SB 141: "An Act relating to the teachers' and public employees' retirement systems and creating defined contribution and health reimbursement plans for members of the teachers' retirement system and the public employees' retirement system who are first hired after July 1, 2005; establishing the Alaska Retirement Management Board to replace the Alaska State Pension Investment Board, the Alaska Teachers' Retirement Board, and the Public Employees' Retirement Board; adding appeals of the decisions of the administrator of the teachers' and public employees' retirement systems to the jurisdiction of the office of administrative hearings; and providing for an effective date."
00 SENATE BILL NO. 141 01 "An Act relating to the teachers' and public employees' retirement systems and creating 02 defined contribution and health reimbursement plans for members of the teachers' 03 retirement system and the public employees' retirement system who are first hired after 04 July 1, 2005; establishing the Alaska Retirement Management Board to replace the 05 Alaska State Pension Investment Board, the Alaska Teachers' Retirement Board, and 06 the Public Employees' Retirement Board; adding appeals of the decisions of the 07 administrator of the teachers' and public employees' retirement systems to the 08 jurisdiction of the office of administrative hearings; and providing for an effective 09 date." 10 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 11 * Section 1. AS 14.25 is amended by adding new sections to read: 12 Article 1. Administration of the Teachers' Retirement System.
01 Sec. 14.25.001. Purpose. The purpose of this chapter is to encourage 02 qualified teachers to enter and remain in service with participating employers by 03 establishing plans for the payment of retirement benefits to or on behalf of the 04 members. 05 Sec. 14.25.002. Attorney general. The attorney general of the state is the 06 legal counsel for the system and shall advise the administrator and represent the 07 system in a legal proceeding. 08 Sec. 14.25.003. Administrator. (a) The commissioner of administration or 09 the commissioner's designee is the administrator of the system. 10 (b) The commissioner of administration shall adopt regulations to govern the 11 operation of the system. 12 Sec. 14.25.004. Powers and duties of the administrator. (a) The 13 administrator shall 14 (1) establish and maintain an adequate system of accounts; 15 (2) transmit the funds deposited in the system to the retirement fund 16 established and maintained by the Alaska Retirement Management Board; 17 (3) approve or disapprove claims for retirement benefits; 18 (4) make payments for the various purposes specified; 19 (5) submit periodic reports or statements of account that are needed; 20 (6) issue a statement of account to an employee not less than once each 21 year showing the amount of the employee's contributions to the applicable plan in the 22 system; 23 (7) formulate and recommend to the commissioner of administration 24 regulations to govern the operation of the system; 25 (8) as soon as possible after the close of each fiscal year, and not later 26 than six months after the close of each fiscal year, send to the governor and the 27 legislature an annual statement on the operations of each of the plans in the system 28 containing 29 (A) a balance sheet; 30 (B) a statement of income and expenditures for the previous 31 fiscal year;
01 (C) a report on valuation of trust fund assets; 02 (D) a summary of assets held in the trust fund listed by the 03 categories of investment, as provided by the Alaska Retirement Management 04 Board; 05 (E) other statistical financial data that are necessary for proper 06 understanding of the financial condition of the system as a whole and each plan 07 in the system and the result of its operations; 08 (9) engage an independent certified public accountant to conduct an 09 annual audit of each plan's accounts and the annual report of the system's financial 10 condition and activity; 11 (10) report to the Legislative Budget and Audit Committee concerning 12 the condition and administration of each plan and distribute the report to the members 13 of each plan in the system; 14 (11) publish an information handbook for each plan in the system at 15 intervals that the administrator considers appropriate; 16 (12) meet at least annually with the board to review the condition and 17 management of the retirement systems and to review significant changes to policies, 18 regulations, or benefits; and 19 (13) do whatever else may be necessary to carry out the purposes of 20 each plan in the system. 21 (b) The administrator is authorized to charge fees necessary to members' 22 accounts to cover the ongoing cost of operating each plan in the system. 23 (c) The administrator is authorized to contract with public and private entities 24 to provide record keeping, benefits payments, and other functions necessary for the 25 administration of each plan in the system. 26 Sec. 14.25.005. Regulations. (a) Regulations adopted by the administrator 27 under this chapter relate to the internal management of a state agency, and the 28 adoption of the regulations is not subject to AS 44.62 (Administrative Procedure Act). 29 (b) Notwithstanding (a) of this section, a regulation adopted under this chapter 30 shall be published in the Alaska Administrative Register and Code for informational 31 purposes.
01 (c) Each regulation adopted under this chapter must conform to the style and 02 format requirements of the drafting manual for administrative regulations that is 03 published under AS 44.62.050. 04 (d) At least 30 days before the adoption, amendment, or repeal of a regulation 05 under this chapter, the board shall provide notice of the action that is being considered. 06 The notice shall be 07 (1) posted in public buildings throughout the state; 08 (2) published in one or more newspapers of general circulation in each 09 judicial district of the state; 10 (3) mailed to each person or group that has filed a request for notice of 11 proposed action with the board; and 12 (4) furnished to each member of the legislature and to the Legislative 13 Affairs Agency. 14 (e) Failure to mail notice to a person as required under (d)(3) of this section 15 does not invalidate an action taken by the board. 16 (f) The board may hold a hearing on a proposed regulation. 17 (g) A regulation adopted under this chapter takes effect 30 days after adoption 18 by the board. 19 (h) Notwithstanding the other provisions of this section, a regulation may be 20 adopted, amended, or repealed, effective immediately, as an emergency regulation by 21 the unanimous vote of a quorum of the board. For an emergency regulation to be 22 effective the board must find that the adoption, amendment, or repeal of the regulation 23 is necessary for the immediate preservation of the orderly operation of the system or 24 the business of the board. The board shall, within 10 days after adoption of an 25 emergency regulation, give notice of the adoption under (d) of this section. An 26 emergency regulation adopted under this subsection may not remain in effect past the 27 date of the next regular meeting of the board unless the board complies with the 28 procedures set out in this section and adopts the regulation as a permanent regulation. 29 (i) In this section, "regulation" has the meaning given in AS 44.62.640(a). 30 Sec. 14.25.006. Appeals. An employer, member, annuitant, or beneficiary 31 may appeal a decision made by the administrator to the office of administrative
01 hearings established under AS 44.64. An aggrieved party may appeal a final decision 02 to the superior court. 03 Sec. 14.25.007. Investment management of retirement system funds. The 04 Alaska Retirement Management Board established under AS 37.10.210 is the 05 fiduciary of the system funds. 06 Sec. 14.25.008. Definitions. In AS 14.25.001 - 14.24.008, 07 (1) "plan" means the retirement plan established in AS 14.25.009 - 08 14.25.200 or the retirement plan established in AS 14.25.310 - 14.25.590; 09 (2) "system" means all retirement plans established under the teachers' 10 retirement system. 11 Article 2. Teachers First Hired before July 1, 2005. 12 Sec. 14.25.009. Applicability of AS 14.25.009 - 14.25.220. The provisions of 13 AS 14.25.009 - 14.25.220 apply only to members first hired before July 1, 2005. 14 * Sec. 2. AS 14.25.010 is amended to read: 15 Sec. 14.25.010. Retirement plan [SYSTEM] established; federal 16 qualification requirements. (a) A joint-contributory retirement plan [SYSTEM] for 17 teachers of the state is created. 18 (b) The retirement plan [SYSTEM] established by AS 14.25.009 - 14.25.220 19 [THIS CHAPTER] is intended to qualify under 26 U.S.C. 401(a) and 414(d) (Internal 20 Revenue Code) as a qualified retirement plan established and maintained by the state 21 for its employees, for the employees of school districts and regional educational 22 attendance areas in the state, and for the employees of other employers whose 23 participation is authorized by AS 14.25.009 - 14.25.220 [THIS CHAPTER] and who 24 participate in this plan [SYSTEM]. 25 (c) An amendment to AS 14.25.009 - 14.25.220 [THIS CHAPTER] does not 26 provide a person with a vested right to a benefit if the Internal Revenue Service 27 determines that the amendment will result in disqualification of the plan under the 28 Internal Revenue Code. 29 * Sec. 3. AS 14.25.012(b) is amended to read: 30 (b) The plan [SYSTEM] created in AS 14.25.009 - 14.25.220 became 31 effective as of July 1, 1955, at which time contributions by the participating employers
01 and members began. 02 * Sec. 4. AS 14.25.012 is amended by adding a new subsection to read: 03 (c) Employees first hired after June 30, 2005, are not eligible to participate in 04 the plan established in AS 14.25.009 - 14.25.220. 05 * Sec. 5. AS 14.25.040(a) is amended to read: 06 (a) Unless a teacher or member has elected to participate in the optional 07 university retirement program under AS 14.40.661 - 14.40.799, [OR] has filed an 08 election under AS 14.25.043(b), or has elected to participate in the plan established 09 in AS 14.25.310 - 14.25.590, a teacher or member contracting for service with a 10 participating employer is subject to AS 14.25.009 - 14.25.220 [THIS CHAPTER]. 11 * Sec. 6. AS 14.25.040(d) is amended to read: 12 (d) A person who is employed at least half-time in the plan [SYSTEM] during 13 the same period that the person is employed at least half-time in a position in the 14 public employees' retirement plan [SYSTEM] under AS 39.35.010 - 39.35.680 15 [AS 39.35] shall receive credited service under each plan [SYSTEM] for half-time 16 employment. However, the amount of credited service a person receives under the 17 public employees' retirement plan [SYSTEM] during a school year may not exceed 18 the amount necessary, when added to the amount of credited service earned during the 19 school year under the plan [SYSTEM], to equal one year of credited service. A 20 person who was employed at least half-time in a position in the public employees' 21 retirement plan [SYSTEM] under AS 39.35.010 - 39.35.680 [AS 39.35] in the same 22 period that the person was employed at least half-time in a position in this plan 23 [SYSTEM] may claim credited service in both plans [SYSTEMS] for employment 24 before May 31, 1989. To obtain this credited service, the person shall claim the 25 service and verify the period of half-time employment. When eligibility for half-time 26 service credit has been established, an indebtedness shall be determined to the 27 retirement plan [SYSTEM] in which the person did not participate. The amount of 28 the indebtedness is the full actuarial cost of providing benefits for the credited service 29 claimed. Interest as prescribed by regulation accrues on that indebtedness beginning 30 on the later of July 1, 1989, or the date on which the member is first eligible to claim 31 the service. Any outstanding indebtedness existing at the time the person retires will
01 require an actuarial adjustment to the benefits payable based on that service. 02 * Sec. 7. AS 14.25.050(a) is amended to read: 03 (a) Except as provided in (c) of this section, beginning July 1, 2005 04 [JANUARY 1, 1991], each member shall contribute to the plan a percentage 05 [SYSTEM AN AMOUNT EQUAL TO 8.65 PERCENT] of the member's base salary 06 accrued from July 1 to the following June 30, as determined under AS 14.25.052. 07 The employer shall deduct the contribution from the member's salary at the end of 08 each payroll period, and the contribution shall be credited by the plan [SYSTEM] to 09 the member contribution account. The contributions shall be deducted from employee 10 compensation before the computation of applicable federal taxes and shall be treated 11 as employer contributions under 26 U.S.C. 414(h)(2). A member may not have the 12 option of making the payroll deduction directly in cash instead of having the 13 contribution picked up by the employer. 14 * Sec. 8. AS 14.25 is amended by adding new sections to read: 15 Sec. 14.25.052. Calculation of member contribution rate. (a) Each active 16 member shall contribute a percentage of the member's base salary to be determined 17 annually in advance by the administrator. The employee contribution rate is the 18 greater of 19 (1) 8.65 percent; or 20 (2) one-half of the normal cost rate actuarially calculated to fund the 21 benefits expected to be earned by active members during the fiscal year. 22 (b) The maximum increase in the contribution rate for a member from one 23 year to the next may not be more than five percentage points, as actuarially calculated. 24 * Sec. 9. AS 14.25.070 is amended to read: 25 Sec. 14.25.070. Contributions by employer. An employer shall contribute to 26 the plan [SYSTEM] an amount equal to the percentage, as certified by the board 27 [ADMINISTRATOR], of the sum total of the base salaries of all members that is 28 required in addition to member contributions to provide the benefits of AS 14.25.009 - 29 14.25.220 [THIS CHAPTER] times the sum total of the base salaries paid to members, 30 including any adjustments to contributions required by AS 14.25.173(a), by the 31 employer.
01 * Sec. 10. AS 14.25.070 is amended by adding a new subsection to read: 02 (b) When added to the member contribution rate calculated under 03 AS 14.25.052, the employer contribution may not be less than the amount required to 04 fully fund the future liabilities of active members as determined by the board. 05 * Sec. 11. AS 14.25.075(a) is amended to read: 06 (a) An employee who is eligible to purchase credited service under 07 AS 14.25.047 or 14.25.048, a member who is eligible to purchase credited service 08 under AS 14.25.048, 14.25.050, 14.25.060, 14.25.061, [14.25.062,] 14.25.100, or 09 14.25.107, or a teacher who is eligible to purchase credited service under 10 AS 14.20.345, AS 14.25.050, [14.25.062,] or 14.25.105, in lieu of making payments 11 directly to the plan, may elect to have the member's employer make payments as 12 provided in this section. 13 * Sec. 12. AS 14.25.075(b) is amended to read: 14 (b) A member may elect to have the employer make payments for all or any 15 portion of the amounts payable for the member's purchase of credited service through 16 a salary reduction program as follows: 17 (1) the amounts paid under a salary reduction program are in lieu of 18 contributions by the member making the election; the electing member's salary or 19 other compensation shall be reduced by the amount paid by the employer under this 20 subsection; 21 (2) the member shall make an irrevocable election under this 22 subsection to purchase credited service as permitted in AS 14.20.345, AS 14.25.047, 23 14.25.048, 14.25.050, 14.25.060, 14.25.061, [14.25.062,] 14.25.100, 14.25.105, or 24 14.25.107 before the member's termination of employment; the irrevocable election 25 must specify the number of payroll periods that deductions will be made from the 26 member'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 with the 29 employer or the member's death; amounts paid by an employer under (f) of this 30 section may not be applied toward the payment of the dollar amount of the deductions 31 representing the portion of the credited service that is being purchased by the member
01 through payroll deduction in accordance with the member's irrevocable election under 02 this paragraph; 03 (3) amounts paid by an employer under this subsection shall be treated 04 as employer contributions for the purpose of determining tax treatment under 26 05 U.S.C. (Internal Revenue Code); the amounts paid by the employer under this section 06 may not be included in the member's gross income for income tax purposes until those 07 amounts are distributed by refund or retirement benefit payments. 08 * Sec. 13. AS 14.25.075(e) is amended to read: 09 (e) Contributions to the plan [SYSTEM] to purchase credited service under 10 this section do not qualify for treatment under this section if recognition of that service 11 would cause a member to receive a retirement benefit for the same service from the 12 plan [SYSTEM] and from one or more other retirement plans or systems of the state. 13 * Sec. 14. AS 14.25.075(f) is amended to read: 14 (f) The administrator may accept rollover contributions from a member [, 15 AND DIRECT TRANSFERS AS DESCRIBED IN THIS SUBSECTION, FOR THE 16 PURCHASE, IN WHOLE OR IN PART, OF FORFEITED CREDITED SERVICE 17 UNDER THIS SECTION FOR THE REINSTATEMENT, IN WHOLE OR IN PART, 18 OF FORFEITED CREDITED SERVICE UNDER AS 14.25.062]. Contributions 19 made under this subsection may not be applied to purchase service being paid under 20 (b) of this section. A rollover contribution [OR TRANSFER] as described in this 21 subsection shall be treated as employer contributions for the purpose of determining 22 tax treatment under the Internal Revenue Code and may be made by any one or a 23 combination of the following methods: 24 (1) subject to the limitations prescribed in 26 U.S.C. 402(c), accepting 25 eligible rollover distributions directly from one or more retirement programs of 26 another employer that are qualified under 26 U.S.C. 401(a) or accepting rollovers 27 directly from a member; 28 (2) subject to the limitations prescribed in 26 U.S.C. 408(d)(3)(A)(ii), 29 accepting from a member conduit rollover contributions that are received by the 30 member from one or more conduit rollover individual retirement accounts previously 31 established by the member;
01 (3) subject to the limitations prescribed in 26 U.S.C. 403(b)(13), 02 accepting direct trustee-to-trustee transfers of all or a portion of the accounts of the 03 member, on or after January 1, 2002, from a tax sheltered annuity described in 26 04 U.S.C. 403(b); 05 (4) subject to the limitations prescribed in 26 U.S.C. 457(e)(17), 06 accepting direct trustee-to-trustee transfers of all or a portion of the accounts of the 07 member, on or after January 1, 2002, from an eligible deferred compensation plan of a 08 tax-exempt organization or a state or local government 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. 15. 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 14.25.105, or 14.25.107, the requirements of this section, and the administrative filing 16 requirements specified by the administrator, the plan shall adjust the member's 17 credited service history and add any additional service credits acquired. 18 * Sec. 16. AS 14.25.145 is amended to read: 19 Sec. 14.25.145. Interest on individual accounts. Interest shall be credited to 20 each teacher's account at the end of each school year at the rate prescribed by the 21 board [REGULATION] for that year. 22 * Sec. 17. AS 14.25.150 is amended by adding a new subsection to read: 23 (c) A member who has received a refund of contributions in accordance with 24 this section forfeits corresponding credited service under AS 14.25.009 - 14.25.220. 25 * Sec. 18. AS 14.25.173(c) is amended to read: 26 (c) At least quarterly, [AT EACH REGULARLY SCHEDULED MEETING 27 OF THE TEACHERS' RETIREMENT BOARD,] the administrator shall report to the 28 commissioner of administration [BOARD] on all situations since the administrator's 29 last report in which an adjustment has been prohibited under (b) of this section. If the 30 commissioner of administration [BOARD] finds that there is reason to believe that 31 one or more of the conditions set out in (b) of this section have not been met, the
01 administrator shall notify the member or beneficiary that an adjustment will be made 02 to recover the overpayment. A member or beneficiary who receives notice of 03 adjustment under this subsection may file a request with the commissioner of 04 administration [APPEAL TO THE BOARD] for a waiver of the adjustment under 05 AS 14.25.175. An adjustment that requires the repayment of benefits may not be 06 required while the waiver request [APPEAL] is pending. 07 * Sec. 19. AS 14.25.175(a) is amended to read: 08 (a) Upon request [APPEAL] by an affected member or beneficiary under (b) 09 of this section, the commissioner of administration [BOARD] may waive an 10 adjustment or a portion of an adjustment made under AS 14.25.173 if, in the opinion 11 of the commissioner of administration [BOARD], 12 (1) the adjustment or portion of the adjustment will cause undue 13 hardship to the member or beneficiary; 14 (2) the adjustment was not the result of erroneous information supplied 15 by the member or beneficiary; 16 (3) before the adjustment was made, the member or beneficiary 17 received confirmation from the administrator that the member's or beneficiary's 18 records were correct; and 19 (4) the member or beneficiary had no reasonable grounds to believe 20 the records were incorrect before the adjustment was made. 21 * Sec. 20. AS 14.25.175(b) is amended to read: 22 (b) In order to obtain consideration of a waiver under this section, the affected 23 member or beneficiary shall file a request with [MUST APPEAL TO] the 24 commissioner of administration [BOARD] in writing within 30 days after receipt of 25 notice that the records have been adjusted. The ruling of the commissioner of 26 administration [BOARD] shall be in writing. 27 * Sec. 21. AS 14.25.175(c) is repealed and reenacted to read: 28 (c) A ruling of the commissioner of administration to deny a waiver under (b) 29 of this section may be appealed to the office of administrative hearings. 30 * Sec. 22. AS 14.25.175(d) is amended to read: 31 (d) The office of administrative hearings [BOARD] may reverse the
01 commissioner of administration's decision to deny a waiver and may impose 02 conditions on granting a waiver that it considers equitable. These conditions may 03 include requiring the member or beneficiary to make additional contributions to the 04 plan [SYSTEM]. 05 * Sec. 23. AS 14.25.220(2) is amended to read: 06 (2) "actuarial adjustment" means the adjustment necessary to obtain 07 equality in value of the aggregate expected payments under two different forms of 08 pension payments, considering expected mortality and interest earnings on the basis of 09 assumptions, factors, and methods specified in regulations issued under the plan 10 [SYSTEM] that are formally adopted [UNDER AS 14.25.022] by the board and that 11 clearly preclude employer discretion in the determination of the amount of any 12 member's benefit; 13 * Sec. 24. AS 14.25.220(3) is amended to read: 14 (3) "administrator" means the [PERSON APPOINTED BY THE] 15 commissioner of administration or the commissioner's designee under AS 14.25.003 16 [AS 14.25.015]; 17 * Sec. 25. AS 14.25.220(9) is amended to read: 18 (9) "board" means the Alaska Retirement Management [ALASKA 19 TEACHERS' RETIREMENT] Board established under AS 37.10.210 [AS 14.25.035]; 20 * Sec. 26. AS 14.25.220(40) is amended to read: 21 (40) "supplemental contribution account" means the account 22 maintained by the plan [SYSTEM] to record the supplemental contributions of each 23 member, including interest and adjustments to the account [IN ACCORDANCE 24 WITH AS 14.25.170]; 25 * Sec. 27. AS 14.25.220 is amended by adding a new paragraph to read: 26 (46) "plan" means the retirement benefit plan established under 27 AS 14.25.009 - 14.25.220. 28 * Sec. 28. AS 14.25 is amended by adding new sections to read: 29 Article 3. Teachers First Hired on or after July 1, 2005. 30 Sec. 14.25.310. Applicability of AS 14.25.310 - 14.25.590. The provisions of 31 AS 14.25.310 - 14.25.590 apply only to teachers who first become members on or
01 after July 1, 2005. 02 Sec. 14.25.320. Defined contribution retirement plan established. (a) A 03 defined contribution retirement plan for teachers of the state is created. 04 (b) The defined contribution retirement plan includes a plan in which savings 05 are accumulated in an individual retirement account for the exclusive benefit of the 06 member or beneficiaries. The plan is established effective July 1, 2005, at which time 07 contributions by employers and employees begin. 08 (c) The defined contribution retirement plan is intended to qualify under 26 09 U.S.C. 401(a) and 414(d) (Internal Revenue Code) as a qualified retirement plan 10 established and maintained by the state for its employees and for the employees of 11 school districts and regional educational attendance areas in the state. 12 (d) An amendment to the defined contribution retirement plan does not 13 provide a person with a vested right to a benefit if the Internal Revenue Service 14 determines that the amendment will result in disqualification of the plan under the 15 Internal Revenue Code. 16 Sec. 14.25.330. Membership. (a) A teacher first hired after July 1, 2005, 17 shall participate in the plan as a member of the defined contribution retirement plan. 18 (b) A teacher who has elected to participate in the optional university 19 retirement program under AS 14.40.661 - 14.40.799 may not participate as a member 20 of the defined contribution retirement plan. 21 Sec. 14.25.340. Contributions by members. (a) Each member shall 22 contribute to the member's individual account an amount equal to eight percent of the 23 member's compensation from July 1 to the following June 30. 24 (b) Subject to the limitations on contributions under AS 14.25.380, a member 25 may elect to make additional contributions to the member's individual account. 26 (c) The employer shall deduct the contribution from the member's 27 compensation at the end of each payroll period, and the contribution shall be credited 28 by the administrator to the member's individual account. The contributions shall be 29 deducted from member's compensation before the computation of applicable federal 30 taxes and shall be treated as employer contributions under 26 U.S.C. 414(h)(2). A 31 member may not have the option of making the payroll deduction directly in cash
01 instead of having the contribution picked up by the employer. 02 Sec. 14.25.348. Teachers of Alaska Native language and culture. An 03 employee employed by a participating employer shall participate in the plan if the 04 employee 05 (1) teaches Alaska Native language or culture in a permanent full-time 06 or permanent part-time position; 07 (2) learned about the subject to be taught by living in the culture or 08 using the language in daily life; and 09 (3) is qualified to teach the subject to elementary or secondary students 10 as required by regulations adopted by the Department of Education and Early 11 Development. 12 Sec. 14.25.350. Contributions by employers. (a) An employer shall 13 contribute to the member's individual account an amount equal to 3.5 percent of each 14 member's compensation from July 1 to the following June 30. 15 (b) An employer shall also contribute an amount equal to 3.75 percent of each 16 member's compensation from July 1 to the following June 30 to pay for retiree major 17 medical insurance. This contribution shall be paid into the group health and life 18 benefits fund established by the commissioner of administration under AS 39.30.095 19 and shall be accounted for in accordance with regulations established by the 20 commissioner. 21 (c) An employer shall also make contributions to the health reimbursement 22 arrangement plan under AS 39.30.300. 23 Sec. 14.25.360. Rollover contributions and distributions. (a) A teacher 24 entering the plan may elect, at the time and in the manner prescribed by the 25 administrator, to have all or part of a direct rollover distribution from an eligible 26 retirement plan owned by the member paid directly into the member's individual 27 account. 28 (b) Rollover contributions do not count as a purchase of membership service 29 for the purpose of determining years of service. 30 (c) A distributee may elect, at the time and in the manner prescribed by the 31 administrator, to have all or part of a direct rollover distribution paid directly to an
01 eligible retirement plan specified by the distributee in the direct rollover. 02 (d) In this section, 03 (1) "direct rollover" means the payment of an eligible rollover 04 distribution by the system to an eligible retirement plan specified by a distributee who 05 is eligible to elect a direct rollover; 06 (2) "distributee" means a member, or a beneficiary who is the 07 surviving spouse of the member, or an alternate payee; 08 (3) "eligible retirement plan" means 09 (A) a conduit individual retirement account described in 26 10 U.S.C. 408(d)(3)(A); 11 (B) an annuity plan described in 26 U.S.C. 403(a); 12 (C) a qualified trust described in 26 U.S.C. 401(a); 13 (D) an annuity plan described in 26 U.S.C. 403(b); or 14 (E) a governmental plan described in 26 U.S.C. 457(b); 15 (4) "eligible rollover distribution" means a distribution of all or part of 16 a total account to a distributee, except for 17 (A) a distribution that is one of a series of substantially equal 18 installments payable not less frequently than annually over the life expectancy 19 of the distributee or the joint and last survivor life expectancy of the distributee 20 and the distributee's designated beneficiary, as defined in 26 U.S.C. 401(a)(9); 21 (B) a distribution that is one of a series of substantially equal 22 installments payable not less frequently than annually over a specified period 23 of 10 years or more; 24 (C) a distribution that is required under 26 U.S.C. 401(a)(9); 25 (D) the portion of any distribution that is not includable in 26 gross income; 27 (E) a distribution that is on account of hardship; and 28 (F) other distributions that are reasonably expected to total less 29 than $200 during a year. 30 Sec. 14.25.370. Transmittal of contributions. All contributions deducted in 31 accordance with AS 14.25.310 - 14.25.590 shall be transmitted to the plan for deposit
01 in the trust fund as soon as administratively feasible, but in no event later than 15 days 02 following the close of the payroll period. 03 Sec. 14.25.380. Limitations on contributions. Notwithstanding any other 04 provisions of this plan, the annual additions to each member's individual account 05 under this plan and under all defined contribution plans of the employer required to be 06 aggregated with the contributions from this plan under the provisions of 26 U.S.C. 415 07 may not exceed, for any limitation year, the amount permitted under 26 U.S.C. 415 at 08 any time. If the amount of a contribution to a member's account exceeds the limitation 09 of 26 U.S.C. 415(c) for any limitation year, the administrator shall take any necessary 10 remedial action to correct an excess contribution. The provisions of 26 U.S.C. 415, 11 and the regulations adopted under that statute, as applied to qualified defined 12 contribution plans of governmental employees are incorporated as part of the terms 13 and conditions of the plan. 14 Sec. 14.25.390. Vesting. (a) A participating member is immediately and 15 fully vested in that member's contributions and related earnings. 16 (b) A member is fully vested in the employer contributions made on that 17 member's behalf, and related earnings, after five years of service. A member is 18 partially vested in the employer contributions made on that member's behalf, and the 19 related earnings, in the ratio of 20 (1) 25 percent with two years of service; 21 (2) 50 percent with three years of service; and 22 (3) 75 percent with four years of service. 23 Sec. 14.25.400. Investment of individual accounts. (a) The board shall 24 provide a range of investment options and permit a participant to exercise investment 25 control over the participant's assets in the member's individual account as provided in 26 this section. If a participant exercises control over the assets in the individual account, 27 the participant is not considered a fiduciary for any reason on the basis of exercising 28 that control. 29 (b) A participant may direct investment of plan funds held in an account 30 among available investment funds in accordance with rules established by the board. 31 (c) A participant may elect to change or transfer all or a portion of the
01 participant's existing account balance among available investment funds not more 02 often than once each day in accordance with the rules established by the administrator. 03 Only the last election received by the administrator before the transmittal of 04 contributions to the trust fund for allocation to the individual account will be used to 05 direct the investment of the contributions received. 06 (d) Except to the extent clearly set out in the terms of the investment plans 07 offered by the employer to the employee, the employer is not liable to the participant 08 for investment losses if the prudent investment standard has been met. 09 (e) The employer, administrator, state, board, or a person or entity who is 10 otherwise a fiduciary is not liable by reason for any participant's investment loss that 11 results from the participant's directing the investment of plan assets allocated to the 12 participant's account. 13 (f) To the extent that a member's individual account has been divided as 14 provided in a qualified domestic relations order between participants, each participant 15 shall be treated as the holder of a separate individual account for purposes of 16 investment yields, decisions, transfers, and time limitations imposed by this section. 17 Sec. 14.25.410. Distribution election at termination. (a) A member is 18 eligible to elect distribution of the member's account in accordance with this section 19 60 days after termination of employment. 20 (b) Notwithstanding (a) of this section, distribution of all or a portion of the 21 individual account of a member may take place before the 60th day after termination 22 of employment with the approval of the administrator if the member makes a written 23 request for a distribution under this subsection. The member's spouse must consent to 24 the request in writing if the member is married. Distribution of an individual account 25 can only be made on account of an immediate and heavy financial need of the member 26 for the following reasons and in the amount the need is demonstrated for 27 (1) medical care described in 26 U.S.C. 213(d) incurred by the 28 member, the member's spouse, or the member's dependent, or necessary to obtain that 29 medical care; 30 (2) the purchase of a principal residence for the member; 31 (3) postsecondary education tuition and related educational fees for the
01 next 12-month period for the member, the member's spouse, or a dependent of the 02 member; in this paragraph, "dependent" has the meaning given in 26 U.S.C. 152; 03 (4) prevention of the eviction of the member from the member's 04 principal residence or foreclosure on the mortgage of the member's principal 05 residence; or 06 (5) any need prescribed by the United States Department of the 07 Treasury, Internal Revenue Service, in a revenue ruling, notice, or other document of 08 general applicability that satisfies the safe harbor definition of hardship under 09 regulations adopted under 26 U.S.C. 401(k). 10 (c) If a member dies before benefits commence, the member's beneficiary is 11 immediately eligible to elect distribution of the member's share of the member's 12 individual account. 13 (d) Distributions are payable to an alternate payee in accordance with the 14 terms and conditions of a qualified domestic relations order that is received and 15 approved by the administrator as specified in AS 14.25.460. 16 (e) Distributions that are being paid to a member may not be affected by the 17 member's subsequent reemployment with the employer. Upon reemployment, a new 18 individual account shall be established for the member to which any future 19 contributions shall be allocated. Upon subsequent termination of employment, the 20 member's new individual account shall be distributed in accordance with this section. 21 Sec. 14.25.420. Forms of distribution. (a) A participant may elect to receive 22 distribution of the participant's share of the individual account in a 23 (1) lump sum payment, which is a single payment of the entire balance 24 in the account; 25 (2) periodic lump sum payment, which is a payment of a portion of the 26 balance in the account, not more than twice each year; 27 (3) period certain annuity payment, which is an annuity payable in a 28 fixed number of monthly installments for a duration of 60, 120, or 180 months; 29 (4) life annuity with a period certain payment, which is an annuity 30 payable until the later of the first day of the month in which the annuitant's death 31 occurs, or the date on which the payment of a fixed number of monthly installments is
01 completed; the period certain for installments is 120 or 180 months; 02 (5) single life annuity payment, which is an annuity payable monthly 03 until the first of the month in which the annuitant's death occurs; or 04 (6) joint and survivor annuity payment, which is an annuity payable 05 monthly to the member until the first of the month in which the member's death 06 occurs; after the member's death, a survivor annuity equal to 50 percent or 100 percent 07 of the member's benefit, as previously elected by the member, shall be paid monthly to 08 the joint annuitant for the remainder of the survivor's lifetime. 09 (b) Upon the death of an annuitant whose payments have commenced, an 10 annuitant's beneficiary shall receive further payments only to the extent provided in 11 accordance with the form of payment that was being made to the annuitant. The 12 remaining portion of the interest will continue to be distributed at least as rapidly as 13 under the method of distribution being used before the annuitant's death. 14 (c) If a participant dies before the distribution commencement date, 15 distribution of the participant's entire interest to a beneficiary shall be payable in any 16 form other than a joint and survivor annuity. 17 (d) If an unmarried member or other participant fails to elect a form of 18 payment before the distribution commencement date, the account shall be paid to a 19 beneficiary in the form of a lump sum to the extent required by the minimum 20 distribution requirements set out in the Internal Revenue Code. If a married member 21 fails to elect a form of payment before the distribution commencement date, the 22 account shall be paid in the form of a 50 percent joint and survivor annuity, with the 23 member's spouse as the joint annuitant. 24 Sec. 14.25.430. Manner of electing distributions. (a) Any election or any 25 alteration or revocation of a prior election by a participant for any purpose under this 26 plan shall be on forms or made in a manner prescribed for that purpose by the plan 27 administrator. To be effective, the forms required or the required action for any 28 purpose under this plan must be completed and received in accordance with rules, 29 regulations, and policies adopted by the administrator. 30 (b) At any time, but not less than seven days before the distribution 31 commencement date, a member, alternate payee, or beneficiary may change
01 (1) the form of payment election; 02 (2) an election to commence benefits; or 03 (3) the joint annuitant designation. 04 (c) Changes in elections are not allowed on or after seven days before the 05 distribution commencement date. 06 Sec. 14.25.440. Distribution requirements. (a) Payments to a participant 07 shall commence as soon as administratively feasible following the distribution 08 commencement date. The distribution commencement date is the first date on which 09 one of the following occurs: 10 (1) a member meets the requirements of AS 14.25.410 and has made a 11 complete application for payment under AS 14.25.420; 12 (2) a participant has elected to defer receipt of the account to a date 13 specified, the date has been attained, and the participant has made a complete 14 application for payment; 15 (3) a member attains normal retirement age and has not made an 16 application for payment or elected to defer receipt of the account to a date later than 17 normal retirement age; 18 (4) a member's beneficiary does not make an application for benefits 19 and five years have elapsed since the member's death; 20 (5) notwithstanding AS 14.25.420, a participant whose account has a 21 balance of $1,000 or less meets the requirements of AS 14.25.410, at which time the 22 participant must take payment of the participant's account. 23 (b) The entire interest of a participant must be distributed or must begin to be 24 distributed not later than the member's required beginning date. 25 (c) If a member dies after the distribution of the member's interest has begun 26 but before the distribution has been completed, the remaining portion of the interest 27 shall continue to be distributed at least as rapidly as under the method of distribution 28 being used before the member's death. 29 (d) If a member has made a distribution election and dies before the 30 distribution commencement date, distribution of the member's entire interest shall be 31 completed by December 31 of the calendar year containing the fifth anniversary of the
01 member's death. However, if any portion of the member's interest is payable to a 02 designated beneficiary, distributions may be made over the life of the designated 03 beneficiary or over a period certain not greater than the life expectancy of the 04 designated beneficiary, commencing on or before December 31 of the calendar year 05 immediately following the calendar year in which the member died, and, if the 06 designated beneficiary is the member's surviving spouse, the date distributions are 07 required to begin may not be earlier than the later of December 31 of the calendar year 08 (1) immediately following the calendar year in which the member died, or (2) in which 09 the member would have attained 70 1/2 years of age, whichever is earlier. If the 10 surviving spouse dies after the member but before payments to the spouse have begun, 11 the provisions of this subsection apply as if the surviving spouse were the member. 12 An amount paid to a child of the member will be treated as if it were paid to the 13 surviving spouse if the amount becomes payable to the surviving spouse when the 14 child reaches the age of majority. 15 (e) If a member has not made a distribution election before the member's 16 death, the member's designated beneficiary must elect the method of distribution not 17 later than December 31 of the calendar year (1) in which distributions would be 18 required to begin under this section, or (2) that contains the fifth anniversary of the 19 date of death of the member, whichever is earlier. If the member does not have a 20 designated beneficiary or if the designated beneficiary does not elect a method of 21 distribution, distribution of the member's entire interest must be completed by 22 December 31 of the calendar year containing the fifth anniversary of the member's 23 death. 24 (f) For purposes of (b) of this section, distribution of a member's interest is 25 considered to begin (1) on the member's required beginning date, or (2) if the 26 designated beneficiary is the member's surviving spouse and the surviving spouse dies 27 after the member but before payments to the spouse have begun, on the date 28 distribution is required to begin to the surviving spouse. If distribution in the form of 29 an annuity irrevocably commences to the member before the required beginning date, 30 the date distribution is considered to begin is the date that the distribution actually 31 commences.
01 (g) Notwithstanding any contrary provisions of AS 14.25.310 - 14.25.590, the 02 requirements of this section apply to all distributions of a member's interest and take 03 precedence over any inconsistent provisions of AS 14.25.310 - 14.25.590. 04 (h) All distributions required under this section are determined and made in 05 accordance with 26 U.S.C. 401(a)(9) and regulations adopted under that statute, 06 including any minimum distribution incidental benefit requirement. 07 (i) In this section, 08 (1) "designated beneficiary" means the individual who is designated as 09 the beneficiary under the system in accordance with 26 U.S.C. 401(a)(9) and 10 regulations adopted under that statute; 11 (2) "required beginning date" means the first day of April of the 12 calendar year following the calendar year in which the member either attains 70 1/2 13 years of age or actually retires, whichever is later. 14 Sec. 14.25.450. Designation of beneficiary. (a) Each participant shall have 15 the right to designate a beneficiary and shall have the right, at any time, to revoke the 16 designation or to substitute another beneficiary, subject to the following limitation: in 17 the event a married member elects a nonspouse beneficiary, the actuarial equivalent 18 value of the benefit payable to the beneficiary may not exceed 50 percent of the 19 member's portion of the account balance, and the member's spouse shall automatically 20 be considered the beneficiary for the remaining 50 percent of the account balance, 21 unless the spouse consents to the beneficiary designation in a writing that is notarized 22 or witnessed by the administrator. If the spouse consents in this manner, a married 23 member may designate a nonspouse beneficiary for the entire benefit or any portion of 24 the benefit as part of an available form of payment contained in this plan, 25 (1) except to the extent a qualified domestic relations order filed with 26 the administrator provides for payment to a former spouse or other dependent of the 27 member; or 28 (2) unless the member filed a revocation of beneficiary accompanied 29 by a written consent to the revocation from the present spouse and each person entitled 30 under the order; however, consent of the present spouse is not required if the member 31 and the present spouse had been married for less than one year on the date of the
01 member's death and if the member established when filing the revocation that the 02 member and the present spouse were not cohabiting. 03 (b) Except as provided in (a) of this section, the member may change or 04 revoke the designation without notice to the beneficiary or beneficiaries at any time. 05 If a member designates more than one beneficiary, each shares equally unless the 06 member specifies a different allocation or preference. The designation of a 07 beneficiary, a change or revocation of a beneficiary, and a consent to revocation of a 08 beneficiary shall be made on a form provided by the administrator and is not effective 09 until filed with the administrator. 10 (c) If a member fails to designate a beneficiary, or if no designated beneficiary 11 survives the member, the death benefit shall be paid 12 (1) to the surviving spouse or, if there is none surviving; 13 (2) to the surviving children in equal parts or, if there are none 14 surviving; 15 (3) to the surviving parents in equal parts or, if there are none 16 surviving; 17 (4) to the estate. 18 (d) A person claiming entitlement to benefits payable under AS 14.25.310 - 19 14.25.590 as a consequence of a member's death shall provide the administrator with a 20 marriage certificate, divorce or dissolution judgment, or other evidence of entitlement. 21 Documents establishing entitlement may be filed with the administrator immediately 22 after a change in the member's marital status. If the administrator does not receive 23 notification of a claim before the date 10 days after the member's death, the person 24 claiming entitlement is not entitled to receive from the division of retirement and 25 benefits any benefit already paid by the administrator. 26 Sec. 14.25.460. Rights under qualified domestic relations order. (a) 27 Notwithstanding the nonalienation provisions in AS 14.25.500(a), the administrator 28 may direct that benefits be paid to someone other than a member or beneficiary under 29 a valid qualified domestic relations order that is executed by the judge of a competent 30 court in accordance with applicable state law and that has been accepted by the 31 administrator.
01 (b) The administrator shall determine whether an order meets the requirements 02 of this section within a reasonable period after receiving an order. The administrator 03 shall notify the member and any alternate payee that an order has been received and 04 indicate to the member and any alternate payee when the order is accepted. A separate 05 account for the alternate payee portion shall be established as soon as administratively 06 feasible after the order has been accepted by the administrator. 07 Sec. 14.25.470. Retirement. (a) In order to obtain medical benefits under 08 AS 14.25.480 and access to the health reimbursement arrangement plan under 09 AS 39.30.300, a member must retire directly from the plan. A member is eligible to 10 retire from the plan if 11 (1) the member has at least 30 years of service; 12 (2) the member reaches the normal retirement age of 65 years of age 13 and has at least 10 years of service; and 14 (3) the member has been an active member for the whole school year 15 during the 12 months before application for retirement. 16 (b) A member must apply to the administrator for retirement and medical 17 benefits enrollment. Application shall be made on forms and in the manner prescribed 18 by the administrator. 19 (c) A member who continues in the employ of the employer after reaching 20 normal retirement age shall continue to participate in the plan and to have 21 contributions allocated to the member's account. 22 Sec. 14.25.480. Medical benefits. (a) The medical benefits available to 23 eligible persons are access to the retiree major medical insurance plan and to the 24 health reimbursement arrangement. Access to the retiree major medical insurance 25 plan means that an eligible person may not be denied insurance coverage except for 26 failure to pay the required premium. 27 (b) The following persons are eligible for the retiree major medical insurance 28 plan provided under this section and the health reimbursement arrangement: 29 (1) a member with at least 30 years of service and who retires directly 30 from the plan; 31 (2) the surviving spouse of a member who elected coverage under (1)
01 of this subsection; 02 (3) a member who reaches the normal retirement age of 65 years of 03 age, has at least 10 years of service, and retires directly from the plan; 04 (4) the surviving spouse of a member who elected coverage under (3) 05 of this subsection. 06 (c) Retiree major medical insurance plan coverage elected by an eligible 07 member under this section covers the eligible member, the spouse of the eligible 08 member, and the dependent children of the eligible member. 09 (d) Retiree major medical insurance plan coverage elected by a surviving 10 spouse of an eligible member under this section covers the surviving spouse and the 11 dependent children of the surviving spouse. 12 (e) Major medical insurance coverage takes effect on the first day of the 13 month following the date of the election and stops when the person who elects 14 coverage under (b) of this section dies or fails to make a required premium payment. 15 (f) The coverage for persons 65 years of age or older is the same as that 16 available for persons under 65 years of age. The benefits payable to those persons 65 17 years of age or older supplement any benefits provided under the federal old age, 18 survivors and disability insurance program. 19 (g) The medical and optional insurance premiums owed by the person who 20 elects coverage under (b) of this section maybe deducted from the health 21 reimbursement arrangement. If the amount of the health reimbursement arrangement 22 becomes insufficient to pay the premiums, the person who elects coverage under (a) of 23 this section shall pay the premiums directly. 24 (h) The cost of premiums for retiree major medical insurance coverage for an 25 eligible member or surviving spouse who is 26 (1) not eligible for Medicare is an amount equal to the full monthly 27 group premiums for retiree major medical insurance coverage; 28 (2) eligible for Medicare, is the following percentage of the premium 29 amounts established for retirees who are eligible for Medicare: 30 (A) 30 percent if the member had 10 or more, but less than 15, 31 years of service;
01 (B) 25 percent if the member had 15 or more, but less than 20, 02 years of service; 03 (C) 20 percent if the member had 20 or more, but less than 25, 04 years of service; 05 (D) 15 percent if the member had 25 or more, but less than 30, 06 years of service; 07 (E) 10 percent if the member had 30 or more years of service. 08 (i) The eligibility for and cost of premiums for retiree major medical insurance 09 coverage for an alternate payee under a qualified domestic relations order shall be 10 determined based on the years of service of the member to which the alternate payee is 11 entitled under the order. 12 (j) A person who is entitled to retiree major medical insurance coverage shall 13 (1) be informed by the administrator in writing 14 (A) that the health insurance coverage available to retired 15 members may be different from the health insurance coverage provided to 16 employees; 17 (B) of time limits for selecting optional health insurance 18 coverage and whether the election is irrevocable; and 19 (2) indicate in writing on a form provided by the administrator that the 20 person has received the information required by this subsection and whether the 21 person has chosen to receive optional health insurance coverage. 22 (k) The monthly group premiums for retiree major medical insurance coverage 23 are established by the administrator in accordance with AS 39.30.095. Nothing in 24 AS 14.25.310 - 14.25.590 guarantees a person who elects coverage under (a) of this 25 section a monthly group premium rate for retiree major medical insurance coverage 26 other than the premium in effect for the month in which the premium is due for 27 coverage for that month. 28 (l) In this section, 29 (1) "health reimbursement arrangement" means the plan established in 30 AS 39.30.300; 31 (2) "retires directly from the plan" means that the member is an active
01 member at the time that the member applies to the administrator for retirement and 02 medical benefits enrollment and that the member continues as an active member up 03 through the day before the day the member is eligible for medical benefits enrollment. 04 Sec. 14.25.490. Amendment and termination of plan. (a) The state has the 05 right to amend the plan at any time and from time to time, in whole or in part, 06 including the right to make retroactive amendments referred to in 26 U.S.C. 401(b). 07 (b) The plan administrator may not modify or amend the plan retroactively in 08 such a manner as to reduce the benefits of any member accrued to date under the plan 09 by reason of contributions made before the modification or amendment except to the 10 extent that the reduction is permitted by the Internal Revenue Code. 11 (c) The state may, in its discretion, terminate the plan in whole or part at any 12 time without liability for the termination. If the plan is terminated, all investments 13 remain in force until all individual accounts have been completely distributed under 14 the plan, and, after all plan liabilities are satisfied, excess assets revert to the employer. 15 (d) Any contribution made by an employer to the plan because of a mistake of 16 fact must be returned to the employer by the administrator within one year after the 17 contribution or discovery, whichever is later. 18 Sec. 14.25.500. Exclusive benefit. (a) The corpus or income of the assets 19 held in trust as required by the plan may not be diverted or used for other than the 20 exclusive benefit of the participants. 21 (b) If plan benefits are provided through the distribution of annuity or 22 insurance contracts, any refunds or credits in excess of plan benefits due to dividends, 23 earnings, or other experience rating credits, or surrender or cancellation credits, will be 24 paid to the trust fund. 25 (c) The assets of the plan may not be used to pay premiums or contributions of 26 the employer under another plan maintained by the employer. 27 Sec. 14.25.510. Nonguarantee of returns, rates, or benefit amounts. The 28 plan created by AS 14.25.310 - 14.25.590 is a defined contribution plan, not a defined 29 benefit plan. The amount of money in the account of a participant depends on the 30 amount of contributions and the rate of return from investments of the account that 31 varies over time. If benefits are paid in the form of an annuity, the benefit amount
01 payable is dependent on the amount of money in the account and the interest rates 02 applied and service fees charged by the annuity payor at the time benefits are first 03 paid. Nothing in this plan guarantees a participant 04 (1) a rate of return or interest rate other than that actually earned by the 05 account of the participant, less applicable administrative expenses; and 06 (2) an annuity based on interest rates or service charges other than 07 interest rates available from and service charges by the annuity payor in effect at the 08 time the annuity is paid. 09 Sec. 14.25.520. Nonguarantee of employment. The provisions of 10 AS 14.25.310 - 14.25.590 are not a contract of employment between an employer and 11 an employee, nor do they confer a right of an employee to be continued in the 12 employment of an employer, nor are they a limitation of the right of an employer to 13 discharge an employee with or without cause. 14 Sec. 14.25.530. Fraud. A person who knowingly makes a false statement or 15 falsifies or permits to be falsified a record of this plan in an attempt to defraud the plan 16 is guilty of a class A misdemeanor. 17 Sec. 14.25.590. Definitions. In AS 14.25.310 - 14.25.590, unless the context 18 requires otherwise, 19 (1) "active member" means a member who is employed by an 20 employer, is receiving compensation on a full-time or part-time basis, and is making 21 contributions to the plan, or a member making contributions under AS 14.20.330 or 22 14.20.345; 23 (2) "administrator" has the meaning given in AS 14.25.220; 24 (3) "alternate payee" means a person entitled to a portion of the 25 distribution from an individual account under a qualified domestic relations order; 26 (4) "annuitant" means a retired member who is receiving a benefit 27 under this plan; 28 (5) "beneficiary" means a person designated by a member to receive 29 benefits that may be due from the plan upon the member's death; 30 (6) "board" has the meaning given in AS 14.25.220; 31 (7) "commissioner" means the commissioner of administration;
01 (8) "compensation" 02 (A) means 03 (i) the total remuneration earned by an employee for 04 personal services rendered, including cost-of-living differentials, as 05 reported on the employee's Federal Income Tax Withholding Statement 06 (Form W-2) from the employer for the calendar year; 07 (ii) the teacher contribution to the teachers' retirement 08 system under AS 14.25.340, employee deferrals under AS 39.45.010, 09 the wage reduction amount contributed to the Alaska Supplemental 10 Annuity Plan under AS 39.30.150(a), and the wage reduction amount 11 contributed to the Alaska Supplemental Benefit Plan under 12 AS 39.30.150(c), as those statutes may be amended from time to time; 13 (B) does not include retirement benefits, severance pay or other 14 separation bonuses, welfare benefits, per diem, expense allowances, workers' 15 compensation payments, payments for leave not used whether those leave 16 payments are scheduled payments, lump-sum payments, donations, or cash-ins, 17 any remuneration contributed by the employer for or on account of the 18 employee under this plan or under any other qualified or nonqualified 19 employee benefit plan, any remuneration not specifically included above 20 which would have been excluded under 26 U.S.C. 3121(a) (Internal Revenue 21 Code) if the employer had remained in the Federal Social Security System, or 22 any remuneration paid by the employer in excess of the Social Security 23 Taxable Wage Base for the calendar year; 24 (C) includes any amount that is contributed by the employer 25 under a salary reduction agreement and that is not includible in the gross 26 income of the employee under 26 U.S.C. 125, 132(f)(4), 402(e)(3), 27 402(h)(I)(B) or 403(b) (Internal Revenue Code); the annual compensation 28 limitation for the member, which is so taken into account for those purposes, 29 may not exceed $200,000, as adjusted for the cost of living in accordance with 30 26 U.S.C. 401(a)(17)(B) (Internal Revenue Code), with the limitation for a 31 fiscal year being the limitation in effect for the calendar year within which the
01 fiscal year begins; 02 (9) "dependent child" has the meaning given in AS 14.25.220; 03 (10) "distribution commencement date" has the meaning given in 04 AS 14.25.440(a); 05 (11) "employer" means a public school district, the Board of Regents 06 of the University of Alaska, the Department of Education and Early Development, or 07 the regional resource centers; 08 (12) "fund" means the assets of the plan; 09 (13) "individual account" means the total maintained by the plan in an 10 investment account within the trust fund, established for each member for the purposes 11 of allocation of the member's mandatory contributions, employer contributions on 12 behalf of the employee, and earnings credited to each of those, investment gains and 13 losses, and expenses, as well as reporting of the member's benefit under the plan; 14 (14) "Internal Revenue Code" has the meaning given in AS 14.25.220; 15 (15) "investment funds" means those separate funds that are provided 16 within and that make up the trust fund and that are established for the purpose of 17 directing investment through the exercise of the sole control of a member, beneficiary, 18 or alternate payee under the terms of the plan and trust agreement; 19 (16) "normal retirement age" means 65 years of age; 20 (17) "participant" means the person who has a vested right to an 21 individual account, such as a member, an alternate payee if the account is subject to a 22 qualified domestic relations order, the member's beneficiary if the member is 23 deceased, or an alternate payee's beneficiary if the alternate payee is deceased; 24 (18) "plan" means the retirement benefit plan established under 25 AS 14.25.310 - 14.25.590; 26 (19) "qualified domestic relations order" means a divorce or 27 dissolution judgment under AS 25.24, including an order approving a property 28 settlement, that 29 (A) creates or recognizes the existence of an alternate payee's 30 right to, or assigns to an alternate payee the right to, receive all or a portion of 31 the individual account, health reimbursement arrangement or medical benefits
01 payable with respect to a member; 02 (B) sets out the name and last known mailing address, if any, of 03 the member and of each alternate payee covered by the order; 04 (C) sets out the amount or percentage of the member's benefit, 05 or of any survivor's benefit, to be paid to the alternate payee, or sets out the 06 manner in which that amount or percentage is to be determined; 07 (D) sets out the number of payments or period to which the 08 order applies; 09 (E) sets out the retirement plan to which the order applies; 10 (F) does not require any type or form of benefit or any option 11 not otherwise provided by AS 14.25.310 - 14.25.590; 12 (G) does not require an increase of benefits in excess of the 13 amount provided by AS 14.25.310 - 14.25.590, determined on the basis of 14 actuarial value; and 15 (H) does not require the payment, to an alternate payee, of 16 benefits that are required to be paid to another alternate payee under another 17 order previously determined to be a qualified domestic relations order; 18 (20) "retirement fund" or "fund" means the fund in which the assets of 19 the plan, including income and interest derived from the investment of money, are 20 deposited and held; 21 (21) "school year" has the meaning given in AS 14.25.220; 22 (22) "system" has the meaning given in AS 14.25.220; 23 (23) "teacher" and "member" are used interchangeably under 24 AS 14.25.310 - 14.25.590 and mean a person eligible to participate in the plan and 25 who is covered by the plan, limited to 26 (A) a certificated full-time or part-time elementary or 27 secondary teacher, a certificated school nurse, or a certificated person in a 28 position requiring a teaching certificate as a condition of employment in a 29 public school of the state, the Department of Education and Early 30 Development, or the Department of Labor and Workforce Development; 31 (B) a full-time or part-time teacher of the University of Alaska
01 or a person occupying a full-time administrative position at the University of 02 Alaska that requires academic standing; the approval of the administrator must 03 be obtained before an administrative position qualifies for membership in the 04 plan; however, a teacher or administrative person at the university who is 05 participating in the optional university retirement program under AS 14.40.661 06 - 14.40.799 is not a member under this plan; 07 (24) "year of service" means service during the dates set for the school 08 year; partial-year service credit is given for membership service as follows: 09 (A) during any school year, 10 (i) less than nine days, no credit; 11 (ii) nine days or more but less than 27 days, 0.1 years; 12 (iii) 27 days or more but less than 45 days, 0.2 years; 13 (iv) 45 days or more but less than 63 days, 0.3 years; 14 (v) 63 days or more but less than 81 days, 0.4 years; 15 (vi) 81 days or more but less than 100 days, 0.5 years; 16 (vii) 100 days or more but less than 118 days, 0.6 years; 17 (viii) 118 days or more but less than 136 days, 0.7 18 years; 19 (ix) 136 days or more but less than 154 days, 0.8 years; 20 (x) 154 days or more but less than 172 days, 0.9 years; 21 (xi) 172 days or more, 1.0 years; 22 (B) service performed on a part-time basis of half time or more 23 will be credited in proportion to the amount of credit that would have been 24 received for service performed on a full-time basis. 25 * Sec. 29. AS 14.40.280(c) is amended to read: 26 (c) Except as provided by (b) of this section, the monetary gifts, bequests, or 27 endowments that are made to the University of Alaska shall be managed and invested 28 by the Board of Regents. In carrying out its management and investment 29 responsibilities under this subsection, the Board of Regents has the same power and 30 obligations to carry out duties with respect to the endowments of the University of 31 Alaska as are provided to and required of the Alaska Retirement Management
01 [STATE PENSION INVESTMENT] Board under AS 37.10.210 [AS 14.25.180]. 02 * Sec. 30. AS 14.40.400(b) is amended to read: 03 (b) The Board of Regents is the fiduciary of the fund. The Board of Regents 04 shall account for and invest the fund. In carrying out its investment responsibilities 05 under this subsection, the Board of Regents has the same powers and duties with 06 respect to the fund as are provided to and required of the Alaska Retirement 07 Management [STATE PENSION INVESTMENT] Board under AS 37.10.210 08 [AS 14.25.180]. 09 * Sec. 31. AS 14.40.671(e) is amended to read: 10 (e) An employee whose rights to transfer assets out of a state retirement 11 system are subject to a qualified domestic relations order is entitled to transfer assets 12 from the state retirement system to the program only if the requirements for receiving 13 a refund under AS 14.25.150(b), 14.25.390, [OR] AS 39.35.200(c), or 39.35.760, as 14 appropriate, are met. 15 * Sec. 32. AS 22.25.048(c) is amended to read: 16 (c) The Alaska Retirement Management [STATE PENSION 17 INVESTMENT] Board is the fiduciary of the fund and has the same powers and 18 duties under this section in regard to the judicial retirement trust fund as are provided 19 in AS 37.10.210 [AS 14.25.180]. 20 * Sec. 33. AS 22.25.900(1) is amended to read: 21 (1) "actuarial equivalent" means the adjustment necessary to obtain 22 equality in value of the aggregate expected payments under two different forms of 23 pension payments, considering expected mortality and interest earnings on the basis of 24 assumptions, factors, and methods specified in regulations issued under the system 25 that are formally adopted [UNDER AS 22.25.027] by the Alaska Retirement 26 Management Board [COMMISSIONER OF ADMINISTRATION] that clearly 27 preclude employer discretion in the determination of the amount of any justice's, 28 judge's, or member's benefit; 29 * Sec. 34. AS 26.05.226(a) is amended to read: 30 (a) The Department of Military and Veterans' Affairs shall contribute to the 31 Alaska National Guard and Alaska Naval Militia retirement system the amounts
01 determined by the Alaska Retirement Management Board [COMMISSIONER OF 02 ADMINISTRATION] as necessary to 03 (1) fund the system based on the actuarial requirements of the system 04 as established by the Alaska Retirement Management Board [COMMISSIONER 05 OF ADMINISTRATION]; and 06 (2) administer the system. 07 * Sec. 35. AS 26.05.228(c) is amended to read: 08 (c) The Alaska Retirement Management [STATE PENSION 09 INVESTMENT] Board is the fiduciary of the fund and has the same powers and 10 duties under this section in regard to the fund as are provided under AS 37.10.210 11 [AS 14.25.180]. 12 * Sec. 36. AS 36.30.015(f) is amended to read: 13 (f) The board of directors of the Alaska Housing Finance Corporation, 14 notwithstanding AS 18.56.088, and the board of directors of the Knik Arm Bridge and 15 Toll Authority under AS 19.75.111, shall adopt regulations under AS 44.62 16 (Administrative Procedure Act) and the board of trustees of the Alaska Retirement 17 Management [STATE PENSION INVESTMENT] Board shall adopt regulations 18 under AS 37.10.240 to govern the procurement of supplies, services, professional 19 services, and construction for the respective public corporation and board. The 20 regulations must reflect competitive bidding principles and provide vendors 21 reasonable and equitable opportunities to participate in the procurement process and 22 must include procurement methods to meet emergency and extraordinary 23 circumstances. Notwithstanding the other provisions of this subsection, the Alaska 24 Housing Finance Corporation, the Knik Arm Bridge and Toll Authority, and the 25 Alaska Retirement Management [STATE PENSION INVESTMENT] Board shall 26 comply with AS 36.30.170(b). 27 * Sec. 37. AS 36.30.990(1) is amended to read: 28 (1) "agency" 29 (A) means a department, institution, board, commission, 30 division, authority, public corporation, the Alaska Pioneers' Home, the Alaska 31 Veterans' Home, or other administrative unit of the executive branch of state
01 government; 02 (B) does not include 03 (i) the University of Alaska; 04 (ii) the Alaska Railroad Corporation; 05 (iii) the Alaska Housing Finance Corporation; 06 (iv) a regional Native housing authority created under 07 AS 18.55.996 or a regional electrical authority created under 08 AS 18.57.020; 09 (v) the Department of Transportation and Public 10 Facilities, in regard to the repair, maintenance, and reconstruction of 11 vessels, docking facilities, and passenger and vehicle transfer facilities 12 of the Alaska marine highway system; 13 (vi) the Alaska Aerospace Development Corporation; 14 (vii) the Alaska Retirement Management [STATE 15 PENSION INVESTMENT] Board; 16 (viii) the Alaska Seafood Marketing Institute; 17 * Sec. 38. AS 37.10.071(d) is amended to read: 18 (d) In exercising investment, custodial, or depository powers or duties under 19 this section, the fiduciary or the fiduciary's designee is liable for a breach of a duty 20 that is assigned or delegated under this section, or under [AS 14.25.180,] 21 AS 14.40.255, 14.40.280(c), 14.40.400(b), AS 37.10.070, AS 37.14.110(c), 37.14.160, 22 or 37.14.170 [, OR AS 39.35.080]. However, the fiduciary or the designee is not 23 liable for a breach of a duty that has been delegated to another person if the delegation 24 is prudent under the applicable standard of prudence set out in statute or if the duty is 25 assigned by law to another person, except to the extent that the fiduciary or designee 26 (1) knowingly participates in, or knowingly undertakes to conceal, an 27 act or omission of another person knowing that the act or omission is a breach of that 28 person's duties under this chapter; 29 (2) by failure to comply with this section in the administration of 30 specific responsibilities, enables another person to commit a breach of duty; or 31 (3) has knowledge of a breach of duty by another person, unless the
01 fiduciary or designee makes reasonable efforts under the circumstances to remedy the 02 breach. 03 * Sec. 39. AS 37.10.071(f) is amended to read: 04 (f) In this section, "fiduciary of a state fund" or "fiduciary" means 05 (1) the commissioner of revenue for investments under AS 37.10.070; 06 or 07 (2) with respect to the Alaska Retirement Management [STATE 08 PENSION INVESTMENT] Board, for investments of the collective funds that it 09 manages and administers [UNDER OR SUBJECT TO AS 14.25.180], 10 (A) each trustee who serves on the board of trustees; and 11 (B) any other person who exercises control or authority with 12 respect to management or disposition of assets for which the board is 13 responsible or who gives investment advice to the board; or 14 (3) the person or body provided by law to manage the investments for 15 investments not subject to [AS 14.25.180 OR] AS 37.10.070. 16 * Sec. 40. AS 37.10.210 is repealed and reenacted to read: 17 Sec. 37.10.210. Alaska Retirement Management Board. (a) The Alaska 18 Retirement Management Board is established in the Department of Revenue. The 19 board's primary mission is to serve as the trustee of the assets of the state's retirement 20 systems. Consistent with standards of prudence, the board has the fiduciary obligation 21 to manage and invest these assets in a manner that is sufficient to meet the liabilities 22 and pension obligations of the systems. The board may, with the approval of the 23 commissioner of revenue and upon agreement with the responsible fiduciary, manage 24 and invest other state funds so long as the activity does not interfere with the board's 25 primary mission. In making investments, the board shall exercise the powers and 26 duties of a fiduciary of a state fund under AS 37.10.071. 27 (b) The Alaska Retirement Management Board consists of nine trustees. The 28 commissioner of administration and the commissioner of revenue shall serve on the 29 board. The governor shall appoint seven additional trustees who meet the eligibility 30 requirements for an Alaska permanent fund dividend and who are professionally 31 credentialed or have recognized competence in investment management, finance,
01 banking, economics, accounting, pension administration, or actuarial analysis as 02 follows: 03 (1) three trustees shall be appointed from the general public; a trustee 04 appointed under this paragraph may not hold another state office, position, or 05 employment and may not be a member or beneficiary of a retirement system managed 06 by the board; 07 (2) one trustee shall be employed as a finance officer for a political 08 subdivision participating in the public employees' retirement system; 09 (3) one trustee shall be employed as a finance officer for a political 10 subdivision participating in the teachers' retirement system; 11 (4) one trustee shall be a member of the public employees' retirement 12 system; 13 (5) one trustee shall be a member of the teachers' retirement system. 14 (c) The trustees, other than the two commissioners, shall serve for staggered 15 terms of three years and may be reappointed to the board for a total of three 16 consecutive terms. A person who has served three consecutive terms may not be 17 reappointed to the board for at least one year. 18 (d) The governor may, by written notice to the trustee, remove a trustee for 19 cause. After a trustee receives written notice of removal, the trustee may not 20 participate in board business and may not be counted for purposes of establishing a 21 quorum. 22 (e) A vacancy on the board of trustees shall be promptly filled. A person 23 filling a vacancy holds office for the balance of the unexpired term of the person's 24 predecessor, and the balance of the unexpired term served is not included in the three- 25 term limitation under (c) of this section. A vacancy on the board does not impair the 26 authority of a quorum of the board to exercise all the powers and perform all the duties 27 of the board. 28 (f) Five trustees constitute a quorum for the transaction of business and the 29 exercise of the powers and duties of the board. 30 (g) A trustee may not designate another person to serve on the board in the 31 absence of the trustee.
01 (h) The board shall provide annual training to its members on the duties and 02 powers of a fiduciary of a state fund and other training as necessary to keep the 03 members of the board educated about pension management and investment. 04 (i) The board shall elect a trustee to serve as chair and a trustee to serve as 05 vice-chair for one-year terms. A trustee may be reelected to serve additional terms as 06 chair or vice-chair. 07 * Sec. 41. AS 37.10 is amended by adding a new section to read: 08 Sec. 37.10.215. Attorney general. The attorney general is the legal counsel 09 for the board and shall advise the board and represent it in a legal proceeding. 10 * Sec. 42. AS 37.10.220 is repealed and reenacted to read: 11 Sec. 37.10.220. Powers and duties of the board. (a) The board shall 12 (1) establish a series of accounts in which the assets of the funds 13 entrusted to the board shall be deposited and held; 14 (2) hold regular and special meetings at the call of the chair or of at 15 least five members; meetings are open to the public, and the board shall keep a full 16 record of all its proceedings; 17 (3) adopt investment policies for each of the funds entrusted to the 18 board; 19 (4) select and retain investment managers and custodians for the funds 20 entrusted to the board; 21 (5) provide a range of investment options and establish the rules by 22 which participants can direct their investments among those options with respect to 23 accounts established under 24 (A) AS 14.25.340 and 14.25.350 (teachers' retirement system 25 defined contribution individual accounts); 26 (B) AS 39.30.150 - 39.30.180 (State of Alaska Supplementary 27 Annuity Plan); 28 (C) AS 39.35.730 - 39.35.750 (public employees' retirement 29 system defined contribution individual accounts); and 30 (D) AS 39.45.010 - 39.45.060 (public employees' deferred 31 compensation program);
01 (6) establish the rate of interest that shall be annually credited to each 02 member's individual contribution account in accordance with AS 14.25.145 and 03 AS 39.35.100 and the rate of interest that shall be annually credited to each member's 04 account in the health reimbursement arrangement plan under AS 39.30.300 - 05 39.30.495; the rate of interest shall be adopted on the basis of the probable effective 06 rate of interest on a long-term basis, and the rate may be changed from time to time; 07 (7) adopt a contribution surcharge as necessary under AS 39.35.160(c); 08 (8) coordinate with the retirement system administrator to have an 09 annual actuarial valuation of each retirement system prepared to determine system 10 assets, accrued liabilities, and funding ratios and to certify to the appropriate 11 budgetary authority of each employer in the system 12 (A) an appropriate contribution rate for normal costs; and 13 (B) an appropriate contribution rate for liquidating any past 14 service liability; 15 (9) review actuarial assumptions prepared and certified by a member 16 of the American Academy of Actuaries and conduct experience analyses of the 17 retirement systems not less than once every four years, except for health cost 18 assumptions, which shall be reviewed annually; 19 (10) contract for an independent audit of the state's actuary not less 20 than once every four years; 21 (11) obtain an external performance review to evaluate the investment 22 policies and performance of each fund entrusted to the board and report the results of 23 the review to the appropriate fund fiduciary; 24 (12) engage an independent certified public accountant to conduct an 25 annual audit of each fund entrusted to the board and report the findings of the audit to 26 the appropriate fund fiduciary; 27 (13) by the first day of each regular legislative session, report to the 28 governor, the legislature, and the individual employers participating in the state's 29 retirement systems on the financial condition of the systems in regard to 30 (A) the valuation of trust fund assets and liabilities; 31 (B) current investment policies adopted by the board;
01 (C) a summary of assets held in trust listed by the categories of 02 investment; 03 (D) the income and expenditures for the previous fiscal year; 04 (E) the return projections for the next calendar year; 05 (F) one-year, three-year, five-year, and 10-year investment 06 performance for each of the funds entrusted to the board; and 07 (G) other statistical data necessary for a proper understanding 08 of the financial status of the systems; 09 (14) submit quarterly updates of the investment performance reports to 10 the Legislative Budget and Audit Committee; and 11 (15) develop an annual operating budget. 12 (b) The board may 13 (1) employ outside investment advisors to review investment policies; 14 (2) enter into an agreement with the fiduciary of another state fund in 15 order to assume the management and investment of those assets; 16 (3) contract for other services necessary to execute the board's powers 17 and duties. 18 (c) Expenses for the board and the operations of the board shall be paid from 19 the retirement fund. 20 * Sec. 43. AS 37.10.250 is amended to read: 21 Sec. 37.10.250. Compensation of trustees. Trustees, other than trustees who 22 are employees of the state, [OR] a political subdivision of the state, or a school 23 district or regional educational attendance area in the state, receive an honorarium 24 of $150 for each day spent at a meeting of the board or at a meeting of a subcommittee 25 of the board or at a public meeting as a representative of the board, including a day in 26 which a trustee travels to or from a meeting. Trustees who are state employees are 27 entitled to administrative leave for service as a trustee. Trustees who are employees of 28 a political subdivision of the state or a school district or regional educational 29 attendance area in the state are entitled to leave benefits provided by their employers 30 comparable to those provided to state employees for service as a trustee. Trustees are 31 entitled to per diem and travel expenses authorized for boards and commissions under
01 AS 39.20.180. 02 * Sec. 44. AS 37.10.270(a) is amended to read: 03 (a) The board may [SHALL] appoint an investment advisory council 04 composed of at least three and not more than five members. Members of the council 05 shall possess experience and expertise in financial investments and management of 06 investment portfolios for public, corporate, or union pension benefit funds, 07 foundations, or endowments. 08 * Sec. 45. AS 37.10.390 is amended to read: 09 Sec. 37.10.390. Definitions. In AS 37.10.210 - 37.10.390, unless the context 10 otherwise requires, 11 (1) "board" means the board of trustees of the Alaska Retirement 12 Management [STATE PENSION INVESTMENT] Board; 13 (2) "retirement systems" or "systems" means the teachers' retirement 14 system, the judicial retirement system, the Alaska National Guard and Alaska Naval 15 Militia retirement system, [AND] the public employees' retirement system, the State 16 of Alaska supplemental annuity plan, the public employees' deferred 17 compensation program, the State of Alaska teachers' and public employees' 18 retiree health reimbursement arrangement plan, and the elected public officers' 19 retirement system under former AS 39.37. 20 * Sec. 46. AS 37.10.390 is amended by adding a new paragraph to read: 21 (3) "fund" means the fund or funds composed of the assets of each of 22 the retirement systems administered and managed by the board. 23 * Sec. 47. AS 37.14.160 is amended to read: 24 Sec. 37.14.160. Duties of the commissioner of revenue. The commissioner 25 of revenue is the treasurer of the trust fund created in AS 37.14.110 and shall 26 (1) in carrying out investment duties under this section, exercise the 27 same powers and duties established for the Alaska Retirement Management [STATE 28 PENSION INVESTMENT] Board in AS 37.10.210 [AS 14.25.180(c)]; 29 (2) deposit the principal and income from investments in separate 30 principal and income accounts for the fund; 31 (3) invest and maintain accounting records that distinguish between the
01 principal and income of the fund; 02 (4) provide reports to the board established under AS 37.14.120 on the 03 condition and investment performance of the fund. 04 * Sec. 48. AS 37.14.210(4) is amended to read: 05 (4) invest and reinvest the assets of the trust as provided in this section 06 and as provided for the investment of funds under [AS 14.25.180(c) AND] 07 AS 37.14.170; 08 * Sec. 49. AS 37.14.520(4) is amended to read: 09 (4) invest and reinvest the assets of the fund as provided in this section 10 and as provided for the investment of funds under [AS 14.25.180(c) AND] 11 AS 37.14.170; 12 * Sec. 50. AS 37.14.610 is amended to read: 13 Sec. 37.14.610. Duties of the commissioner. The commissioner of revenue 14 has the power and duty to 15 (1) act as official custodian of the cash and investments belonging to 16 the Arctic Winter Games Team Alaska trust by securing adequate and safe custodial 17 facilities; 18 (2) exercise the same powers and duties as those established for the 19 Alaska Retirement Management [STATE PENSION INVESTMENT] Board in 20 AS 37.10.210 [AS 14.25.180(b) AND (c)]; 21 (3) invest the assets of the trust in a manner likely to yield at least five 22 percent real rate of return over time; 23 (4) maintain accounting records of the trust in accordance with 24 investment accounting principles; 25 (5) enter into and enforce contracts or agreements considered 26 necessary for the investment purposes of the trust; 27 (6) report annually to the board of directors of the Arctic Winter 28 Games Team Alaska the condition and performance of the trust; 29 (7) monitor use of trust money by the Arctic Winter Games Team 30 Alaska; and 31 (8) do all acts that the commissioner of revenue considers necessary or
01 proper in administering the assets of the trust. 02 * Sec. 51. AS 39.30.090(a) is amended to read: 03 (a) The Department of Administration may obtain a policy or policies of group 04 insurance covering state employees, persons entitled to coverage under AS 14.25.168, 05 14.25.480, AS 22.25.090, AS 39.35.535, 39.35.880, or former AS 39.37.145, 06 employees of other participating governmental units, or persons entitled to coverage 07 under AS 23.15.136, subject to the following conditions: 08 (1) A group insurance policy shall provide one or more of the 09 following benefits: life insurance, accidental death and dismemberment insurance, 10 weekly indemnity insurance, hospital expense insurance, surgical expense insurance, 11 dental expense insurance, audiovisual insurance, or other medical care insurance. 12 (2) Each eligible employee of the state, the spouse and the unmarried 13 children chiefly dependent on the eligible employee for support, and each eligible 14 employee of another participating governmental unit shall be covered by the group 15 policy, unless exempt under regulations adopted by the commissioner of 16 administration. 17 (3) A governmental unit may participate under a group policy if 18 (A) its governing body adopts a resolution authorizing 19 participation, and payment of required premiums; 20 (B) a certified copy of the resolution is filed with the 21 Department of Administration; and 22 (C) the commissioner of administration approves the 23 participation in writing. 24 (4) In procuring a policy of group health or group life insurance as 25 provided under this section or excess loss insurance as provided in AS 39.30.091, the 26 Department of Administration shall comply with the dual choice requirements of 27 AS 21.86.310, and shall obtain the insurance policy from an insurer authorized to 28 transact business in the state under AS 21.09, a hospital or medical service corporation 29 authorized to transact business in this state under AS 21.87, or a health maintenance 30 organization authorized to operate in this state under AS 21.86. An excess loss 31 insurance policy may be obtained from a life or health insurer authorized to transact
01 business in this state under AS 21.09 or from a hospital or medical service corporation 02 authorized to transact business in this state under AS 21.87. 03 (5) The Department of Administration shall make available bid 04 specifications for desired insurance benefits or for administration of benefit claims and 05 payments to (A) all insurance carriers authorized to transact business in this state 06 under AS 21.09 and all hospital or medical service corporations authorized to transact 07 business under AS 21.87 who are qualified to provide the desired benefits; and (B) to 08 insurance carriers authorized to transact business in this state under AS 21.09, hospital 09 or medical service corporations authorized to transact business under AS 21.87, and 10 third-party administrators licensed to transact business in this state and qualified to 11 provide administrative services. The specifications shall be made available at least 12 once every five years. The lowest responsible bid submitted by an insurance carrier, 13 hospital or medical service corporation, or third-party administrator with adequate 14 servicing facilities shall govern selection of a carrier, hospital or medical service 15 corporation, or third-party administrator under this section or the selection of an 16 insurance carrier or a hospital or medical service corporation to provide excess loss 17 insurance as provided in AS 39.30.091. 18 (6) If the aggregate of dividends payable under the group insurance 19 policy exceeds the governmental unit's share of the premium, the excess shall be 20 applied by the governmental unit for the sole benefit of the employees. 21 (7) A person receiving benefits under AS 14.25.110, AS 22.25, 22 AS 39.35, or former AS 39.37 may continue the life insurance coverage that was in 23 effect under this section at the time of termination of employment with the state or 24 participating governmental unit. 25 (8) A person electing to have insurance under (7) of this subsection 26 shall pay the cost of this insurance. 27 (9) For each permanent part-time employee electing coverage under 28 this section, the state shall contribute one-half the state contribution rate for permanent 29 full-time state employees, and the permanent part-time employee shall contribute the 30 other one-half. 31 (10) A person receiving benefits under AS 14.25, AS 22.25, AS 39.35,
01 or former AS 39.37 may obtain auditory, visual, and dental insurance for that person 02 and eligible dependents under this section. The level of coverage for persons over 65 03 shall be the same as that available before reaching age 65 except that the benefits 04 payable shall be supplemental to any benefits provided under the federal old age, 05 survivors, and disability insurance program. A person electing to have insurance 06 under this paragraph shall pay the cost of the insurance. The commissioner of 07 administration shall adopt regulations implementing this paragraph. 08 (11) A person receiving benefits under AS 14.25, AS 22.25, AS 39.35, 09 or former AS 39.37 may obtain long-term care insurance for that person and eligible 10 dependents under this section. A person who elects insurance under this paragraph 11 shall pay the cost of the insurance premium. The commissioner of administration 12 shall adopt regulations to implement this paragraph. 13 (12) Each licensee holding a current operating agreement for a vending 14 facility under AS 23.15.010 - 23.15.210 shall be covered by the group policy that 15 applies to governmental units other than the state. 16 * Sec. 52. AS 39.30.095(d) is amended to read: 17 (d) If the commissioner of administration determines that there is more money 18 in the fund than the amount needed to pay premiums, benefits, and administrative 19 costs for the current fiscal year, the surplus, or so much of it as the commissioner of 20 administration considers advisable, may be invested by the commissioner of revenue 21 in the same manner as retirement funds are invested under AS 37.10.210 22 [AS 14.25.180]. 23 * Sec. 53. AS 39.30.150(b) is amended to read: 24 (b) Employees of the division of marine transportation included in 25 AS 39.35.095 - 39.35.680 [THE PUBLIC EMPLOYEES' RETIREMENT SYSTEM] 26 through the process of collective bargaining under AS 39.35.680(21)(D) may, under 27 the terms of a collective bargaining agreement, utilize contributions made under (a) of 28 this section on their behalf to offset the costs of inclusion in the public employees' 29 retirement system; however, 30 (1) the state is placed under no obligation to continue making 31 contributions under this section if the state resumes participation in the federal social
01 security system; 02 (2) the bargaining agreement must provide a mechanism for satisfying 03 any residual liabilities that might exist if the state resumes participation in the federal 04 social security system; and 05 (3) funds contributed under (a) of this section on behalf of employees 06 who are not covered by maritime union contracts may not be obligated or expended to 07 pay any costs associated with the inclusion of marine transportation employees in 08 AS 39.35.095 - 39.35.680 [THE PUBLIC EMPLOYEES' RETIREMENT SYSTEM]. 09 * Sec. 54. AS 39.30 is amended by adding a new section to read: 10 Sec. 39.30.151. Administrator. The commissioner of administration or the 11 commissioner's designee is the administrator of the system. 12 * Sec. 55. AS 39.30 is amended by adding a new section to read: 13 Sec. 39.30.154. Powers and duties of the administrator. The administrator 14 has the same powers and duties with regard to the plan as those set out in 15 AS 14.25.004. 16 * Sec. 56. AS 39.30.155 is repealed and reenacted to read: 17 Sec. 39.30.155. Management and investment of fund. The Alaska 18 Retirement Management Board is the fiduciary of the fund and has the same powers 19 and duties under this section in regard to the fund as are provided under AS 37.10.210. 20 * Sec. 57. AS 39.30.160(a) is amended to read: 21 (a) The Department of Administration shall, in accordance with policies 22 prescribed by regulations of the Alaska Retirement Management [PUBLIC 23 EMPLOYEES RETIREMENT] Board, provide to employees for whom special 24 individual employee benefit accounts are established under AS 39.30.150 the 25 following benefit options: 26 (1) supplemental health benefits; [,] 27 (2) supplemental death benefits; [,] 28 (3) supplemental disability benefits; [,] and 29 (4) supplemental dependent care benefits. 30 * Sec. 58. AS 39.30.160(e) is amended to read: 31 (e) Regulations adopted by the board [PUBLIC EMPLOYEES
01 RETIREMENT BOARD] implementing AS 39.30.150 and this section are not subject 02 to AS 44.62 (Administrative Procedure Act). 03 * Sec. 59. AS 39.30.175(a) is amended to read: 04 (a) The board [ALASKA STATE PENSION INVESTMENT BOARD] is the 05 fiduciary of the mandatory receipts, under AS 39.30.150(a), of the employee benefits 06 program established under AS 39.30.150 - 39.30.180 and has the same powers and 07 duties concerning the management and investment in regard to those receipts as are 08 provided under AS 37.10.210 [AS 14.25.180]. 09 * Sec. 60. AS 39.30.180 is amended by adding a new paragraph to read: 10 (3) "board" means the board of trustees of the Alaska Retirement 11 Management Board established under AS 37.10.210. 12 * Sec. 61. AS 39.30 is amended by adding new sections to read: 13 Article 5. State of Alaska Teachers' and Public Employees' Retiree Health 14 Reimbursement Arrangement Plan. 15 Sec. 39.30.300. State of Alaska Teachers' and Public Employees' Retiree 16 Health Reimbursement Arrangement Plan established. The State of Alaska 17 Teachers' and Public Employees' Retiree Health Reimbursement Arrangement Plan is 18 established for teachers who first become members of the defined contribution plan of 19 the teachers' retirement system under AS 14.25.310 - 14.25.590 on or after July 1, 20 2005, and employees of the state, political subdivisions of the state, and public 21 organizations of the state who first become members of the defined contribution plan 22 of the public employees' retirement system under AS 39.35.700 - 39.35.990 on or after 23 July 1, 2005. 24 Sec. 39.30.310. Purpose and effective date. (a) The purpose of the plan is to 25 allow medical care expenses to be reimbursed from individual savings accounts 26 established for qualified members. 27 (b) The plan becomes effective July 1, 2005, at which time contributions by 28 employers begin. 29 Sec. 39.30.320. Attorney general. The attorney general of the state is the 30 legal counsel for the plan and shall advise the administrator and represent the plan in a 31 legal proceeding.
01 Sec. 39.30.330. Administrator. The commissioner of administration or the 02 commissioner's designee is the administrator of the plan. 03 Sec. 39.30.340. Powers and duties of the administrator. The administrator 04 shall establish a teachers' and public employees' retiree health reimbursement 05 arrangement plan trust fund in which the assets of the plan shall be deposited and held. 06 The administrator has the same powers and duties with regard to the plan and the trust 07 fund as provided in AS 14.25.004. 08 Sec. 39.30.350. Employer contribution fund. The fund established under 09 AS 39.30.340 is an employer contribution fund. The value of the fund reflects 10 employer contributions, expenses, and investment gains and losses. Employee 11 contributions to the fund are not permitted. 12 Sec. 39.30.360. Management and investment of the fund. The Alaska 13 Retirement Management Board is the fiduciary of the fund and has the same powers 14 and duties under this section in regard to the fund as are provided under AS 37.10.220. 15 Sec. 39.30.370. Contributions by employers. For each member of the plan, 16 an employer shall contribute to the teachers' and public employees' retiree health 17 reimbursement arrangement plan trust fund an amount equal to one percent of the 18 employer's average annual employee compensation, not to exceed $500 a member a 19 year. The administrator shall maintain a record for each member to account for 20 employer contributions on behalf of that member. The board shall establish by 21 regulation the rate of interest to be applied annually to the amount in a member's 22 record. 23 Sec. 39.30.380. Termination of employment. A person who terminates 24 employment before application and eligibility for normal retirement loses any right to 25 the contributions made on behalf of the person to the teachers' and public employees' 26 retiree health reimbursement arrangement trust fund. If a person returns to 27 employment with the same employer within five years after the date of termination 28 and if the employer is still a participating employer, the person's account balance shall 29 be restored in the amount recorded on the date of termination from the trust, without 30 interest or other adjustment. 31 Sec. 39.30.390. Eligibility and enrollment. A member is eligible for
01 reimbursement from the individual account established for that member under the plan 02 when that member becomes eligible for medical benefits under AS 14.25.480 or 03 AS 39.35.880. The administrator shall enroll an eligible member in the plan upon 04 receipt of the eligible member's request for enrollment in retirement and medical 05 benefits. 06 Sec. 39.30.400. Benefits payable from the individual account. (a) The 07 administrator may pay the cost of monthly premiums for retiree major medical 08 insurance on behalf of a participant if the participant elected retiree major medical 09 insurance under AS 14.25.480 or AS 39.35.880. 10 (b) Upon application of a participant, the administrator shall reimburse to a 11 participant the costs for medical care expenses as defined in 26 U.S.C. 213(d) . 12 (c) When the member's individual account balance is exhausted, the insurance 13 premium payments under (a) of this section and the reimbursement of medical care 14 expenses under (b) of this section end. 15 (d) If a participant dies before exhausting the participant's individual account, 16 the surviving spouse and the surviving spouse's dependent children are eligible to be 17 reimbursed for medical care expenses as defined in 26 U.S.C. 213(d) until the 18 individual account is exhausted. If any amount remains in an individual account after 19 the death of a participant, the account balance shall revert to the trust. 20 Sec. 39.30.410. Exemption from taxation and process. (a) Contributions 21 and other amounts held in the plan on behalf of a member or other person who is or 22 may become eligible for benefits under the plan may be used only to reimburse 23 eligible medical expenses, are exempt from Alaska state and municipal taxes and 24 federal taxes to the extent allowed under the Internal Revenue Code, and are not 25 subject to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, or 26 charge of any kind, either voluntary or involuntary, before they are received by the 27 person entitled to the amount under the terms of the plan. Any attempt to anticipate, 28 alienate, sell, transfer, assign, pledge, encumber, charge, or otherwise dispose of any 29 right to amounts accrued in the plan is void. However, a member's right to receive 30 benefits may be assigned 31 (1) under a qualified domestic relations order; or
01 (2) to a trust or similar legal device that meets the requirements for a 02 Medicaid-qualifying trust under AS 47.07.020(f) and 42 U.S.C. 1396p(d)(4). 03 (b) Notwithstanding AS 09.38.065, contributions and other amounts held in 04 the plan and benefits payable under this plan are exempt from garnishment, execution, 05 or levy. 06 Sec. 39.30.420. Amendment and termination of plan. (a) The state has the 07 right to amend the plan at any time and from time to time, in whole or in part, 08 including the right to make retroactive amendments referred to in 26 U.S.C. 401(b). 09 (b) The plan administrator may not modify or amend the plan retroactively in 10 such a manner as to reduce the benefits of any member accrued to date under the plan 11 by reason of contributions made before the modification or amendment except to the 12 extent that the reduction is permitted by the Internal Revenue Code. 13 (c) The state may, in its discretion, terminate the plan in whole or part at any 14 time without liability for the termination. If the plan is terminated, all investments 15 remain in force until all individual accounts have been completely distributed under 16 the plan, and, after all plan liabilities are satisfied, excess assets revert to the employer. 17 (d) Any contribution made by an employer to the plan because of a mistake of 18 fact must be returned to the employer by the administrator within one year after the 19 contribution or discovery, whichever is later. 20 Sec. 39.30.430. Exclusive benefit. (a) The corpus or income of the assets 21 held in trust as required by the plan may not be diverted or used for other than the 22 exclusive benefit of the participants. 23 (b) The assets of the plan may not be used to pay premiums or contributions of 24 the employer under another plan maintained by the employer. 25 Sec. 39.30.495. Definitions. Unless the context requires otherwise, in 26 AS 39.30.300 - 39.30.495 27 (1) "administrator" means the commissioner of administration or the 28 commissioner's designee; 29 (2) "board" means the Alaska Retirement Management Board 30 established under AS 37.10.210; 31 (3) "compensation" has the meaning given in AS 14.25.590;
01 (4) "employer" has the meaning given in AS 14.25.590 for employers 02 of teachers in the defined contribution plan established in AS 14.25.310 - 14.25.590 03 and has the meaning given in AS 39.35.990 for employers of public employees in the 04 defined contribution plan established in AS 39.35.700 - 39.35.990; 05 (5) "fund" means the assets of the teachers' and public employees' 06 retiree health reimbursement arrangement plan trust fund; 07 (6) "individual account" means the record established by the 08 administrator for individual employees under the teachers' and public employees' 09 retiree health reimbursement arrangement plan; 10 (7) "member" means a member of the defined contribution plan of the 11 teachers' retirement system in AS 14.25.310 - 14.25.590 or a member of the public 12 employees' retirement system in AS 39.35.700 - 39.35.990; 13 (8) "qualified domestic relations order" has the meaning given in 14 AS 14.25.220; 15 (9) "qualified member" means a member entitled to medical benefits. 16 * Sec. 62. AS 39.35 is amended by adding new sections to read: 17 Article 1. Administration of the Public Employees' Retirement System of Alaska. 18 Sec. 39.35.001. Purpose. The purpose of this chapter is to encourage 19 qualified personnel to enter and remain in service with participating employers by 20 establishing plans for the payment of retirement, disability, and death benefits to or on 21 behalf of the members. 22 Sec. 39.35.002. Attorney general. The attorney general of the state is the 23 legal counsel for the system and shall advise the administrator and represent the 24 system in a legal proceeding. 25 Sec. 39.35.003. Administrator. (a) The commissioner of administration or 26 the commissioner's designee is the administrator of the system. 27 (b) The commissioner of administration shall adopt regulations to govern the 28 operation of the system. 29 Sec. 39.35.004. Powers and duties of the administrator. (a) The 30 administrator shall 31 (1) establish and maintain an adequate system of accounts;
01 (2) transmit the funds deposited in the system to the retirement fund 02 established and maintained by the Alaska Retirement Management Board; 03 (3) approve or disapprove claims for retirement benefits; 04 (4) make payments for the various purposes specified; 05 (5) submit periodic reports or statements of account that are needed; 06 (6) issue a statement of account to an employee not less than once each 07 year showing the amount of the employee's contributions to the applicable plan in the 08 system; 09 (7) formulate and recommend to the commissioner of administration 10 regulations to govern the operation of the system; 11 (8) as soon as possible after the close of each fiscal year, and not later 12 than six months after the close of each fiscal year, send to the governor and the 13 legislature an annual statement on the operations of each of the plans in the system 14 containing 15 (A) a balance sheet; 16 (B) a statement of income and expenditures for the year; 17 (C) a report on valuation of trust fund assets; 18 (D) a summary of assets held in the trust fund listed by the 19 categories of investment, as provided by the Alaska Retirement Management 20 Board; 21 (E) other statistical financial data that are necessary for proper 22 understanding of the financial condition of the system as a whole and each plan 23 in the system and the result of its operations; 24 (9) engage an independent certified public accountant to conduct an 25 annual audit of each plan's accounts and the annual report of the system's financial 26 condition and activity; 27 (10) report to the Legislative Budget and Audit Committee concerning 28 the condition and administration of each plan and distribute the report to the members 29 of each plan in the system; 30 (11) publish an information handbook for each plan in the system at 31 intervals that the administrator considers appropriate; and
01 (12) meet at least annually with the board to review the condition and 02 management of the retirement systems and to review significant changes to policies, 03 regulations or benefits; 04 (13) do whatever else may be necessary to carry out the purposes of 05 each plan in the system. 06 (b) The administrator is authorized to charge uniform fees to members' 07 accounts to cover the ongoing cost of operating each plan in the system. 08 (c) The administrator is authorized to contract with public and private entities 09 to provide record keeping, benefits payments, and other functions necessary for the 10 administration of each plan in the system. 11 Sec. 39.35.005. Regulations. (a) Regulations adopted by the commissioner 12 of administration under this chapter relate to the internal management of state 13 agencies, and the adoption of these regulations is not subject to AS 44.62 14 (Administrative Procedure Act). 15 (b) Notwithstanding (a) of this section, a regulation adopted under this chapter 16 shall be published in the Alaska Administrative Register and Code for informational 17 purposes. 18 (c) Each regulation adopted under this chapter must conform to the style and 19 format requirements of the drafting manual for administrative regulations that is 20 published under AS 44.62.050. 21 (d) At least 30 days before the adoption, amendment, or repeal of a regulation 22 under this chapter, the board shall provide notice of the action that is being considered. 23 The notice shall be 24 (1) posted in public buildings throughout the state; 25 (2) published in one or more newspapers of general circulation in each 26 judicial district of the state; 27 (3) mailed to each person or group that has filed a request for notice of 28 proposed action with the board; and 29 (4) furnished to each member of the legislature and to the Legislative 30 Affairs Agency. 31 (e) Failure to mail notice to a person as required under (d)(3) of this section
01 does not invalidate an action taken by the board. 02 (f) The board may hold a public hearing on a proposed regulation. 03 (g) A regulation adopted under this chapter takes effect 30 days after adoption 04 by the board. 05 (h) Notwithstanding the other provisions of this section, a regulation may be 06 adopted, amended, or repealed, effective immediately, as an emergency regulation by 07 the unanimous vote of a quorum of the board. For an emergency regulation to be 08 effective the board must find that the adoption, amendment, or repeal of the regulation 09 is necessary for the immediate preservation of the orderly operation of the system or 10 the business of the board. The board shall, within 10 days after adoption of an 11 emergency regulation, give notice of the adoption under (d) of this section. An 12 emergency regulation adopted under this subsection may not remain in effect past the 13 date of the next regular board meeting unless the board complies with the procedures 14 set out in this section and adopts the regulation as a permanent regulation. 15 (i) In this section, "regulation" has the meaning given in AS 44.62.640(a). 16 Sec. 39.35.006. Appeals. An employer, member, annuitant, or beneficiary 17 may appeal a decision made by the administrator to the office of administrative 18 hearings established under AS 44.64. An aggrieved party may appeal a final decision 19 to the superior court. 20 Sec. 39.35.007. Investment management of retirement system funds. The 21 Alaska Retirement Management Board established under 37.10.210 is the fiduciary of 22 the system funds. 23 Sec. 39.35.008. Definitions. In AS 39.35.001 - 39.35.008, 24 (1) "plan" means the retirement plan established in AS 39.35.095 - 25 39.35.680 or the retirement plan established in AS 39.35.700 - 39.35.990; 26 (2) "system" means all retirement plans established under the public 27 employees' retirement system. 28 * Sec. 63. AS 39.35 is amended by adding a new section to read: 29 Article 2. Public Employees First Hired before July 1, 2005. 30 Sec. 39.35.095. Applicability of AS 39.35.095 - 39.35.680 to employees first 31 hired before July 1, 2005. The following provisions of this chapter apply only to
01 members first hired before July 1, 2005: AS 39.35.095 - 39.35.680. 02 * Sec. 64. AS 39.35.100 is amended to read: 03 Sec. 39.35.100. Accounting. (a) The commissioner of administration shall 04 establish and maintain an adequate system of accounts and records for the plan 05 [SYSTEM]. The accounts and records shall be integrated with the accounts, records, 06 and procedures of the employers to the end that they operate most effectively and at 07 minimum expense, and that duplication of records and accounts is avoided. 08 (b) All income of the pension fund and all disbursements made by the fund 09 shall be credited or charged, whichever is appropriate, to the following accounts: 10 (1) An individual account shall be maintained for each employee to 11 record the amount of the employee's mandatory contributions collected under 12 AS 39.35.160(a). As of the last day of each calendar year and each fiscal year 13 beginning with June 30, 1969, this account shall be credited with interest, by applying 14 [ONE HALF OF] the prescribed rate of interest as determined by the board to the 15 balance in the account as of that date. Within one year following retirement, the 16 amount actuarially determined as necessary to fully fund the benefits to be received 17 shall be transferred first from the employee contribution account and, after the 18 employee contribution account has been exhausted, then from the employer 19 contribution account into the retirement reserve account. 20 (2) An individual account shall be maintained for each employee to 21 record the amount of the employee's voluntary contributions. As of the last day of 22 each calendar year and each fiscal year beginning with June 30, 1969, this account 23 shall be credited with interest, by applying [ONE HALF OF] the prescribed rate of 24 interest as determined by the board to the balance in the account as of that date. 25 Amounts that, before termination of employment, are withdrawn by an employee from 26 the employee's savings account shall be charged to that account. Upon retirement, the 27 amount actuarially determined as necessary to fully fund the benefits to be received 28 shall be transferred first from the employee savings account and, after the employee 29 savings account has been exhausted, then from the employer contribution account into 30 the retirement reserve account. 31 (3) A separate account for each employer shall be maintained. The
01 account shall be credited with contributions of the employer. This account shall be 02 charged with the employer's actuarial charge for pension, death benefits, and other 03 benefits paid under this plan [SYSTEM] to or on behalf of the employee of the 04 employer. After an allowance for interest credited to employee contribution accounts 05 and employee savings accounts, the investment income of the pension fund shall be 06 allocated to the retirement reserve account and to each employer asset share account 07 according to the ratio that the average of the assets in the account as of the beginning 08 and as of the end of the fiscal year bears to the total of the average balance of the 09 retirement reserve account and all employer accounts. 10 (4) An expense account shall be maintained for the plan [SYSTEM]. 11 This account shall be charged with all disbursements representing administrative 12 expenses incurred by the plan [SYSTEM]. At the end of the year the expense account 13 shall be allocated to each employer in accordance with (3) of this subsection. 14 Expenditures from this account shall be included in the governor's budget for each 15 fiscal year and are subject to approval by the legislature. 16 * Sec. 65. AS 39.35 is amended by adding a new section to article 1 to read: 17 Sec. 39.35.115. Defined benefits retirement plan. (a) A defined benefits 18 retirement plan for employees of the state, political subdivisions, and public 19 organizations is created. The plan becomes effective January 1, 1961, at which time 20 contributions by the employers and employees begin. 21 (b) The retirement plan established by AS 39.35.115 - 39.35.680 is intended to 22 qualify under 26 U.S.C. 401(a) and 414(d) (Internal Revenue Code) as a qualified 23 retirement plan established and maintained by the state for its employees and for the 24 employees of political subdivisions, public corporations, and public organizations of 25 the state, and for the employees of other employers whose participation is authorized 26 by AS 39.35.115 - 39.35.680 and who participate in this plan. 27 (c) An amendment to AS 39.35.115 - 39.35.680 does not provide a person 28 with a vested right to a benefit if the Internal Revenue Service determines that the 29 amendment will result in disqualification of the plan under the Internal Revenue Code. 30 * Sec. 66. AS 39.35.131 is amended to read: 31 Sec. 39.35.131. Membership in teachers' and public employees'
01 retirement systems. (a) A person who is employed at least half-time in the plan 02 [SYSTEM] during the same period that the person is employed at least half-time in a 03 position in the teachers' retirement system under AS 14.25 shall receive credited 04 service under each retirement program [SYSTEM] for half-time employment. 05 However, the amount of credited service a person receives under the plan [SYSTEM] 06 during a school year may not exceed the amount necessary, when added to the amount 07 of credited service earned during the school year under the teachers' retirement 08 system, to equal one year of credited service. 09 (b) A person who was employed at least half-time in a position in the teachers' 10 retirement system under AS 14.25 in the same period that the person was employed at 11 least half-time in a position in this plan [SYSTEM] may claim credited service in both 12 retirement programs [SYSTEMS] for employment before May 31, 1989. To obtain 13 this credited service, the person shall claim the service and verify the period of half- 14 time employment. When eligibility for half-time service credit has been established, 15 an indebtedness shall be determined to the retirement program [SYSTEM] in which 16 the person did not participate. The amount of the indebtedness is the full actuarial cost 17 of providing benefits for the credited service claimed. Interest as prescribed by 18 regulation accrues on that indebtedness beginning on the later of July 1, 1989, or the 19 date on which the member is first eligible to claim the service. Any outstanding 20 indebtedness existing at the time the person retires will require an actuarial adjustment 21 to the benefits payable based on that service. 22 * Sec. 67. AS 39.35.158 is amended to read: 23 Sec. 39.35.158. Administrative director of courts. An administrative 24 director of the Alaska court system who withdraws from the judicial retirement system 25 under AS 22.25.012 is eligible for membership in the plan [SYSTEM] and shall 26 receive credited service in the plan [SYSTEM] for service rendered as administrative 27 director. To be eligible for membership in the plan [SYSTEM] under this subsection, 28 the administrative director must contribute to the plan [SYSTEM] 29 (1) the amount the director would have contributed if the director had 30 been a member during the director's period of membership in the judicial retirement 31 system; and
01 (2) any contributions for services as administrative director refunded 02 by the plan [SYSTEM] at the time the director became a member of the judicial 03 retirement system. 04 * Sec. 68. AS 39.35.160(a) is amended to read: 05 (a) Beginning July 1, 2005 [JANUARY 1, 1987], each peace officer or fire 06 fighter shall contribute to the plan a percentage [SYSTEM AN AMOUNT EQUAL 07 TO SEVEN AND ONE-HALF PERCENT] of the peace officer's or fire fighter's 08 compensation as determined under AS 39.35.162. Except as provided in (d) of this 09 section, beginning July 1, 2005 [JANUARY 1, 1987], each other employee shall 10 contribute to the system a percentage [AN AMOUNT EQUAL TO SIX AND 11 THREE-QUARTERS PERCENT] of the employee's compensation as determined 12 under AS 39.35.162. The contributions shall be deducted by the employer at the end 13 of each payroll period. The contributions shall be deducted from employee 14 compensation before computation of applicable federal taxes, and the contributions 15 shall be treated as employer contributions under 26 U.S.C. 414(h)(2). A member may 16 not have the option of making the payroll deduction directly instead of having the 17 contribution picked up by the employer. 18 * Sec. 69. AS 39.35 is amended by adding new sections to read: 19 Sec. 39.35.162. Calculation of member contribution rate. (a) Each peace 20 officer or fire fighter shall contribute a percentage of the peace officer's or fire fighter's 21 compensation to be determined annually in advance by the administrator. Each other 22 employee shall contribute a percentage of the employee's compensation to be 23 determined annually in advance by the administrator. The employee contribution rate 24 is the greater of 25 (1) 7.5 percent for a peace officer or fire fighter; 26 (2) 6.75 percent for each other employee; or 27 (3) one-half of the normal cost rate actuarially calculated to fund the 28 benefits expected to be earned by active members during the fiscal year. 29 (b) The normal cost rate for peace officers or fire fighters and the employee 30 contribution rate for other employees shall be separately calculated based on the 31 actuarially calculated costs for each group of employees. The maximum increase in
01 the contribution rate for a peace officer or fire fighter or other employee from one year 02 to the next may not be more than five percentage points, as actuarially calculated. 03 * Sec. 70. AS 39.35.165(a) is amended to read: 04 (a) An employee who is eligible to purchase credited service under 05 AS 39.35.310, 39.35.330, 39.35.340, 39.35.342, 39.35.345, [39.35.350,] 39.35.360, or 06 39.35.370, a member who is eligible to purchase credited service under AS 39.35.375, 07 or an elected public official who is eligible to purchase credited service under 08 AS 39.35.381 is an employee for purposes of this section. An employee may, in lieu 09 of making payments directly to the plan, elect to have the employee's employer make 10 payments as provided in this section. 11 * Sec. 71. AS 39.35.165(b) is amended to read: 12 (b) An employee may elect to have the employer make payments for all or any 13 portion of the amounts payable for the employee's purchase of credited service 14 through a salary reduction program as follows: 15 (1) the amounts paid under a salary reduction program are in lieu of 16 contributions by the employee making the election; the electing employee's salary or 17 other compensation shall be reduced by the amount paid by the employer under this 18 subsection; 19 (2) the employee shall make an irrevocable election under this section 20 to purchase credited service as permitted in AS 39.35.310, 39.35.330, 39.35.340, 21 39.35.342, 39.35.345, [39.35.350,] 39.35.360, 39.35.370, 39.35.375, or 39.35.381 and 22 before the employee's termination of employment; the irrevocable election must 23 specify the number of payroll periods that deductions will be made from the 24 employee's compensation and the dollar amount of deductions for each payroll period 25 during the specified number of payroll periods; the deductions made under this 26 paragraph cease upon the earlier of the member's termination of employment with the 27 employer or the member's death; amounts paid by an employer under (f) of this 28 section may not be applied toward the payment of the dollar amount of the deductions 29 representing the portion of the credited service that is being purchased by the member 30 through payroll deduction in accordance with the member's irrevocable election under 31 this subsection;
01 (3) amounts paid by an employer under this subsection shall be treated 02 as employer contributions for the purpose of determining tax treatment under the 03 Internal Revenue Code; the amounts paid by the employer under this section may not 04 be included in the member's gross income for income tax purposes until those amounts 05 are distributed by refund or retirement benefit payments. 06 * Sec. 72. AS 39.35.165(f) is amended to read: 07 (f) The commissioner may accept rollover contributions from a member [AND 08 DIRECT TRANSFERS, AS DESCRIBED IN THIS SUBSECTION, FOR THE 09 PURCHASE, IN WHOLE OR IN PART, OF CREDITED SERVICE FOR THE 10 REINSTATEMENT, IN WHOLE OR IN PART, OF FORFEITED CREDITED 11 SERVICE UNDER AS 39.35.350]. A rollover contribution [OR TRANSFER] as 12 described in this subsection shall also be treated as employer contributions for the 13 purpose of determining tax treatment under the Internal Revenue Code and may be 14 made by any one or a combination of the following methods: 15 (1) subject to the limitations prescribed in 26 U.S.C. 401(a)(3) and 26 16 U.S.C. 402(c), accepting eligible rollover distributions directly from one or more 17 retirement programs of another employer that are qualified under 26 U.S.C. 401(a) or 18 accepting rollovers directly from a member; 19 (2) subject to the limitations prescribed in 26 U.S.C. 408(d)(3)(A)(ii), 20 accepting from a member conduit rollover contributions that are received by the 21 employee from one or more conduit rollover individual retirement accounts previously 22 established by the member; 23 (3) subject to the limitations prescribed in 26 U.S.C. 403(b)(13), 24 accepting direct trustee-to-trustee transfers of all or a portion of the accounts of the 25 member, on or after January 1, 2002, from a tax sheltered annuity described in 26 26 U.S.C. 403(b); 27 (4) subject to the limitations prescribed in 26 U.S.C. 457(e)(17), 28 accepting direct trustee-to-trustee transfers of all or a portion of the accounts of the 29 member, on or after January 1, 2002, from an eligible deferred compensation plan of a 30 tax-exempt organization or a state or local government described in 26 U.S.C. 457(b); 31 (5) accepting direct trustee-to-trustee transfer from an account
01 established for the benefit of the member in AS 39.30.150 - 39.30.180 (Alaska 02 Supplemental Annuity Plan). 03 * Sec. 73. AS 39.35.165(g) is amended to read: 04 (g) Payments made under this section shall be applied to reduce the 05 employee's outstanding indebtedness described in AS 39.35.310, 39.35.330, 06 39.35.340, 39.35.342, 39.35.345, [39.35.350,] 39.35.360, 39.35.370, 39.35.375, or 07 39.35.381 at the time that the contributions are received by the plan. 08 * Sec. 74. AS 39.35.165(i) is amended to read: 09 (i) On satisfaction of the eligibility requirements of AS 39.35.310, 39.35.330, 10 39.35.340, 39.35.341, 39.35.345, [39.35.350,] 39.35.360, 39.35.370, 39.35.375, or 11 39.35.381, the requirements of this section, and the administrative filing requirements 12 specified by the commissioner, the plan shall adjust the employee's credited service 13 history and add any additional service credits acquired. 14 * Sec. 75. AS 39.35.200 is amended by adding a new subsection to read: 15 (d) An employee who receives a refund of contributions in accordance with 16 this section forfeits corresponding credited service under AS 39.35.115 - 39.35.680. 17 * Sec. 76. AS 39.35.270 is amended to read: 18 Sec. 39.35.270. Amount of employer's contributions. The amount of each 19 employer's contributions shall be determined by applying the employer's contribution 20 rate, as certified by the board, to the total compensation paid to the active employees 21 of the employer for each payroll period and by including any adjustments to 22 contributions required by AS 39.35.520(a). This amount shall be remitted by the 23 employer to the administrator in accordance with AS 39.35.610. 24 * Sec. 77. AS 39.35.270 is amended by adding a new subsection to read: 25 (b) When added to the member contribution rate calculated under 26 AS 39.35.162, the employer contribution may not be less than the rate required, as 27 determined by the board, to fully fund the future liabilities of active members. 28 * Sec. 78. AS 39.35.340(f) is amended to read: 29 (f) An employee cannot be credited with a period of active military service in 30 the armed forces of the United States under this section if credit for that military 31 service was granted under AS 14.25.009 - 14.25.220 [AS 14.25].
01 * Sec. 79. AS 39.35.340(h) is amended to read: 02 (h) The combined period of military service claimed under this section and 03 under AS 14.25.009 - 14.25.220 [AS 14.25] may not exceed five years. 04 * Sec. 80. AS 39.35.360(i) is amended to read: 05 (i) An employee who completes three years of credited service with an 06 employer, for which the employee makes contributions required by AS 39.35.095 - 07 39.35.680 [THIS CHAPTER], is entitled to credited service on a year-for-year basis 08 for service credited in the Civil Service Retirement System, rendered as an employee 09 of an Alaska Bureau of Indian Affairs (BIA) school, other than service as a teacher. 10 When eligibility for retroactive credited service under this subsection has been 11 established, an indebtedness of the employee to the plan [SYSTEM] shall be 12 determined as follows: (1) the employee's actual annual compensation, or the 13 calculated annual compensation for an employee who works fewer than 12 months, for 14 the most recent calendar year in which service is rendered to an employer before the 15 calendar year in which the employee first becomes eligible to claim service under this 16 subsection, multiplied by (2) the number of years of service in Alaska BIA schools 17 that is credited under this subsection, and this product multiplied by (3) six percent for 18 employees first eligible to claim this service before January 1, 1987, or eight and one- 19 half percent for employees first eligible to claim this service on or after January 1, 20 1987. Interest as prescribed by regulation accrues on the indebtedness beginning on 21 the date the employee may first claim the retroactive credited service. Any 22 outstanding indebtedness that exists at the time the employee retires requires an 23 actuarial adjustment to the benefits that are based on retroactive credited service under 24 this subsection. A retirement benefit payable under this subsection for Alaska BIA 25 service shall be reduced by an amount equal to the retirement benefits paid to the 26 member by the United States government for the same service. 27 * Sec. 81. AS 39.35.360(l) is amended to read: 28 (l) An administrative director of the Alaska Court System who withdraws 29 from the judicial retirement system under AS 22.25.012(b) is eligible for membership 30 in the plan [PUBLIC EMPLOYEES' RETIREMENT SYSTEM] and shall receive 31 credited service in this plan [SYSTEM] for service rendered as administrative
01 director. To be eligible for membership in this plan [SYSTEM] under this subsection, 02 the administrative director must contribute to the plan [SYSTEM] 03 (1) the amount that would have been contributed if the administrative 04 director had been a member during the period of the membership in the judicial 05 retirement system; and 06 (2) any contributions for service as administrative director refunded 07 from the plan [PUBLIC EMPLOYEES' RETIREMENT SYSTEM] at the time the 08 administrative director became a member of the judicial retirement system. 09 * Sec. 82. AS 39.35.370(g) is amended to read: 10 (g) When an employee who was employed as a dispatcher in a state trooper 11 office or in a police or fire department in the plan [PUBLIC EMPLOYEES' 12 RETIREMENT SYSTEM] applies for appointment to retirement, the employee may 13 convert the credited service for that position to credited service as a peace officer by 14 claiming the service as peace officer service. An employee who has converted 15 credited service to peace officer service under this subsection shall be treated as a 16 peace officer for purposes of AS 39.35.095 - 39.35.680 [THIS CHAPTER]. When the 17 member claims this credited service as peace officer service, an indebtedness of the 18 member to the plan [SYSTEM] shall be established. The indebtedness is equal to the 19 full actuarial cost of the conversion of the credited service to treatment as peace 20 officer service. Any outstanding indebtedness that exists at the time the member is 21 appointed to retirement will require an actuarial adjustment to the benefits payable 22 based upon the conversion of the credited service. 23 * Sec. 83. AS 39.35.375(a) is amended to read: 24 (a) An active or inactive member who has never been vested in this plan 25 [SYSTEM] or in the teachers' retirement system under AS 14.25, who has at least two 26 years of credited service in this plan [SYSTEM], and who has membership service in 27 the teachers' retirement system may claim credited service in this plan [SYSTEM] in 28 an amount equal to the membership service the member has in the teachers' retirement 29 system. The claimed credited service may be added to service earned under 30 AS 39.35.095 - 39.35.680 [THIS CHAPTER] to enable the member to qualify for a 31 public service benefit under this section. The member may not claim credited service
01 for membership service for which the member has received a refund under 02 AS 14.25.150 unless the member fully pays the indebtedness as established under 03 AS 14.25.063. The member may not claim credited service in this plan [SYSTEM] 04 based on unused sick leave under AS 14.25.115. 05 * Sec. 84. AS 39.35.375(b) is amended to read: 06 (b) To claim credited service under this section, the member shall file a 07 written request with the administrator when the member applies to retire. The 08 administrator shall determine the full actuarial cost of benefits based on the member's 09 total credited service and shall transfer from the teachers' retirement system to this 10 plan [SYSTEM] an amount equal to the sum of the member contributions and any 11 indebtedness payments to the teachers' retirement system and the employer 12 contributions to the teachers' retirement system made on behalf of the employee 13 together with interest earned on those contributions and indebtedness payments. If the 14 amount to be transferred, when combined with the amount of employee contributions 15 and indebtedness payments to this plan [SYSTEM] and the amount of employer 16 contributions on behalf of the employee in this plan [SYSTEM], and interest earned 17 on contributions and indebtedness payments for the employee, is less than the full 18 actuarial cost computed under this subsection, an indebtedness to the plan [SYSTEM] 19 equal to the amount of the difference is established. Interest as prescribed by 20 regulation accrues on the indebtedness. The member must pay any outstanding 21 indebtedness existing at the time the member applies for retirement in full before the 22 member is appointed to retirement under this section. 23 * Sec. 85. AS 39.35.375(c) is amended to read: 24 (c) A member is entitled to receive a public service benefit under this section 25 if the member has at least a total of five years credited service under AS 39.35.095 - 26 39.35.680 [THIS CHAPTER] and credited service from the teachers' retirement 27 system claimed under this section. A public service benefit shall be calculated using 28 the higher of the average monthly compensation for service in this plan [SYSTEM] or 29 the average base salary for service in the teachers' retirement system. The amount of 30 the benefit shall be calculated in accordance with AS 39.35.370(c). 31 * Sec. 86. AS 39.35.375(d) is amended to read:
01 (d) Credited service earned under either this plan [SYSTEM] or the teachers' 02 retirement system that has been claimed for a public service benefit under this section 03 may not be used for any other purpose. A member who claims credited service under 04 this section loses all rights to benefits under AS 14.25 based on the claimed credited 05 service. A member may not claim credited service under this section unless the 06 member claims all of the membership service the member has in the teachers' 07 retirement system. A public service benefit does not constitute a normal or early 08 retirement benefit for purposes of qualifying for a conditional service retirement 09 benefit under AS 14.25.125 or AS 39.35.385. 10 * Sec. 87. AS 39.35.375(f) is amended to read: 11 (f) Notwithstanding AS 14.25.063 and AS 39.35.350, a former member of the 12 teachers' retirement system who is an active member or inactive member of this plan 13 [SYSTEM] may reinstate, under this section, membership service earned under 14 AS 14.25 for which the member received a refund of contributions. 15 * Sec. 88. AS 39.35.375(f) is amended to read: 16 (f) Notwithstanding AS 14.25.063 [AND AS 39.35.350], a former member of 17 the teachers' retirement system who is an active member or inactive member of this 18 plan may reinstate, under this section, membership service earned under AS 14.25 for 19 which the member received a refund of contributions. 20 * Sec. 89. AS 39.35.375(g) is amended to read: 21 (g) If a member retires under this section and subsequently returns to work for 22 an employer under this plan [SYSTEM] or the teachers' retirement system, benefits 23 under this section shall cease during the period of reemployment and shall 24 recommence when the reemployment is ended. The credited service earned during the 25 period of reemployment may not be added to the credited service claimed for a public 26 service benefit under this section. If a member vests and meets the other eligibility 27 requirements under this system or the teachers' retirement system during the 28 reemployment, the member is entitled to a benefit under AS 14.25.009 - 14.25.220 29 [AS 14.25] or 39.35.095 - 39.35.680 [AS 39.35], as appropriate. 30 * Sec. 90. AS 39.35.375 is amended by adding a new subsection to read: 31 (h) In this section,
01 (1) "teachers' retirement system" and "teachers' retirement system 02 under AS 14.25" means the teachers' retirement plan established in AS 14.25.009 - 03 14.25.220; 04 (2) "membership service earned under AS 14.25" means membership 05 service earned under AS 14.25.009 - 14.25.220. 06 * Sec. 91. AS 39.35.381(a) is amended to read: 07 (a) An elected public officer is eligible for a public officer benefit if the officer 08 is retired under AS 14.25.009 - 14.25.220 [AS 14.25 (TEACHERS' RETIREMENT 09 SYSTEM)]. Only fully paid credited service as an elected public officer of a 10 municipality or other political subdivision, earned while the municipality or political 11 subdivision was an employer under this plan [SYSTEM] and while the person was 12 employed full-time under AS 14.25.009 - 14.25.220 [AS 14.25], may be counted 13 under this section. 14 * Sec. 92. AS 39.35.410(f) is amended to read: 15 (f) An employee is not entitled to an occupational disability benefit unless the 16 employee files an application for it with the administrator within 90 days of the date of 17 terminating employment. If the employee is unable to meet a filing requirement of 18 this subsection, it may be waived by the administrator [PUBLIC EMPLOYEES' 19 RETIREMENT BOARD] if there are extraordinary circumstances that resulted in the 20 employee's inability to meet the filing requirement. [THE BOARD MAY 21 DELEGATE THE AUTHORITY TO WAIVE A FILING DEADLINE UNDER THIS 22 SUBSECTION TO THE ADMINISTRATOR.] 23 * Sec. 93. AS 39.35.475(b) is amended to read: 24 (b) The increase in benefit payments applies to total benefit payments 25 [EXCEPT FOR THE COST-OF-LIVING ALLOWANCE UNDER AS 39.35.480]. 26 The amount of the increase is a percentage of the current benefit equal to 27 (1) the lesser of 75 percent of the increase in the cost of living in the 28 preceding calendar year or nine percent, for recipients who on July 1 are at least 65 29 years old and for members receiving disability benefits; and 30 (2) the lesser of 50 percent of the increase in the cost of living in the 31 preceding calendar year or six percent, for recipients who on July 1 are at least 60 but
01 less than 65 years old or for recipients who are less than 60 years old on July 1 but 02 who have received benefits from the plan [SYSTEM] for at least five years. 03 * Sec. 94. AS 39.35.485(a) is amended to read: 04 (a) An employee who is eligible for a benefit calculated in accordance with 05 AS 39.35.370(c) is entitled to a benefit of at least $25 a month for each year of 06 credited service, not including adjustments made under AS 39.35.340 for military 07 service, AS 39.35.350 for reinstatement of credited service, AS 39.35.360 for credit 08 for earlier service, AS 39.35.370(c) for early retirement, AS 39.35.420 for 09 nonoccupational death benefits, AS 39.35.450 for the survivor's option, former 10 AS 39.35.460 for the level income option, and AS 39.35.475 for the post-retirement 11 pension adjustment [, AND AS 39.35.480 FOR THE COST OF LIVING]. 12 * Sec. 95. AS 39.35.485(a) is amended to read: 13 (a) An employee who is eligible for a benefit calculated in accordance with 14 AS 39.35.370(c) is entitled to a benefit of at least $25 a month for each year of 15 credited service, not including adjustments made under AS 39.35.340 for military 16 service, [AS 39.35.350 FOR REINSTATEMENT OF CREDITED SERVICE,] 17 AS 39.35.360 for credit for earlier service, AS 39.35.370(c) for early retirement, 18 AS 39.35.420 for nonoccupational death benefits, AS 39.35.450 for the survivor's 19 option, former AS 39.35.460 for the level income option, and AS 39.35.475 for the 20 post-retirement pension adjustment. 21 * Sec. 96. AS 39.35.680(2) is amended to read: 22 (2) "actuarial adjustment" means the adjustment necessary to obtain 23 equality in value of the aggregate expected payments under two different forms of 24 pension payments, considering expected mortality and interest earnings on the basis of 25 assumptions, factors, and methods specified in regulations issued under this plan 26 [SYSTEM] that are formally adopted [UNDER AS 39.35.042] by the board that 27 clearly preclude employer discretion in the determination of the amount of any 28 member's benefit; 29 * Sec. 97. AS 39.35.680(6) is amended to read: 30 (6) "board" means the Alaska Retirement Management [PUBLIC 31 EMPLOYEES RETIREMENT] Board;
01 * Sec. 98. AS 39.35.680(34) is amended to read: 02 (34) "qualified domestic relations order" means a divorce or 03 dissolution judgment under AS 25.24, including an order approving a property 04 settlement, that 05 (A) creates or recognizes the existence of an alternate payee's 06 right to, or assigns to an alternate payee the right to, receive all or a portion of 07 employee contribution account or the benefits payable with respect to an 08 employee; 09 (B) sets out the name and last known mailing address, if any, of 10 the employee and of each alternate payee covered by the order; 11 (C) sets out the amount or percentage of the employee's benefit, 12 or of any survivor's benefit, to be paid to the alternate payee, or sets out the 13 manner in which that amount or percentage is to be determined; 14 (D) sets out the number of payments or period to which the 15 order applies; 16 (E) sets out the retirement plan [SYSTEM] to which the order 17 applies; 18 (F) does not require any type or form of benefit or any option 19 not otherwise provided by AS 39.35.010 - 39.35.680 [THIS CHAPTER]; 20 (G) does not require an increase of benefits in excess of the 21 amount provided by AS 39.35.010 - 39.35.680 [THIS CHAPTER], determined 22 on the basis of actuarial value; and 23 (H) does not require the payment to an alternate payee of 24 benefits that are required to be paid to another alternate payee under another 25 order previously determined to be a qualified domestic relations order; 26 * Sec. 99. AS 39.35.680 is amended by adding a new paragraph to read: 27 (41) "plan" means the retirement plan established in AS 39.35.115 - 28 39.35.680. 29 * Sec. 100. AS 39.35 is amended by adding new sections to read: 30 Article 9. Employees First Hired on or after July 1, 2005. 31 Sec. 39.35.700. Applicability of AS 39.35.700 - 39.35.990. The provisions of
01 AS 39.35.700 - 39.35.990 apply only to members first hired on or after July 1, 2005. 02 Sec. 39.35.710. Defined contribution retirement plan established; federal 03 qualification requirements. (a) A defined contribution retirement plan is established 04 for employees of the state or a political subdivision or public organization of the state. 05 (b) The defined contribution retirement plan is a plan in which savings are 06 accumulated in an individual retirement account for the exclusive benefit of the 07 member or beneficiaries. The plan is established effective July 1, 2005, at which time 08 contributions by employers and employees begin. 09 (c) The retirement plan established by AS 39.35.700 - 39.35.990 is intended to 10 qualify under 26 U.S.C. 401(a) and 414(d) (Internal Revenue Code) as a qualified 11 retirement plan established and maintained by the state for its employees, for the 12 employees of political subdivisions, public corporations, and public organizations of 13 the state, and for the employees of other employers whose participation is authorized 14 by AS 39.35.700 - 39.35.990 and who participate in the plan set out in AS 39.35.700 - 15 39.35.990. 16 (d) An amendment to AS 39.35.700 - 39.35.990 does not provide a person 17 with a vested right to a benefit if the Internal Revenue Service determines that the 18 amendment will result in disqualification of the plan under the Internal Revenue Code. 19 Sec. 39.35.720. Membership. An employee first hired on or after July 1, 20 2005, shall participate in the plan set out in AS 39.35.700 - 39.35.990. 21 Sec. 39.35.730. Contributions by members. (a) Member contributions to 22 the trust fund are mandatory and shall be in an amount equal to eight percent of the 23 member's compensation from July 1 to the following June 30. This contribution shall 24 be paid into a member's individual account in the Department of Administration under 25 the terms set out in AS 39.35.700 - 39.35.990. 26 (b) Subject to the limitations on contributions under AS 39.35.780, a member 27 may elect to make additional contributions to the member's individual account. 28 (c) The employer shall deduct the contribution from the member's 29 compensation at the end of each payroll period, and the contribution shall be credited 30 by the plan to the member's individual account. The contributions shall be deducted 31 from member's compensation before the computation of applicable federal taxes and
01 shall be treated as employer contributions under 26 U.S.C. 414(h)(2). A member may 02 not have the option of making the payroll deduction directly in cash instead of having 03 the contribution picked up by the employer. 04 Sec. 39.35.740. Employment contributions mandatory. Contributions of 05 employees shall be made by payroll deductions. Every included employee shall be 06 considered to consent to payroll deductions. It is of no consequence that a payroll 07 deduction may cause the compensation paid in cash to an employee to be reduced 08 below the minimum required by law. Payment of an employee's compensation, less 09 payroll deductions, is a full and complete discharge and satisfaction of all claims and 10 demands by the employee relating to remuneration of services during the period 11 covered by the payment, except with respect to the benefits provided under the plan. 12 Sec. 39.35.750. Contributions by employers. (a) An employer shall 13 contribute to each member's individual account an amount equal to 3.5 percent of the 14 member's compensation from July 1 to the following June 30. 15 (b) An employer shall also contribute an amount equal to 3.75 percent of each 16 member's compensation to pay for retiree major medical insurance. This contribution 17 shall be paid into the group health and life benefits fund established by the 18 commissioner of administration under AS 39.30.095 and shall be accounted for in 19 accordance with regulations established by the commissioner. 20 (c) An employer shall also make contributions to the health reimbursement 21 arrangement plan under AS 39.30.300. 22 Sec. 39.35.760. Rollover contributions and distributions. (a) An employee 23 may elect, at the time and in the manner prescribed by the administrator, to have all or 24 part of a direct rollover distribution from an eligible retirement plan owned by the 25 member paid directly into the member's individual account established under 26 AS 39.35.730 - 39.35.750. 27 (b) Rollover contributions do not count as a purchase of membership service 28 for the purpose of determining years of service. 29 (c) A distributee may elect, at the time and in the manner prescribed by the 30 administrator, to have all or part of an eligible rollover distribution paid directly to an 31 eligible retirement plan specified by the distributee in the direct rollover.
01 (d) In this section, 02 (1) "direct rollover" means the payment of an eligible rollover 03 distribution by the plan to an eligible retirement plan specified by a distributee who is 04 eligible to elect a direct rollover; 05 (2) "distributee" means a member, or a beneficiary who is the 06 surviving spouse of the member, or an alternate payee; 07 (3) "eligible retirement plan" means 08 (A) a conduit individual retirement account described in 26 09 U.S.C. 408(d)(3)(A); 10 (B) an annuity plan described in 26 U.S.C. 403(a); 11 (C) a qualified trust described in 26 U.S.C. 401(a); 12 (D) an annuity plan described in 26 U.S.C. 403(b); or 13 (E) a governmental plan described in 26 U.S.C. 457(b); 14 (4) "eligible rollover distribution" means a distribution of all or part of 15 a total account to a distributee, except for 16 (A) a distribution that is one of a series of substantially equal 17 installments payable not less frequently than annually over the life expectancy 18 of the distributee or the joint and last survivor life expectancy of the distributee 19 and the distributee's designated beneficiary, as defined in 26 U.S.C. 401(a)(9); 20 (B) a distribution that is one of a series of substantially equal 21 installments payable not less frequently than annually over a specified period 22 of 10 years or more; 23 (C) a distribution that is required under 26 U.S.C. 401(a)(9); 24 (D) the portion of any distribution that is not includable in 25 gross income; 26 (E) a distribution that is on account of hardship; and 27 (F) other distributions that are reasonably expected to total less 28 than $200 during a year. 29 Sec. 39.35.770. Transmittal of contributions. All contributions deducted in 30 accordance with AS 39.35.700 - 39.35.990 shall be transmitted to the plan for deposit 31 in the trust fund as soon as administratively feasible, but in no event later than 15 days
01 following the close of the payroll period. 02 Sec. 39.35.780. Limitations on contributions. Notwithstanding any other 03 provisions of this plan, the annual additions to each member's individual account 04 under this plan and under all defined contribution plans of the employer required to be 05 aggregated with the contributions from this plan under the provisions of 26 U.S.C. 415 06 may not exceed, for any limitation year, the amount permitted under 26 U.S.C. 415 at 07 any time. If the amount of a member's defined contribution plan contributions exceeds 08 the limitation of 26 U.S.C. 415(c) for any limitation year, the administrator shall take 09 any necessary remedial action to correct an excess contribution. The provisions of 26 10 U.S.C. 415, and the regulations adopted under that statute, as applied to qualified 11 defined contribution plans of governmental employees are incorporated as part of the 12 terms and conditions of the plan. 13 Sec. 39.35.790. Vesting. (a) A participating member is immediately and 14 fully vested in that member's contributions and related earnings. 15 (b) A member shall be fully vested in the employer contributions made on that 16 member's behalf, and related earnings, after five years of service. A member is 17 partially vested in the employer contributions made on that member's behalf, and the 18 related earnings, in the ratio of 19 (1) 25 percent with two years of service; 20 (2) 50 percent with three years of service; and 21 (3) 75 percent with four years of service. 22 Sec. 39.35.800. Investment of individual accounts. (a) The board shall 23 provide a range of investment options and permit a participant to exercise investment 24 control over the participant's assets in the member's individual account as provided in 25 this section. If a participant exercises control over the assets in the individual account, 26 the participant is not considered a fiduciary for any reason on the basis of exercising 27 that control. 28 (b) A participant may direct investment of plan funds held in an account 29 among available investment funds in accordance with rules established by the board. 30 (c) A participant may elect to change or transfer all or a portion of the 31 participant's existing account balance among available investment funds not more
01 often than once each day in accordance with the rules established by the administrator. 02 Only the last election received by the administrator before the transmittal of 03 contributions to the trust fund for allocation to the individual account will be used to 04 direct the investment of the contributions received. 05 (d) Except to the extent clearly set out in the terms of the investment plans 06 offered by the employer to the employee, the employer is not liable to the participant 07 for investment losses if the prudent investment standard has been met. 08 (e) The employer, administrator, state, board, or a person or entity who is 09 otherwise a fiduciary is not liable by reason for any participant's investment loss that 10 results from the participant's directing the investment of plan assets allocated to the 11 participant's account. 12 (f) To the extent that a member's individual account has been divided as 13 provided in a qualified domestic relations order between participants, each participant 14 shall be treated as the holder of a separate individual account for purposes of 15 investment yields, decisions, transfers, and time limitations imposed by this section. 16 Sec. 39.35.810. Distribution election at termination. (a) A member is 17 eligible to elect distribution of the member's account in accordance with this section 18 60 days after termination of employment. 19 (b) Notwithstanding (a) of this section, distribution of all or a portion of the 20 individual account of a member may take place before the 60th day after the 21 termination of employment with the approval of the administrator if the member 22 makes a written request for a distribution under this subsection. The member's spouse 23 must consent to the request in writing if the member is married. Distribution of an 24 individual account may only be made on account of an immediate and heavy financial 25 need of the member for the following reasons and in the amount the need is 26 demonstrated for 27 (1) medical care described in 26 U.S.C. 213(d) incurred by the 28 member, the member's spouse, or the member's dependent, or necessary to obtain that 29 medical care; 30 (2) the purchase of a principal residence for the member; 31 (3) postsecondary education tuition and related educational fees for the
01 next 12-month period for the member, the member's spouse, or a dependent of the 02 member; in this paragraph, "dependent" has the meaning given in 26 U.S.C. 152; 03 (4) prevention of the eviction of the member from the member's 04 principal residence or foreclosure on the mortgage of the member's principal 05 residence; or 06 (5) any need prescribed by the United States Department of the 07 Treasury, Internal Revenue Service, in a revenue ruling, notice, or other document of 08 general applicability that satisfies the safe harbor definition of hardship under 09 regulations adopted under 26 U.S.C. 401(k). 10 (c) If a member dies before benefits commence, the member's beneficiary is 11 immediately eligible to elect distribution of the member's share of the member's 12 individual account. 13 (d) Distributions are payable to an alternate payee in accordance with the 14 terms and conditions of a qualified domestic relations order that is received and 15 approved by the administrator as specified in AS 39.35.860. 16 (e) Distributions that are being paid to a member may not be affected by the 17 member's subsequent reemployment with the employer. Upon reemployment, a new 18 individual account shall be established for the member to which any future 19 contributions shall be allocated. Upon subsequent termination of employment, the 20 member's new individual account shall be distributed in accordance with this section. 21 Sec. 39.35.820. Forms of distribution. (a) A participant may elect to receive 22 the participant's share of the individual account in a 23 (1) lump sum payment, which is a single payment of the entire balance 24 in the account; 25 (2) periodic lump sum payment, which is a payment of a portion of the 26 balance in the account, not more than twice each year; 27 (3) period certain annuity payment, which is an annuity payable in a 28 fixed number of monthly installments for a duration of 60, 120, or 180 months; 29 (4) life annuity with a period certain payment, which is an annuity 30 payable until the later of the first day of the month in which the annuitant's death 31 occurs, or the date on which the payment of a fixed number of monthly installments is
01 completed; the period certain for installments is 120 or 180 months; 02 (5) single life annuity payment, which is an annuity payable monthly 03 until the first of the month in which the annuitant's death occurs; or 04 (6) joint and survivor annuity payment, which is an annuity payable 05 monthly to the member until the first of the month in which the member's death 06 occurs; after the member's death, a survivor annuity equal to 50 percent or 100 percent 07 of the member's benefit, as previously elected by the member, shall be paid monthly to 08 the joint annuitant for the remainder of the survivor's lifetime. 09 (b) Upon the death of an annuitant whose payments have commenced, an 10 annuitant's beneficiary shall receive further payments only to the extent provided in 11 accordance with the form of payment that was being made to the annuitant. The 12 remaining portion of the interest will continue to be distributed at least as rapidly as 13 under the method of distribution being used before the annuitant's death. 14 (c) If a participant dies before the distribution commencement date, 15 distribution of the participant's entire interest to a beneficiary shall be payable in any 16 form other than a joint and survivor annuity. 17 (d) If an unmarried member or other participant fails to elect a form of 18 payment before the distribution commencement date, the account shall be paid to a 19 beneficiary in the form of a lump sum to the extent required by the minimum 20 distribution requirements set out in the Internal Revenue Code. If a married member 21 fails to elect a form of payment before the distribution commencement date, the 22 account shall be paid in the form of a 50 percent joint and survivor annuity, with the 23 member's spouse as the joint annuitant. 24 Sec. 39.35.830. Manner of electing distributions. (a) Any election or any 25 alteration or revocation of a prior election by a participant for any purpose under this 26 plan shall be on forms or made in a manner prescribed for that purpose by the plan 27 administrator. To be effective, the forms required or the required action for any 28 purpose under this plan must be completed and received in accordance with rules, 29 regulations, and policies adopted by the administrator. 30 (b) At any time, but not less than seven days before the benefit 31 commencement date, a member, alternate payee, or beneficiary may change
01 (1) the form of payment election; 02 (2) an election to commence benefits; or 03 (3) the joint annuitant designation. 04 (c) Changes in elections are not allowed on or after seven days before the 05 benefit commencement date. 06 Sec. 39.35.840. Distribution requirements. (a) Payments to a participant 07 shall commence as soon as administratively feasible following the distribution 08 commencement date. The distribution commencement date is the first date on which 09 one of the following occurs: 10 (1) a member meets the requirements of AS 39.35.810 and has made a 11 complete application for payment under AS 39.35.820; 12 (2) a participant has elected to defer receipt of the account to a date 13 specified, the date has been attained, and the participant has made a complete 14 application for payment; 15 (3) a member attains normal retirement age and has not made an 16 application for payment or elected to defer receipt of the account to a date later than 17 normal retirement age; 18 (4) a member's beneficiary does not make an application for benefits 19 and five years have elapsed since the member's death; 20 (5) notwithstanding AS 39.35.820, a participant whose account has a 21 balance of $1,000 or less meets the requirements of AS 39.35.810, at which time the 22 participant must take payment of the participant's account. 23 (b) The entire interest of a member must be distributed or must begin to be 24 distributed not later than the member's required beginning date. 25 (c) If a member dies after the distribution of the member's interest has begun 26 but before the distribution has been completed, the remaining portion of the interest 27 shall continue to be distributed at least as rapidly as under the method of distribution 28 being used before the member's death. 29 (d) If a member has made a distribution election and dies before the 30 distribution of the member's interest begins, distribution of the member's entire interest 31 shall be completed by December 31 of the calendar year containing the fifth
01 anniversary of the member's death. However, if any portion of the member's interest 02 is payable to a designated beneficiary, distributions may be made over the life of the 03 designated beneficiary or over a period certain not greater than the life expectancy of 04 the designated beneficiary, commencing on or before December 31 of the calendar 05 year immediately following the calendar year in which the member died, and, if the 06 designated beneficiary is the member's surviving spouse, the date distributions are 07 required to begin may not be earlier than the later of December 31 of the calendar year 08 (1) immediately following the calendar year in which the member died, or (2) in which 09 the member would have attained 70 1/2 years of age, whichever is earlier. If the 10 surviving spouse dies after the member but before payments to the spouse have begun, 11 the provisions of this subsection apply as if the surviving spouse were the member. 12 An amount paid to a child of the member will be treated as if it were paid to the 13 surviving spouse if the amount becomes payable to the surviving spouse when the 14 child reaches the age of majority. 15 (e) If a member has not made a distribution election before the member's 16 death, the member's designated beneficiary must elect the method of distribution not 17 later than December 31 of the calendar year (1) in which distributions would be 18 required to begin under this section, or (2) that contains the fifth anniversary of the 19 date of death of the member, whichever is earlier. If the member does not have a 20 designated beneficiary or if the designated beneficiary does not elect a method of 21 distribution, distribution of the member's entire interest must be completed by 22 December 31 of the calendar year containing the fifth anniversary of the member's 23 death. 24 (f) For purposes of (b) of this section, distribution of a member's interest is 25 considered to begin (1) on the member's required beginning date, or (2) if the 26 designated beneficiary is the member's surviving spouse and the surviving spouse dies 27 after the member but before payments to the spouse have begun, on the date 28 distribution is required to begin to the surviving spouse. If distribution in the form of 29 an annuity irrevocably commences to the member before the required beginning date, 30 the date distribution is considered to begin is the date that the distribution actually 31 commences.
01 (g) Notwithstanding any contrary provisions of AS 39.35.700 - 39.35.990, the 02 requirements of this section apply to all distributions of a member's interest and take 03 precedence over any inconsistent provisions of AS 39.35.700 - 39.35.990. 04 (h) All distributions required under this section are determined and made in 05 accordance with 26 U.S.C. 401(a)(9) and regulations adopted under that statute, 06 including any minimum distribution incidental benefit requirement. 07 (i) In this section, 08 (1) "designated beneficiary" means the individual who is designated as 09 the beneficiary under the plan in accordance with 26 U.S.C. 401(a)(9) and regulations 10 adopted under that statute; 11 (2) "required beginning date" means the first day of April of the 12 calendar year following the calendar year in which the member either attains 70 1/2 13 years of age or actually retires, whichever is later. 14 Sec. 39.35.850. Designation of beneficiary. (a) Each participant shall have 15 the right to designate a beneficiary and shall have the right, at any time, to revoke the 16 designation or to substitute another beneficiary, subject to the following limitation: in 17 the event a married member elects a nonspouse beneficiary, the actuarial equivalent 18 value of the benefit payable to the beneficiary may not exceed 50 percent of the 19 member's portion of the account balance, and the member's spouse shall automatically 20 be considered the beneficiary for the remaining 50 percent of the account balance, 21 unless the spouse consents to the beneficiary designation in a writing that is notarized 22 or witnessed by the administrator. If the spouse consents in this manner, a married 23 member may designate a nonspouse beneficiary for the entire benefit or any portion 24 the benefit as part of an available form of payment contained in this plan, 25 (1) except to the extent a qualified domestic relations order filed with 26 the administrator provides for payment to a former spouse or other dependent of the 27 member; or 28 (2) unless the member filed a revocation of beneficiary accompanied 29 by a written consent to the revocation from the present spouse and each person entitled 30 under the order; however, consent of the present spouse is not required if the member 31 and the present spouse had been married for less than one year on the date of the
01 member's death and if the member established when filing the revocation that the 02 member and the present spouse were not cohabiting. 03 (b) Except as provided in (a) of this section, the member may change or 04 revoke the designation without notice to the beneficiary or beneficiaries at any time. 05 If a member designates more than one beneficiary, each shares equally unless the 06 member specifies a different allocation or preference. The designation of a 07 beneficiary, a change or revocation of a beneficiary, and a consent to revocation of a 08 beneficiary shall be made on a form provided by the administrator and is not effective 09 until filed with the administrator. 10 (c) If a member fails to designate a beneficiary, or if no designated beneficiary 11 survives the member, the death benefit shall be paid 12 (1) to the surviving spouse or, if there is none surviving; 13 (2) to the surviving children in equal parts or, if there are none 14 surviving; 15 (3) to the surviving parents in equal parts or, if there are none 16 surviving; 17 (4) to the estate. 18 (d) A person claiming entitlement to benefits payable under AS 39.35.700 - 19 39.35.990 as a consequence of a member's death shall provide the administrator with a 20 marriage certificate, divorce or dissolution judgment, or other evidence of entitlement. 21 Documents establishing entitlement may be filed with the administrator immediately 22 after a change in the member's marital status. If the administrator does not receive 23 notification of a claim before the date 10 days after the member's death, the person 24 claiming entitlement is not entitled to receive from the division of retirement and 25 benefits any benefit already paid by the administrator. 26 Sec. 39.35.860. Rights under qualified domestic relations order. (a) 27 Notwithstanding the nonalienation provisions in AS 39.35.900(a), the plan 28 administrator may direct that benefits be paid to someone other than a member or 29 beneficiary under a valid qualified domestic relations order that is executed by the 30 judge of a competent court in accordance with applicable state law and that has been 31 accepted by the administrator.
01 (b) The administrator shall determine whether an order meets the requirements 02 of this section within a reasonable period after receiving an order. The administrator 03 shall notify the member and any alternate payee that an order has been received and 04 indicate to the member and any alternate payee when the order is accepted. A separate 05 account for the alternate payee portion shall be established as soon as administratively 06 feasible after the order has been accepted by the administrator. 07 Sec. 39.35.870. Retirement. (a) In order to obtain medical benefits under 08 AS 39.35.880 and access to the health reimbursement arrangement plan under 09 AS 39.30.300, an active member must retire directly from the plan. A member is 10 eligible to retire from the plan if 11 (1) the member has at least 25 years of service as a peace officer or fire 12 fighter or 30 years of service for all other employees; 13 (2) the member reaches the normal retirement age of 65 years of age 14 and has at least 10 years of membership service; and 15 (3) the member has been an active member for at least 12 months 16 before application for retirement. 17 (b) A member must apply to the administrator for retirement and medical 18 benefit enrollment. Application shall be made on forms and in the manner prescribed 19 by the administrator. 20 (c) A member who continues in the employ of the employer after reaching 21 normal retirement age shall continue to participate in the plan and to have 22 contributions allocated to the member's account. 23 Sec. 39.35.880. Medical benefits. (a) The medical benefits available to 24 eligible persons are access to the retiree major medical insurance plan and to the 25 health reimbursement arrangement. Access to the retiree major medical insurance 26 plan means that an eligible person may not be denied insurance coverage except for 27 failure to pay the required premium. 28 (b) The following persons are eligible for the retiree major medical insurance 29 plan provided under this section and the health reimbursement arrangement: 30 (1) a member 31 (A) with at least
01 (i) 25 years of service as a peace officer or fire fighter; 02 or 03 (ii) 30 years of service for all other employees; and 04 (B) who retires directly from the plan; 05 (2) the surviving spouse of a member who elected coverage under (1) 06 of this subsection; 07 (3) a member who reaches the normal retirement age of 65 years of 08 age, has at least 10 years of service, and retires directly from the plan; 09 (4) the surviving spouse of a member who elected coverage under (3) 10 of this subsection. 11 (c) Retiree major medical insurance plan coverage elected by an eligible 12 member under this section covers the eligible member, the spouse of the eligible 13 member, and the dependent children of the eligible member. 14 (d) Retiree major medical insurance plan coverage elected by a surviving 15 spouse of an eligible member under this section covers the surviving spouse and the 16 dependent children of the surviving spouse. 17 (e) Major medical insurance coverage takes effect on the first day of the 18 month following the date of the election and stops when the person who elects 19 coverage under (b) of this section dies or fails to make a required premium payment. 20 (f) The coverage for persons 65 years of age or older is the same as that 21 available for persons under 65 years of age. The benefits payable to those persons 65 22 years of age or older supplement any benefits provided under the federal old age, 23 survivors and disability insurance program. 24 (g) The medical and optional insurance premiums owed by the person who 25 elects coverage under (b) of this section may be deducted from the health 26 reimbursement arrangement. If the amount of the health reimbursement arrangement 27 becomes insufficient to pay the premiums, the person who elects coverage under (a) of 28 this section shall pay the premiums directly. 29 (h) The cost of premiums for retiree major medical insurance coverage for an 30 eligible member or surviving spouse who is 31 (1) not eligible for Medicare is an amount equal to the full monthly
01 group premium for retiree major medical insurance coverage; 02 (2) eligible for Medicare is the following percentage of the premium 03 amounts established for retirees who are Medicare: 04 (A) 30 percent if the member had 10 or more, but less than 15, 05 years of service; 06 (B) 25 percent if the member had 15 or more, but less than 20, 07 years of service; 08 (C) 20 percent if the member had 20 or more, but less than 25, 09 years of service; 10 (D) 15 percent if the member had 25 or more, but less than 30, 11 years of service; 12 (E) 10 percent if the member had 30 or more years of service. 13 (i) The eligibility for and cost of premiums for retiree major medical insurance 14 coverage for an alternate payee under a qualified domestic relations order shall be 15 determined based on the years of service of the member to which the alternate payee is 16 entitled under the order. 17 (j) A person who is entitled to retiree major medical insurance coverage shall 18 (1) be informed by the administrator in writing 19 (A) that the health insurance coverage available to retired 20 members may be different from the health insurance coverage provided to 21 employees; 22 (B) of time limits for selecting optional health insurance 23 coverage and whether the election is irrevocable; and 24 (2) indicate in writing on a form provided by the administrator that the 25 person has received the information required by this subsection and whether the 26 person has chosen to receive optional health insurance coverage. 27 (k) The monthly group premiums for retiree major medical insurance coverage 28 are established by the administrator in accordance with AS 39.30.095. Nothing in 29 AS 39.35.700 - 39.35.990 guarantees a person who elects coverage under (a) of this 30 section a monthly group premium rate for retiree major medical insurance coverage 31 other than the premium in effect for the month in which the premium is due for
01 coverage for that month. 02 (l) In this section, 03 (1) "health reimbursement arrangement" means the plan established in 04 AS 39.30.300; 05 (2) "retires directly from the plan" means that the member is an active 06 member at the time that the member applies to the administrator for retirement and 07 medical benefits enrollment and that the member continues as an active member up 08 through the day before the day the member is enrolled in retirement and medical 09 benefits. 10 Sec. 39.35.890. Amendment and termination of plan. (a) The state has the 11 right to amend the plan at any time and from time to time, in whole or in part, 12 including the right to make retroactive amendments referred to in 26 U.S.C. 401(b). 13 (b) The plan administrator may not modify or amend the plan retroactively in 14 such a manner as to reduce the benefits of any member accrued to date under the plan 15 by reason of contributions made before the modification or amendment except to the 16 extent that the reduction is permitted by the Internal Revenue Code. 17 (c) The state may, in its discretion, terminate the plan in whole or part at any 18 time without liability for the termination. If the plan is terminated, all investments 19 remain in force until all individual accounts have been completely distributed under 20 the plan, and, after all plan liabilities are satisfied, excess assets revert to the employer. 21 (d) Any contribution made by an employer to the plan because of a mistake of 22 fact must be returned to the employer by the administrator within one year after the 23 contribution or discovery, whichever is later. 24 Sec. 39.35.900. Exclusive benefit. (a) The corpus or income of the assets 25 held in trust as required by the plan may not be diverted or used for other than the 26 exclusive benefit of the participants. 27 (b) If plan benefits are provided through the distribution of annuity or 28 insurance contracts, any refunds or credits in excess of plan benefits due to dividends, 29 earnings, or other experience rating credits, or surrender or cancellation credits, will be 30 paid to the trust fund. 31 (c) The assets of the plan may not be used to pay premiums or contributions of
01 the employer under another plan maintained by the employer. 02 Sec. 39.35.910. Nonguarantee of returns, rates, or benefit amounts. The 03 plan created by AS 39.35.700 - 39.35.990 is a defined contribution plan, not a defined 04 benefit plan. The amount of money in the account of a member depends on the 05 amount of contributions and the rate of return from investments of the account that 06 varies over time. If benefits are paid in the form of an annuity, the benefit amount 07 payable is dependent on the amount of money in the account and the interest rates 08 applied and service fees charged by the annuity payor at the time benefits are first 09 paid. Nothing in this plan guarantees a member, beneficiary, or alternate payee 10 (1) a rate of return or interest rate other than that actually earned by the 11 account of the member, beneficiary, or alternate payee, less applicable administrative 12 expenses; 13 (2) an annuity based on interest rates or service charges other than 14 interest rates available from and service charges by the annuity payor in effect at the 15 time the annuity is paid. 16 Sec. 39.35.920. Nonguarantee of employment. The provisions of 17 AS 39.35.700 - 39.35.990 are not a contract of employment between an employer and 18 an employee, nor do they confer a right of an employee to be continued in the 19 employment of an employer, nor are they a limitation of the right of an employer to 20 discharge an employee with or without cause. 21 Sec. 39.35.930. Fraud. A person who knowingly makes a false statement or 22 falsifies or permits to be falsified a record of this plan in an attempt to defraud the plan 23 is guilty of a class A misdemeanor. 24 Sec. 39.35.990. Definitions. In AS 39.35.700 - 39.35.990, unless the context 25 requires otherwise, 26 (1) "active member" means an employee who is employed by an 27 employer, is receiving compensation for seasonal, permanent full-time, or permanent 28 part-time services, and is making contributions to the plan; 29 (2) "administrator" means the commissioner of administration or the 30 commissioner's designee; 31 (3) "alternate payee" means the person for whom an amount has been
01 separated into an account under a qualified domestic relations order described in 02 AS 39.35.860; 03 (4) "beneficiary" means the person or persons entitled under the 04 provisions of this plan to receive benefits after the death of a member or alternate 05 payee; 06 (5) "board" means the Alaska Retirement Management Board 07 established under AS 37.10.210; 08 (6) "calendar year" has the meaning given in AS 39.35.680; 09 (7) "compensation" 10 (A) means 11 (i) the total remuneration earned by an employee for 12 personal services rendered, including cost-of-living differentials, as 13 reported on the employee's Federal Income Tax Withholding Statement 14 (Form W-2) from the employer for the calendar year; 15 (ii) the teacher contribution to the teachers' retirement 16 system under AS 14.25.340, employee deferrals under AS 39.45.010, 17 the wage reduction amount contributed to the Alaska Supplemental 18 Annuity Plan under AS 39.30.150(a), and the wage reduction amount 19 contributed to the Alaska Supplemental Benefit Plan under 20 AS 39.30.150(c), as those statutes may be amended from time to time; 21 (B) does not include retirement benefits, severance pay or other 22 separation bonuses, welfare benefits, per diem, expense allowances, workers' 23 compensation payments, payments for leave not used whether those leave 24 payments are scheduled payments, lump-sum payments, donations, or cash-ins, 25 any remuneration contributed by the employer for or on account of the 26 employee under this plan or under any other qualified or nonqualified 27 employee benefit plan, any remuneration not specifically included above 28 which would have been excluded under 26 U.S.C. 3121(a) (Internal Revenue 29 Code) if the employer had remained in the Federal Social Security System, or 30 any remuneration paid by the employer in excess of the Social Security 31 Taxable Wage Base for the calendar year; notwithstanding the foregoing,
01 (C) includes any amount that is contributed by the employer 02 under a salary reduction agreement and that is not includible in the gross 03 income of the employee under 26 U.S.C. 125, 132(f)(4), 402(e)(3), 04 402(h)(I)(B) or 403(b) (Internal Revenue Code); the annual compensation 05 limitation for the member, which is so taken into account for those purposes, 06 may not exceed $200,000, as adjusted for the cost of living in accordance with 07 26 U.S.C. 401(a)(17)(B) (Internal Revenue Code), with the limitation for a 08 fiscal year being the limitation in effect for the calendar year within which the 09 fiscal year begins; 10 (8) "dependent child" has the meaning in AS 39.35.680; 11 (9) "distribution commencement date" has the meaning given in 12 AS 39.35.840(a); 13 (10) "employer" means 14 (A) the State of Alaska; or 15 (B) a political subdivision or public organization of the state 16 that participates in the plan; 17 (11) "fund" means the assets of the plan; 18 (12) "individual account" means the total maintained by the plan in an 19 investment account within the trust fund, established for each participant for the 20 purposes of allocation of the member's contributions, the employer's contributions, and 21 earnings credited to each of those contributing investment gains and losses, and 22 expenses; as well as reporting of the member's benefit under the plan; 23 (13) "Internal Revenue Code" means the Internal Revenue Code of 24 1986, as amended; 25 (14) "investment funds" means those separate funds that are provided 26 within and that make up the trust fund and that are established for the purpose of 27 directing investment through the exercise of the sole control of a member, beneficiary, 28 or alternate payee under the terms of the plan and trust agreement; 29 (15) "member" means an employee of an employer or former 30 employee of an employer who retains a right to benefits under the plan; 31 (16) "membership service" means full-time or part-time employment
01 by an employer in the plan and participation as an active member; 02 (17) "normal retirement age" means 65 years of age; 03 (18) "participant" means the person who has a vested right to an 04 individual account, such as a member, an alternate payee if the account is subject to a 05 qualified domestic relations order, the member's beneficiary if the member is 06 deceased, or an alternate payee's beneficiary if the alternate payee is deceased; 07 (19) "peace officer" or "fire fighter" has the meaning given in 08 AS 39.35.680; 09 (20) "plan" means the retirement plan established in AS 39.35.700 - 10 39.35.990; 11 (21) "qualified domestic relations order" means a divorce or 12 dissolution judgment under AS 25.24, including an order approving a property 13 settlement, that 14 (A) creates or recognizes the existence of an alternate payee's 15 right to, or assigns to an alternate payee the right to, receive all or a portion of 16 an individual account or the benefits payable with respect to an employee; 17 (B) sets out the name and last known mailing address, if any, of 18 the employee and of each alternate payee covered by the order; 19 (C) sets out the amount or percentage of the employee's benefit, 20 or of any survivor's benefit, to be paid to the alternate payee, or sets out the 21 manner in which that amount or percentage is to be determined; 22 (D) sets out the number of payments or period to which the 23 order applies; 24 (E) sets out the retirement plan to which the order applies; 25 (F) does not require any type or form of benefit or any option 26 not otherwise provided by AS 39.35.700 - 39.35.990; 27 (G) does not require an increase of benefits in excess of the 28 amount provided by AS 39.35.700 - 39.35.990, determined on the basis of 29 actuarial value; and 30 (H) does not require the payment to an alternate payee of 31 benefits that are required to be paid to another alternate payee under another
01 order previously determined to be a qualified domestic relations order; 02 (22) "surviving spouse" means the spouse of an employee who has 03 been married to the employee for at least one year at the time of the employee's death; 04 (23) "system" has the meaning given in AS 39.35.680; 05 (24) "years of service" means the total number of complete years of 06 membership service completed by an employee; part-time service is given credit on a 07 pro rata basis if the part-time service was for regular employment at least 50 percent of 08 full time. 09 * Sec. 101. AS 39.45.030(a) is amended to read: 10 (a) The Alaska Retirement Management [STATE PENSION 11 INVESTMENT] Board is authorized, subject to contracts with individual employees, 12 to invest the funds held under a deferred compensation program. The board has the 13 same powers and duties concerning the management and investment in regard to those 14 funds as are provided under AS 37.10.220 [AS 14.25.180]. 15 * Sec. 102. AS 39.45.030(g) is amended to read: 16 (g) In this section, "board" means the Alaska Retirement Management 17 [STATE PENSION INVESTMENT] Board. 18 * Sec. 103. AS 39.45.060 is amended by adding a new paragraph to read: 19 (2) "board" means the trustees of the Alaska Retirement Management 20 Board established under AS 37.10.210. 21 * Sec. 104. AS 39.50.200(a)(9) is amended to read: 22 (9) "public official" means 23 (A) a judicial officer; 24 (B) the governor or the lieutenant governor; 25 (C) a person hired or appointed in a department in the 26 executive branch as 27 (i) the head or deputy head of the department; 28 (ii) the director or deputy director of a division; 29 (iii) a special assistant to the head of the department; 30 (iv) a person serving as the legislative liaison for the 31 department;
01 (D) an assistant to the governor or the lieutenant governor; 02 (E) the chair or a member of a state commission or board 03 [OTHER THAN PHYSICIAN MEMBERS OR ALTERNATES OF THE 04 ALASKA TEACHERS' RETIREMENT BOARD APPOINTED UNDER 05 AS 14.25.035(a)(2) OR OF THE PUBLIC EMPLOYEES' RETIREMENT 06 BOARD APPOINTED UNDER AS 39.35.030(d);] 07 (F) state investment officers and the state comptroller in the 08 Department of Revenue; 09 (G) [REPEALED 10 (H)] the chief procurement officer appointed under 11 AS 36.30.010; 12 (H) [(I)] the executive director of the Alaska Workforce 13 Investment Board; and 14 (I) [(J)] each appointed or elected municipal officer; 15 * Sec. 105. AS 39.50.200(b)(54) is amended to read: 16 (54) Alaska Retirement Management [STATE PENSION 17 INVESTMENT] Board (AS 37.10.210); 18 * Sec. 106. AS 44.25.020(2) is amended to read: 19 (2) collect, account for, have custody of, invest, and manage all state 20 funds and all revenues of the state except revenues incidental to a program of licensing 21 and regulation carried on by another state department, funds managed and invested by 22 the Alaska Retirement Management [STATE PENSION INVESTMENT] Board, 23 and as otherwise provided by law; 24 * Sec. 107. AS 44.25.028(a) is amended to read: 25 (a) The commissioner of revenue may designate employees of the Department 26 of Revenue who are subject to the provisions of AS 39.50 because of their 27 responsibility for participating in the management or investment of the funds for 28 which the Alaska Retirement Management [STATE PENSION INVESTMENT] 29 Board is responsible. 30 * Sec. 108. AS 44.25.028(b) is amended to read: 31 (b) If an officer or employee of the Department of Revenue with responsibility
01 for funds for which the Alaska Retirement Management [STATE PENSION 02 INVESTMENT] Board is responsible acquires, owns, or controls an interest, direct or 03 indirect, in an entity or project in which assets under the control of the board are 04 invested, the officer or employee shall immediately disclose the interest to the board. 05 The disclosure is a matter of public record and shall be included in the minutes of the 06 board meeting next following the disclosure. The commissioner shall adopt 07 regulations to restrict officers and employees of the department from having a 08 substantial interest in an entity or project in which assets under the control of the board 09 are invested. 10 * Sec. 109. AS 44.64.030(a) is amended by adding a new paragraph to read: 11 (36) AS 37.10.210 - 37.10.390 (Alaska Retirement Management 12 Board). 13 * Sec. 110. AS 14.25.012(a), 14.25.015, 14.25.020, 14.25.022, 14.25.030, 14.25.035, 14 14.25.037, 14.25.170, 14.25.175(e), 14.25.180, 14.25.190, 14.25.220(41); AS 39.30.175(f); 15 AS 39.35.010, 39.35.011, 39.35.020, 39.35.030, 39.35.040, 39.35.042, 39.35.047, 39.35.060, 16 39.35.080, 39.35.090, 39.35.480, 39.35.520(c), 39.35.522(c), 39.35.522(e); AS 39.45.025; 17 AS 39.50.200(b)(23), and 39.50.200(b)(29) are repealed. 18 * Sec. 111. AS 14.25.061(c), 14.25.062; and AS 39.35.350 are repealed. 19 * Sec. 112. The uncodified law of the State of Alaska is amended by adding a new section 20 to read: 21 TRANSITION: INITIAL STAGGERED TERMS OF TRUSTEES OF THE 22 ALASKA RETIREMENT SECURITY AND PORTABILITY BOARD. Notwithstanding 23 AS 37.10.210(c), as repealed and reenacted by sec. 40 of this Act, the terms of the initially 24 appointed trustees of the Alaska Retirement Management Board who are not commissioners 25 shall be set by the governor to achieve staggered terms in the manner provided for nine- 26 member boards by AS 39.05.055(7). 27 * Sec. 113. The uncodified law of the State of Alaska is amended by adding a new section 28 to read: 29 TERMS OF MEMBERS OF THE ALASKA TEACHERS' RETIREMENT BOARD, 30 THE ALASKA STATE PENSION INVESTMENT BOARD, AND THE PUBLIC 31 EMPLOYEES' RETIREMENT BOARD. The terms of all board members appointed to the
01 Alaska Teachers' Retirement Board, the Alaska State Pension Investment Board, and the 02 Public Employees' Retirement Board expire on the effective date of this section. 03 * Sec. 114. The uncodified law of the State of Alaska is amended by adding a new section 04 to read: 05 TRANSITION. Hearings and other proceedings pending under a law amended or 06 repealed by this Act or in connection with functions transferred by this Act continue in effect 07 and may be continued and completed notwithstanding a transfer or amendment or repeal 08 provided for in this Act. Orders and regulations issued or adopted under authority of a law 09 amended or repealed by this Act remain in effect for the term issued, or until revoked, 10 vacated, or otherwise modified under the provisions of this Act. Contracts, rights, liabilities, 11 and obligations created by or under a law amended or repealed by this Act, and in effect on 12 the effective date of this section, remain in effect notwithstanding this Act's taking effect. 13 Records, equipment, appropriations, funds, and other property of boards or agencies of the 14 state whose functions are transferred under this Act shall be transferred to implement the 15 provisions of this Act. 16 * Sec. 115. The uncodified law of the State of Alaska is amended by adding a new section 17 to read: 18 TRANSITION: REGULATIONS. (a) The Department of Administration may 19 proceed to develop and adopt regulations required to implement this Act. 20 (b) Regulations adopted by the Department of Administration under this Act relate to 21 the internal management of a state agency, and the adoption of the regulations is not subject to 22 AS 44.62 (Administrative Procedure Act). 23 * Sec. 116. The uncodified law of the State of Alaska is amended by adding a new section 24 to read: 25 INSTRUCTION REGARDING ALASKA TEACHERS' RETIREMENT SYSTEM 26 BOARD, ALASKA PUBLIC EMPLOYEES' RETIREMENT SYSTEM BOARD, AND 27 ALASKA STATE PENSION INVESTMENT BOARD. Wherever in the Alaska Statutes and 28 the Alaska Administrative Code the terms "Alaska Teachers' Retirement System Board," 29 "Alaska Public Employees' Retirement System Board," or "Alaska State Pension Investment 30 Board" are used, they shall be read as "Alaska Retirement Management Board" when to do so 31 would be consistent with the changes made by this Act.
01 * Sec. 117. The uncodified law of the State of Alaska is amended by adding a new section 02 to read: 03 SPECIFIC INSTRUCTIONS TO REVISOR OF STATUTES CONCERNING 04 SPECIFIC REFERENCES. (a) The revisor of statutes shall change references to "this 05 chapter" to "AS 14.25.009 - 14.25.220" in the following statutes: AS 14.25.040(b), 06 14.25.040(c), 14.25.045(a), 14.25.047, 14.25.061(a), 14.25.062, 14.25.063(a), 14.25.075(c), 07 14.25.105, 14.25.107, 14.25.110(k), 14.25.142(a), 14.25.150(b), 14.25.153, 14.25.160(h), 08 14.25.165(f), 14.25.166, 14.25.177, 14.25.195, 14.25.200(b), 14.25.205, and 14.25.210, and 09 in 14.25.220 in each place that the phrase appears. 10 (b) The revisor of statutes shall change the reference to "board" to "administrator" in 11 the following statutes: AS 14.25.075 and 14.25.130(f). 12 (c) The revisor of statutes shall change the reference to "system" to "plan" in the 13 following statutes: AS 14.25.040(b), 14.25.040(c), 14.25.045, 14.25.047, 14.25.055, 14 14.25.060, 14.25.061(a), 14.25.062, 14.25.063(a), 14.25.065, 14.25.070, 14.25.075(c), 15 14.25.075(d), 14.25.075(g), 14.25.075(h), 14.25.075(i), 14.25.100(a), 14.25.105(c), 16 14.25.107, 14.25.110, 14.25.125(c), 14.25.143, 14.25.163, 14.25.165(i), 14.25.167(g), 17 14.25.168, 14.25.169, 14.25.173(a), 14.25.173(d), 14.25.181, 14.25.200, 14.25.210, 18 14.25.220(1), 14.25.220(4), 14.25.220(7), 14.25.220(14), 14.25.220(20), 14.25.220(22), 19 14.25.220(23), 14.25.220(31), 14.25.220(34), 14.25.220(36), 14.25.220(37), 14.25.220(42); 20 AS 39.35.120, 39.35.125, 39.35.160, 39.35.165(a), 39.35.165(c), 39.35.165(d), 39.35.165(e), 21 39.35.165(g), 39.35.165(h), 39.35.165(i), 39.35.170, 39.35.180, 39.35.195(b), 39.35.195(c), 22 39.35.250, 39.35.280, 39.35.300(c), 39.35.310(a), 39.35.310(c), 39.35.340(a), 39.35.342(a), 23 39.35.342(d), 39.35.345(a), 39.35.345(d), 39.35.360(a), 39.35.360(g), 39.35.360(h), 24 39.35.360(k), 39.35.370(f), 39.35.370(h), 39.35.370(i), 39.35.370(j), 39.35.370(k), 25 39.35.371(i), 39.35.381(b), 39.35.381(g), 39.35.385(c), 39.35.400(e), 39.35.450(g), 26 39.35.475(a), 39.35.475(d), 39.35.500(a), 39.35.505, 39.35.520(a), 39.35.520(d), 27 39.35.522(d), 39.35.527(a), 39.35.527(b), 39.35.530, 39.35.535(a), 39.35.535(d), 39.35.550, 28 39.35.560, 39.35.570, 39.35.580, 39.35.590, 39.35.600, 39.35.610, 39.35.620(a), 29 39.35.620(h), 39.35.650, 39.35.670, 39.35.675(a), 39.35.680(1), 39.35.680(5), 39.35.680(9), 30 39.35.680(12), 39.35.680(15), 39.35.680(16), 39.35.680(17), 39.35.680(20), 31 39.35.680(21)(A), 39.35.680(29), 39.35.680(32), 39.35.680(33), and 39.35.680(35).
01 (d) The revisor of statutes shall change the reference to "board" to "commissioner" in 02 the following statutes: AS 39.35.290, 39.35.522(a), 39.35.522(b), and 39.35.522(d). 03 (e) The revisor of statutes shall change references to "this chapter" to "AS 39.35.095 - 04 39.35.680" in the following statutes: AS 39.35.165, 39.35.200, 39.35.250, 39.35.300, 05 39.35.340, 39.35.350, 39.35.360, 39.35.370, 39.35.371, 39.35.375, 39.35.381, 39.35.490, 06 39.35.495, 39.35.505, 39.35.530, 39.35.546, 39.35.547, 39.35.615(c), 39.35.620(e), 07 39.35.660, 39.35.675(b), 39.35.677, and 39.35.680. 08 (f) The revisor of statutes shall renumber AS 39.35.690 to follow AS 39.35.990. 09 * Sec. 118. The uncodified law of the State of Alaska is amended by adding a new section 10 to read: 11 IMPLEMENTATION OF SECTIONS 116 and 117 OF THIS ACT. Under 12 AS 01.05.031, the revisor of statutes shall implement secs. 116 and 117 of this Act in the 13 Alaska Statutes, and, under AS 44.62.125(b)(6), the regulations attorney shall implement secs. 14 116 and 117 of this Act in the administrative code. 15 * Sec. 119. Sections 11, 12, 14, 15, 17, 70 - 75, 88, 95, and 111 of this Act take effect 16 June 30, 2010. 17 * Sec. 120. Section 118 of this Act takes effect immediately under AS 01.10.070(c). 18 * Sec. 121. Except as provided in secs. 119 and 120 of this Act, this Act takes effect July 1, 19 2005.