CSHB 475(FIN) am: "An Act relating to the supplemental employee benefit program; relating to teachers' and public employees' defined benefit retirement plans; relating to teachers' and public employees' defined contribution retirement plans that apply to employees first hired after June 30, 2007; relating to the health reimbursement arrangement plan for certain teachers and public employees; clarifying eligibility for membership in the health reimbursement arrangement plan; relating to waiver of adjustments under the teachers' defined benefit retirement plan and the public employees' defined benefit retirement plan; relating to the administrator of the Public Employees' Retirement System of Alaska; relating to employer contributions for occupational disability and death benefits; repealing participation in the teachers' defined contribution and defined benefit retirement plans by certain employees of the National Education Association of Alaska; relating to requirements for employer minimum contributions to the teachers' and the public employees' defined benefit retirement systems; relating to the public employees' defined benefit deferred compensation program; providing for an effective date by amending sec. 148, ch. 9, FSSLA 2005, which contains an effective date; and providing for an effective date."
00 CS FOR HOUSE BILL NO. 475(FIN) am 01 "An Act relating to the supplemental employee benefit program; relating to teachers' 02 and public employees' defined benefit retirement plans; relating to teachers' and public 03 employees' defined contribution retirement plans that apply to employees first hired 04 after June 30, 2007; relating to the health reimbursement arrangement plan for certain 05 teachers and public employees; clarifying eligibility for membership in the health 06 reimbursement arrangement plan; relating to waiver of adjustments under the teachers' 07 defined benefit retirement plan and the public employees' defined benefit retirement 08 plan; relating to the administrator of the Public Employees' Retirement System of 09 Alaska; relating to employer contributions for occupational disability and death 10 benefits; repealing participation in the teachers' defined contribution and defined 11 benefit retirement plans by certain employees of the National Education Association of 12 Alaska; relating to requirements for employer minimum contributions to the teachers'
01 and the public employees' defined benefit retirement systems; relating to the public 02 employees' defined benefit deferred compensation program; providing for an effective 03 date by amending sec. 148, ch. 9, FSSLA 2005, which contains an effective date; and 04 providing for an effective date." 05 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 06 * Section 1. AS 14.25.009 is amended to read: 07 Sec. 14.25.009. Applicability of AS 14.25.009 - 14.25.220. The provisions of 08 AS 14.25.009 - 14.25.220 apply only to members first hired before July 1, 2007 09 [2006]. 10 * Sec. 2. AS 14.25.012(c) is amended to read: 11 (c) Employees first hired after June 30, 2007 [2006], are not eligible to 12 participate in the plan established in AS 14.25.009 - 14.25.220. 13 * Sec. 3. AS 14.25.070(a) is amended to read: 14 (a) An employer shall make contributions to the plan in accordance with this 15 section and as certified by the board in an amount sufficient, after subtracting 16 member contributions, to provide the benefits of AS 14.25.009 - 14.25.220. The 17 amount shall be calculated by applying the employer normal cost rate to the sum 18 total of the base salaries paid to members in the plan and by applying the past 19 service rate to the sum total of the base salaries paid to members in the system 20 [AN EMPLOYER CONTRIBUTION RATE, CERTIFIED BY THE BOARD, 21 AGAINST THE SUM TOTAL OF THE BASE SALARIES PAID TO MEMBERS], 22 including any adjustments to contributions required by AS 14.25.173(a). The 23 employer shall remit this amount to the administrator in accordance with 24 AS 14.25.065. 25 * Sec. 4. AS 14.25.070 is amended by adding new subsections to read: 26 (d) In (a) of this section, "employer normal cost rate" means the percentage of 27 compensation of all active members in the plan that, when combined with the member 28 contribution rate of active members in the plan, is sufficient to provide the benefits 29 that are expected to be credited with respect to service during the year beginning after
01 the last valuation date. This percentage is uniformly determined for all employers and 02 is applicable to each employer. 03 (e) In (a) of this section, "past service rate" means the percentage of 04 compensation of all active members in the system necessary to provide the annual 05 amount required to amortize the unfunded obligations of the employers for benefits 06 earned by members in the plan before the date of the last actuarial valuation over a 07 period not to exceed the maximum period allowed by generally accepted accounting 08 principles of the Governmental Accounting Standards Board. This percentage is 09 uniformly determined for all employers and is applicable to each employer. 10 * Sec. 5. AS 14.25.070 is amended by adding a new subsection to read: 11 (f) The employer contribution rate may not be less than the rate required, after 12 subtracting the member contribution rate, to fully fund the actuarially calculated 13 benefits expected to be earned by active members during the fiscal year. 14 * Sec. 6. AS 14.25.125(c) is amended to read: 15 (c) Membership service for which contributions were refunded is not 16 creditable under this section [UNLESS THE REFUNDED CONTRIBUTIONS HAVE 17 BEEN REPAID. FOR PURPOSES OF THIS SECTION, A MEMBER OR FORMER 18 MEMBER DOES NOT HAVE TO BE REEMPLOYED UNDER THIS PLAN IN 19 ORDER TO REPAY REFUNDED CONTRIBUTIONS. COMPOUND INTEREST 20 AT THE RATE PRESCRIBED BY REGULATION MUST BE ADDED TO THE 21 REINSTATEMENT INDEBTEDNESS FROM THE DATE OF THE REFUND TO 22 THE DATE OF REPAYMENT]. 23 * Sec. 7. AS 14.25.310, as enacted by sec. 35, ch. 9, FSSLA 2005, is amended to read; 24 Sec. 14.25.310. Applicability of AS 14.25.310 - 14.25.590. The provisions of 25 AS 14.25.310 - 14.25.590 apply only to teachers who first become members on or 26 after July 1, 2007 [2006], or to members who transfer into the defined contribution 27 plan under AS 14.25.540. 28 * Sec. 8. AS 14.25.320(b), as enacted by sec. 35, ch. 9, FSSLA 2005, is amended to read: 29 (b) The defined contribution retirement plan includes a plan in which savings 30 are accumulated in an individual account for the exclusive benefit of the member or 31 beneficiaries, and certain fixed occupational death and disability benefits are
01 paid. The plan is established effective July 1, 2007 [2006], at which time 02 contributions by employers and members begin. 03 * Sec. 9. AS 14.25.320(c), as enacted by sec. 35, ch. 9, FSSLA 2005, is amended to read: 04 (c) The defined contribution retirement plan is intended to qualify under 26 05 U.S.C. 401(a), [AND] 414(d), and 414(k) (Internal Revenue Code) as a qualified 06 retirement plan established and maintained by the state for its employees and for the 07 employees of school districts and regional educational attendance areas in the state. 08 * Sec. 10. AS 14.25.330(a), as enacted by sec. 35, ch. 9, FSSLA 2005, is amended to read: 09 (a) A teacher who first becomes a member on or after July 1, 2007 [2006], 10 shall participate in the plan as a member of the defined contribution retirement plan. 11 * Sec. 11. AS 14.25.340(c), as enacted by sec. 35, ch. 9, FSSLA 2005, is amended to read: 12 (c) The employer shall deduct the contribution from the member's 13 compensation at the end of each payroll period, and the contribution shall be credited 14 by the administrator to the member's individual account. To the extent permitted by 15 federal law, the [THE] contributions shall be deducted from the member'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. 20 * Sec. 12. AS 14.25.350(c), as enacted by sec. 35, ch. 9, FSSLA 2005, is amended to read: 21 (c) Notwithstanding (b) of this section, the employer contribution for retiree 22 major medical insurance for fiscal year 2008 [2007] shall be 1.75 percent of each 23 member's compensation from July 1 to the following June 30. 24 * Sec. 13. AS 14.25.350(e), as enacted by sec. 35, ch. 9, FSSLA 2005, is amended by 25 adding a new subsection to read: 26 (e) An employer shall make annual contributions to a trust account in the plan, 27 applied as a percentage of each member's compensation from July 1 to the following 28 June 30, in an amount determined by the board to be actuarially required to fully fund 29 the cost of providing occupational disability and occupational death benefits under 30 AS 14.25.310 - 14.25.590. 31 * Sec. 14. AS 14.25.380, as enacted by sec. 35, ch. 9, FSSLA 2005, is amended to read:
01 Sec. 14.25.380. Limitations on contributions and benefits. Notwithstanding 02 any other provisions of this plan, the annual additions to each member's individual 03 account under this plan and under all defined contribution plans of the employer 04 required to be aggregated with the contributions from this plan under the provisions of 05 26 U.S.C. 415 may not exceed, for any limitation year, the amount permitted under 26 06 U.S.C. 415(c) at any time. If the amount of a member's individual account 07 [DEFINED CONTRIBUTION PLAN] contributions exceeds the limitation of 26 08 U.S.C. 415(c) for any limitation year, the administrator shall take any necessary 09 remedial action to correct an excess contribution. A fixed benefit provided under 10 this plan may not exceed, for or during a limitation year, the amount permitted 11 under 26 U.S.C. 415(b). If a fixed benefit provided under this plan exceeds, for or 12 during a limitation year, the amount permitted under 26 U.S.C. 415(b), the 13 administrator shall take remedial action necessary to comply with the limits on 14 the benefit amount in 26 U.S.C. 415(b). The provisions of 26 U.S.C. 415, and the 15 regulations adopted under that statute, as applied to qualified [DEFINED 16 CONTRIBUTION] plans of governmental employees are incorporated as part of the 17 terms and conditions of the plan. 18 * Sec. 15. AS 14.25.400(b), as enacted by sec. 35, ch. 9, FSSLA 2005, is amended to read: 19 (b) A participant may direct investment of plan funds held in an individual 20 account among available investment funds in accordance with rules established by the 21 board. 22 * Sec. 16. AS 14.25.470(g), as enacted by sec. 35, ch. 9, FSSLA 2005, is amended to read: 23 (g) An eligible person shall make the irrevocable election to participate or not 24 participate in the retiree major medical insurance plan by reaching 70 1/2 years of age, 25 or upon application for retirement and medical benefits, whichever is later. The 26 administrator may require an eligible person who deferred participation in the 27 retiree major medical insurance plan at the time the person applied for 28 retirement to show evidence of insurability or provide a letter of coverage when 29 the person later applies to participate in the retiree major medical insurance 30 plan. If the person does not establish insurability or provide a letter of coverage, 31 the administrator may deny participation by the person in the retiree major
01 medical insurance plan. 02 * Sec. 17. AS 14.25.485(b), as enacted by sec. 35, ch. 9, FSSLA 2005, is amended to read: 03 (b) The occupational disability benefits accrue beginning the first day of the 04 month following termination of employment as a result of the disability and are 05 payable the last day of the month. If a final determination granting the benefit is not 06 made in time to pay the benefit when due, a retroactive payment shall be made to 07 cover the period of deferment. The last payment shall be for the first month in which 08 the disabled member 09 (1) dies; 10 (2) recovers from the disability; 11 (3) fails to meet the requirements under (f), (h), or (j) [(h)] of this 12 section; or 13 (4) reaches normal retirement age. 14 * Sec. 18. AS 14.25.485(c), as enacted by sec. 35, ch. 9, FSSLA 2005, is amended to read: 15 (c) If the disabled member becomes ineligible to receive occupational 16 disability benefits before the normal retirement date, the disabled member shall then 17 be entitled to receive retirement benefits if the member would have been eligible for 18 the benefit had employment continued during the period of disability. The period of 19 disability constitutes membership service for the purposes of [IN REGARD TO] 20 determining eligibility for retirement and medical benefits under this chapter and 21 AS 39.30.300 - 39.30.495. 22 * Sec. 19. AS 14.25.485(d), as enacted by sec. 35, ch. 9, FSSLA 2005, is amended to read: 23 (d) The monthly amount of an occupational disability benefit is 40 percent of 24 the disabled member's gross monthly compensation at the time of termination due to 25 disability. Notwithstanding AS 14.25.390(b), at the time a member is appointed to 26 disability, the member becomes fully vested in the employer contributions made 27 under AS 14.25.350(a). A disabled member is fully vested in the contributions to 28 the member's individual account made under this subsection. A member is not 29 entitled to elect distributions from the member's individual contribution account 30 under AS 14.25.410 while the member is receiving disability benefits under this 31 section. While a member is receiving disability benefits, based on the disabled
01 member's gross monthly compensation at the time of termination due to disability, the 02 employer shall make contributions to the 03 (1) member's individual account under AS 14.25.340 on behalf of the 04 member, without deduction from the member's disability payments; and 05 (2) appropriate accounts and funds on behalf of the member under 06 AS 14.25.350. 07 * Sec. 20. AS 14.25.485(g), as enacted by sec. 35, ch. 9, FSSLA 2005, is amended to read: 08 (g) A disabled member's occupational disability benefit terminates the last 09 day of the month following the date [WHEN] the disabled member first qualifies 10 [ATTAINS ELIGIBILITY] for normal retirement. At that time, the member's 11 retirement benefit shall be determined under the provisions of AS 14.25.420 - 12 14.25.440, 14.25.470, and 14.25.480. A member whose occupational disability 13 benefit terminates under this subsection [RECEIVING DISABILITY BENEFITS 14 UP UNTIL ELIGIBILITY FOR RETIREMENT] shall be considered to have retired 15 directly from the plan. 16 * Sec. 21. AS 14.25.485(i), as enacted by sec. 35, ch. 9, FSSLA 2005, is amended to read: 17 (i) Upon the death of a disabled member who is receiving or is entitled to 18 receive an occupational disability benefit, the administrator shall pay the surviving 19 spouse a surviving spouse's pension, equal to 40 percent of the member's monthly 20 compensation at the termination of employment because of occupational disability. If 21 there is no surviving spouse, the administrator shall pay the survivor's pension in equal 22 parts to the dependent children of the member. While the monthly survivor's 23 pension is being paid, the survivor is not entitled to elect distributions from the 24 employee's individual contribution account under AS 14.25.410. The first payment 25 of the surviving spouse's pension or of a dependent child's pension shall accrue from 26 the first day of the month following the member's death and is payable the last day of 27 the month. The last payment shall be made the last day of [FOR] the last month in 28 which there is an eligible surviving spouse or dependent child, or the last day of the 29 month following the earliest date the member would have first qualified for 30 normal retirement if the member had survived, whichever day comes sooner. A 31 retirement benefit shall be determined under the provisions of AS 14.25.420 -
01 14.25.440, 14.25.470, and 14.25.480 based on [. ON] the date the member would 02 have first qualified for normal retirement [OF THE MEMBER WOULD HAVE 03 OCCURRED] if the member had survived. In addition to the payment of the 04 member's individual account, the surviving spouse or, if there is no surviving 05 spouse, the surviving dependent children of the member, shall receive an 06 additional benefit in an amount equal to the accumulated contributions that 07 would have been made to the deceased member's individual account under 08 AS 14.25.340(a) and 14.25.350(a), based on the deceased member's gross monthly 09 compensation at the time of occupational disability, from the time of the 10 member's death to the date the member would have first qualified for normal 11 retirement if the member had survived. Earnings shall be allocated to the 12 additional benefit calculated under this subsection based on the actual rate of 13 return, net of expenses, of the trust account established under AS 14.25.350(e) 14 over the period that the contributions would have been made. This additional 15 amount shall be paid in the same manner as determined for the member's 16 individual account under AS 14.25.420 - 14.25.460. For the purpose of 17 determining eligibility of a survivor who is receiving a benefit under this 18 subsection for medical benefits under AS 14.25.470 - 14.25.480, a [LIVED, THE 19 RETIREMENT BENEFIT SHALL BE DETERMINED UNDER THE PROVISIONS 20 OF AS 14.25.420 - 14.25.440, 14.25.470, AND 14.25.480. A] member who died 21 while receiving disability benefits shall be considered to have retired directly from the 22 plan on the date the member would have first qualified for normal retirement [OF 23 THE MEMBER WOULD HAVE OCCURRED] if the member had survived. The 24 period during which the member was eligible for a disability benefit and the 25 period during which a survivor's pension is paid to a survivor under this 26 subsection each constitute membership service for the purposes of determining 27 vesting in employer contributions under AS 14.25.390(b) and eligibility for 28 retirement and medical benefits under this chapter and AS 39.30.300 - 39.30.495 29 [LIVED]. 30 * Sec. 22. AS 14.25.485(j), as enacted by sec. 35, ch. 9, FSSLA 2005, is amended to read: 31 (j) In this section, "occupational disability" means a physical or mental
01 condition that the administrator determines presumably permanently prevents 02 an employee from satisfactorily performing the employee's usual duties or the 03 duties of another comparable position or job available to the employee and for 04 which the employee is qualified by training or education; however, the proximate 05 cause of the condition must be a bodily injury sustained, or a hazard undergone, 06 while in the performance and within the scope of the employee's duties and not 07 the proximate result of the wilful negligence of the employee [HAS THE 08 MEANING GIVEN IN AS 39.35.680]. 09 * Sec. 23. AS 14.25 is amended by adding a new section to read: 10 Sec. 14.25.486. Disability benefit adjustment. (a) Once each year, the 11 administrator shall increase disability benefits. The amount of the increase is a 12 percentage of the current disability benefit equal to the lesser of 75 percent of the 13 increase in the cost of living in the preceding calendar year or nine percent. 14 (b) If a disabled member was not receiving a benefit during the entire 15 preceding calendar year, the increase in the benefit under this section shall be adjusted 16 by multiplying it by a fraction, the numerator of which is the number of months for 17 which the benefit was received in the preceding calendar year and the denominator of 18 which is 12. 19 (c) An increase in benefit payments under this section is effective July 1 of 20 each year and is based on the percentage increase in the Consumer Price Index for 21 urban wage earners and clerical workers for Anchorage, Alaska, during the previous 22 calendar year, as determined by the United States Department of Labor, Bureau of 23 Labor Statistics. 24 (d) Benefit adjustments under this section shall terminate the last day of the 25 month following the date on which a disabled member is no longer receiving a 26 disability benefit under AS 14.25.485. 27 * Sec. 24. AS 14.25.487(b), as enacted by sec. 35, ch. 9, FSSLA 2005, is amended to read: 28 (b) The first payment of the surviving spouse's pension or of a dependent 29 child's pension shall be made for the month following the month in which the member 30 dies. Payments [, AND PAYMENT] shall cease on the last day of the month in 31 which there is no longer an eligible spouse or eligible dependent child, or the last
01 day of the month following the earliest date [TO BE MADE BEGINNING WITH 02 THE MONTH IN WHICH] the member would have first qualified for normal 03 retirement if the member had survived, whichever day is sooner. 04 * Sec. 25. AS 14.25.487(c), as enacted by sec. 35, ch. 9, FSSLA 2005, is amended to read: 05 (c) The monthly survivor's pension in (b) of this section for survivors of 06 members is 40 percent of the member's monthly compensation in the month in which 07 the member dies. While the monthly survivor's pension is being paid, the survivor 08 is not entitled to elect distributions from the member's individual contribution 09 account under AS 14.25.410, except as required by AS 14.25.440. While the 10 monthly survivor's pension is being paid, the employer shall make contributions on 11 behalf of the member's surviving spouse and member's surviving dependent 12 children [BENEFICIARIES BASED ON THE DECEASED MEMBER'S GROSS 13 MONTHLY COMPENSATION AT THE TIME OF OCCUPATIONAL DEATH 14 (1) TO THE MEMBER'S INDIVIDUAL ACCOUNT UNDER 15 AS 14.25.340, WITHOUT DEDUCTION FROM THE SURVIVOR'S PENSION; 16 AND 17 (2)] to the appropriate accounts and funds [ON BEHALF OF THE 18 MEMBER] under AS 14.25.350(b) - (e). 19 * Sec. 26. AS 14.25.487(e), as enacted by sec. 35, ch. 9, FSSLA 2005, is amended to read: 20 (e) On the date the member would have first qualified for normal retirement 21 [OF THE MEMBER WOULD HAVE OCCURRED] if the member had survived 22 [LIVED], the retirement benefit shall be determined under the provisions of 23 AS 14.25.420 - 14.25.440, 14.25.470, and 14.25.480. In addition to payment of the 24 member's individual account, the surviving spouse or, if there is no surviving 25 spouse, the surviving dependent children of the member, shall receive an 26 additional benefit in an amount equal to the accumulated contributions that 27 would have been made to the deceased member's individual account under 28 AS 14.25.340(a) and 14.25.350(a), based on the deceased member's gross monthly 29 compensation at the time of the member's occupational death, from the time of 30 the member's death to the date the member would have first qualified for normal 31 retirement if the member had survived. Earnings shall be allocated to the
01 additional benefit calculated under this subsection based on the actual rate of 02 return, net of expenses, of the trust account established under AS 14.25.350(e) 03 over the period that the contributions would have been made. This additional 04 amount shall be paid in the same manner as determined for the member's 05 individual account under AS 14.25.420 - 14.25.460. A member who died and whose 06 survivors receive occupational death benefits under this section shall be considered to 07 have retired directly from the plan on the date the [NORMAL RETIREMENT OF 08 THE] member would have first qualified for normal retirement [OCCURRED] if 09 the member had survived. The period of time during which a survivor's pension is 10 paid under this section constitutes membership service for the purposes of 11 determining vesting in employer contributions under AS 14.25.390(b) and 12 eligibility for retirement and medical benefits under this chapter and 13 AS 39.30.300 - 39.30.495 [LIVED]. 14 * Sec. 27. AS 14.25 is amended by adding new sections to read: 15 Sec. 14.25.488. Survivor's pension adjustment. (a) Once each year, the 16 administrator shall increase payments to a person 60 years of age or older receiving a 17 survivor's pension under AS 14.25.485(i) or 14.25.487(c) and to a person who has 18 received a survivor's pension under AS 14.25.485(i) or 14.25.487(c) for at least eight 19 years, who is not otherwise eligible for an increase under this section. 20 (b) The amount of the increase is a percentage of the current survivor's 21 pension equal to the lesser of 50 percent of the increase in the cost of living in the 22 preceding calendar year or six percent. 23 (c) If a survivor was not receiving a pension during the entire preceding 24 calendar year, the increase in the survivor's pension under this section shall be 25 adjusted by multiplying it by a fraction, the numerator of which is the number of 26 months for which the pension was received in the preceding calendar year and the 27 denominator of which is 12. 28 (d) The administrator shall increase the initial survivor's pension paid to a 29 survivor of a member who died while receiving disability benefits by a percentage 30 equal to the total cumulative percentage that has been applied to the member's 31 disability benefit under AS 14.25.486.
01 (e) An increase in benefit payments under this section is effective July 1 of 02 each year and is based on the percentage increase in the Consumer Price Index for 03 urban wage earners and clerical workers for Anchorage, Alaska, during the previous 04 calendar year, as determined by the United States Department of Labor, Bureau of 05 Labor Statistics. 06 (f) Pension adjustments under this section shall terminate the last day of the 07 month following the date on which a survivor is no longer receiving a survivor's 08 pension under AS 14.25.485(i) or 14.25.487(c). 09 Sec. 14.25.489. Premiums for retiree major medical insurance coverage 10 upon termination of disability benefits or survivor's pension. The premium for 11 retiree major medical insurance coverage payable by a member whose disability 12 benefit is terminated under AS 14.25.485(g) or by an eligible survivor whose survivor 13 pension is terminated under AS 14.25.485(i) or 14.25.487(e) when the member would 14 have been eligible for normal retirement if the member had survived shall be 15 determined under AS 14.25.480(g)(2) as if the member or survivor were eligible for 16 Medicare. 17 * Sec. 28. AS 14.25.510, as enacted by sec. 35, ch. 9, FSSLA 2005, is amended to read: 18 Sec. 14.25.510. Nonguarantee of returns, rates, or benefit amounts. The 19 plan created by AS 14.25.310 - 14.25.590 is, with respect to individual accounts, 20 treated as a defined contribution plan and [PLAN,] not a defined benefit plan. The 21 amount of money in the individual account of a participant depends on the amount of 22 contributions and the rate of return from investments of the account that varies over 23 time. If benefits are paid in the form of an annuity, the benefit amount payable is 24 dependent on the amount of money in the account and the interest rates applied and 25 service fees charged by the annuity payor at the time the annuity is purchased from 26 the carrier and benefits are first paid. Nothing in this plan guarantees a participant 27 (1) a rate of return or interest rate other than that actually earned by the 28 account of the participant, less applicable administrative expenses; or 29 (2) an annuity based on interest rates or service charges other than 30 interest rates available from and service charges by the annuity payor in effect at the 31 time the annuity is paid.
01 * Sec. 29. AS 14.25.540(c), as enacted by sec. 35, ch. 9, FSSLA 2005, is amended to read: 02 (c) Each eligible member who elects to participate in the defined contribution 03 retirement plan shall have transferred to a new account the member contribution 04 account balance held in trust for the member under the defined benefit retirement plan 05 of the teachers' retirement system. A matching employer contribution shall be made on 06 behalf of that employee to the new account. The employer shall make the matching 07 contribution from funds other than the trust funds of the defined benefit retirement 08 plan. The amount of the matching employer contribution shall be subject to, and 09 may not exceed, the limitation of 26 U.S.C. 415(c) during the applicable limitation 10 year in which the contribution is made. 11 * Sec. 30. AS 14.25.540(d), as enacted by sec. 35, ch. 9, FSSLA 2005, is amended to read: 12 (d) Upon a transfer, all membership service previously earned under the 13 defined benefit retirement plan shall be nullified for purposes of entitlement to a future 14 benefit under the defined benefit retirement plan but shall be credited for purposes of 15 determining vesting in employer contributions under AS 14.25.390(b) and 16 eligibility to elect medical benefits under AS 14.25.470. Membership service allowed 17 for credit toward medical benefits does not include any service credit purchased under 18 AS 14.25.075 for employment by an employer who is not a participating employer in 19 this chapter. 20 * Sec. 31. AS 14.25.540(h), as enacted by sec. 35, ch. 9, FSSLA 2005, is amended to read: 21 (h) A member who is eligible to elect transfer to the defined contribution 22 plan must make the election not later than 12 months after the member's 23 employer notifies the administrator that the member's employer consents to 24 transfers of its members under (i) of this section. The election to participate in the 25 defined contribution retirement plan must be made in writing on forms and in the 26 manner prescribed by the administrator. Before accepting an election to participate in 27 the defined contribution retirement plan, the administrator must provide the employee 28 planning on making an election to participate in the defined contribution retirement 29 plan with information, including calculations to illustrate the effect of moving the 30 employee's retirement plan from the defined benefit retirement plan to the defined 31 contribution retirement plan as well as other information to clearly inform the
01 employee of the potential consequences of the employee's election. An election made 02 under this subsection to participate in the defined contribution retirement plan is 03 irrevocable. Upon making the election, the participant shall be enrolled as a member 04 of the defined contribution retirement plan, the member's participation in the plan shall 05 be governed by the provisions of AS 14.25.310 - 14.25.590, and the member's 06 participation in the defined benefit retirement plan under AS 14.25.009 - 14.25.220 07 shall terminate. The participant's enrollment in the defined contribution retirement 08 plan shall be effective the first day of the month after the administrator receives the 09 completed enrollment forms. An election made by an eligible member who is married 10 is not effective unless the election is signed by the individual's spouse. 11 * Sec. 32. AS 14.25.540(i), as enacted by sec. 35, ch. 9, FSSLA 2005, is amended to read: 12 (i) A member may make an election under this section only if the member's 13 employer participates in both the defined benefit retirement plan and the defined 14 contribution retirement plan and consents to transfers under this section. The employer 15 shall notify the administrator if the employer consents to allowing the employer's 16 members to choose to transfer from the defined benefit retirement plan to the defined 17 contribution retirement plan under this section. The initial period during which the 18 employer's members may choose to transfer commences on the first day of the 19 month following the administrator's receipt of notice under this subsection and 20 continues for 12 months. An employer may consent to a second period of 12 21 months during which the employer's members may choose to transfer from the 22 defined benefit retirement plan to the defined contribution retirement plan under 23 this section. The second period commences on the first day of the month 24 following the administrator's receipt of notice under this subsection and 25 continues for 12 months. An employer's initial notice to allow transfers is 26 irrevocable and applicable to all eligible employees of the employer. An employer's 27 second notice to allow transfers under this section is irrevocable and applicable 28 only to those eligible employees to whom the initial period of transfer was not 29 available. 30 * Sec. 33. AS 14.25.540(j), as enacted by sec. 35, ch. 9, FSSLA 2005, is amended by adding 31 a new paragraph to read:
01 (3) "membership service" has the meaning given in AS 14.25.220 and 02 does not include any service for which reinstatement indebtedness has not been fully 03 paid. 04 * Sec. 34. AS 39.30.160(a) is amended to read: 05 (a) The Department of Administration shall, in accordance with policies 06 prescribed by regulations adopted by the commissioner [OF THE ALASKA 07 RETIREMENT MANAGEMENT BOARD], provide to employees for whom special 08 individual employee benefit accounts are established under AS 39.30.150(c) the 09 following benefit options: 10 (1) supplemental health benefits; 11 (2) supplemental death benefits; 12 (3) supplemental disability benefits; and 13 (4) supplemental dependent care benefits. 14 * Sec. 35. AS 39.30.160(e) is amended to read: 15 (e) Regulations adopted by the commissioner [BOARD] implementing 16 AS 39.30.150 and this section are not subject to AS 44.62 (Administrative Procedure 17 Act). 18 * Sec. 36. AS 39.30 is amended by adding a new section to read: 19 Sec. 39.30.165. Appeals. A final decision made under AS 39.30.150 - 20 39.30.180 is subject to appeal under AS 44.64. 21 * Sec. 37. AS 39.30.300, as enacted by sec. 80, ch. 9, FSSLA 2005, is amended to read: 22 Sec. 39.30.300. State of Alaska Teachers' and Public Employees' Retiree 23 Health Reimbursement Arrangement Plan established. The State of Alaska 24 Teachers' and Public Employees' Retiree Health Reimbursement Arrangement Plan is 25 established for teachers who first become members of the defined contribution plan of 26 the teachers' retirement system under AS 14.25.310 - 14.25.590 on or after July 1, 27 2007 [2006], and employees of the state, political subdivisions of the state, and public 28 organizations of the state who first become members of the defined contribution plan 29 of the public employees' retirement system under AS 39.35.700 - 39.35.990 on or after 30 July 1, 2007 [2006]. 31 * Sec. 38. AS 39.30.310(b), as enacted by sec. 80, ch. 9, FSSLA 2005, is amended to read:
01 (b) The plan becomes effective July 1, 2007 [2006], at which time 02 contributions by employers begin. 03 * Sec. 39. AS 39.30 is amended by adding a new section to read: 04 Sec. 39.30.335. Appeals. A final decision made under AS 39.30.300 - 05 39.30.495 is subject to appeal under AS 44.64. 06 * Sec. 40. AS 39.30.370, as enacted by sec. 80, ch. 9, FSSLA 2005, is amended to read: 07 Sec. 39.30.370. Contributions by employers. For each member of the plan, 08 an employer shall contribute to the teachers' and public employees' retiree health 09 reimbursement arrangement plan trust fund an amount equal to three percent of the 10 average annual compensation of all employees of employers in the plan 11 [EMPLOYER'S AVERAGE ANNUAL EMPLOYEE COMPENSATION]. The 12 administrator shall maintain a record for each member to account for employer 13 contributions on behalf of that member. The board shall establish by regulation the 14 rate of interest to be applied annually to the amount in a member's individual account. 15 * Sec. 41. AS 39.30.380, as enacted by sec. 80, ch. 9, FSSLA 2005, is amended to read: 16 Sec. 39.30.380. Termination of employment. A person who terminates 17 employment before meeting the eligibility requirements of AS 39.30.390 18 [AS 14.25.470 OR AS 39.35.870] loses any right to the contributions made on behalf 19 of the person to the teachers' and public employees' retiree health reimbursement 20 arrangement trust fund. If a person returns to employment with a participating 21 employer by December 31 of the year in which the person reaches 65 years of age, the 22 person's account balance shall be restored in the amount recorded on the date of 23 termination from the trust, adjusted for inflation at the rate of the Consumer Price 24 Index for Anchorage, Alaska. The earlier period of employment with a participating 25 employer shall be credited toward eligibility for medical benefits. 26 * Sec. 42. AS 39.30.390, as enacted by sec. 80, ch. 9, FSSLA 2005, is amended to read: 27 Sec. 39.30.390. Eligibility and reimbursement. Persons who meet the 28 eligibility requirements of AS 14.25.470 or [AND] AS 39.35.870 are eligible for 29 reimbursements from the individual account established for a member under the plan, 30 except members do not have to retire directly from the system. A person who is the 31 dependent child of an eligible member is eligible for reimbursements if the eligible
01 member and surviving spouse have both died so long as the person meets the 02 definition of dependent child. 03 * Sec. 43. AS 39.35.095 is amended to read: 04 Sec. 39.35.095. Applicability of AS 39.35.095 - 39.35.680. The following 05 provisions of this chapter apply only to members first hired before July 1, 2007 06 [2006]: AS 39.35.095 - 39.35.680. 07 * Sec. 44. AS 39.35.250 is amended to read: 08 Sec. 39.35.250. Calculation of employer's contribution rate. (a) An 09 employer shall make contributions to the plan in amounts determined in accordance 10 with this section. For the purposes of this section and AS 39.35.270, the [PAST 11 SERVICE DATE FOR EACH EMPLOYER IS THE ENTRY DATE OF THE 12 EMPLOYER OR DECEMBER 31, 1972, WHICHEVER IS LATER. AFTER 13 DECEMBER 31, 1972, IF AMENDMENTS TO AS 39.35.095 - 39.35.680 ARE 14 ENACTED THAT SUBSTANTIALLY AFFECT BENEFITS ACCRUED BEFORE 15 THE EFFECTIVE DATE OF THE AMENDMENT, THE PAST SERVICE DATE 16 WILL BE CHANGED TO DECEMBER 31 OF THE YEAR IMMEDIATELY 17 PRECEDING THAT IN WHICH THE AMENDMENT IS ENACTED. THE] 18 contribution rate is the sum of the consolidated employer normal cost rate and the 19 past service rate as certified by the board. 20 (b) In (a) of this section, "consolidated employer normal cost rate" means the 21 percentage of compensation of all active employees in the plan which, [IF PAID 22 OVER THE PERIOD OF THEIR CREDITED SERVICE AFTER THEIR PAST 23 SERVICE DATE AND] when combined with all employee contributions to the plan, 24 is sufficient to provide the benefits earned during the year beginning after the last 25 valuation date [AFTER SUCH PAST SERVICE DATES]. This percentage is 26 [UNIFORMLY] determined at the plan level for all employers and is applicable to 27 each employer. 28 (c) In (a) of this section, "past service rate" means the percentage of 29 compensation of all active employees in the system [PLAN] necessary to provide the 30 annual amount required to amortize the unfunded obligations of the employer for 31 benefits earned by the employer's members in the plan before the date of the last
01 actuarial valuation [EMPLOYER'S PAST SERVICE DATE] over a period not to 02 exceed the maximum allowed by generally accepted accounting principles of the 03 Governmental Accounting Standards Board [40 YEARS. THE PERIOD OF 04 AMORTIZATION BEGINS AT THE PAST SERVICE DATE OF EACH 05 EMPLOYER]. The percentage is separately determined for each employer. 06 * Sec. 45. AS 39.35.270(a) is amended to read: 07 (a) The amount of each employer's contributions shall be determined by 08 applying the consolidated employer normal cost [EMPLOYER'S 09 CONTRIBUTION] rate [, AS CERTIFIED BY THE BOARD,] to the total 10 compensation paid to the employer's active employees of the plan and by applying 11 the employer's past service rate to the total compensation paid to the employer's 12 active employees in the system [EMPLOYER] for each payroll period, [AND BY] 13 including any adjustments to contributions required by AS 39.35.520(a). This amount 14 shall be remitted by the employer to the administrator in accordance with 15 AS 39.35.610. 16 * Sec. 46. AS 39.35.270 is amended by adding a new subsection to read: 17 (d) The employer contribution rate may not be less than the rate required, after 18 subtracting the member contribution rate, to fully fund the actuarially calculated 19 benefits expected to be earned by active members during a fiscal year. 20 * Sec. 47. AS 39.35.375(a) is amended to read: 21 (a) An active or inactive member who has never been vested in this plan or in 22 the teachers' retirement plan under AS 14.25.009 - 14.25.220, who has at least two 23 years of credited service in this plan, and who has membership service in the teachers' 24 retirement system may claim credited service in this plan in an amount equal to the 25 membership service the member has in the teachers' retirement system. The claimed 26 credited service may be added to service earned under AS 39.35.095 - 39.35.680 to 27 enable the member to qualify for a public service benefit under this section. The 28 member may not claim credited service for membership service for which the member 29 has received a refund under AS 14.25.150 [UNLESS THE MEMBER FULLY PAYS 30 THE INDEBTEDNESS AS ESTABLISHED UNDER AS 14.25.063]. The member 31 may not claim credited service in this plan based on unused sick leave under
01 AS 14.25.115. 02 * Sec. 48. AS 39.35.385(c) is amended to read: 03 (c) Credited service for which contributions were refunded is not creditable 04 under this section [UNLESS THE REFUNDED CONTRIBUTIONS HAVE BEEN 05 REPAID. FOR PURPOSES OF (a) AND (b) OF THIS SECTION, A MEMBER OR 06 FORMER MEMBER DOES NOT HAVE TO BE REEMPLOYED UNDER THIS 07 PLAN IN ORDER TO PAY REFUNDED CONTRIBUTIONS. COMPOUND 08 INTEREST AT THE RATE PRESCRIBED BY REGULATION SHALL BE ADDED 09 TO THE REINSTATEMENT INDEBTEDNESS FROM THE DATE OF THE 10 REFUND TO THE DATE OF REPAYMENT]. 11 * Sec. 49. AS 39.35.522(d) is amended to read: 12 (d) A ruling of the [THE] commissioner of administration denying a waiver 13 under this section may be appealed under AS 44.64. The administrative law 14 judge may reverse the ruling of the commissioner and may impose equitable 15 conditions on the granting of a waiver [WHICH IT CONSIDERS EQUITABLE]. 16 These conditions may include requiring the member or beneficiary to make additional 17 contributions to the plan. 18 * Sec. 50. AS 39.35.680(3) is amended to read: 19 (3) "administrator" means [THE PERSON APPOINTED BY] the 20 commissioner of administration or the commissioner's designee appointed under 21 AS 39.35.003 [AS 39.35.050]; 22 * Sec. 51. AS 39.35.700, as enacted by sec. 122, ch. 9, FSSLA 2005, is amended to read: 23 Sec. 39.35.700. Applicability of AS 39.35.700 - 39.35.990. The provisions of 24 AS 39.35.700 - 39.35.990 apply only to members first hired on or after July 1, 2007 25 [2006], or to members who transfer into the defined contribution plan under 26 AS 39.35.940. 27 * Sec. 52. AS 39.35.710(b), as enacted by sec. 122, ch. 9, FSSLA 2005, is amended to read: 28 (b) The defined contribution retirement plan includes [IS] a plan in which 29 savings are accumulated in an individual retirement account for the exclusive benefit 30 of the member or beneficiaries, certain fixed occupational death and disability 31 benefits are paid, and certain fixed retirement and survivor benefits for peace
01 officers and fire fighters are paid. The plan is established effective July 1, 2007 02 [2006], at which time contributions by employers and members begin. 03 * Sec. 53. AS 39.35.710(c), as enacted by sec. 122, ch. 9, FSSLA 2005, is amended to read: 04 (c) The retirement plan established by AS 39.35.700 - 39.35.990 is intended to 05 qualify under 26 U.S.C. 401(a), [AND] 414(d), and 414(k) (Internal Revenue Code) 06 as a qualified retirement plan established and maintained by the state for its 07 employees, for the employees of political subdivisions, public corporations, and public 08 organizations of the state, and for the employees of other employers whose 09 participation is authorized by AS 39.35.700 - 39.35.990 and who participate in the 10 plan set out in AS 39.35.700 - 39.35.990. 11 * Sec. 54. AS 39.35.720, as enacted by sec. 122, ch. 9, FSSLA 2005, is amended to read: 12 Sec. 39.35.720. Membership. An employee who becomes a member on or 13 after July 1, 2007 [2006], shall participate in the plan set out in AS 39.35.700 - 14 39.35.990. 15 * Sec. 55. AS 39.35.730(c), as enacted by sec. 122, ch. 9, FSSLA 2005, is amended to read: 16 (c) The employer shall deduct the contribution from the member's 17 compensation at the end of each payroll period, and the contribution shall be credited 18 by the plan to the member's individual account. To the extent permitted by federal 19 law, the [THE] contributions shall be deducted from the member's compensation 20 before the computation of applicable federal taxes and shall be treated as employer 21 contributions under 26 U.S.C. 414(h)(2). A member may not have the option of 22 making the payroll deduction directly in cash instead of having the contribution picked 23 up by the employer. 24 * Sec. 56. AS 39.35.750(c), as enacted by sec. 122, ch. 9, FSSLA 2005, is amended to read: 25 (c) Notwithstanding (b) of this section, the employer contribution for retiree 26 major medical insurance for fiscal year 2008 [2007] shall be 1.75 percent of each 27 member's compensation from July 1 to the following June 30. 28 * Sec. 57. AS 39.35.750(e), as enacted by sec. 122, ch. 9, FSSLA 2005, is amended to read: 29 (e) An employer shall make annual contributions to a trust account in the 30 plan, applied as a percentage of each member's compensation from July 1 to the 31 following June 30, in an amount determined by the board to be actuarially required to
01 fully fund the cost of providing occupational disability and occupational death benefits 02 under AS 39.35.700 - 39.35.990 and retirement benefits elected by disabled peace 03 officers and fire fighters under AS 39.35.890(h)(2) [AS 39.35.890 AND 39.35.892]. 04 The contribution required under this subsection for peace officers and fire fighters and 05 the contribution required under this subsection for other employees shall be separately 06 calculated based on the actuarially calculated costs for each group of employees. 07 * Sec. 58. AS 39.35.780, as enacted by sec. 122, ch. 9, FSSLA 2005, is amended to read: 08 Sec. 39.35.780. Limitations on contributions and benefits. Notwithstanding 09 any other provisions of this plan, the annual additions to each member's individual 10 account under this plan and under all defined contribution plans of the employer 11 required to be aggregated with the contributions from this plan under the provisions of 12 26 U.S.C. 415 may not exceed, for any limitation year, the amount permitted under 26 13 U.S.C. 415(c) at any time. If the amount of a member's individual account 14 [DEFINED CONTRIBUTION PLAN] contributions exceeds the limitation of 26 15 U.S.C. 415(c) for any limitation year, the administrator shall take any necessary 16 remedial action to correct an excess contribution. A fixed benefit provided under 17 this plan may not exceed, for or during a limitation year, the amount permitted 18 under 26 U.S.C. 415(b). If a fixed benefit provided under this plan exceeds, for or 19 during a limitation year, the amount permitted under 26 U.S.C. 415(b), the 20 administrator shall take remedial action necessary to comply with the limits on 21 the benefit amount in 26 U.S.C. 415(b). The provisions of 26 U.S.C. 415, and the 22 regulations adopted under that statute, as applied to qualified [DEFINED 23 CONTRIBUTION] plans of governmental employees are incorporated as part of the 24 terms and conditions of the plan. 25 * Sec. 59. AS 39.35.800(b), as enacted by sec. 122, ch. 9, FSSLA 2005, is amended to read: 26 (b) A participant may direct investment of plan funds held in an individual 27 account among available investment funds in accordance with rules established by the 28 board. 29 * Sec. 60. AS 39.35.870(g), as enacted by sec. 122, ch. 9, FSSLA 2005, is amended to read: 30 (g) An eligible person must make the irrevocable election to participate or not 31 participate in the retiree major medical insurance plan by reaching 70 1/2 years of age,
01 or upon application for retirement and medical benefits, whichever is later. The 02 administrator may require an eligible person who deferred participation in the 03 retiree major medical insurance plan at the time the person applied for 04 retirement to show evidence of insurability or provide a letter of coverage when 05 the person later applies to participate in the retiree major medical insurance 06 plan. If the person does not establish insurability or provide a letter of coverage, 07 the administrator may prohibit participation by the person in the retiree major 08 medical insurance plan. 09 * Sec. 61. AS 39.35.890(b), as enacted by sec. 122, ch. 9, FSSLA 2005, is amended to read: 10 (b) The occupational disability benefits accrue beginning the first day of the 11 month following termination of employment as a result of the disability and are 12 payable the last day of the month. If a final determination granting the benefit is not 13 made in time to pay the benefit when due, a retroactive payment shall be made to 14 cover the period of deferment. The last payment shall be for the first month in which 15 the disabled employee 16 (1) dies; 17 (2) recovers from the disability; 18 (3) fails to meet the requirements under (f), (j), or (l) [(j)] of this 19 section; or 20 (4) reaches normal retirement age. 21 * Sec. 62. AS 39.35.890(c), as enacted by sec. 122, ch. 9, FSSLA 2005, is amended to read: 22 (c) If the disabled employee becomes ineligible to receive occupational 23 disability benefits before the normal retirement date, the disabled employee shall then 24 be entitled to receive retirement benefits if the employee would have been eligible for 25 the benefit had employment continued during the period of disability. The period of 26 disability constitutes membership service for the purposes of [IN REGARD TO] 27 determining eligibility for retirement and medical benefits under this chapter and 28 AS 39.30.300 - 39.30.495. 29 * Sec. 63. AS 39.35.890(d), as enacted by sec. 122, ch. 9, FSSLA 2005, is amended to read: 30 (d) The monthly amount of an occupational disability benefit is 40 percent of 31 the disabled employee's gross monthly compensation at the time of termination due to
01 disability. Notwithstanding AS 39.35.790(b), at the time a member is appointed to 02 disability, the member becomes fully vested in the employer contributions made 03 under AS 39.35.750(a). A disabled member is fully vested in the contributions to 04 the member's individual account made under this subsection. An employee is not 05 entitled to elect distributions from the employee's individual contribution 06 account under AS 39.35.810 while the employee is receiving disability benefits 07 under this section. While an employee is receiving disability benefits, based on the 08 disabled employee's gross monthly compensation at the time of termination due to 09 disability, the employer shall make contributions 10 (1) to the employee's individual account under AS 39.35.730 on behalf 11 of the employee, without deduction from the employee's disability payments; and 12 (2) on behalf of the employee under AS 39.35.750. 13 * Sec. 64. AS 39.35.890(g), as enacted by sec. 122, ch. 9, FSSLA 2005, is amended to read: 14 (g) A disabled employee's occupational disability benefit terminates the last 15 day of the month [WHEN] the disabled employee first qualifies [ATTAINS 16 ELIGIBILITY] for normal retirement. At that time, the employee's retirement benefit 17 shall be determined under the provisions of AS 39.35.820 - 39.35.840, 39.35.870, and 18 39.35.880. An employee whose occupational disability benefit terminates under 19 this subsection [RECEIVING DISABILITY BENEFITS UP UNTIL ELIGIBILITY 20 FOR RETIREMENT] shall be considered to have retired directly from the plan. 21 * Sec. 65. AS 39.35.890(h), as enacted by sec. 122, ch. 9, FSSLA 2005, is amended to read: 22 (h) Notwithstanding (g) of this section, at the time a peace officer or fire 23 fighter receiving occupational disability benefits under this section first attains 24 eligibility for normal retirement, the employee shall irrevocably elect to receive 25 retirement benefits in the amount calculated as the 26 (1) employee's retirement benefit calculated under the provisions of 27 AS 39.35.820 - 39.35.840; or 28 (2) employee's retirement benefit calculated as if the provisions of 29 AS 39.35.370(c) were to apply; however, retirement benefits paid under this paragraph 30 must be paid first from the peace officer's or fire fighter's individual contribution 31 account, and the remaining benefits must be paid from the trust account
01 established under AS 39.35.750(e); the peace officer or fire fighter may not elect 02 other distributions from the peace officer's or fire fighter's individual 03 contribution account under AS 39.35.810 while receiving retirement benefits 04 under this paragraph [MAY NOT BE MADE FROM THE TRUST FUND OF THE 05 PUBLIC EMPLOYEES' DEFINED BENEFIT RETIREMENT PLAN]. 06 * Sec. 66. AS 39.35.890(k), as enacted by sec. 122, ch. 9, FSSLA 2005, is amended to read: 07 (k) Upon the death of a disabled employee who is receiving or is entitled to 08 receive an occupational disability benefit, the administrator shall pay the surviving 09 spouse a surviving spouse's pension, equal to 40 percent of the employee's monthly 10 compensation at the termination of employment because of occupational disability. If 11 there is no surviving spouse, the administrator shall pay the survivor's pension in equal 12 parts to the dependent children of the employee. While the monthly survivor's 13 pension is being paid, the survivor is not entitled to elect distributions from the 14 employee's individual contribution account under AS 39.35.810. The first payment 15 of the surviving spouse's pension or of a dependent child's pension shall accrue from 16 the first day of the month following the employee's death and is payable the last day of 17 the month. The last payment shall be made the last day of [FOR] the last month in 18 which there is an eligible surviving spouse or dependent child, or the last day of the 19 month following the earliest date the employee would have first qualified for 20 normal retirement if the employee had survived, whichever day comes sooner. A 21 retirement benefit shall be determined under the provisions of AS 39.35.820 - 22 39.35.840, 39.35.870, and 39.35.880 based on [. ON] the date the employee would 23 have first qualified for normal retirement [OF THE EMPLOYEE WOULD HAVE 24 OCCURRED] if the employee had survived. In addition to payment of the 25 member's individual account, the surviving spouse or, if there is no surviving 26 spouse, the surviving dependent children of the member, shall receive an 27 additional benefit in an amount equal to the accumulated contributions that 28 would have been made to the deceased member's individual account under 29 AS 39.35.730(a) and 39.35.750(a), based on the deceased member's gross monthly 30 compensation at the time of occupational disability, from the time of the 31 member's death to the date the member would have first qualified for normal
01 retirement if the member had survived. Earnings shall be allocated to the 02 additional benefit calculated under this subsection based on the actual rate of 03 return, net of expenses, of the trust account established under AS 39.35.750(e) 04 over the period that the contributions would have been made. This additional 05 amount shall be paid in the same manner as determined for the member's 06 individual account under AS 39.35.820 - 39.35.860. For the purpose of 07 determining eligibility of an employee's survivor who is receiving a benefit under 08 this subsection for medical benefits under AS 39.35.870 - 39.35.880, an employee 09 [LIVED, THE RETIREMENT BENEFIT SHALL BE DETERMINED UNDER THE 10 PROVISIONS OF AS 39.35.820 - 39.35.840, 39.35.870, AND 39.35.880. AN 11 EMPLOYEE] who died while receiving disability benefits shall be considered to have 12 retired directly from the plan on the date the employee would have first qualified for 13 normal retirement if the employee had survived. The period during which the 14 employee was eligible for a disability benefit and the period during which a 15 survivor's pension is paid to a survivor under this subsection each constitute 16 membership service for the purposes of determining vesting in employer 17 contributions under AS 39.35.790(b) and eligibility for retirement and medical 18 benefits under this chapter and AS 39.30.300 - 39.30.495 [NORMAL 19 RETIREMENT OF THE EMPLOYEE WOULD HAVE OCCURRED IF THE 20 EMPLOYEE HAD LIVED]. 21 * Sec. 67. AS 39.35.890(l), as enacted by sec. 122, ch. 9, FSSLA 2005, is amended to read: 22 (l) In this section, "occupational disability" means a physical or mental 23 condition that the administrator determines presumably permanently prevents 24 an employee from satisfactorily performing the employee's usual duties or the 25 duties of another comparable position or job available to the employee and for 26 which the employee is qualified by training or education; however, the proximate 27 cause of the condition must be a bodily injury sustained, or a hazard undergone, 28 while in the performance and within the scope of the employee's duties and not 29 the proximate result of the wilful negligence of the employee [HAS THE 30 MEANING GIVEN IN AS 39.35.680]. 31 * Sec. 68. AS 39.35 is amended by adding a new section to read:
01 Sec. 39.35.891. Disability benefit and disabled peace officer or fire fighter 02 retirement benefit adjustment. (a) Once each year, the administrator shall increase 03 disability benefits and retirement benefits elected by disabled peace officers or fire 04 fighters under AS 39.35.890(h)(2). The amount of the increase is a percentage of the 05 current disability benefit or retirement benefit equal to the lesser of 75 percent of the 06 increase in the cost of living in the preceding calendar year or nine percent. 07 (b) If a disabled member was not receiving a benefit during the entire 08 preceding calendar year, the increase in the benefit under this section shall be adjusted 09 by multiplying it by a fraction, the numerator of which is the number of months for 10 which the benefit was received in the preceding calendar year and the denominator of 11 which is 12. 12 (c) If a disabled peace officer or fire fighter elects to receive a retirement 13 benefit in the amount calculated under AS 39.35.890(h)(2), the administrator shall, at 14 the time the disabled peace officer or fire fighter is appointed to retirement, increase 15 the retirement benefit by a percentage equal to the total cumulative percentage that has 16 been applied to the disabled peace officer's or fire fighter's disability benefit under this 17 section. 18 (d) An increase in benefit payments under this section is effective July 1 of 19 each year and is based on the percentage increase in the Consumer Price Index for 20 urban wage earners and clerical workers for Anchorage, Alaska, during the previous 21 calendar year, as determined by the United States Department of Labor, Bureau of 22 Labor Statistics. 23 (e) Benefit adjustments under this section shall terminate the last day of the 24 month following the date on which a disabled member is no longer receiving a 25 disability benefit under AS 39.35.890, unless the member is a disabled peace officer or 26 fire fighter and has chosen a retirement benefit under AS 39.35.890(h)(2). 27 * Sec. 69. AS 39.35.892(b), as enacted by sec. 122, ch. 9, FSSLA 2005, is amended to read: 28 (b) The first payment of the surviving spouse's pension or of a dependent 29 child's pension shall be made for the month following the month in which the 30 employee dies. Payments [, AND PAYMENT] shall cease on the last day of the 31 month in which there is no longer an eligible spouse or eligible dependent child,
01 or the last day of the month following the earliest date [TO BE MADE 02 BEGINNING WITH THE MONTH IN WHICH] the employee would have first 03 qualified for normal retirement if the employee had survived, whichever day is 04 sooner. 05 * Sec. 70. AS 39.35.892(c), as enacted by sec. 122, ch. 9, FSSLA 2005, is amended to read: 06 (c) The monthly survivor's pension in (b) of this section for survivors of 07 employees who were not peace officers or fire fighters is 40 percent of the employee's 08 monthly compensation in the month in which the employee dies. The monthly 09 survivor's pension in (b) of this section for survivors of employees who were peace 10 officers or fire fighters is 50 percent of the monthly compensation in the month in 11 which the employee dies. While the monthly survivor's pension is being paid, the 12 survivor is not entitled to elect distributions from the employee's individual 13 contribution account under AS 39.35.810, except as required by AS 39.35.840. 14 While the monthly survivor's pension is being paid, the employer shall make 15 contributions on behalf of the employee's surviving spouse and employee's 16 surviving dependent children [BENEFICIARIES BASED ON THE DECEASED 17 EMPLOYEE'S GROSS MONTHLY COMPENSATION AT THE TIME OF 18 OCCUPATIONAL DEATH 19 (1) TO THE EMPLOYEE'S INDIVIDUAL ACCOUNT UNDER 20 AS 39.35.730, WITHOUT DEDUCTION FROM THE SURVIVOR'S PENSION; 21 AND 22 (2)] to the appropriate accounts and funds under AS 39.35.750(b) - (e). 23 * Sec. 71. AS 39.35.892(e), as enacted by sec. 122, ch. 9, FSSLA 2005, is amended to read: 24 (e) On the date the employee would have first qualified for normal 25 retirement [OF THE EMPLOYEE WOULD HAVE OCCURRED] if the employee 26 had survived [LIVED], the retirement benefit shall be determined under the 27 provisions of AS 39.35.820 - 39.35.840, 39.35.870, and 39.35.880. In addition to 28 payment of the member's individual account, the surviving spouse or, if there is 29 no surviving spouse, the surviving dependent children of the member, shall 30 receive an additional benefit in an amount equal to the accumulated 31 contributions that would have been made to the deceased member's individual
01 account under AS 39.35.730(a) and 39.35.750(a), based on the deceased member's 02 gross monthly compensation at the time of occupational death, from the time of 03 the member's death to the date the member would have first qualified for normal 04 retirement if the member had survived. Earnings shall be allocated to the 05 additional benefit calculated under this subsection based on the actual rate of 06 return, net of expenses, of the trust account established under AS 39.35.750(e) 07 over the period that such contributions would have been made. This additional 08 amount shall be paid in the same manner as determined for the member's 09 individual account under AS 39.35.820 - 39.35.860. An employee who died and 10 whose survivors receive occupational death benefits under this section shall be 11 considered to have retired directly from the plan on the date the [NORMAL 12 RETIREMENT OF THE] employee would have first qualified for normal 13 retirement [OCCURRED] if the employee had survived. The period of time during 14 which a survivor's pension is paid under this section constitutes membership 15 service for the purposes of determining vesting in employer contributions under 16 AS 39.35.790(b) and eligibility for retirement and medical benefits under this 17 chapter and AS 39.30.300 - 39.30.495 [LIVED]. 18 * Sec. 72. AS 39.35 is amended by adding new sections to read: 19 Sec. 39.35.893. Survivor's pension adjustment. (a) Once each year, the 20 administrator shall increase payments to a person 60 years of age or older receiving a 21 survivor's pension under AS 39.35.890(k) or 39.35.892(c) and to a person who has 22 received a survivor's pension under AS 39.35.890(k) or 39.35.892(c) for at least five 23 years, who is not otherwise eligible for an increase under this section. 24 (b) The amount of the increase is a percentage of the current survivor's 25 pension equal to the lesser of 50 percent of the increase in the cost of living in the 26 preceding calendar year or six percent. 27 (c) If a survivor was not receiving a pension during the entire preceding 28 calendar year, the increase in the survivor's pension under this section shall be 29 adjusted by multiplying it by a fraction, the numerator of which is the number of 30 months for which the pension was received in the preceding calendar year and the 31 denominator of which is 12.
01 (d) The administrator shall increase the initial survivor's pension paid to a 02 survivor of a member who died while receiving disability benefits by a percentage 03 equal to the total cumulative percentage that has been applied to the member's 04 disability benefit under AS 39.35.891. 05 (e) An increase in benefit payments under this section is effective July 1 of 06 each year and is based on the percentage increase in the Consumer Price Index for 07 urban wage earners and clerical workers for Anchorage, Alaska, during the previous 08 calendar year, as determined by the United States Department of Labor, Bureau of 09 Labor Statistics. 10 (f) Pension adjustments under this section shall terminate the last day of the 11 month following the date on which a survivor is no longer receiving a survivor's 12 pension under AS 39.35.890(k) or 39.35.892(c). 13 Sec. 39.35.894. Premiums for retiree major medical insurance coverage 14 upon termination of disability benefits or survivor's pension. The premium for 15 retiree major medical insurance coverage payable by an employee whose disability 16 benefit is terminated under AS 39.35.890(g) or by an eligible survivor whose survivor 17 pension is terminated under AS 39.35.890(k) or 39.35.892(e) when the employee 18 would have been eligible for normal retirement if the employee had survived shall be 19 determined under AS 39.35.880(g)(2) as if the employee or survivor were eligible for 20 Medicare. 21 * Sec. 73. AS 39.35.910, as enacted by sec. 122, ch. 9, FSSLA 2005, is amended to read: 22 Sec. 39.35.910. Nonguarantee of returns, rates, or benefit amounts. The 23 plan created by AS 39.35.700 - 39.35.990 is, with respect to individual accounts, 24 treated as a defined contribution plan and [PLAN,] not a defined benefit plan. The 25 amount of money in the individual account of a participant depends on the amount of 26 contributions and the rate of return from investments of the account that varies over 27 time. If benefits are paid in the form of an annuity, the benefit amount payable is 28 dependent on the amount of money in the account and the interest rates applied and 29 service fees charged by the annuity payor at the time the annuity is purchased from 30 the carrier and benefits are first paid. Nothing in this plan guarantees a participant 31 (1) a rate of return or interest rate other than that actually earned by the
01 account of the participant, less applicable administrative expenses; or 02 (2) an annuity based on interest rates or service charges other than 03 interest rates available from and service charges by the annuity payor in effect at the 04 time the annuity is paid. 05 * Sec. 74. AS 39.35.940(c), as enacted by sec. 122, ch. 9, FSSLA 2005, is amended to read: 06 (c) Each eligible member who elects to participate in the defined contribution 07 retirement plan shall have transferred to a new account the employee contribution 08 account balance held in trust for the member under the defined benefit retirement plan 09 of the public employees' retirement system. A matching employer contribution shall 10 be made on behalf of that employee to the new account. The employer shall make the 11 matching contribution from funds other than the trust funds of the defined benefit 12 retirement plan established under AS 39.35.095 - 39.35.680. The amount of the 13 matching employer contribution shall be subject to, and may not exceed, the 14 limitation of 26 U.S.C. 415(c) during the applicable limitation year in which the 15 contribution is made. 16 * Sec. 75. AS 39.35.940(d), as enacted by sec. 122, ch. 9, FSSLA 2005, is amended to read: 17 (d) Upon a transfer, all membership service previously earned under the 18 defined benefit retirement plan shall be nullified for purposes of entitlement to a future 19 benefit under the defined benefit retirement plan but shall be credited for purposes of 20 determining vesting in employer contributions under AS 39.35.790(b) and 21 eligibility to elect medical benefits under AS 39.35.870. Membership service allowed 22 for credit toward medical benefits does not include any service credit purchased for 23 employment by an employer who is not a participating employer in this chapter. 24 * Sec. 76. AS 39.35.940(h), as enacted by sec. 122, ch. 9, FSSLA 2005, is amended to read: 25 (h) An employee who is eligible to elect transfer to the defined 26 contribution plan must make the election not later than 12 months after the 27 employee's employer notifies the administrator that the employee's employer 28 consents to transfers of its employees under (i) of this section. The election to 29 participate in the defined contribution retirement plan must be made in writing on 30 forms and in the manner prescribed by the administrator. Before accepting an election 31 to participate in the defined contribution retirement plan, the administrator must
01 provide the employee planning on making an election to participate in the defined 02 contribution retirement plan with information, including calculations to illustrate the 03 effect of moving the employee's retirement plan from the defined benefit retirement 04 plan to the defined contribution retirement plan as well as other information to clearly 05 inform the employee of the potential consequences of the employee's election. An 06 election made under this subsection to participate in the defined contribution 07 retirement plan is irrevocable. Upon making the election, the participant shall be 08 enrolled as a member of the defined contribution retirement plan, the member's 09 participation in the plan shall be governed by the provisions of AS 39.35.700 - 10 39.35.990, and the member's participation in the defined benefit retirement plan under 11 AS 39.35.115 shall terminate. The participant's enrollment in the defined contribution 12 retirement plan shall be effective the first day of the month after the administrator 13 receives the completed enrollment forms. An election made by an eligible member 14 who is married is not effective unless the election is signed by the individual's spouse. 15 * Sec. 77. AS 39.35.940(i), as enacted by sec. 122, ch. 9, FSSLA 2005, is amended to read: 16 (i) A member may make an election under this section only if the member's 17 employer participates in both the defined benefit retirement plan and the defined 18 contribution retirement plan and consents to transfers under this section. The employer 19 shall notify the administrator if the employer consents to allowing the employer's 20 members to choose to transfer from the defined benefit retirement plan to the defined 21 contribution retirement plan under this section. The initial period during which the 22 employer's members may choose to transfer commences on the first day of the 23 month following the administrator's receipt of notice under this subsection and 24 continues for 12 months. An employer may consent to a second period of 12 25 months during which the employer's members may choose to transfer from the 26 defined benefit retirement plan to the defined contribution retirement plan under 27 this section. The second period commences on the first day of the month 28 following the administrator's receipt of notice under this subsection and 29 continues for 12 months. An employer's initial notice to allow transfers is 30 irrevocable and applicable to all eligible employees of the employer. An employer's 31 second notice to allow transfers under this section is irrevocable and applicable
01 only to those eligible employees to whom the initial period of transfer was not 02 available. 03 * Sec. 78. AS 39.35.940(j), as enacted by sec. 122, ch. 9, FSSLA 2005, is amended by 04 adding a new paragraph to read: 05 (3) "membership service" means service with a participating employer 06 under AS 39.35.095 - 39.35.680 for which contributions have been paid and does not 07 include any service for which reinstatement indebtedness has not been fully paid. 08 * Sec. 79. AS 39.35 is amended by adding new sections to read: 09 Sec. 39.35.957. Designation of eligible employees, agreement to contribute, 10 and amendment of participation. (a) A political subdivision or public organization 11 participating in the defined contribution retirement plan under AS 39.35.700 - 12 39.35.990 shall designate the departments, groups, or other classifications of 13 employees eligible to participate in the plan and, by participating, shall legally be 14 presumed to have agreed to make contributions each year in the amounts required for 15 members of the plan under AS 39.35.750. 16 (b) If the employer does not participate in the defined benefit retirement plan 17 under AS 39.35.095 - 39.35.680, an employee who is eligible under (a) of this section 18 and who is a member of the defined benefit retirement plan under AS 39.35.095 - 19 39.35.680 does not accrue credited service or make contributions under that defined 20 benefit retirement plan, but shall be a member of the defined contribution retirement 21 plan under AS 39.35.700 - 39.35.990 and make contributions under that plan. 22 (c) An employer may request to amend its participation in the plan to add or 23 exclude departments, groups, or other classifications of employees by filing a 24 resolution as provided by AS 39.35.950 or 39.35.955 with the administrator. 25 Sec. 39.35.958. Termination of participation in the plan. (a) A political 26 subdivision or public organization may request that its participation in the plan be 27 terminated. The request may be made only after adoption of a resolution by the 28 legislative body of the political subdivision and approval of the resolution by the 29 person required by law to approve the resolution, or, in the case of a public 30 organization, after adoption of a resolution by the governing body of that public 31 organization. A certified copy of the resolution shall be filed with the administrator.
01 (b) If contributions are not transmitted to the plan within the prescribed time 02 limit, the commissioner of administration may grant an extension and shall assess 03 interest on the outstanding contributions at the rate established under AS 39.35.610. If 04 the political subdivision or public organization is in default at the end of the extension, 05 participation in the plan is terminated, and it shall be sent notice of termination. 06 (c) When an employer's participation in the plan is terminated, or when an 07 employer terminates coverage of a department, group, or other classification of 08 employees under AS 39.35.957(c), the administrator shall assess the employer an 09 amount that the administrator determines is actuarially required to fully fund the costs 10 to the plan for employees whose coverage is terminated, including the cost of 11 providing the employer's share of retiree health benefits under AS 39.35.880, 12 occupational disability and occupational death benefits under AS 39.35.890 and 13 39.35.892, and retirement benefits elected under AS 39.35.890(h)(2). 14 (d) An employee whose coverage under the plan is terminated as a result of 15 termination of an employer's participation under this section or amendment of the 16 employer's agreement under AS 39.35.957(c) shall be considered fully vested in 17 employer contributions under AS 39.35.790(b) and in the individual account 18 established for the employee under AS 39.30.370. If the employee is later employed 19 with a participating employer, the employee's membership service earned under the 20 plan during employment with a terminated employer shall be credited for purposes of 21 determining vesting in employer contributions under AS 39.35.790(b) and eligibility 22 for retirement and medical benefits under this chapter and AS 39.30.300 - 39.30.495. 23 * Sec. 80. AS 39.35.990(16), as enacted by sec. 122, ch. 9, FSSLA 2005, is amended to 24 read: 25 (16) "member" or "employee" means a person who is eligible to 26 participate in the plan and who is covered by [AN EMPLOYEE OF AN 27 EMPLOYER OR FORMER EMPLOYEE OF AN EMPLOYER WHO RETAINS A 28 RIGHT TO BENEFITS UNDER] the plan, but does not include full-time or part-time 29 instructors of the Department of Labor and Workforce Development and the 30 Department of Education and Early Development in positions that require a 31 teaching certificate;
01 * Sec. 81. AS 39.35.990(20), as enacted by sec. 122, ch. 9, FSSLA 2005, is amended to 02 read: 03 (20) "peace officer" or "fire fighter" means an employee occupying a 04 position as a peace officer, chief of police, regional public safety officer, 05 correctional officer, correctional superintendent, fire fighter, fire chief, or 06 probation officer, but does not include a village public safety officer employed by 07 a village public safety officer program established under AS 18.65.670 [HAS THE 08 MEANING GIVEN IN AS 39.35.680]; 09 * Sec. 82. AS 39.45 is amended by adding a new section to read: 10 Sec. 39.45.055. Appeals. A final decision made under AS 39.45.010 - 11 39.45.060 is subject to appeal under AS 44.64. 12 * Sec. 83. AS 44.64.030(a) is amended by adding new paragraphs to read: 13 (36) AS 14.25.175 (waiver of adjustments under teachers' defined 14 benefit plan); 15 (37) AS 39.30.165 (supplemental benefits system); 16 (38) AS 39.30.335 (teachers' and public employees' health 17 reimbursement arrangement plan); 18 (39) AS 39.35.522 (waiver of adjustments under public employees' 19 defined benefit plan) 20 (40) AS 39.45.055 (public employees' deferred compensation 21 program). 22 * Sec. 84. The uncodified law of the State of Alaska enacted in sec. 134, ch. 9, FSSLA 23 2005, is amended to read: 24 Sec. 134. EMPLOYER CONTRIBUTIONS FOR OCCUPATIONAL 25 DISABILITY AND DEATH BENEFITS IN THE PUBLIC EMPLOYEES' DEFINED 26 CONTRIBUTION RETIREMENT PLAN FOR THE FIRST FISCAL YEAR THE 27 PLAN IS IN EFFECT. Notwithstanding AS 39.35.750(e), added by sec. 122, ch. 9, 28 FSSLA 2005 [OF THIS ACT], for the first fiscal year in which the public employees' 29 defined contribution retirement plan is in effect, the employer contribution to fully 30 fund the cost of providing occupational disability and occupational death benefits 31 under AS 39.35.890 and 39.35.892 shall be equal to
01 (1) 0.73 [0.4] percent of the compensation for peace officers and fire 02 fighters who are members in the plan; and 03 (2) 0.37 [0.3] percent of the compensation for all other employees who 04 are members in the plan. 05 * Sec. 85. AS 14.25.045, and AS 39.35.050(a) are repealed. 06 * Sec. 86. AS 14.25.570, as enacted by sec. 35, ch. 9, FSSLA 2005, is repealed. 07 * Sec. 87. AS 14.25.070(b) and AS 39.35.270(b) are repealed. 08 * Sec. 88. AS 39.35.375(f) is repealed July 1, 2011. 09 * Sec. 89. The uncodified law of the State of Alaska is amended by adding a new section to 10 read: 11 EMPLOYER CONTRIBUTIONS FOR OCCUPATIONAL DISABILITY AND 12 OCCUPATIONAL DEATH BENEFITS IN THE TEACHERS' DEFINED CONTRIBUTION 13 RETIREMENT PLAN FOR THE FIRST FISCAL YEAR THE PLAN IS IN EFFECT. 14 Notwithstanding AS 14.25.350(e), added by sec. 13 of this Act, for the first fiscal year in 15 which the teachers' defined contribution retirement plan is in effect, the employer contribution 16 to fully fund the cost of providing occupational disability and occupational death benefits 17 under AS 14.25.485 and 14.25.487 shall be equal to 0.26 percent of the amount of 18 compensation paid to all teachers who work for the employer in that year and are members of 19 the plan. 20 * Sec. 90. The uncodified law of the State of Alaska is amended by adding a new section to 21 read: 22 RETROACTIVITY. Section 87 of this Act is retroactive to July 1, 2005. 23 * Sec. 91. The uncodified law of the State of Alaska is amended by adding a new section to 24 read: 25 CONDITIONAL RETROACTIVITY. If, under sec. 95 of this Act, secs. 1, 2, 7, 8, 10, 26 12, 37, 38, 43, 51, 52, 54, 56, and 91 of this Act take effect after June 30,2006, secs. 1, 2, 7, 8, 27 10, 12, 37, 38, 43, 51, 52, 54, 56, and 91 of this Act are retroactive to June 30, 2006. 28 * Sec. 92. Section 148, ch. 9, FSSLA 2005, is amended to read: 29 Sec. 148. Sections 2, 8, 35, 40, 46, 61, 69, 80, 82, 122, and 134 of this Act take 30 effect July 1, 2007 [2006]. 31 * Sec. 93. Sections 5 and 46 of this Act take effect July 1, 2009.
01 * Sec. 94. Sections 6, 47, and 48 of this Act take effect July 1, 2011. 02 * Sec. 95. Except as provided in secs. 93 and 94 of this Act, this Act takes effect 03 immediately under AS 01.10.070(c).