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CSSB 232(FIN): "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; eliminating the public employees' retirement system conditional duty 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(FIN)                                                                   
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; eliminating the public employees' retirement system conditional duty to refund                                  
05 contributions under $1,000 to inactive employees; limiting service credit for village                                   
06 public safety officer service in the public employees' retirement system to five years; and                             
07 providing 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)  An employee who is eligible to purchase credited service under                                          
30       AS 14.25.047 or 14.25.048, a member who is eligible to purchase credited service                                  
31       under AS 14.25.048, 14.25.050, 14.25.060 [AS 14.25.060], 14.25.061, 14.25.062,                            
01       [OR] 14.25.100, or 14.25.107, or a teacher who is eligible to purchase credited service                       
02       under AS 14.20.345, AS 14.25.050, 14.25.062, or 14.25.105 [IS A MEMBER FOR                                    
03       PURPOSES OF THIS SECTION. A MEMBER], in lieu of making payments directly                                          
04       to the system, may elect to have the member's employer make payments as provided                                  
05       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 earlier of the member's termination                                  
22       of employment with the employer or the member's death; amounts paid by an                                     
23       employer under (f) of this section may not be applied toward the payment of the                               
24       dollar amount of the deductions representing the portion of the credited service                              
25       that is being purchased by the member through payroll deduction in accordance                                 
26       with the member's irrevocable election under this paragraph;                                                  
27                 (3)  [A MEMBER WHO MAKES AN ELECTION UNDER THIS                                                         
28       SECTION TO HAVE THE EMPLOYER MAKE PAYMENTS FOR LESS THAN                                                          
29       ALL OF THE AMOUNTS PAYABLE FOR THE MEMBER'S PURCHASE OF                                                           
30       CREDITED SERVICE MAY SUBSEQUENTLY ELECT TO HAVE THE                                                               
31       EMPLOYER MAKE PAYMENTS FOR ALL OR ANY PORTION OF THE                                                              
01       REMAINING AMOUNTS PAYABLE FOR THE MEMBER'S PURCHASE OF                                                            
02       CREDITED SERVICE;                                                                                                 
03                 (4)]  amounts paid by an employer under this subsection [SECTION]                                   
04       shall be treated as employer contributions for the purpose of determining tax treatment                           
05       under 26 U.S.C. (Internal Revenue Code); the amounts paid by the employer under                                   
06       this section may not be included in the member's gross income for income tax                                      
07       purposes until those amounts are distributed by refund or retirement benefit payments.                            
08    * Sec. 9.  AS 14.25.075(f) is amended to read:                                                                   
09            (f)  The [TO THE EXTENT THAT A PAYMENT UNDER THIS SECTION                                                
10       DOES NOT ALTER, AMEND, OR REVOKE ANY ONE OR MORE CURRENTLY                                                        
11       EFFECTIVE ELECTIONS MADE BY THE EMPLOYEE, THE] board may accept                                                   
12       rollover [EMPLOYEE] contributions from a member, and direct transfers as                                  
13       described in the subsection, for the purchase, in whole or in part, of forfeited                              
14       credited service under this section for the reinstatement, in whole or in part, of                            
15       forfeited credited service under AS 14.25.062.  Contributions made under this                                 
16       subsection may not be applied to purchase service being paid under (b) of this                                
17       section.  A rollover contribution or transfer as described in this subsection [,                              
18       WHICH] shall [ALSO] be treated as employer contributions for the purpose of                                       
19       determining tax treatment under the Internal Revenue Code and may be made [, FOR                              
20       THE PAYMENT FOR CREDITED SERVICE PURCHASES MADE UNDER THIS                                                        
21       SECTION IN WHOLE OR IN PART,] by any one or a combination of the following                                        
22       methods:                                                                                                          
23                 (1)  subject to the limitations prescribed in [26 U.S.C. 401(a)(3) AND]                                 
24       26 U.S.C. 402(c), accepting eligible rollover distributions directly from one or more                             
25       retirement programs of another employer that are qualified under 26 U.S.C. 401(a) or                              
26       accepting rollovers directly from a member [AN EMPLOYEE];                                                     
27                 (2)  subject to the limitations prescribed in 26 U.S.C. 408(d)(3)(A)(ii),                               
28       accepting from a member [AN EMPLOYEE] conduit rollover contributions that are                                 
29       received by the member [EMPLOYEE] from one or more conduit rollover individual                                
30       retirement accounts previously established by the member [EMPLOYEE];                                          
31                 (3)  subject to the limitations prescribed in 26 U.S.C. 403(b)(13),                                     
01       accepting direct trustee-to-trustee transfers of all or a portion of the accounts of the                          
02       member [EMPLOYEE], on or [AND] after January 1, 2002, from a tax sheltered                                
03       annuity described in 26 U.S.C. 403(b);                                                                            
04                 (4)  subject to the limitations prescribed in 26 U.S.C. 457(e)(17),                                     
05       accepting direct trustee-to-trustee transfers of all or a portion of the accounts of the                          
06       member [EMPLOYEE], on or [AND] after January 1, 2002, from an eligible deferred                           
07       compensation plan of a tax-exempt organization or a state or local government                                     
08       described in 26 U.S.C. 457(b);                                                                                    
09                 (5)  accepting direct trustee-to-trustee transfer from an account                                       
10       established for the benefit of the member in AS 39.30.150 - 39.30.180 (Alaska                                     
11       Supplemental Annuity Plan).                                                                                       
12    * Sec. 10.  AS 14.25.075(i) is amended to read:                                                                  
13            (i)  On satisfaction of the eligibility requirements of AS 14.20.345,                                        
14       AS 14.25.047, 14.25.048, 14.25.050, 14.25.060, 14.25.061, 14.25.062, 14.25.100,                               
15       [OR] 14.25.105, or 14.25.107, the requirements of this section, and the administrative                        
16       filing requirements specified by the board, the system shall adjust the member's                                  
17       credited service history and add any additional service credits acquired.                                         
18    * Sec. 11.  AS 14.25.110(k) is amended to read:                                                                  
19            (k)  For system fiscal years beginning after December 31, 1975, and                                      
20       notwithstanding [NOTWITHSTANDING] any other provision of this chapter, the                                    
21       projected annual benefit provided by this chapter and the benefit from all other defined                          
22       benefit plans required to be aggregated with the benefits from this system under the                              
23       provisions of 26 U.S.C. 415 may not increase to an amount in excess of the amount                                 
24       permitted under 26 U.S.C. 415 at any time. In the event that any projected annual                                 
25       benefit of a member exceeds the limitation of 26 U.S.C. 415 for a limitation year, the                            
26       system shall take any necessary remedial action to correct an excess accrued annual                           
27       benefit. The provisions of 26 U.S.C. 415, and the regulations adopted under that                                  
28       statute, as applied to qualified defined benefit plans of governmental employers are                              
29       incorporated as part of the terms and conditions of the system. This subsection applies                           
30       to any member of this system.                                                                                     
31    * Sec. 12.  AS 14.25.165(h) is amended to read:                                                                    
01            (h)  Unless otherwise specified, the provisions of this section apply to calendar                            
02       years beginning on or after January 1, 1983 [1989].                                                           
03    * Sec. 13.  AS 14.25.220(2) is amended to read:                                                                    
04                 (2)  "actuarial adjustment" means the adjustment necessary to obtain                                    
05       equality in value of the aggregate expected payments under two different forms of                                 
06       pension payments, considering expected mortality and interest earnings on the basis of                            
07       assumptions, factors, and methods specified in regulations issued under the                                   
08       system that are formally adopted under AS 14.25.022 by the board and that                                     
09       clearly preclude employer discretion in the determination of the amount of any                                
10       member's benefit [TABLES REFERRED TO IN THE INFORMATION                                                       
11       HANDBOOK PUBLISHED UNDER AS 14.25.030(5)];                                                                        
12    * Sec. 14.  AS 14.25.220(42) is amended to read:                                                                   
13                 (42)  "teacher" and [OR] "member" are used interchangeably under                                
14       this chapter and mean [MEANS] a person eligible to participate in the system and                              
15       who is covered by the system, limited to                                                                          
16                      (A)  a certificated full-time or part-time elementary or                                           
17            secondary teacher, a certificated school nurse, or a certificated person in a                                
18            position requiring a teaching certificate as a condition of employment in a                                  
19            public school of the state, the Department of Education and Early                                            
20            Development, or the Department of Labor and Workforce Development;                                           
21                      (B)  a full-time or part-time teacher of the University of Alaska                                  
22            or a person occupying a full-time administrative position at the University of                               
23            Alaska that requires academic standing; the approval of the administrator must                               
24            be obtained before an administrative position qualifies for membership in the                                
25            system; however, a teacher or administrative person at the university who is                                 
26            participating in the optional university retirement program under AS 14.40.661                               
27            - 14.40.799 is not a member under this system;                                                               
28                      (C)  a state legislator who elects membership under                                                
29            AS 14.25.040(b);                                                                                             
30    * Sec. 15.  AS 22.25.011 is amended to read:                                                                     
31            Sec. 22.25.011.  Contributions of judges and justices.  Each justice and                                   
01       judge appointed after July 1, 1978, is a member under the judicial retirement                                 
02       system as of the date of the justice's or judge's appointment and shall contribute                            
03       seven percent of the base annual salary received by the justice or judge to the judicial                          
04       retirement system. Contributions shall be made for all creditable service under this                              
05       chapter up to a maximum of 15 years. This contribution is made in the form of a                                   
06       deduction from compensation, at the end of each payroll period, and is made even if                               
07       the compensation paid in cash to the justice or judge is reduced below the minimum                                
08       prescribed by law. The contributions shall be deducted from the justice's or judge's                              
09       compensation before the computation of applicable federal taxes and shall be treated                              
10       as employer contributions under 26 U.S.C. 414(h)(2). A member may not have the                                    
11       option of making the payroll deduction directly in cash instead of having the                                     
12       contribution picked up by the employer. Each justice and judge is considered to                                   
13       consent to the deduction from compensation. Payment of compensation less the                                      
14       deduction constitutes a full discharge of all claims and demands for the services                                 
15       rendered by the justice or judge during the period covered by the payment, except as                              
16       to the benefits provided for under this chapter. The contributions shall be credited to                           
17       the judicial retirement fund established in accordance with AS 22.25.048.                                         
18    * Sec. 16.  AS 22.25.012(a) is amended to read:                                                                  
19            (a)  An administrative director of the Alaska court system appointed under art.                              
20       IV, sec. 16 of the state constitution is a member under the judicial retirement                               
21       system as of the date of the administrative director's appointment and is entitled                            
22       to retirement benefits under this chapter on the terms and conditions applicable to a                             
23       superior court judge appointed after July 1, 1978, except that an administrative                                  
24       director may receive retirement benefits only with service as administrative director                             
25       for 10 or more years.                                                                                             
26    * Sec. 17.  AS 22.25.025 is amended by adding a new subsection to read:                                            
27            (b)  An amendment to this chapter does not provide a person with a vested                                    
28       right to a benefit if the Internal Revenue Service determines that the amendment will                             
29       result in disqualification of the plan under the Internal Revenue Code.                                           
30    * Sec. 18.  AS 22.25.048(i) is amended to read:                                                                  
31            (i)  If the judicial retirement system is terminated,                                                    
01                 (1)  a member whose contributions have not been refunded,                                           
02       regardless of the member's employment status at the date of the termination of                                
03       the system, shall be considered fully vested in the member's adjusted accrued                                 
04       retirement benefits as of the date of the termination of the system; and                                      
05                 (2)  if [IF, UPON TERMINATION OF THE SYSTEM,] all liabilities                                       
06       are satisfied, any excess assets arising from erroneous actuarial computation shall                               
07       revert to the employer.                                                                                           
08    * Sec. 19.  AS 22.25.900(1) is amended to read:                                                                    
09                 (1)  "actuarial equivalent" means the adjustment necessary to obtain                                
10       equality in value of the aggregate expected payments under two different forms of                                 
11       pension payments, considering expected mortality and interest earnings on the basis of                            
12       assumptions, factors and methods specified in regulations issued under the                                    
13       system that are formally adopted under AS 22.25.027 by the commissioner of                                    
14       administration that clearly preclude employer discretion in the determination of                              
15       the amount of any justice's, judge's, or member's benefit [TABLES REFERRED                                    
16       TO IN THE INFORMATION HANDBOOK PUBLISHED UNDER AS 22.25.025];                                                     
17    * Sec. 20.  AS 39.35.010 is amended by adding a new subsection to read:                                            
18            (d)  An amendment to this chapter does not provide a person with a vested                                    
19       right to a benefit if the Internal Revenue Service determines that the amendment will                             
20       result in disqualification of the plan under the Internal Revenue Code.                                           
21    * Sec. 21.  AS 39.35.120 is amended to read:                                                                       
22            Sec. 39.35.120.  Commencement of participation.  (a) An employee of the                                    
23       state shall be included in this system upon commencement of employment with the                                   
24       state, or on January 1, 1961, whichever is later. Unless an employee has elected to                               
25       participate in the optional university retirement program under AS 14.40.661 -                                    
26       14.40.799, an employee of a political subdivision or public organization that becomes                             
27       an employer shall be included in the system on the effective date of the employer's                               
28       participation or the date of the employee's commencement of employment with the                                   
29       employer, whichever is later. [UNLESS THE VILLAGE PUBLIC SAFETY                                                   
30       OFFICER WAIVES COVERAGE UNDER AS 39.35.127, A VILLAGE PUBLIC                                                      
31       SAFETY OFFICER EMPLOYED UNDER THE VILLAGE PUBLIC SAFETY                                                           
01       OFFICER PROGRAM ESTABLISHED IN AS 18.65.670 IS INCLUDED IN THIS                                                   
02       SYSTEM ON THE EFFECTIVE DATE OF THIS BILL SECTION OR UPON THE                                                     
03       OFFICER'S COMMENCEMENT OF EMPLOYMENT WITH THE EMPLOYER,                                                           
04       WHICHEVER IS LATER.]                                                                                              
05            (b)  Inclusion in the system is a condition of employment for an employee                                    
06       except as otherwise provided for                                                                                  
07                 (1)  an elected official;                                                                               
08                 (2)  an employee making an election under AS 39.35.150(b); and                                      
09                 (3)  an employee of the university who has elected to participate in the                                
10       optional university retirement program under AS 14.40.661 - 14.40.799 [; AND                                      
11                 (4)  A VILLAGE PUBLIC SAFETY OFFICER EMPLOYED BY A                                                      
12       NONPROFIT REGIONAL CORPORATION AS SET OUT IN AS 39.35.127].                                                       
13    * Sec. 22.  AS 39.35.165(b) is amended to read:                                                                  
14            (b)  An employee may elect to have the employer make payments for all or any                                 
15       portion of the amounts payable for the employee's purchase of credited service                                    
16       through a salary reduction program as follows:                                                                    
17                 (1)  the amounts paid under a salary reduction program are in lieu of                                   
18       contributions by the employee making the election; the electing employee's salary or                              
19       other compensation shall be reduced by the amount paid by the employer under this                                 
20       subsection;                                                                                                       
21                 (2)  the employee shall make an irrevocable election under this section                             
22       to purchase credited service as permitted in AS 39.35.310, 39.35.330, 39.35.340,                                  
23       39.35.342, 39.35.345, 39.35.350, 39.35.360, 39.35.370, 39.35.375, or 39.35.381 and                                
24       before the employee's termination of employment; the irrevocable election must                                
25       specify the number of payroll periods that deductions will be made from the                                       
26       employee's compensation and the dollar amount of deductions for each payroll period                               
27       during the specified number of payroll periods; the deductions made under this                                
28       paragraph cease upon the earlier of the member's termination of employment                                    
29       with the employer or the member's death; amounts paid by an employer under                                    
30       (f) of this section may not be applied toward the payment of the dollar amount of                             
31       the deductions representing the portion of the credited service that is being                                 
01       purchased by the member through payroll deduction in accordance with the                                      
02       member's irrevocable election under this subsection;                                                          
03                 (3)  [AN EMPLOYEE WHO MAKES AN ELECTION UNDER THIS                                                      
04       SECTION TO HAVE THE EMPLOYER MAKE PAYMENTS FOR LESS THAN                                                          
05       ALL OF THE AMOUNTS PAYABLE FOR THE EMPLOYEE'S PURCHASE OF                                                         
06       CREDITED SERVICE MAY SUBSEQUENTLY ELECT TO HAVE THE                                                               
07       EMPLOYER MAKE PAYMENTS FOR ALL OR ANY PORTION OF THE                                                              
08       REMAINING AMOUNTS PAYABLE FOR THE EMPLOYEE'S PURCHASE OF                                                          
09       CREDITED SERVICE;                                                                                                 
10                 (4)]  amounts paid by an employer under this subsection [SECTION]                                   
11       shall be treated as employer contributions for the purpose of determining tax treatment                           
12       under the Internal Revenue Code; the amounts paid by the employer under this section                              
13       may not be included in the member's gross income for income tax purposes until those                              
14       amounts are distributed by refund or retirement benefit payments.                                                 
15    * Sec. 23.  AS 39.35.165(f) is amended to read:                                                                  
16            (f)  The [TO THE EXTENT THAT A PAYMENT UNDER THIS SECTION                                                
17       DOES NOT ALTER, AMEND, OR REVOKE ANY ONE OR MORE CURRENTLY                                                        
18       EFFECTIVE ELECTIONS MADE BY THE EMPLOYEE, THE] board may accept                                                   
19       rollover [EMPLOYEE] contributions from a member and direct transfers, as                                  
20       described in this subsection, for the purchase, in whole or in part, of credited                              
21       service for the reinstatement, in whole or in part, of forfeited credited service                             
22       under AS 39.35.350.  A rollover contribution or transfer as described in this                                 
23       subsection [, WHICH] shall also be treated as employer contributions for the purpose                          
24       of determining tax treatment under the Internal Revenue Code and may be made [,                               
25       FOR THE PAYMENT FOR CREDITED SERVICE PURCHASES MADE UNDER                                                         
26       THIS SECTION IN WHOLE OR IN PART,] by any one or a combination of the                                             
27       following methods:                                                                                                
28                 (1)  subject to the limitations prescribed in 26 U.S.C. 401(a)(3) and 26                                
29       U.S.C. 402(c), accepting eligible rollover distributions directly from one or more                                
30       retirement programs of another employer that are qualified under 26 U.S.C. 401(a) or                              
31       accepting rollovers directly from a member [AN EMPLOYEE];                                                     
01                 (2)  subject to the limitations prescribed in 26 U.S.C. 408(d)(3)(A)(ii),                               
02       accepting from a member [AN EMPLOYEE] conduit rollover contributions that are                                 
03       received by the employee from one or more conduit rollover individual retirement                                  
04       accounts previously established by the member [EMPLOYEE];                                                     
05                 (3)  subject to the limitations prescribed in 26 U.S.C. 403(b)(13),                                     
06       accepting direct trustee-to-trustee transfers of all or a portion of the accounts of the                          
07       member [EMPLOYEE], on or [AND] after January 1, 2002, from a tax sheltered                                
08       annuity described in 26 U.S.C. 403(b);                                                                            
09                 (4)  subject to the limitations prescribed in 26 U.S.C. 457(e)(17),                                     
10       accepting direct trustee-to-trustee transfers of all or a portion of the accounts of the                          
11       member [EMPLOYEE], on or [AND] after January 1, 2002, from an eligible deferred                           
12       compensation plan of a tax-exempt organization or a state or local government                                     
13       described in 26 U.S.C. 457(b);                                                                                    
14                 (5)  accepting direct trustee-to-trustee transfer from an account                                       
15       established for the benefit of the member in AS 39.30.150 - 39.30.180 (Alaska                                     
16       Supplemental Annuity Plan).                                                                                       
17    * Sec. 24.  AS 39.35.200(b) is amended to read:                                                                    
18            (b)  [IF, UPON TERMINATION OF EMPLOYMENT, AN EMPLOYEE                                                        
19       HAS CREDITED SERVICE OF LESS THAN FIVE YEARS AND HAS LESS                                                         
20       THAN $1,000 IN THE EMPLOYEE CONTRIBUTION ACCOUNT, A REFUND OF                                                     
21       THE EMPLOYEE CONTRIBUTION ACCOUNT MUST BE MADE UNLESS THE                                                         
22       EMPLOYEE INDICATES IN WRITING THAT FUTURE RETIREMENT IS                                                           
23       INTENDED AND CONTRIBUTIONS SHOULD NOT BE REFUNDED.]  An                                                           
24       employee who is reemployed with an employer and whose contributions have not                                      
25       been refunded before reemployment is not eligible for a refund.                                                   
26    * Sec. 25.  AS 39.35.342(a) is amended to read:                                                                    
27            (a)  A [EXCEPT FOR EMPLOYMENT FOR WHICH THE EMPLOYEE                                                     
28       WAIVED COVERAGE UNDER AS 39.35.127, A] vested employee is entitled to                                             
29       credited service for employment as a village public safety officer under the program                              
30       established under AS 18.65.670 for which the employee has not otherwise received                                  
31       credited service under this system. An employee is not entitled to credited service for                           
01       employment as a village public safety officer unless the employee was employed as a                               
02       village public safety officer for at least one year.  The credited service claimed                            
03       under this section may not exceed five years.  Benefits are not payable on credited                           
04       service for village public safety officer service under this section unless the employee                          
05       makes retroactive contributions to the system for the period of time that service credit                          
06       is claimed.                                                                                                       
07    * Sec. 26.  AS 39.35.370(i) is amended to read:                                                                    
08            (i)  For system fiscal years beginning after December 31, 1975, and                                      
09       notwithstanding [NOTWITHSTANDING] any other provision of this chapter, the                                    
10       projected annual benefit provided by this chapter and the benefit from all other defined                          
11       benefit plans required to be aggregated with the benefits from this system under the                              
12       provisions of 26 U.S.C. 415 may not increase to an amount in excess of the amount                                 
13       permitted under 26 U.S.C. 415 at any time. In the event that any projected annual                                 
14       benefit of a member exceeds the limitation of 26 U.S.C. 415(g) for a limitation year,                             
15       the system shall take any necessary remedial action to correct an excess accrued                                  
16       annual benefit. The provisions of 26 U.S.C. 415, and the regulations adopted under                            
17       that statute, as applied to qualified defined benefit plans of governmental employers                             
18       are incorporated as part of the terms and conditions of the system. This subsection                               
19       applies to any member of this system.                                                                             
20    * Sec. 27.  AS 39.35.371(h) is amended to read:                                                                    
21            (h)  Unless otherwise specified, the provisions of this section apply to calendar                            
22       years beginning on or after January 1, 1983 [1989].                                                           
23    * Sec. 28.  AS 39.35.680(2) is amended to read:                                                                    
24                 (2)  "actuarial adjustment" means the adjustment necessary to obtain                                    
25       equality in value of the aggregate expected payments under two different forms of                                 
26       pension payments, considering expected mortality and interest earnings on the basis of                            
27       assumptions, factors and methods specified in regulations issued under this                                 
28       system that are formally adopted under AS 39.35.042 by the board that clearly                                 
29       preclude employer discretion in the determination of the amount of any                                        
30       member's benefit [TABLES REFERRED TO IN THE INFORMATION                                                       
31       HANDBOOK PUBLISHED UNDER AS 39.35.060(8)];                                                                        
01    * Sec. 29.  AS 39.35.680(17) is amended to read:                                                                   
02                 (17)  "employer" means                                                                                  
03                      (A)  the State of Alaska; or                                                                   
04                      (B)  [A NONPROFIT REGIONAL CORPORATION, BUT                                                        
05            ONLY WITH RESPECT TO VILLAGE PUBLIC SAFETY OFFICERS                                                          
06            EMPLOYED BY THE CORPORATION UNDER AS 18.65.670 WHO HAVE                                                      
07            NOT TERMINATED PARTICIPATION IN THE SYSTEM UNDER                                                             
08            AS 39.35.127; OR                                                                                             
09                      (C)]  a political subdivision or public organization of the state                                  
10            that participates in the system;                                                                             
11    * Sec. 30.  AS 18.65.670(d); AS 39.35.127, and 39.35.285 are repealed.                                             
12    * Sec. 31.  The uncodified law of the State of Alaska enacted in sec. 49, ch. 59, SLA 2002,                        
13 is amended by adding a new subsection to read:                                                                          
14            (f)  Notwithstanding AS 14.25.177 and AS 39.35.547, the following provisions                                 
15       of this Act are retroactive to January 1, 1993:                                                                   
16                 (1)  AS 14.25.163, enacted by sec. 9 of this Act;                                                       
17                 (2)  AS 22.25.022, enacted by sec. 19 of this Act;                                                      
18                 (3)  AS 39.35.195, enacted by sec. 32 of this Act.                                                      
19    * Sec. 32.  Section 48, ch. 59, SLA 2002, is repealed.                                                             
20    * Sec. 33.  The uncodified law of the State of Alaska is amended by adding a new section to                        
21 read:                                                                                                                   
22       REVISOR'S INSTRUCTION.  The revisor of statutes is instructed to change the                                       
23 catchline for                                                                                                           
24            (1)  AS 14.25.050 from "Contributions by teachers" to "Contributions of                                      
25 members";                                                                                                               
26            (2)  AS 39.35.546 from "Tax exemption" to "State and federal taxation of                                     
27 benefits."                                                                                                              
28    * Sec. 34.  This Act takes effect immediately under AS 01.10.070(c).