CSHB 375(FIN): "An Act establishing the teachers' retirement system past service cost liability account in the Department of Revenue; establishing the public employees' retirement system past service cost liability account in the Department of Revenue; and providing for an effective date."
00 CS FOR HOUSE BILL NO. 375(FIN) 01 "An Act establishing the teachers' retirement system past service cost liability account 02 in the Department of Revenue; establishing the public employees' retirement system 03 past service cost liability account in the Department of Revenue; and providing for an 04 effective date." 05 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 06 * Section 1. AS 37.10 is amended by adding new sections to read: 07 Article 4A. Teachers' and Public Employees' Retirement System Past Service 08 Cost Liability Accounts. 09 Sec. 37.10.200. Teachers' retirement system past service cost 10 liability account. (a) There is established in the Department of Revenue the 11 teachers' retirement system past service cost liability account, consisting of 12 appropriations to the account. The commissioner of revenue shall develop and adopt 13 regulations necessary to accomplish the requirements of this section and shall manage 14 the account according to the requirements of AS 37.10.071.
01 (b) At the end of each fiscal year, after all distributions under (c) of 02 this section are completed, money appropriated for use in that fiscal year 03 reverts to the general fund and all income earned on the money shall be 04 paid to the general fund. 05 (c) During each fiscal year, the commissioner of revenue shall 06 distribute from the account established in (a) of this section, to each 07 employer other than the state that is a member of the Teachers' 08 Retirement System of Alaska, a payment in the amount the commissioner 09 of revenue anticipates the employer will pay to the state for that fiscal year 10 toward eliminating the employer's past service cost liability to the 11 Teachers' Retirement System of Alaska. 12 (d) A payment to an employer under (c) of this section must be 13 based on 85 percent of the payroll on which employer contributions to the 14 Teachers' Retirement System of Alaska were required and that the 15 employer reported to the Department of Administration for the fiscal year 16 preceding by three fiscal years the fiscal year for which a distribution is 17 made under this section, and the past service cost rate of the system for 18 the fiscal year preceding by three fiscal years the fiscal year for which a 19 distribution is made under this section. 20 (e) For any fiscal year that the money available for distribution 21 from the account is insufficient to pay every eligible employer the amount 22 due under this section, the amount distributed in that fiscal year to every 23 eligible employer shall be decreased pro rata. 24 (f) An employer who receives an overpayment in excess of a 25 distribution authorized by this section or in excess of the employer's past 26 service cost liability shall immediately return the overpayment to the 27 commissioner of revenue, who shall cause it to be returned to the account. 28 Sec. 37.10.202. Public employees' retirement system past 29 service cost liability account. (a) There is established in the Department of 30 Revenue the public employees' retirement system past service cost liability
01 account, consisting of appropriations to the account. The commissioner of revenue 02 shall develop and adopt regulations necessary to accomplish the requirements of this 03 section and shall manage the account according to the requirements of AS 37.10.071. 04 (b) At the end of each fiscal year, after all distributions under (c) 05 and (d) of this section are completed, money appropriated for use in that 06 fiscal year reverts to the general fund and all income earned on the money 07 shall be paid to the general fund. 08 (c) During each fiscal year, the commissioner of revenue shall 09 distribute from the account established in (a) of this section, to each 10 municipal employer or school district employer member of the Public 11 Employees' Retirement System of Alaska, a payment in the amount the 12 commissioner of revenue anticipates the employer will pay to the state for 13 that fiscal year toward eliminating the employer's past service cost 14 liability to the Public Employees' Retirement System of Alaska. 15 (d) A payment to an employer under (c) of this section must be 16 based on the payroll on which employer contributions to the Public 17 Employees' Retirement System of Alaska were required and that the 18 employer reported to the Department of Administration for the fiscal year 19 preceding by three fiscal years the fiscal year for which a distribution is 20 made under (c) of this section and 85 percent of the employer's past service 21 cost rate during the fiscal year that precedes the distribution fiscal year 22 under (c) of this section by three fiscal years. 23 (e) In addition to the distribution under (c) of this section, an 24 employer that paid to the Public Employees' Retirement System of Alaska 25 in excess of the amount the employer was required to pay for the fiscal 26 year preceding by three fiscal years the fiscal year that a distribution is 27 made under this section shall receive, in unrestricted funds, an incentive 28 distribution from the account in an amount equal to 50 percent of the 29 excess. 30 (f) For any fiscal year that the money available for distribution from
01 the account is insufficient to pay every eligible employer the amount due 02 under this section, the amount distributed in that fiscal year to every 03 eligible employer shall be decreased pro rata. 04 (g) An employer who receives an overpayment in excess of a 05 distribution or incentive distribution authorized by this section shall 06 immediately return the overpayment to the commissioner of revenue, who 07 shall cause it to be returned to the account. 08 Sec. 37.10.204. Definitions. In AS 37.10.200 - AS 37.10.204, 09 (1) "average past service cost rate" means the average of the past 10 service cost rate of all employers as reported by the state's actuary for the fiscal year 11 preceding by three fiscal years the fiscal year for which a distribution is made under 12 AS 37.10.200 or AS 37.10.202; 13 (2) "past service cost rate" means the annual payment required to 14 eliminate an employer's unfunded liability over the amortization period, divided by the 15 payroll for which employer contributions are required and that is reported by the 16 employer to the Department of Administration for the fiscal year preceding by three 17 fiscal years the fiscal year that a distribution is made under AS 37.10.200 or 18 AS 37.10.202. 19 * Sec. 2. This Act takes effect July 1, 2006.