employment for an employee                                    
12       except as otherwise provided for                                                                                  
13                 (1)  an elected official;                                                                               
14                 (2)  an employee making an election under AS 39.35.150(b); and                                      
15                 (3)  an employee of the university who has elected to participate in the                                
16       optional university retirement program under AS 14.40.661 - 14.40.799 [; AND                                      
17                 (4)  A VILLAGE PUBLIC SAFETY OFFICER EMPLOYED BY A                                                      
18       NONPROFIT REGIONAL CORPORATION AS SET OUT IN AS 39.35.127].                                                       
19    * Sec. 21.  AS 39.35.165(b) is amended to read:                                                                  
20            (b)  An employee may elect to have the employer make payments for all or any                                 
21       portion of the amounts payable for the employee's purchase of credited service                                    
22       through a salary reduction program as follows:                                                                    
23                 (1)  the amounts paid under a salary reduction program are in lieu of                                   
24       contributions by the employee making the election; the electing employee's salary or                              
25       other compensation shall be reduced by the amount paid by the employer under this                                 
26       subsection;                                                                                                       
27                 (2)  the employee shall make an irrevocable election under this section                             
28       to purchase credited service as permitted in AS 39.35.310, 39.35.330, 39.35.340,                                  
29       39.35.342, 39.35.345, 39.35.350, 39.35.360, 39.35.370, 39.35.375, or 39.35.381 and                                
30       before the employee's termination of employment; the irrevocable election must                                
31       specify the number of payroll periods that deductions will be made from the                                       
01       employee's compensation and the dollar amount of deductions for each payroll period                               
02       during the specified number of payroll periods; the deductions made under this                                
03       paragraph cease upon the member's termination of employment with the                                          
04       employer;                                                                                                     
05                 (3)  [AN EMPLOYEE WHO MAKES AN ELECTION UNDER THIS                                                      
06       SECTION TO HAVE THE EMPLOYER MAKE PAYMENTS FOR LESS THAN                                                          
07       ALL OF THE AMOUNTS PAYABLE FOR THE EMPLOYEE'S PURCHASE OF                                                         
08       CREDITED SERVICE MAY SUBSEQUENTLY ELECT TO HAVE THE                                                               
09       EMPLOYER MAKE PAYMENTS FOR ALL OR ANY PORTION OF THE                                                              
10       REMAINING AMOUNTS PAYABLE FOR THE EMPLOYEE'S PURCHASE OF                                                          
11       CREDITED SERVICE;                                                                                                 
12                 (4)]  amounts paid by an employer under this section shall be treated as                                
13       employer contributions for the purpose of determining tax treatment under the Internal                            
14       Revenue Code; the amounts paid by the employer under this section may not be                                      
15       included in the member's gross income for income tax purposes until those amounts                                 
16       are distributed by refund or retirement benefit payments.                                                         
17    * Sec. 22.  AS 39.35.165(f) is amended to read:                                                                  
18            (f)  The [TO THE EXTENT THAT A PAYMENT UNDER THIS SECTION                                                
19       DOES NOT ALTER, AMEND, OR REVOKE ANY ONE OR MORE CURRENTLY                                                        
20       EFFECTIVE ELECTIONS MADE BY THE EMPLOYEE, THE] board may accept                                                   
21       rollover [EMPLOYEE] contributions from a member and direct transfers, as                                  
22       described in this subsection, for the purchase, in whole or in part, of credited                              
23       service for the reinstatement, in whole or in part, of service under AS 39.35.350.                            
24       Contributions made under this subsection may not be applied to purchase service                               
25       being paid under (b) of this section.  A rollover contribution or transfer as                                 
26       described in this subsection [, WHICH] shall also be treated as employer                                      
27       contributions for the purpose of determining tax treatment under the Internal Revenue                             
28       Code and may be made [, FOR THE PAYMENT FOR CREDITED SERVICE                                                  
29       PURCHASES MADE UNDER THIS SECTION IN WHOLE OR IN PART,] by any                                                    
30       one or a combination of the following methods:                                                                    
31                 (1)  subject to the limitations prescribed in 26 U.S.C. 401(a)(3) and 26                                
01       U.S.C. 402(c), accepting eligible rollover distributions directly from one or more                                
02       retirement programs of another employer that are qualified under 26 U.S.C. 401(a) or                              
03       accepting rollovers directly from a member [AN EMPLOYEE];                                                     
04                 (2)  subject to the limitations prescribed in 26 U.S.C. 408(d)(3)(A)(ii),                               
05       accepting from a member [AN EMPLOYEE] conduit rollover contributions that are                                 
06       received by the employee from one or more conduit rollover individual retirement                                  
07       accounts previously established by the member [EMPLOYEE];                                                     
08                 (3)  subject to the limitations prescribed in 26 U.S.C. 403(b)(13),                                     
09       accepting direct trustee-to-trustee transfers of all or a portion of the accounts of the                          
10       member [EMPLOYEE], on or [AND] after January 1, 2002, from a tax sheltered                                
11       annuity described in 26 U.S.C. 403(b);                                                                            
12                 (4)  subject to the limitations prescribed in 26 U.S.C. 457(e)(17),                                     
13       accepting direct trustee-to-trustee transfers of all or a portion of the accounts of the                          
14       member [EMPLOYEE], on or [AND] after January 1, 2002, from an eligible deferred                           
15       compensation plan of a tax-exempt organization or a state or local government                                     
16       described in 26 U.S.C. 457(b);                                                                                    
17                 (5)  accepting direct trustee-to-trustee transfer from an account                                       
18       established for the benefit of the member in AS 39.30.150 - 39.30.180 (Alaska                                     
19       Supplemental Annuity Plan).                                                                                       
20    * Sec. 23.  AS 39.35.200(b) is amended to read:                                                                    
21            (b)  [IF, UPON TERMINATION OF EMPLOYMENT, AN EMPLOYEE                                                        
22       HAS CREDITED SERVICE OF LESS THAN FIVE YEARS AND HAS LESS                                                         
23       THAN $1,000 IN THE EMPLOYEE CONTRIBUTION ACCOUNT, A REFUND OF                                                     
24       THE EMPLOYEE CONTRIBUTION ACCOUNT MUST BE MADE UNLESS THE                                                         
25       EMPLOYEE INDICATES IN WRITING THAT FUTURE RETIREMENT IS                                                           
26       INTENDED AND CONTRIBUTIONS SHOULD NOT BE REFUNDED.]  An                                                           
27       employee who is reemployed with an employer and whose contributions have not                                      
28       been refunded before reemployment is not eligible for a refund.                                                   
29    * Sec. 24.  AS 39.35.342(a) is amended to read:                                                                    
30            (a)  A [EXCEPT FOR EMPLOYMENT FOR WHICH THE EMPLOYEE                                                     
31       WAIVED COVERAGE UNDER AS 39.35.127, A] vested employee is entitled to                                             
01       credited service for employment as a village public safety officer under the program                              
02       established under AS 18.65.670 for which the employee has not otherwise received                                  
03       credited service under this system. An employee is not entitled to credited service for                           
04       employment as a village public safety officer unless the employee was employed as a                               
05       village public safety officer for at least one year.  The credited service claimed                            
06       under this section may not exceed five years.  Benefits are not payable on credited                           
07       service for village public safety officer service under this section unless the employee                          
08       makes retroactive contributions to the system for the period of time that service credit                          
09       is claimed.                                                                                                       
10    * Sec. 25.  AS 39.35.370(i) is amended to read:                                                                    
11            (i)  For system fiscal years beginning after December 31, 1975, and                                      
12       notwithstanding [NOTWITHSTANDING] any other provision of this chapter, the                                    
13       projected annual benefit provided by this chapter and the benefit from all other defined                          
14       benefit plans required to be aggregated with the benefits from this system under the                              
15       provisions of 26 U.S.C. 415 may not increase to an amount in excess of the amount                                 
16       permitted under 26 U.S.C. 415 at any time. In the event that any projected annual                                 
17       benefit of a member exceeds the limitation of 26 U.S.C. 415(g) for a limitation year,                             
18       the system shall take any necessary remedial action to correct an excess accrued                                  
19       annual benefit. The provisions of 26 U.S.C. 415, and the regulations adopted under                            
20       that statute, as applied to qualified defined benefit plans of governmental employers                             
21       are incorporated as part of the terms and conditions of the system. This subsection                               
22       applies to any member of this system.                                                                             
23    * Sec. 26.  AS 39.35.371(h) is amended to read:                                                                    
24            (h)  Unless otherwise specified, the provisions of this section apply to calendar                            
25       years beginning on or after January 1, 1983 [1989].                                                           
26    * Sec. 27.  AS 39.35.680(2) is amended to read:                                                                    
27                 (2)  "actuarial adjustment" means the adjustment necessary to obtain                                    
28       equality in value of the aggregate expected payments under two different forms of                                 
29       pension payments, considering expected mortality and interest earnings on the basis of                            
30       assumptions, factors and methods that clearly preclude employer discretion in                               
31       the determination of the amount of any member's benefit [TABLES REFERRED                                      
01       TO IN THE INFORMATION HANDBOOK PUBLISHED UNDER                                                                    
02       AS 39.35.060(8)];                                                                                                 
03    * Sec. 28.  AS 39.35.680(17) is amended to read:                                                                   
04                 (17)  "employer" means                                                                                  
05                      (A)  the State of Alaska; or                                                                   
06                      (B)  [A NONPROFIT REGIONAL CORPORATION, BUT                                                        
07            ONLY WITH RESPECT TO VILLAGE PUBLIC SAFETY OFFICERS                                                          
08            EMPLOYED BY THE CORPORATION UNDER AS 18.65.670 WHO HAVE                                                      
09            NOT TERMINATED PARTICIPATION IN THE SYSTEM UNDER                                                             
10            AS 39.35.127; OR                                                                                             
11                      (C)]  a political subdivision or public organization of the state                                  
12            that participates in the system;                                                                             
13    * Sec. 29.  AS 18.65.670(d); AS 39.35.127, and 39.35.285 are repealed.                                             
14    * Sec. 30.  The uncodified law of the State of Alaska enacted in sec. 49, ch. 59, SLA 2002,                        
15 is amended by adding a new subsection to read:                                                                          
16       (f)  Notwithstanding AS 14.25.177 and AS 39.35.547, the following provisions of this                              
17 Act are retroactive to January 1, 1993:                                                                                 
18            (1)  AS 14.25.163, enacted by sec. 9 of this Act;                                                            
19            (2)  AS 22.25.022, enacted by sec. 19 of this Act;                                                           
20            (3)  AS 39.35.195, enacted by sec. 32 of this Act.                                                           
21    * Sec. 31.  The uncodified law of the State of Alaska is amended by adding a new section to                        
22 read:                                                                                                                   
23       REVISOR'S INSTRUCTION.  The revisor of statutes is instructed to change the                                       
24 catchline for                                                                                                           
25            (1)  AS 14.25.050 from "Contributions by teachers" to "Contributions of                                      
26 members";                                                                                                               
27            (2)  AS 39.35.546 from "Tax exemption" to "State and federal taxation of                                     
28 benefits."                                                                                                              
29    * Sec. 32.  The uncodified law of the State of Alaska is amended by adding a new section to                        
30 read:                                                                                                                   
31       INTERNAL REVENUE SERVICE  RULINGS ON PURCHASE OF CREDITED                                                         
01 SERVICE UNDER TEACHERS' RETIREMENT SYSTEMS.  The commissioner of                                                        
02 administration shall promptly notify the revisor of statutes of the effective date of the                               
03 favorable ruling from the Internal Revenue Service that, under 26 U.S.C. 414(h)(2), the                                 
04 amounts paid by the employer under AS 14.25.075(b)(3) as reimbursed by sec. 8 of this Act                               
05 will not be included in the member's gross income for income tax purposes until those                                   
06 amounts are distributed by refund or retirement benefit payment.                                                        
07    * Sec. 33.  The uncodified law of the State of Alaska is amended by adding a new section to                        
08 read:                                                                                                                   
09       INTERNAL REVENUE SERVICE  RULINGS ON PURCHASE OF CREDITED                                                         
10 SERVICE UNDER PUBLIC EMPLOYEES' RETIREMENT SYSTEMS.  The commissioner                                                   
11 of administration shall promptly notify the revisor of statutes of the effective date of the                            
12 favorable ruling from the Internal Revenue Service that, under 26 U.S.C. 414(h)(2), the                                 
13 amounts paid by the employer under AS 39.35.165(b)(3) as reimbursed by sec. 21 of this Act                              
14 will not be included in the member's gross income for income tax purposes until those                                   
15 amounts are distributed by refund or retirement benefit payment.                                                        
16    * Sec. 34.  Section 8 of this Act takes effect on the date contained in the notification to the                    
17 revisor of statutes by the commissioner of administration under sec. 32 of this Act.                                    
18    * Sec. 35.  Section 21 of this Act takes effect on the date contained in the notification to the                   
19 revisor of statutes by the commissioner of administration under sec. 33 of this Act.                                    
20    * Sec. 36.  Sections 1 - 7, 9 - 20, and 22 - 33 of this Act take effect immediately under                          
21 AS 01.10.070(c).