HCS CSSB 141(STA): "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; relating to university retirement programs; 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; providing for nonvested members of the teachers' retirement system defined benefit plans to transfer into the teachers' retirement system defined contribution plan and for nonvested members of the public employees' retirement system defined benefit plans to transfer into the public employees' retirement system defined contribution plan; providing for political subdivisions and public organizations to request to participate in the public employees' defined contribution retirement plan; and providing for an effective date."
00 HOUSE CS FOR CS FOR SENATE BILL NO. 141(STA) 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; relating to university retirement programs; establishing the Alaska 05 Retirement Management Board to replace the Alaska State Pension Investment Board, 06 the Alaska Teachers' Retirement Board, and the Public Employees' Retirement Board; 07 adding appeals of the decisions of the administrator of the teachers' and public 08 employees' retirement systems to the jurisdiction of the office of administrative 09 hearings; providing for nonvested members of the teachers' retirement system defined 10 benefit plans to transfer into the teachers' retirement system defined contribution plan 11 and for nonvested members of the public employees' retirement system defined benefit 12 plans to transfer into the public employees' retirement system defined contribution
01 plan; providing for political subdivisions and public organizations to request to 02 participate in the public employees' defined contribution retirement plan; and providing 03 for an effective date." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05 * Section 1. The uncodified law of the State of Alaska is amended by adding a new section 06 to read: 07 LEGISLATIVE INTENT REGARDING RETIREE HEALTH CARE COST 08 SAVINGS IN SECS. 32 AND 120. It is the intent of the legislature for the division of 09 retirement and benefits to implement by regulation cost-saving measures appropriate to 10 current and future retirees in the health care system. This includes using manufacturer's 11 rebates, co-pay levels, and multi-tiered co-payment structures; mandating the use of generic 12 drugs; determining the type of drug classes in a formulary; dispensing fees; mandating or 13 providing incentives for mail order pharmaceuticals; using a reduction in the average 14 wholesale price; providing case management services for certain users of pharmaceuticals; 15 capping the number of prescriptions filled each month; and restricting the number of refills 16 that users can have at one time. 17 * Sec. 2. AS 14.25 is amended by adding new sections to read: 18 Article 1. Administration of the Teachers' Retirement System. 19 Sec. 14.25.001. Purpose. The purpose of this chapter is to encourage 20 qualified teachers to enter and remain in service with participating employers by 21 establishing plans for the payment of retirement and death benefits to or on behalf of 22 the members. 23 Sec. 14.25.002. Attorney general. The attorney general of the state is the 24 legal counsel for the system and shall advise the administrator and represent the 25 system in a legal proceeding. 26 Sec. 14.25.003. Administrator. (a) The commissioner of administration or 27 the commissioner's designee is the administrator of the system. 28 (b) The commissioner of administration shall adopt regulations to govern the 29 operation of the system. 30 Sec. 14.25.004. Powers and duties of the administrator. (a) The
01 administrator shall 02 (1) establish and maintain an adequate system of accounts; 03 (2) transmit the funds deposited in the system to the retirement fund 04 established and maintained by the Alaska Retirement Management Board; 05 (3) approve or disapprove claims for retirement benefits; 06 (4) make payments for the various purposes specified; 07 (5) submit periodic reports or statements of account that are needed; 08 (6) issue a statement of account to an employee not less than once each 09 year showing the amount of the employee's contributions to the applicable plan in the 10 system; 11 (7) formulate and recommend to the commissioner of administration 12 regulations to govern the operation of the system; 13 (8) as soon as possible after the close of each fiscal year, and not later 14 than six months after the close of each fiscal year, send to the governor and the 15 legislature an annual statement on the operations of each of the plans in the system 16 containing 17 (A) a balance sheet; 18 (B) a statement of income and expenditures for the previous 19 fiscal year; 20 (C) a report on valuation of trust fund assets; 21 (D) a summary of assets held in the trust fund listed by the 22 categories of investment, as provided by the Alaska Retirement Management 23 Board; 24 (E) other statistical financial data that are necessary for proper 25 understanding of the financial condition of the system as a whole and each plan 26 in the system and the result of its operations; 27 (9) engage an independent certified public accountant to conduct an 28 annual audit of each plan's accounts and the annual report of the system's financial 29 condition and activity; 30 (10) report to the Legislative Budget and Audit Committee concerning 31 the condition and administration of each plan and distribute the report to the members
01 of each plan in the system; 02 (11) publish an information handbook for each plan in the system at 03 intervals that the administrator considers appropriate; 04 (12) meet at least annually with the board to review the condition and 05 management of the retirement systems and to review significant changes to policies, 06 regulations, or benefits; and 07 (13) do whatever else may be necessary to carry out the purposes of 08 each plan in the system. 09 (b) The administrator is authorized to charge fees necessary to members' 10 accounts to cover the ongoing cost of operating each plan in the system. 11 (c) The administrator is authorized to contract with public and private entities 12 to provide record keeping, benefits payments, and other functions necessary for the 13 administration of each plan in the system. 14 Sec. 14.25.005. Regulations. (a) Regulations adopted by the commissioner 15 of administration under this chapter relate to the internal management of a state 16 agency, and the adoption of the regulations is not subject to AS 44.62 (Administrative 17 Procedure Act). 18 (b) Notwithstanding (a) of this section, a regulation adopted under this chapter 19 shall be published in the Alaska Administrative Register and Code for informational 20 purposes. 21 (c) Each regulation adopted under this chapter must conform to the style and 22 format requirements of the drafting manual for administrative regulations that is 23 published under AS 44.62.050. 24 (d) At least 30 days before the adoption, amendment, or repeal of a regulation 25 under this chapter, the commissioner of administration shall provide notice of the 26 action that is being considered. The notice shall be 27 (1) posted in public buildings throughout the state; 28 (2) published in one or more newspapers of general circulation in each 29 judicial district of the state; 30 (3) mailed to each person or group that has filed a request for notice of 31 proposed action with the commissioner of administration; and
01 (4) furnished to each member of the legislature and to the Legislative 02 Affairs Agency. 03 (e) Failure to mail notice to a person as required under (d)(3) of this section 04 does not invalidate an action taken by the commissioner of administration. 05 (f) The commissioner of administration may hold a hearing on a proposed 06 regulation. 07 (g) A regulation adopted under this chapter takes effect 30 days after adoption 08 by the commissioner of administration. 09 (h) Notwithstanding the other provisions of this section, a regulation may be 10 adopted, amended, or repealed, effective immediately, as an emergency regulation by 11 the commissioner of administration. For an emergency regulation to be effective the 12 commissioner must find that the adoption, amendment, or repeal of the regulation is 13 necessary for the immediate preservation of the orderly operation of the system. The 14 commissioner shall, within 10 days after adoption of an emergency regulation, give 15 notice of the adoption under (d) of this section. 16 (i) In this section, "regulation" has the meaning given in AS 44.62.640(a). 17 Sec. 14.25.006. Appeals. An employer, member, annuitant, or beneficiary 18 may appeal a decision made by the administrator to the office of administrative 19 hearings established under AS 44.64. An aggrieved party may appeal a final decision 20 to the superior court. 21 Sec. 14.25.007. Investment management of retirement system funds. The 22 Alaska Retirement Management Board established under AS 37.10.210 is the 23 fiduciary of the system funds. 24 Sec. 14.25.008. Definitions. In AS 14.25.001 - 14.24.008, 25 (1) "plan" means the retirement plan established in AS 14.25.009 - 26 14.25.220 or the retirement plan established in AS 14.25.310 - 14.25.590; 27 (2) "system" means all retirement plans established under the teachers' 28 retirement system. 29 Article 2. Teachers First Hired before July 1, 2005. 30 Sec. 14.25.009. Applicability of AS 14.25.009 - 14.25.220. The provisions of 31 AS 14.25.009 - 14.25.220 apply only to members first hired before July 1, 2005.
01 * Sec. 3. AS 14.25.010 is amended to read: 02 Sec. 14.25.010. Retirement plan [SYSTEM] established; federal 03 qualification requirements. (a) A joint-contributory retirement plan [SYSTEM] for 04 teachers of the state is created. 05 (b) The retirement plan [SYSTEM] established by AS 14.25.009 - 14.25.220 06 [THIS CHAPTER] is intended to qualify under 26 U.S.C. 401(a) and 414(d) (Internal 07 Revenue Code) as a qualified retirement plan established and maintained by the state 08 for its employees, for the employees of school districts and regional educational 09 attendance areas in the state, and for the employees of other employers whose 10 participation is authorized by AS 14.25.009 - 14.25.220 [THIS CHAPTER] and who 11 participate in this plan [SYSTEM]. 12 (c) An amendment to AS 14.25.009 - 14.25.220 [THIS CHAPTER] 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. 4. AS 14.25.012(b) is amended to read: 17 (b) The plan [SYSTEM] created in AS 14.25.009 - 14.25.220 became 18 effective as of July 1, 1955, at which time contributions by the participating employers 19 and members began. 20 * Sec. 5. AS 14.25.012 is amended by adding a new subsection to read: 21 (c) Employees first hired after June 30, 2005, are not eligible to participate in 22 the plan established in AS 14.25.009 - 14.25.220. 23 * Sec. 6. AS 14.25.040(a) is amended to read: 24 (a) Unless a teacher or member participates in a [HAS ELECTED TO 25 PARTICIPATE IN THE OPTIONAL] university retirement program under 26 AS 14.40.661 - 14.40.799, [OR] has filed an election under AS 14.25.043(b), or has 27 elected to participate in the plan established in AS 14.25.310 - 14.25.590, a teacher 28 or member contracting for service with a participating employer is subject to 29 AS 14.25.009 - 14.25.220 [THIS CHAPTER]. 30 * Sec. 7. AS 14.25.040(d) is amended to read: 31 (d) A person who is employed at least half-time in the plan [SYSTEM] during
01 the same period that the person is employed at least half-time in a position in the 02 public employees' retirement plan [SYSTEM] under AS 39.35.095 - 39.35.680 03 [AS 39.35] shall receive credited service under each plan [SYSTEM] for half-time 04 employment. However, the amount of credited service a person receives under the 05 public employees' retirement plan [SYSTEM] during a school year may not exceed 06 the amount necessary, when added to the amount of credited service earned during the 07 school year under the plan [SYSTEM], to equal one year of credited service. A 08 person who was employed at least half-time in a position in the public employees' 09 retirement plan [SYSTEM] under AS 39.35.095 - 39.35.680 [AS 39.35] in the same 10 period that the person was employed at least half-time in a position in this plan 11 [SYSTEM] may claim credited service in both plans [SYSTEMS] for employment 12 before May 31, 1989. To obtain this credited service, the person shall claim the 13 service and verify the period of half-time employment. When eligibility for half-time 14 service credit has been established, an indebtedness shall be determined to the 15 retirement plan [SYSTEM] in which the person did not participate. The amount of 16 the indebtedness is the full actuarial cost of providing benefits for the credited service 17 claimed. Interest as prescribed by regulation accrues on that indebtedness beginning 18 on the later of July 1, 1989, or the date on which the member is first eligible to claim 19 the service. Any outstanding indebtedness existing at the time the person retires will 20 require an actuarial adjustment to the benefits payable based on that service. 21 * Sec. 8. AS 14.25.070 is amended to read: 22 Sec. 14.25.070. Contributions by employer. An employer shall contribute to 23 the plan [SYSTEM] an amount equal to the percentage, as certified by the board 24 [ADMINISTRATOR], of the sum total of the base salaries of all members that is 25 required in addition to member contributions to provide the benefits of AS 14.25.009 - 26 14.25.220 [THIS CHAPTER] times the sum total of the base salaries paid to members, 27 including any adjustments to contributions required by AS 14.25.173(a), by the 28 employer. 29 * Sec. 9. AS 14.25.070 is amended by adding a new subsection to read: 30 (b) When added to the member contribution determined under AS 14.25.050, 31 the employer contribution may not result in an amount less than the amount required
01 as actuarially calculated to fully fund the future liabilities of active members nor may 02 the employer contribution percentage under (a) of this section be set at less than 11 03 percent. 04 * Sec. 10. AS 14.25.075(a) is amended to read: 05 (a) An employee who is eligible to purchase credited service under 06 AS 14.25.047 or 14.25.048, a member who is eligible to purchase credited service 07 under AS 14.25.048, 14.25.050, 14.25.060, 14.25.061, [14.25.062,] 14.25.100, or 08 14.25.107, or a teacher who is eligible to purchase credited service under 09 AS 14.20.345, AS 14.25.050, [14.25.062,] or 14.25.105, in lieu of making payments 10 directly to the plan, may elect to have the member's employer make payments as 11 provided in this section. 12 * Sec. 11. AS 14.25.075(b) is amended to read: 13 (b) A member may elect to have the employer make payments for all or any 14 portion of the amounts payable for the member's purchase of credited service through 15 a salary reduction program as follows: 16 (1) the amounts paid under a salary reduction program are in lieu of 17 contributions by the member making the election; the electing member's salary or 18 other compensation shall be reduced by the amount paid by the employer under this 19 subsection; 20 (2) the member shall make an irrevocable election under this 21 subsection to purchase credited service as permitted in AS 14.20.345, AS 14.25.047, 22 14.25.048, 14.25.050, 14.25.060, 14.25.061, [14.25.062,] 14.25.100, 14.25.105, or 23 14.25.107 before the member's termination of employment; the irrevocable election 24 must specify the number of payroll periods that deductions will be made from the 25 member's compensation and the dollar amount of deductions for each payroll period 26 during the specified number of payroll periods; the deductions made under this 27 paragraph cease upon the earlier of the member's termination of employment with the 28 employer or the member's death; amounts paid by an employer under (f) of this 29 section may not be applied toward the payment of the dollar amount of the deductions 30 representing the portion of the credited service that is being purchased by the member 31 through payroll deduction in accordance with the member's irrevocable election under
01 this paragraph; 02 (3) amounts paid by an employer under this subsection shall be treated 03 as employer contributions for the purpose of determining tax treatment under 26 04 U.S.C. (Internal Revenue Code); the amounts paid by the employer under this section 05 may not be included in the member's gross income for income tax purposes until those 06 amounts are distributed by refund or retirement benefit payments. 07 * Sec. 12. AS 14.25.075(e) is amended to read: 08 (e) Contributions to the plan [SYSTEM] to purchase credited service under 09 this section do not qualify for treatment under this section if recognition of that service 10 would cause a member to receive a retirement benefit for the same service from the 11 plan [SYSTEM] and from one or more other retirement plans or systems of the state. 12 * Sec. 13. AS 14.25.075(f) is amended to read: 13 (f) The administrator may accept rollover contributions from a member [, 14 AND DIRECT TRANSFERS AS DESCRIBED IN THIS SUBSECTION, FOR THE 15 PURCHASE, IN WHOLE OR IN PART, OF FORFEITED CREDITED SERVICE 16 UNDER THIS SECTION FOR THE REINSTATEMENT, IN WHOLE OR IN PART, 17 OF FORFEITED CREDITED SERVICE UNDER AS 14.25.062]. Contributions 18 made under this subsection may not be applied to purchase service being paid under 19 (b) of this section. A rollover contribution [OR TRANSFER] as described in this 20 subsection shall be treated as employer contributions for the purpose of determining 21 tax treatment under the Internal Revenue Code and may be made by any one or a 22 combination of the following methods: 23 (1) subject to the limitations prescribed in 26 U.S.C. 402(c), accepting 24 eligible rollover distributions directly from one or more retirement programs of 25 another employer that are qualified under 26 U.S.C. 401(a) or accepting rollovers 26 directly from a member; 27 (2) subject to the limitations prescribed in 26 U.S.C. 408(d)(3)(A)(ii), 28 accepting from a member conduit rollover contributions that are received by the 29 member from one or more conduit rollover individual retirement accounts previously 30 established by the member; 31 (3) subject to the limitations prescribed in 26 U.S.C. 403(b)(13),
01 accepting direct trustee-to-trustee transfers of all or a portion of the accounts of the 02 member, on or after January 1, 2002, from a tax sheltered annuity described in 26 03 U.S.C. 403(b); 04 (4) subject to the limitations prescribed in 26 U.S.C. 457(e)(17), 05 accepting direct trustee-to-trustee transfers of all or a portion of the accounts of the 06 member, on or after January 1, 2002, from an eligible deferred compensation plan of a 07 tax-exempt organization or a state or local government described in 26 U.S.C. 457(b); 08 (5) accepting direct trustee-to-trustee transfer from an account 09 established for the benefit of the member in AS 39.30.150 - 39.30.180 (Alaska 10 Supplemental Annuity Plan). 11 * Sec. 14. AS 14.25.075(i) is amended to read: 12 (i) On satisfaction of the eligibility requirements of AS 14.20.345, 13 AS 14.25.047, 14.25.048, 14.25.050, 14.25.060, 14.25.061, [14.25.062,] 14.25.100, 14 14.25.105, or 14.25.107, the requirements of this section, and the administrative filing 15 requirements specified by the administrator, the plan shall adjust the member's 16 credited service history and add any additional service credits acquired. 17 * Sec. 15. AS 14.25.115(a) is amended to read: 18 (a) A teacher in membership service on or after July 1, 1977, who is appointed 19 to retirement on or after July 1, 1978, may elect to apply unused sick leave credit in 20 computing the total number of years of credited service under AS 14.25.110(d) except 21 for sick leave earned while participating in a [THE OPTIONAL] university retirement 22 program under AS 14.40.661 - 14.40.799. To obtain service credit for unused sick 23 leave, a teacher must apply to the administrator not [NO] later than one year after 24 appointment to retirement. Unused sick leave shall be credited on a day-for-day basis 25 in accordance with the table for service after July 1, 1969, contained in 26 AS 14.25.220(45). Teacher contributions may not be required for credited unused sick 27 leave. 28 * Sec. 16. AS 14.25.143(a), as that subsection read following amendment by sec. 3, ch. 29 146, SLA 1980, until amended by sec. 12, ch. 106, SLA 1988, is amended to read: 30 (a) When the administrator determines that the cost of living has increased and 31 that the financial condition of the retirement fund permits, the administrator shall
01 increase benefit payments to persons receiving benefits under this plan. For 02 purposes of this subsection, the financial condition of the fund would only permit 03 an increase in benefits when the ratio of total fund assets to the accrued liability 04 meets or exceeds 110 percent. In this subsection, "accrued liability" means the 05 present value of all member benefits accrued by member service in this plan 06 [SYSTEM]. 07 * Sec. 17. AS 14.25.143(a), as that subsection read following amendment by sec. 12, ch. 08 106, SLA 1988, until amended by sec. 12, ch. 97, SLA 1990, is amended to read: 09 (a) When the administrator determines that the cost of living has increased and 10 that the financial condition of the retirement fund [SYSTEM] permits, the 11 administrator shall increase benefit payments to persons receiving benefits under this 12 plan. For purposes of this subsection, the financial condition of the fund would 13 only permit an increase in benefits when the ratio of total fund assets to the 14 accrued liability meets or exceeds 110 percent. In this subsection, "accrued 15 liability" means the present value of all member benefits accrued by member 16 service in this plan [SYSTEM]. 17 * Sec. 18. AS 14.25.145 is amended to read: 18 Sec. 14.25.145. Interest on individual accounts. Interest shall be credited to 19 each teacher's account at the end of each school year at the rate prescribed by the 20 board [REGULATION] for that year. 21 * Sec. 19. AS 14.25.150 is amended by adding a new subsection to read: 22 (c) A member who has received a refund of contributions in accordance with 23 this section forfeits corresponding credited service under AS 14.25.009 - 14.25.220. 24 * Sec. 20. AS 14.25.173(c) is amended to read: 25 (c) At least quarterly, [AT EACH REGULARLY SCHEDULED MEETING 26 OF THE TEACHERS' RETIREMENT BOARD,] the administrator shall report to the 27 commissioner of administration [BOARD] on all situations since the administrator's 28 last report in which an adjustment has been prohibited under (b) of this section. If the 29 commissioner of administration [BOARD] finds that there is reason to believe that 30 one or more of the conditions set out in (b) of this section have not been met, the 31 administrator shall notify the member or beneficiary that an adjustment will be made
01 to recover the overpayment. A member or beneficiary who receives notice of 02 adjustment under this subsection may file a request with the commissioner of 03 administration [APPEAL TO THE BOARD] for a waiver of the adjustment under 04 AS 14.25.175. An adjustment that requires the repayment of benefits may not be 05 required while the waiver request [APPEAL] is pending. 06 * Sec. 21. AS 14.25.175(a) is amended to read: 07 (a) Upon request [APPEAL] by an affected member or beneficiary under (b) 08 of this section, the commissioner of administration [BOARD] may waive an 09 adjustment or a portion of an adjustment made under AS 14.25.173 if, in the opinion 10 of the commissioner of administration [BOARD], 11 (1) the adjustment or portion of the adjustment will cause undue 12 hardship to the member or beneficiary; 13 (2) the adjustment was not the result of erroneous information supplied 14 by the member or beneficiary; 15 (3) before the adjustment was made, the member or beneficiary 16 received confirmation from the administrator that the member's or beneficiary's 17 records were correct; and 18 (4) the member or beneficiary had no reasonable grounds to believe 19 the records were incorrect before the adjustment was made. 20 * Sec. 22. AS 14.25.175(b) is amended to read: 21 (b) In order to obtain consideration of a waiver under this section, the affected 22 member or beneficiary shall file a request with [MUST APPEAL TO] the 23 commissioner of administration [BOARD] in writing within 30 days after receipt of 24 notice that the records have been adjusted. The ruling of the commissioner of 25 administration [BOARD] shall be in writing. 26 * Sec. 23. AS 14.25.175(c) is repealed and reenacted to read: 27 (c) A ruling of the commissioner of administration to deny a waiver under (b) 28 of this section may be appealed to the office of administrative hearings. 29 * Sec. 24. AS 14.25.175(d) is amended to read: 30 (d) The office of administrative hearings [BOARD] may reverse the 31 commissioner of administration's decision to deny a waiver and may impose
01 conditions on granting a waiver that it considers equitable. These conditions may 02 include requiring the member or beneficiary to make additional contributions to the 03 plan [SYSTEM]. 04 * Sec. 25. AS 14.25.210(a) is amended to read: 05 (a) A person who knowingly makes a false statement, or falsifies or permits to 06 be falsified any record of this plan [SYSTEM], in an attempt to defraud this plan 07 [SYSTEM], is guilty of a class A misdemeanor [AND FORFEITS ALL RIGHTS 08 UNDER THIS CHAPTER]. 09 * Sec. 26. AS 14.25.220(2) is amended to read: 10 (2) "actuarial adjustment" means the adjustment necessary to obtain 11 equality in value of the aggregate expected payments under two different forms of 12 pension payments, considering expected mortality and interest earnings on the basis of 13 assumptions, factors, and methods specified in regulations issued under the plan 14 [SYSTEM] that are formally adopted [UNDER AS 14.25.022] by the board and that 15 clearly preclude employer discretion in the determination of the amount of any 16 member's benefit; 17 * Sec. 27. AS 14.25.220(3) is amended to read: 18 (3) "administrator" means the [PERSON APPOINTED BY THE] 19 commissioner of administration or the commissioner's designee under AS 14.25.003 20 [AS 14.25.015]; 21 * Sec. 28. AS 14.25.220(9) is amended to read: 22 (9) "board" means the Alaska Retirement Management [ALASKA 23 TEACHERS' RETIREMENT] Board established under AS 37.10.210 [AS 14.25.035]; 24 * Sec. 29. AS 14.25.220(40) is amended to read: 25 (40) "supplemental contribution account" means the account 26 maintained by the plan [SYSTEM] to record the supplemental contributions of each 27 member, including interest and adjustments to the account [IN ACCORDANCE 28 WITH AS 14.25.170]; 29 * Sec. 30. AS 14.25.220(42) is amended to read: 30 (42) "teacher" and "member" are used interchangeably under this 31 chapter and mean a person eligible to participate in the system and who is covered by
01 the system, limited to 02 (A) a certificated full-time or part-time elementary or 03 secondary teacher, a certificated school nurse, or a certificated person in a 04 position requiring a teaching certificate as a condition of employment in a 05 public school of the state, the Department of Education and Early 06 Development, or the Department of Labor and Workforce Development; 07 (B) a full-time or part-time teacher of the University of Alaska 08 or a person occupying a full-time administrative position at the University of 09 Alaska that requires academic standing; the approval of the administrator must 10 be obtained before an administrative position qualifies for membership in the 11 system; however, a teacher or administrative person at the university who is 12 participating in a [THE OPTIONAL] university retirement program under 13 AS 14.40.661 - 14.40.799 is not a member under this system; 14 (C) a state legislator who elects membership under 15 AS 14.25.040(b); 16 (D) A full-time or part-time instructor of the Department of 17 Labor and Workforce Development who has a teaching certificate 18 regardless of whether the position as instructor requires a teaching 19 certificate as a condition of employment and who has earlier credited 20 service in the plan; 21 * Sec. 31. AS 14.25.220 is amended by adding a new paragraph to read: 22 (46) "plan" means the retirement benefit plan established under 23 AS 14.25.009 - 14.25.220. 24 * Sec. 32. AS 14.25 is amended by adding new sections to read: 25 Article 3. Teachers First Hired on or after July 1, 2005. 26 Sec. 14.25.310. Applicability of AS 14.25.310 - 14.25.590. The provisions of 27 AS 14.25.310 - 14.25.590 apply only to teachers who first become members on or 28 after July 1, 2005, or to members who transfer into the defined contribution plan under 29 AS 14.25.540. 30 Sec. 14.25.320. Defined contribution retirement plan established. (a) A 31 defined contribution retirement plan for teachers of the state is created.
01 (b) The defined contribution retirement plan includes a plan in which savings 02 are accumulated in an individual account for the exclusive benefit of the member or 03 beneficiaries. The plan is established effective July 1, 2005, at which time 04 contributions by employers and members begin. 05 (c) The defined contribution retirement plan is intended to qualify under 26 06 U.S.C. 401(a) and 414(d) (Internal Revenue Code) as a qualified retirement plan 07 established and maintained by the state for its employees and for the employees of 08 school districts and regional educational attendance areas in the state. 09 (d) An amendment to the defined contribution retirement plan does not 10 provide a person with a vested right to a benefit if the Internal Revenue Service 11 determines that the amendment will result in disqualification of the plan under the 12 Internal Revenue Code. 13 Sec. 14.25.330. Membership. (a) A teacher who first becomes a member on 14 or after July 1, 2005, shall participate in the plan as a member of the defined 15 contribution retirement plan. 16 (b) A teacher who is participating in a university retirement program under 17 AS 14.40.661 - 14.40.799 may not participate as a member of the defined contribution 18 retirement plan. 19 Sec. 14.25.340. Contributions by members. (a) Each member shall 20 contribute to the member's individual account an amount equal to eight percent of the 21 member's compensation from July 1 to the following June 30. 22 (b) Subject to the limitations on contributions under AS 14.25.380, a member 23 may elect to make additional contributions to the member's individual account. 24 (c) The employer shall deduct the contribution from the member's 25 compensation at the end of each payroll period, and the contribution shall be credited 26 by the administrator to the member's individual account. The contributions shall be 27 deducted from member's compensation before the computation of applicable federal 28 taxes and shall be treated as employer contributions under 26 U.S.C. 414(h)(2). A 29 member may not have the option of making the payroll deduction directly in cash 30 instead of having the contribution picked up by the employer. 31 Sec. 14.25.345. Employment contributions mandatory. (a) Contributions
01 of members shall be made by payroll deductions. Each member shall be considered to 02 consent to payroll deductions. It is of no consequence that a payroll deduction may 03 cause the compensation paid in cash to a member to be reduced below the minimum 04 required by law. 05 (b) Payment of a member's compensation, less payroll deductions, is a full and 06 complete discharge and satisfaction of all claims and demands by the member relating 07 to remuneration of services during the period covered by the payment, except with 08 respect to the benefits provided under the plan. 09 Sec. 14.25.350. Contributions by employers. (a) An employer shall 10 contribute to each member's individual account an amount equal to 4.5 percent of the 11 member's compensation from July 1 to the following June 30. 12 (b) An employer shall also contribute an amount equal to 3.75 percent of each 13 member's compensation from July 1 to the following June 30 to pay for retiree major 14 medical insurance. This contribution shall be paid into the group health and life 15 benefits fund established by the commissioner of administration under AS 39.30.095 16 and shall be accounted for in accordance with regulations established by the 17 commissioner. 18 (c) An employer shall also make contributions to the health reimbursement 19 arrangement plan under AS 39.30.300. 20 Sec. 14.25.360. Rollover contributions and distributions. (a) A teacher 21 entering the plan may elect, at the time and in the manner prescribed by the 22 administrator, to have all or part of a direct rollover distribution from an eligible 23 retirement plan owned by the member paid directly into the member's individual 24 account. 25 (b) Rollover contributions do not count as a purchase of membership service 26 for the purpose of determining years of service. 27 (c) A distributee may elect, at the time and in the manner prescribed by the 28 administrator, to have all or part of a direct rollover distribution paid directly to an 29 eligible retirement plan specified by the distributee in the direct rollover. 30 (d) In this section, 31 (1) "direct rollover" means the payment of an eligible rollover
01 distribution by the plan to an eligible retirement plan specified by a distributee who is 02 eligible to elect a direct rollover; 03 (2) "distributee" means a member, or a beneficiary who is the 04 surviving spouse of the member, or an alternate payee; 05 (3) "eligible retirement plan" means 06 (A) a conduit individual retirement account described in 26 07 U.S.C. 408(d)(3)(A); 08 (B) an annuity plan described in 26 U.S.C. 403(a); 09 (C) a qualified trust described in 26 U.S.C. 401(a); 10 (D) an annuity plan described in 26 U.S.C. 403(b); or 11 (E) a governmental plan described in 26 U.S.C. 457(b); 12 (4) "eligible rollover distribution" means a distribution of all or part of 13 a total account to a distributee, except for 14 (A) a distribution that is one of a series of substantially equal 15 installments payable not less frequently than annually over the life expectancy 16 of the distributee or the joint and last survivor life expectancy of the distributee 17 and the distributee's designated beneficiary, as defined in 26 U.S.C. 401(a)(9); 18 (B) a distribution that is one of a series of substantially equal 19 installments payable not less frequently than annually over a specified period 20 of 10 years or more; 21 (C) a distribution that is required under 26 U.S.C. 401(a)(9); 22 (D) the portion of any distribution that is not includable in 23 gross income; 24 (E) a distribution that is on account of hardship; and 25 (F) other distributions that are reasonably expected to total less 26 than $200 during a year. 27 Sec. 14.25.370. Transmittal of contributions. All contributions deducted in 28 accordance with AS 14.25.310 - 14.25.590 shall be transmitted to the plan for deposit 29 in the trust fund as soon as administratively feasible, but in no event later than 15 days 30 following the close of the payroll period. 31 Sec. 14.25.380. Limitations on contributions. Notwithstanding any other
01 provisions of this plan, the annual additions to each member's individual account 02 under this plan and under all defined contribution plans of the employer required to be 03 aggregated with the contributions from this plan under the provisions of 26 U.S.C. 415 04 may not exceed, for any limitation year, the amount permitted under 26 U.S.C. 415 at 05 any time. If the amount of a member's defined contribution plan contributions exceeds 06 the limitation of 26 U.S.C. 415(c) for any limitation year, the administrator shall take 07 any necessary remedial action to correct an excess contribution. The provisions of 26 08 U.S.C. 415, and the regulations adopted under that statute, as applied to qualified 09 defined contribution plans of governmental employees are incorporated as part of the 10 terms and conditions of the plan. 11 Sec. 14.25.390. Vesting. (a) A participating member is immediately and 12 fully vested in that member's contributions and related earnings. 13 (b) A member is fully vested in the employer contributions made on that 14 member's behalf, and related earnings, after five years of service. A member is 15 partially vested in the employer contributions made on that member's behalf, and the 16 related earnings, in the ratio of 17 (1) 25 percent with two years of service; 18 (2) 50 percent with three years of service; and 19 (3) 75 percent with four years of service. 20 Sec. 14.25.400. Investment of individual accounts. (a) The board shall 21 provide a range of investment options and permit a participant to exercise investment 22 control over the participant's assets in the member's individual account as provided in 23 this section. If a participant exercises control over the assets in the individual account, 24 the participant is not considered a fiduciary for any reason on the basis of exercising 25 that control. 26 (b) A participant may direct investment of plan funds held in an account 27 among available investment funds in accordance with rules established by the board. 28 (c) A participant may elect to change or transfer all or a portion of the 29 participant's existing account balance among available investment funds not more 30 often than once each day in accordance with the rules established by the administrator. 31 Only the last election received by the administrator before the transmittal of
01 contributions to the trust fund for allocation to the individual account will be used to 02 direct the investment of the contributions received. 03 (d) Except to the extent clearly set out in the terms of the investment plans 04 offered by the employer to the employee, the employer is not liable to the participant 05 for investment losses if the prudent investment standard has been met. 06 (e) The employer, administrator, state, board, or a person or entity who is 07 otherwise a fiduciary is not liable by reason for any participant's investment loss that 08 results from the participant's directing the investment of plan assets allocated to the 09 participant's account. 10 (f) To the extent that a member's individual account has been divided as 11 provided in a qualified domestic relations order between participants, each participant 12 shall be treated as the holder of a separate individual account for purposes of 13 investment yields, decisions, transfers, and time limitations imposed by this section. 14 Sec. 14.25.410. Distribution election at termination. (a) A member is 15 eligible to elect distribution of the member's account in accordance with this section 16 60 days after termination of employment. 17 (b) Notwithstanding (a) of this section, distribution of all or a portion of the 18 individual account of a member may take place before the 60th day after the 19 termination of employment with the approval of the administrator if the member 20 makes a written request for a distribution under this subsection. The member's spouse 21 must consent to the request in writing if the member is married. Distribution of an 22 individual account may only be made on account of an immediate and heavy financial 23 need of the member for the following reasons and in the amount the need is 24 demonstrated for 25 (1) medical care described in 26 U.S.C. 213(d) incurred by the 26 member, the member's spouse, or the member's dependent, or necessary to obtain that 27 medical care; 28 (2) the purchase of a principal residence for the member; 29 (3) postsecondary education tuition and related educational fees for the 30 next 12-month period for the member, the member's spouse, or a dependent of the 31 member; in this paragraph, "dependent" has the meaning given in 26 U.S.C. 152;
01 (4) prevention of the eviction of the member from the member's 02 principal residence or foreclosure on the mortgage of the member's principal 03 residence; or 04 (5) any need prescribed by the United States Department of the 05 Treasury, Internal Revenue Service, in a revenue ruling, notice, or other document of 06 general applicability that satisfies the safe harbor definition of hardship under 07 regulations adopted under 26 U.S.C. 401(k). 08 (c) If a member dies before benefits commence, the member's beneficiary is 09 immediately eligible to elect distribution of the member's share of the member's 10 individual account. 11 (d) Distributions are payable to an alternate payee in accordance with the 12 terms and conditions of a qualified domestic relations order that is received and 13 approved by the administrator as specified in AS 14.25.460. 14 (e) Distributions that are being paid to a member may not be affected by the 15 member's subsequent reemployment with the employer. Upon reemployment, a new 16 individual account shall be established for the member to which any future 17 contributions shall be allocated. Upon subsequent termination of employment, the 18 member's new individual account shall be distributed in accordance with this section. 19 Sec. 14.25.420. Forms of distribution. (a) A participant may elect to receive 20 distribution of the participant's share of the individual account in a 21 (1) lump sum payment, which is a single payment of the entire balance 22 in the account; 23 (2) periodic lump sum payment, which is a payment of a portion of the 24 balance in the account, not more than twice each year; 25 (3) period certain annuity payment, which is an annuity payable in a 26 fixed number of monthly installments for a duration of 60, 120, or 180 months; 27 (4) life annuity with a period certain payment, which is an annuity 28 payable until the later of the first day of the month in which the annuitant's death 29 occurs, or the date on which the payment of a fixed number of monthly installments is 30 completed; the period certain for installments is 120 or 180 months; 31 (5) single life annuity payment, which is an annuity payable monthly
01 until the first of the month in which the annuitant's death occurs; or 02 (6) joint and survivor annuity payment, which is an annuity payable 03 monthly to the member until the first of the month in which the member's death 04 occurs; after the member's death, a survivor annuity equal to 50 percent or 100 percent 05 of the member's benefit, as previously elected by the member, shall be paid monthly to 06 the joint annuitant for the remainder of the survivor's lifetime. 07 (b) Upon the death of an annuitant whose payments have commenced, an 08 annuitant's beneficiary shall receive further payments only to the extent provided in 09 accordance with the form of payment that was being made to the annuitant. The 10 remaining portion of the interest shall continue to be distributed at least as rapidly as 11 under the method of distribution being used before the annuitant's death. 12 (c) If a participant dies before the distribution commencement date, 13 distribution of the participant's entire interest to a beneficiary shall be payable in any 14 form other than a joint and survivor annuity. 15 (d) If an unmarried member or other participant fails to elect a form of 16 payment before the distribution commencement date, the account shall be paid to a 17 beneficiary in the form of a lump sum to the extent required by the minimum 18 distribution requirements set out in the Internal Revenue Code. If a married member 19 fails to elect a form of payment before the distribution commencement date, the 20 account shall be paid in the form of a 50 percent joint and survivor annuity, with the 21 member's spouse as the joint annuitant. 22 Sec. 14.25.430. Manner of electing distributions. (a) Any election or any 23 alteration or revocation of a prior election by a participant for any purpose under this 24 plan shall be on forms or made in a manner prescribed for that purpose by the plan 25 administrator. To be effective, the forms required or the required action for any 26 purpose under this plan must be completed and received in accordance with 27 regulations adopted by the commissioner of administration. 28 (b) At any time, but not less than seven days before the distribution 29 commencement date, a member, alternate payee, or beneficiary may change 30 (1) the form of payment election; 31 (2) an election to commence benefits; or
01 (3) the joint annuitant designation. 02 (c) Changes in elections are not allowed on or after seven days before the 03 distribution commencement date. 04 Sec. 14.25.440. Distribution requirements. (a) Payments to a participant 05 shall commence as soon as administratively feasible following the distribution 06 commencement date. The distribution commencement date is the first date on which 07 one of the following occurs: 08 (1) a member meets the requirements of AS 14.25.410 and has made a 09 complete application for payment under AS 14.25.430; 10 (2) a participant has elected to defer receipt of the account to a date 11 specified, the date has been attained, and the participant has made a complete 12 application for payment; 13 (3) a member attains normal retirement age and has not made an 14 application for payment or elected to defer receipt of the account to a date later than 15 normal retirement age; 16 (4) a member's beneficiary does not make an application for benefits 17 and five years have elapsed since the member's death; 18 (5) notwithstanding (a) of this section, a participant whose account has 19 a balance of $1,000 or less meets the requirements of AS 14.25.410, at which time the 20 participant must take payment of the participant's account. 21 (b) The entire interest of a participant must be distributed or must begin to be 22 distributed not later than the member's required beginning date. 23 (c) If a member dies after the distribution of the member's interest has begun 24 but before the distribution has been completed, the remaining portion of the interest 25 shall continue to be distributed at least as rapidly as under the method of distribution 26 being used before the member's death. 27 (d) If a member has made a distribution election and dies before the 28 distribution of the member's interest begins, distribution of the member's entire interest 29 shall be completed by December 31 of the calendar year containing the fifth 30 anniversary of the member's death. However, if any portion of the member's interest 31 is payable to a designated beneficiary, distributions may be made over the life of the
01 designated beneficiary or over a period certain not greater than the life expectancy of 02 the designated beneficiary, commencing on or before December 31 of the calendar 03 year immediately following the calendar year in which the member died, and, if the 04 designated beneficiary is the member's surviving spouse, the date distributions are 05 required to begin may not be earlier than the later of December 31 of the calendar year 06 (1) immediately following the calendar year in which the member died, or (2) in which 07 the member would have attained 70 1/2 years of age, whichever is earlier. If the 08 surviving spouse dies after the member but before payments to the spouse have begun, 09 the provisions of this subsection apply as if the surviving spouse were the member. 10 An amount paid to a child of the member shall be treated as if it were paid to the 11 surviving spouse if the amount becomes payable to the surviving spouse when the 12 child reaches the age of majority. 13 (e) If a member has not made a distribution election before the member's 14 death, the member's designated beneficiary must elect the method of distribution not 15 later than December 31 of the calendar year (1) in which distributions would be 16 required to begin under this section, or (2) that contains the fifth anniversary of the 17 date of death of the member, whichever is earlier. If the member does not have a 18 designated beneficiary or if the designated beneficiary does not elect a method of 19 distribution, distribution of the member's entire interest must be completed by 20 December 31 of the calendar year containing the fifth anniversary of the member's 21 death. 22 (f) For purposes of (b) of this section, distribution of a member's interest is 23 considered to begin (1) on the member's required beginning date, or (2) if the 24 designated beneficiary is the member's surviving spouse and the surviving spouse dies 25 after the member but before payments to the spouse have begun, on the date 26 distribution is required to begin to the surviving spouse. If distribution in the form of 27 an annuity irrevocably commences to the member before the required beginning date, 28 the date distribution is considered to begin is the date that the distribution actually 29 commences. 30 (g) Notwithstanding any contrary provisions of AS 14.25.310 - 14.25.590, the 31 requirements of this section apply to all distributions of a member's interest and take
01 precedence over any inconsistent provisions of AS 14.25.310 - 14.25.590. 02 (h) All distributions required under this section are determined and made in 03 accordance with 26 U.S.C. 401(a)(9) and regulations adopted under that statute, 04 including any minimum distribution incidental benefit requirement. 05 (i) In this section, 06 (1) "designated beneficiary" means the individual who is designated as 07 the beneficiary under the plan in accordance with 26 U.S.C. 401(a)(9) and regulations 08 adopted under that statute; 09 (2) "required beginning date" means the first day of April of the 10 calendar year following the calendar year in which the member either attains 70 1/2 11 years of age or actually terminates employment, whichever is later. 12 Sec. 14.25.450. Designation of beneficiary. (a) Each participant shall have 13 the right to designate a beneficiary and shall have the right, at any time, to revoke the 14 designation or to substitute another beneficiary, subject to the following limitation: if 15 a married member elects a nonspouse beneficiary, the value of the benefit payable to 16 the beneficiary may not exceed 50 percent of the member's portion of the account 17 balance, and the member's spouse shall automatically be considered the beneficiary for 18 the remaining 50 percent of the account balance, unless the spouse consents to the 19 beneficiary designation in a writing that is notarized or witnessed by the administrator. 20 If the spouse consents in this manner, a married member may designate a nonspouse 21 beneficiary for the entire benefit or any portion of the benefit as part of an available 22 form of payment contained in this plan, 23 (1) except to the extent a qualified domestic relations order filed with 24 the administrator provides for payment to a former spouse or other dependent of the 25 member; or 26 (2) unless the member filed a revocation of beneficiary accompanied 27 by a written consent to the revocation from the present spouse and each person entitled 28 under the order; however, consent of the present spouse is not required if the member 29 and the present spouse had been married for less than one year on the date of the 30 member's death and if the member established when filing the revocation that the 31 member and the present spouse were not cohabiting.
01 (b) Except as provided in (a) of this section, the member may change or 02 revoke the designation without notice to the beneficiary or beneficiaries at any time. 03 If a member designates more than one beneficiary, each shares equally unless the 04 member specifies a different allocation or preference. The designation of a 05 beneficiary, a change or revocation of a beneficiary, and a consent to revocation of a 06 beneficiary shall be made on a form provided by the administrator and is not effective 07 until filed with the administrator. 08 (c) If a member fails to designate a beneficiary, or if no designated beneficiary 09 survives the member, the death benefit shall be paid 10 (1) to the surviving spouse or, if there is none surviving; 11 (2) to the surviving children of the member in equal parts or, if there 12 are none surviving; 13 (3) to the surviving parents in equal parts or, if there are none 14 surviving; 15 (4) to the estate. 16 (d) A person claiming entitlement to benefits payable under AS 14.25.310 - 17 14.25.590 as a consequence of a member's death shall provide the administrator with a 18 marriage certificate, divorce or dissolution judgment, or other evidence of entitlement. 19 Documents establishing entitlement may be filed with the administrator immediately 20 after a change in the member's marital status. If the administrator does not receive 21 notification of a claim before the date 10 days after the member's death, the person 22 claiming entitlement is not entitled to receive from the division of retirement and 23 benefits any benefit already paid by the administrator. 24 Sec. 14.25.460. Rights under qualified domestic relations order. (a) 25 Notwithstanding the nonalienation provisions in AS 14.25.500(a), the administrator 26 may direct that benefits be paid to someone other than a member or beneficiary under 27 a valid qualified domestic relations order that is executed by the judge of a competent 28 court in accordance with applicable state law and that has been accepted by the 29 administrator. 30 (b) The administrator shall determine whether an order meets the requirements 31 of this section within a reasonable period after receiving an order. The administrator
01 shall notify the member and any alternate payee that an order has been received and 02 indicate to the member and any alternate payee when the order is accepted. A separate 03 account for the alternate payee portion shall be established as soon as administratively 04 feasible after the order has been accepted by the administrator. 05 Sec. 14.25.470. Retirement. (a) In order to obtain medical benefits under 06 AS 14.25.480 a member must retire directly from the plan. A member is eligible to 07 retire from the plan if the member has been an active member for at least 12 months 08 before application for retirement and 09 (1) the member has at least 30 years of service; or 10 (2) the member reaches the normal retirement age and has at least 10 11 years of service. 12 (b) The normal retirement age is 60 months less than the age set for Medicare 13 eligibility at the time the member retires. 14 (c) A member must apply to the administrator for appointment to retirement. 15 Application shall be made on forms and in the manner prescribed by the administrator. 16 (d) A member who continues in the employ of the employer after reaching 17 normal retirement age shall continue to participate in the plan and to have 18 contributions allocated to the member's account. 19 Sec. 14.25.480. Medical benefits. (a) The medical benefits available to 20 eligible persons are access to the retiree major medical plan. Access to the retiree 21 major medical plan means that an eligible person may not be denied medical coverage 22 except for failure to pay the required premium. 23 (b) The following persons are eligible for the retiree major medical plan 24 provided under this section and may elect coverage under it: 25 (1) a member with at least 30 years of service and who retires directly 26 from the plan; 27 (2) the surviving spouse of a member who elected coverage under (1) 28 of this subsection; 29 (3) a member who reaches the normal retirement age as provided in 30 AS 14.25.470, has at least 10 years of service, and retires directly from the plan; 31 (4) the surviving spouse of a member who elected coverage under (3)
01 of this subsection. 02 (c) Retiree major medical plan coverage elected by an eligible member under 03 this section covers the eligible member, the spouse of the eligible member, and the 04 dependent children of the eligible member. 05 (d) Retiree major medical plan coverage elected by the surviving spouse of an 06 eligible member under this section covers the surviving spouse and the dependent 07 children of the eligible member who are dependent on the surviving spouse. 08 (e) A person other than an eligible member is not eligible for coverage if, 09 during the time the eligible member was an active member, the person was 10 (1) not married to the member; or 11 (2) not a dependent child of the member. 12 (f) Major medical coverage takes effect on the first day of the month 13 following the date of the election and stops when the person who elects coverage 14 under (b) of this section dies or fails to make a required premium payment. 15 (g) The coverage for persons who are eligible for Medicare is the same as that 16 available for persons who are not yet eligible for Medicare. The benefits payable to 17 those Medicare eligible persons supplement any benefits provided under the Medicare 18 program. 19 (h) The medical and optional insurance premiums owed by the person who 20 elects coverage under (b) of this section shall be 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 (b) of 23 this section shall pay the premiums directly. 24 (i) The administrator shall set on an annual basis separate retiree health 25 coverage premiums for participants who are Medicare eligible and for participants 26 who are not yet Medicare eligible. A participant's share of the applicable premium 27 shall be determined according to (j) and (k) of this section. 28 (j) Participants who have not attained normal retirement age are required to 29 pay the full amount of the applicable medical health coverage premium. 30 (k) Participants who have attained normal retirement age are eligible for a 31 subsidy applicable to the cost of the applicable premium. The subsidy percentage
01 applicable to the cost of premiums payable by the participant is 30 percent if the 02 member had 10 years of service; for each additional year of service after the member's 03 10th year of service, the discount increases by three percentage points; however, the 04 maximum discount is 90 percent if the member has 30 or more years of service. The 05 applicable subsidy percentage shall be applied to the subsidy base to determine the 06 dollar amount of the subsidy which is applied against the cost of the premium. 07 (l) Participants who are eligible for Medicare will use the subsidy base for 08 Medicare-eligible premiums. Participants who are not yet eligible for Medicare will 09 use the subsidy base for non-Medicare eligible premiums. 10 (m) The subsidy base for Medicare-eligible participants will be the same as 11 the premium amount for Medicare-eligible participants in the first year of this plan and 12 the subsidy base for non-Medicare eligible participants will be the same as the 13 premium amount for non-Medicare eligible participants in the first year of this plan. 14 Each subsidy base will increase five percent each year or the rate at which the actual 15 premium amount increases for the corresponding aged participants, whichever is less. 16 (n) The eligibility for retiree major medical coverage for an alternate payee 17 under a qualified domestic relations order shall be determined based on the eligibility 18 of the member to elect coverage. The alternate payee shall pay the full monthly 19 premium for retiree major medical coverage. 20 (o) The administrator shall establish monthly group premiums for retiree 21 major medical coverage. Nothing in AS 14.25.310 - 14.25.590 guarantees a person 22 who elects coverage under (b) of this section a monthly group premium rate for retiree 23 major medical coverage other than the premium in effect for the month in which the 24 premium is due for coverage for that month. 25 (p) A member is eligible to apply for reimbursement from the health 26 reimbursement arrangement plan after a minimum of 10 years of service and does not 27 have to retire directly from the system. 28 (q) 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 has been an
01 active member for at least 12 consecutive months immediately before the time that the 02 member applies to the administrator for appointment to retirement and that the 03 member continues as an active member up through the day before the day the member 04 is appointed to retirement." 05 Sec. 14.25.490. Amendment and termination of plan. (a) The state has the 06 right to amend the plan at any time and from time to time, in whole or in part, 07 including the right to make retroactive amendments referred to in 26 U.S.C. 401(b). 08 (b) The plan administrator may not modify or amend the plan retroactively in 09 such a manner as to reduce the benefits of any member accrued to date under the plan 10 by reason of contributions made before the modification or amendment except to the 11 extent that the reduction is permitted by the Internal Revenue Code. 12 (c) The state may, in its discretion, terminate the plan in whole or part at any 13 time without liability for the termination. If the plan is terminated, all investments 14 remain in force until all individual accounts have been completely distributed under 15 the plan, and, after all plan liabilities are satisfied, excess assets revert to the employer. 16 (d) Any contribution made by an employer to the plan because of a mistake of 17 fact must be returned to the employer by the administrator within one year after the 18 contribution or discovery, whichever is later. 19 Sec. 14.25.500. Exclusive benefit. (a) The corpus or income of the assets 20 held in trust as required by the plan may not be diverted or used for other than the 21 exclusive benefit of the participants. 22 (b) If plan benefits are provided through the distribution of annuity or 23 insurance contracts, any refunds or credits in excess of plan benefits due to dividends, 24 earnings, or other experience rating credits, or surrender or cancellation credits, shall 25 be paid to the trust fund. 26 (c) The assets of the plan may not be used to pay premiums or contributions of 27 the employer under another plan maintained by the employer. 28 Sec. 14.25.510. Nonguarantee of returns, rates, or benefit amounts. The 29 plan created by AS 14.25.310 - 14.25.590 is a defined contribution plan, not a defined 30 benefit plan. The amount of money in the account of a participant depends on the 31 amount of contributions and the rate of return from investments of the account that
01 varies over time. If benefits are paid in the form of an annuity, the benefit amount 02 payable is dependent on the amount of money in the account and the interest rates 03 applied and service fees charged by the annuity payor at the time benefits are first 04 paid. Nothing in this plan guarantees a participant 05 (1) a rate of return or interest rate other than that actually earned by the 06 account of the participant, less applicable administrative expenses; or 07 (2) an annuity based on interest rates or service charges other than 08 interest rates available from and service charges by the annuity payor in effect at the 09 time the annuity is paid. 10 Sec. 14.25.520. Nonguarantee of employment. The provisions of 11 AS 14.25.310 - 14.25.590 are not a contract of employment between an employer and 12 an employee, nor do they confer a right of an employee to be continued in the 13 employment of an employer, nor are they a limitation of the right of an employer to 14 discharge an employee with or without cause. 15 Sec. 14.25.530. Fraud. (a) A person who knowingly makes a false statement 16 or falsifies or permits to be falsified a record of this plan in an attempt to defraud the 17 plan is guilty of a class A misdemeanor. 18 (b) In this section, "knowingly" has the meaning given in AS 11.81.900(a). 19 Sec. 14.25.540. Transfer into defined contribution retirement plan by 20 nonvested members of defined benefit retirement plan. (a) Subject to (g) of this 21 section, an active member of the defined benefit retirement plan of the teachers' 22 retirement system is eligible to participate in the defined contribution retirement plan 23 established under AS 14.25.310 - 14.25.590 if that member has not vested. 24 Participation in the defined contribution retirement plan is in lieu of participation in 25 the defined benefit retirement plan established under AS 14.25.009 - 14.25.220. 26 (b) A member who has vested in a defined benefit retirement plan is not 27 eligible to transfer under this section. 28 (c) Each eligible member who elects to participate in the defined contribution 29 retirement plan shall have transferred to a new account the present value of the 30 member contribution account balance held in trust for the member under the defined 31 benefit retirement plan of the teachers' retirement system. A matching employer
01 contribution shall be made on behalf of that employee to the new account. Upon a 02 transfer, all service credit previously earned under the defined benefit retirement plan 03 shall be nullified for purposes of entitlement to a future benefit under the defined 04 benefit retirement plan but shall be credited for purposes of eligibility to elect medical 05 benefits under AS 14.25.470. An eligible member whose accounts are subject to a 06 qualified domestic relations order may not make an election to participate in the 07 defined contribution retirement plan under this subsection unless the qualified 08 domestic relations order is amended or vacated and court-certified copies of the order 09 are received by the administrator. 10 (d) As directed by the participant, the board shall transfer or cause to be 11 transferred the appropriate amounts to the designated account. The board shall 12 establish transfer procedures by regulation, but the actual transfer may not be later 13 than 30 days after the effective date of the member's participation in the defined 14 contribution retirement plan unless the major financial markets for securities available 15 for a transfer are seriously disrupted by an unforeseen event that also causes the 16 suspension of trading on any national securities exchange in the country where the 17 securities were issued. In that event, the 30-day period of time may be extended by a 18 resolution of the board of trustees. Transfers are not commissionable or subject to 19 other fees and may be in the form of securities or cash as determined by the board. 20 Securities shall be valued as of the date of receipt in the participant's account. 21 (e) If the board or the administrator receives notification from the United 22 States Department of the Treasury, Internal Revenue Service, that this section or a 23 portion of this section will cause the retirement system under this chapter, or a portion 24 of the retirement system under this chapter, to be disqualified for tax purposes under 25 the Internal Revenue Code, the portion that will cause the disqualification does not 26 apply, and the board and the administrator shall notify the presiding officers of the 27 legislature. 28 (f) The election to participate in the defined contribution retirement plan must 29 be made in writing on forms and in the manner prescribed by the administrator. 30 Before accepting an election to participate in the defined contribution retirement plan, 31 the administrator must provide the employee planning on making an election to
01 participate in the defined contribution retirement plan with information, including 02 calculations to illustrate the effect of moving the employee's retirement plan from the 03 defined benefit retirement plan to the defined contribution retirement plan as well as 04 other information to clearly inform the employee of the potential consequences of the 05 employee's election. An election made under this subsection to participate in the 06 defined contribution retirement plan is irrevocable. Upon making the election, the 07 participant shall be enrolled as a member of the defined contribution retirement plan, 08 the member's participation in the plan shall be governed by the provisions of 09 AS 14.25.310 - 14.25.590, and the member's participation in the defined benefit 10 retirement plan under AS 14.25.009 - 14.25.220 shall terminate. The participant's 11 enrollment in the defined contribution retirement plan shall be effective the first day of 12 the month after the administrator receives the completed enrollment forms. An 13 election made by an eligible member who is married is not effective unless the 14 election is signed by the individual's spouse. 15 (g) A member may make an election under this section only if the member's 16 employer participates in both the defined benefits retirement plan and the defined 17 contribution retirement plan and consents to transfers under this section. The 18 employer shall notify the administrator if the employer consents to allowing the 19 employer's members to choose to transfer from the defined benefits retirement plan to 20 the defined contribution retirement plan under this section. An employer's notice to 21 allow transfers is irrevocable and applicable to all eligible employees of the employer. 22 (h) In this section, 23 (1) "defined benefit retirement plan" means the retirement plan 24 established in AS 14.25.009 - 14.25.220; 25 (2) "defined contribution retirement plan" means the retirement plan 26 established in AS 14.25.310 - 14.25.590. 27 Sec. 14.25.550. Membership in teachers' and public employees' 28 retirement systems. A person who is employed at least half-time in the public 29 employees' defined contribution retirement plan (AS 39.35.700 - 39.35.990) during the 30 same period that the person is employed at least half-time in a position in the teachers' 31 defined contribution retirement plan (AS 14.25.310 - 14.25.590) shall receive credited
01 service under each plan for half-time employment. However, the amount of credited 02 service a person receives under the public employees' defined contribution retirement 03 plan during a school year may not exceed the amount necessary, when added to the 04 amount of credited service earned during the school year under the teachers' defined 05 contribution retirement plan, to equal one year of credited service. 06 Sec. 14.25.560. Legislators who have been teachers. (a) A state legislator 07 who was an active member of the defined contribution plan under other sections of 08 AS 14.25.310 - 14.25.590 within the 12 months immediately preceding election to 09 office may, subject to the requirements of (b) of this section, elect to be an active 10 member of the teachers' defined contribution retirement plan for as long as the state 11 legislator serves continuously as a state legislator if, within 90 days after taking the 12 oath of office, 13 (1) the state legislator directs the employer in writing to 14 (A) pay into this plan the employer contributions required for a 15 member under AS 14.25.310 - 14.25.590; and 16 (B) deduct from the state legislator's salary and pay into this 17 plan 18 (i) the employee contributions required for a member 19 under AS 14.25.310 - 14.25.590; and 20 (ii) an amount equal to the difference between the total 21 employer and state contributions required for a member under 22 AS 14.25.310 - 14.25.590 and the employer contributions that would be 23 required under the public employees' defined contribution retirement 24 plan (AS 39.35.700 - 39.35.990) if the legislator were covered under 25 that plan; and 26 (2) notice is given the administrator in writing. 27 (b) A state legislator is not entitled to elect membership under (a) of this 28 section if the state legislator is covered for the same period of service under the public 29 employees' defined contribution retirement plan (AS 39.35.700 - 39.35.990). An 30 election of membership under (a) of this section is retroactive to the date the state 31 legislator took the oath of office. A state legislator may not receive membership credit
01 under (a) of this section for legislative service performed before the legislative session 02 during which the state legislator elected membership under (a) of this section. In order 03 to continue in membership service under (a) of this section, the state legislator must 04 earn at least 0.3 years of membership service under other sections of AS 14.25.310 - 05 14.25.590 during each five-year period. 06 Sec. 14.25.570. Participation by National Education Association 07 employees. An employee or former employee of the National Education Association 08 of Alaska may participate in the teachers' defined contribution retirement plan under 09 AS 14.25.310 - 14.25.590 if the employee or former employee possesses or is eligible 10 to possess a teacher certificate under AS 14.20.020. 11 Sec. 14.25.580. Participation by Special Education Service Agency 12 employees. An employee of the Special Education Service Agency may participate in 13 the system under this chapter if the employee possesses or is eligible to possess a 14 teacher certificate under AS 14.20.020. 15 Sec. 14.25.590. Definitions. In AS 14.25.310 - 14.25.590, unless the context 16 requires otherwise, 17 (1) "administrator" has the meaning given in AS 14.25.220; 18 (2) "alternate payee" means a person entitled to a portion of the 19 distribution from an individual account under a qualified domestic relations order; 20 (3) "annuitant" means a member, beneficiary or alternate payee who is 21 receiving a benefit under this plan; 22 (4) "beneficiary" means the person or persons entitled to receive 23 benefits that may be due from the plan upon the death of the member or alternate 24 payee; 25 (5) "board" has the meaning given in AS 14.25.220; 26 (6) "calendar year" has the meaning given in AS 39.35.680; 27 (7) "compensation" 28 (A) means 29 (i) the total remuneration earned by an employee for 30 personal services rendered, including cost-of-living differentials, as 31 reported on the employee's Federal Income Tax Withholding Statement
01 (Form W-2) from the employer for the calendar year; 02 (ii) the member contribution to the teachers' retirement 03 system under AS 14.25.340; 04 (B) does not include retirement benefits, severance pay or other 05 separation bonuses, welfare benefits, per diem, expense allowances, workers' 06 compensation payments, payments for leave not used whether those leave 07 payments are scheduled payments, lump-sum payments, donations, or cash-ins, 08 any remuneration contributed by the employer for or on account of the 09 employee under this plan or under any other qualified or nonqualified 10 employee benefit plan, any remuneration not specifically included above 11 which would have been excluded under 26 U.S.C. 3121(a) (Internal Revenue 12 Code) if the employer had remained in the Federal Social Security System, or 13 any remuneration paid by the employer in excess of the Social Security 14 Taxable Wage Base for the calendar year; 15 (C) notwithstanding (B) of this paragraph, includes any amount 16 that is contributed by the employer under a salary reduction agreement and that 17 is not includible in the gross income of the employee under 26 U.S.C. 125, 18 132(f)(4), 402(e)(3), 402(h)(1)(B) or 403(b) (Internal Revenue Code); the 19 annual compensation limitation for the member, which is so taken into account 20 for those purposes, may not exceed $200,000, as adjusted for the cost of living 21 in accordance with 26 U.S.C. 401(a)(17)(B) (Internal Revenue Code), with the 22 limitation for a fiscal year being the limitation in effect for the calendar year 23 within which the fiscal year begins; 24 (8) "dependent child" has the meaning given in AS 14.25.220; 25 (9) "distribution commencement date" has the meaning given in 26 AS 14.25.440(a); 27 (10) "employer" means a public school district, the Board of Regents 28 of the University of Alaska, the Department of Education and Early Development, or 29 the regional resource centers; 30 (11) "fund" means the assets of the plan; 31 (12) "individual account" means the total maintained by the plan in an
01 investment account within the trust fund, established for each member for the purposes 02 of allocation of the member's contributions, employer contributions on behalf of the 03 member, and earnings credited to each of those contributions, investment gains and 04 losses, and expenses, as well as reporting of the member's benefit under the plan; 05 (13) "Internal Revenue Code" has the meaning given in AS 14.25.220; 06 (14) "investment funds" means those separate funds that are provided 07 within and that make up the trust fund and that are established for the purpose of 08 directing investment through the exercise of the sole control of a member, beneficiary, 09 or alternate payee under the terms of the plan and trust agreement; 10 (15) "limitation year" means the year for which contributions are made 11 to a member's individual account as reported to the Internal Revenue Service under the 12 limits described in 26 U.S.C. 415(c); 13 (16) "member" means an employee of an employer or a former 14 employee of an employer who retains a right to benefits under the plan; 15 (17) "membership service" means full-time or part-time employment 16 with an employer in the plan; 17 (18) "normal retirement age" means 60 months less than the age set for 18 Medicare eligibility at the time the member retires; 19 (19) "participant" means the person who has a vested right to an 20 individual account, such as a member, an alternate payee if the account is subject to a 21 qualified domestic relations order, the member's beneficiary if the member is 22 deceased, or an alternate payee's beneficiary if the alternate payee is deceased; 23 (20) "plan" means the retirement benefit plan established under 24 AS 14.25.310 - 14.25.590; 25 (21) "prudent investment standard" means the degree of care, skill, 26 prudence, and diligence under the circumstances then prevailing that a prudent person 27 acting in a like capacity and familiar with such matters would use in the conduct of an 28 enterprise of a like character and with like aims; 29 (22) "qualified domestic relations order" means a divorce or 30 dissolution judgment under AS 25.24, including an order approving a property 31 settlement, that
01 (A) creates or recognizes the existence of an alternate payee's 02 right to, or assigns to an alternate payee the right to, receive all or a portion of 03 the individual account, or the benefits payable with respect to a member; 04 (B) sets out the name and last known mailing address, if any, of 05 the member and of each alternate payee covered by the order; 06 (C) sets out the amount or percentage of the member's benefit, 07 or of any survivor's benefit, to be paid to the alternate payee, or sets out the 08 manner in which that amount or percentage is to be determined; 09 (D) sets out the number of payments or period to which the 10 order applies; 11 (E) sets out the retirement plan to which the order applies; 12 (F) does not require any type or form of benefit or any option 13 not otherwise provided by AS 14.25.310 - 14.25.590; 14 (G) does not require an increase of benefits in excess of the 15 amount provided by AS 14.25.310 - 14.25.590; and 16 (H) does not require the payment, to an alternate payee, of 17 benefits that are required to be paid to another alternate payee under another 18 order previously determined to be a qualified domestic relations order; 19 (23) "retiree" means an eligible person who has elected to receive the 20 medical benefits under AS 14.25.480; 21 (24) "retirement fund" or "fund" means the fund in which the assets of 22 the plan, including income and interest derived from the investment of money, are 23 deposited and held; 24 (25) "school year" has the meaning given in AS 14.25.220; 25 (26) "system" has the meaning given in AS 14.25.220; 26 (27) "teacher" and "member" are used interchangeably under 27 AS 14.25.310 - 14.25.590 and mean a person eligible to participate in the plan and 28 who is covered by the plan, limited to 29 (A) a certificated full-time or part-time elementary or 30 secondary teacher, a certificated school nurse, or a certificated person in a 31 position requiring a teaching certificate as a condition of employment in a
01 public school of the state, the Department of Education and Early 02 Development, or the Department of Labor and Workforce Development; 03 (B) a full-time or part-time teacher of the University of Alaska 04 or a person occupying a full-time administrative position at the University of 05 Alaska that requires academic standing; the approval of the administrator must 06 be obtained before an administrative position qualifies for membership in the 07 plan; however, a teacher or administrative person at the university who is 08 participating in a university retirement program under AS 14.40.661 - 09 14.40.799 is not a member under this plan; 10 (C) a full-time or part-time instructor of the Department of 11 Labor and Workforce Development who has 12 (i) a teaching certificate regardless of whether the 13 position as instructor requires a teaching certificate as a condition of 14 employment; and 15 (ii) earlier credited service in the plan; 16 (28) "year of service" means service during the dates set for the school 17 year; partial-year service credit is given for membership service as follows: 18 (A) during any school year, 19 (i) less than nine days, no credit; 20 (ii) nine days or more but less than 27 days, 0.1 years; 21 (iii) 27 days or more but less than 45 days, 0.2 years; 22 (iv) 45 days or more but less than 63 days, 0.3 years; 23 (v) 63 days or more but less than 81 days, 0.4 years; 24 (vi) 81 days or more but less than 100 days, 0.5 years; 25 (vii) 100 days or more but less than 118 days, 0.6 years; 26 (viii) 118 days or more but less than 136 days, 0.7 27 years; 28 (ix) 136 days or more but less than 154 days, 0.8 years; 29 (x) 154 days or more but less than 172 days, 0.9 years; 30 (xi) 172 days or more, 1.0 years; 31 (B) service performed on a part-time basis of half time or more
01 shall be credited in proportion to the amount of credit that would have been 02 received for service performed on a full-time basis. 03 * Sec. 33. AS 14.40.280(c) is amended to read: 04 (c) Except as provided by (b) of this section, the monetary gifts, bequests, or 05 endowments that are made to the University of Alaska shall be managed and invested 06 by the Board of Regents. In carrying out its management and investment 07 responsibilities under this subsection, the Board of Regents has the same power and 08 obligations to carry out duties with respect to the endowments of the University of 09 Alaska as are provided to and required of the Alaska Retirement Management 10 [STATE PENSION INVESTMENT] Board under AS 37.10.210 [AS 14.25.180]. 11 * Sec. 34. AS 14.40.400(b) is amended to read: 12 (b) The Board of Regents is the fiduciary of the fund. The Board of Regents 13 shall account for and invest the fund. In carrying out its investment responsibilities 14 under this subsection, the Board of Regents has the same powers and duties with 15 respect to the fund as are provided to and required of the Alaska Retirement 16 Management [STATE PENSION INVESTMENT] Board under AS 37.10.210 17 [AS 14.25.180]. 18 * Sec. 35. AS 14.40.661 is amended to read: 19 Sec. 14.40.661. Authority of board. (a) The board may establish and 20 maintain [AN OPTIONAL] university retirement programs [PROGRAM] for 21 eligible employees in which retirement, health, and death benefits are provided 22 through the purchase of annuity contracts, either fixed, variable, or a combination of 23 fixed and variable. Participation in a university retirement [THE] program is in 24 place of participation in a state retirement system. The university may establish 25 retirement programs for new employees in a participating position at any time. 26 Retirement programs may be optional or mandatory. 27 (b) The board shall 28 (1) provide for the administration of the retirement programs 29 [PROGRAM], including procedures for resolving complaints from participating 30 employees; 31 (2) designate the company or companies to which payment of the
01 contributions required under AS 14.40.691 may be made, after considering the 02 (A) nature and extent of the rights and benefits that the 03 contracts will provide to employees who elect to participate and to their 04 beneficiaries; 05 (B) relation of the contractual rights and benefits to the 06 contributions to be made under AS 14.40.661 - 14.40.799; 07 (C) suitability of the contractual rights and benefits to the needs 08 and interests of employees who [ELECTING TO] participate and to the 09 interest of the university in the employment and retention of employees; 10 (D) ability of the designated company or companies to provide 11 rights and benefits under the contracts; and 12 (E) efficacy of the contracts in the recruitment and retention of 13 faculty and administrators; 14 (3) take other actions required to ensure that the retirement programs 15 comply with applicable provisions of 26 U.S.C. 401 - 417 [PROGRAM 16 QUALIFIES AS A QUALIFIED TRUST UNDER 26 U.S.C. 401(a)] (Internal 17 Revenue Code). 18 * Sec. 36. AS 14.40.661 is amended by adding a new subsection to read: 19 (c) The university retirement programs established under this section are not 20 subject to bargaining under AS 23.40.070 - 23.40.260 (Public Employment Relations 21 Act). 22 * Sec. 37. AS 14.40.671(b) is amended to read: 23 (b) An election under (a) of this section to participate in a university 24 retirement [THE] program is irrevocable. The election shall be made in writing on a 25 form provided by the board and approved for the state by the commissioner of 26 administration. The form must be filed with the university not [BOARD NO] later 27 than 30 days after the date on which the employee is notified by the university that 28 the employee is [FIRST BECOMES] eligible to participate in the program. A copy of 29 the form shall be delivered to the appropriate state retirement system. The election 30 becomes irrevocable on the date it is received by the board. 31 * Sec. 38. AS 14.40.671(c) is amended to read:
01 (c) Participation in a university retirement [THE ELECTION TO 02 PARTICIPATE IN THE] program constitutes a waiver of all rights and benefits under 03 the state retirement systems earned on or after the effective date of the election if the 04 participation is optional, or the effective date of the participation if the 05 participation is mandatory, and while the employee is participating in a university 06 retirement [THE] program. 07 * Sec. 39. AS 14.40.671(d) is amended to read: 08 (d) Except as provided in (e) of this section, if a nonvested member of a state 09 retirement system participates [ELECTS TO PARTICIPATE] in a university 10 retirement [THE] program, the employee may choose to transfer the amount in the 11 employee's contribution account to a university retirement [THE] program. If the 12 employee chooses to transfer the account, the appropriate state retirement system shall 13 pay to the university on behalf of the employee an amount equal to the balance in the 14 account. The payment must be made within 45 days after notice of the employee's 15 decision to transfer the employee's contribution account to a university 16 retirement program [THE ELECTION] is received by the state retirement system. 17 The financial officer of the university shall [IMMEDIATELY] pay the amount 18 received to the designated company or companies for the benefit of the employee as 19 soon as possible. An employee who transfers assets under this subsection may not 20 reclaim the corresponding service in the state retirement system if the employee is 21 reemployed under the state retirement system. 22 * Sec. 40. AS 14.40.671(e) is amended to read: 23 (e) An employee whose rights to transfer assets out of a state retirement 24 system are subject to a qualified domestic relations order is entitled to transfer assets 25 from the state retirement system to a university retirement [THE] program only if 26 the requirements for receiving a refund under AS 14.25.150(b), 14.25.360, [OR] 27 AS 39.35.200(c), or 39.35.760, as appropriate, are met. 28 * Sec. 41. AS 14.40.671(f) is amended to read: 29 (f) If a vested member of a state retirement system participates [ELECTS TO 30 PARTICIPATE] in a university retirement [THE] program, the employee ceases to 31 be an active member of the state retirement system on the effective date of the
01 participation in a university retirement [THE] program. The employee retains all 02 benefits accrued in the state retirement system. 03 * Sec. 42. AS 14.40.671(g) is amended to read: 04 (g) An employee who does not [ELECT TO] participate in a university 05 retirement [THE] program under this section becomes or remains a member of the 06 appropriate state retirement system. 07 * Sec. 43. AS 14.40.671 is amended by adding new subsections to read: 08 (h) Notwithstanding (a) of this section, the university may establish a 09 mandatory retirement program for new employees. 10 (i) Notwithstanding (b) of this section, the university may offer an employee 11 who made an election not to participate in an optional university retirement program at 12 the time the employee was eligible to participate in the program an option to enroll in 13 a different university retirement program first established by the university after the 14 effective date of this subsection. 15 * Sec. 44. AS 14.40.681 is amended to read: 16 Sec. 14.40.681. Retirement system membership. An [ELIGIBLE] employee 17 participating [ELECTING TO PARTICIPATE] in a university retirement [THE] 18 program may not participate in a state retirement system during the time the employee 19 is employed in a participating position. If the employee is later employed in a position 20 covered by a state retirement system that is not a participating position, the employee 21 may not continue to participate in a university retirement [THE] program and shall 22 begin to participate in the state retirement system. 23 * Sec. 45. AS 14.40.691(c) is amended to read: 24 (c) The board may specify that contributions required by this section are made 25 by a reduction in salary under 26 U.S.C. 403(b) or 26 U.S.C. 414(h)(2) (Internal 26 Revenue Code). 27 * Sec. 46. AS 14.40.701 is amended to read: 28 Sec. 14.40.701. Benefits. Payment of benefits to participants of the program 29 is the responsibility of the company or companies designated by the board and is not 30 the responsibility of the board, the university, or the state. The benefits are payable to 31 participants or their beneficiaries in accordance with the terms of the applicable
01 retirement plan document [ANNUITY CONTRACT OR CONTRACTS. 02 HOWEVER, RETIREMENT BENEFITS MUST BE PAID IN THE FORM OF A 03 LIFETIME INCOME. EXCEPT FOR DEATH BENEFITS, A SINGLE-SUM CASH 04 PAYMENT IS NOT PERMITTED UNDER THIS SECTION]. 05 * Sec. 47. AS 14.40.799(3) is amended to read: 06 (3) "contribution account" means the member contribution account 07 under AS 14.25.009 - 14.25.220, the individual account under AS 14.25.310 - 08 14.25.590, [AS 14.25 OR] the employee contribution account under AS 39.35.095 - 09 39.35.680, or the individual account under AS 39.35.700 - 39.35.990 [AS 39.35], 10 whichever is appropriate; 11 * Sec. 48. AS 14.40.799(5) is amended to read: 12 (5) "participating position" means a position that is a permanent 13 position that is at least a .5 full-time appointment and is included in the applicable 14 retirement plan document [AS 15 (A) A FACULTY APPOINTMENT; OR 16 (B) AN ADMINISTRATOR AND THE POSITION HAS 17 BEEN DESIGNATED BY THE BOARD FOR INCLUSION IN THE 18 PROGRAM]; 19 * Sec. 49. AS 14.40.799(6) is amended to read: 20 (6) "program" means a [THE OPTIONAL] university retirement 21 program; 22 * Sec. 50. AS 14.40.799 is amended by adding a new paragraph to read: 23 (8) "university" means the University of Alaska. 24 * Sec. 51. AS 22.25.048(c) is amended to read: 25 (c) The Alaska Retirement Management [STATE PENSION 26 INVESTMENT] Board is the fiduciary of the fund and has the same powers and 27 duties under this section in regard to the judicial retirement trust fund as are provided 28 in AS 37.10.210 [AS 14.25.180]. 29 * Sec. 52. AS 22.25.900(1) is amended to read: 30 (1) "actuarial equivalent" means the adjustment necessary to obtain 31 equality in value of the aggregate expected payments under two different forms of
01 pension payments, considering expected mortality and interest earnings on the basis of 02 assumptions, factors, and methods specified in regulations issued under the system 03 that are formally adopted [UNDER AS 22.25.027] by the Alaska Retirement 04 Management Board [COMMISSIONER OF ADMINISTRATION] that clearly 05 preclude employer discretion in the determination of the amount of any justice's, 06 judge's, or member's benefit; 07 * Sec. 53. AS 26.05.226(a) is amended to read: 08 (a) The Department of Military and Veterans' Affairs shall contribute to the 09 Alaska National Guard and Alaska Naval Militia retirement system the amounts 10 determined by the Alaska Retirement Management Board [COMMISSIONER OF 11 ADMINISTRATION] as necessary to 12 (1) fund the system based on the actuarial requirements of the system 13 as established by the Alaska Retirement Management Board [COMMISSIONER 14 OF ADMINISTRATION]; and 15 (2) administer the system. 16 * Sec. 54. AS 26.05.228(c) is amended to read: 17 (c) The Alaska Retirement Management [STATE PENSION 18 INVESTMENT] Board is the fiduciary of the fund and has the same powers and 19 duties under this section in regard to the fund as are provided under AS 37.10.220 20 [AS 14.25.180]. 21 * Sec. 55. AS 36.30.015(f) is amended to read: 22 (f) The board of directors of the Alaska Housing Finance Corporation, 23 notwithstanding AS 18.56.088, and the board of directors of the Knik Arm Bridge and 24 Toll Authority under AS 19.75.111, shall adopt regulations under AS 44.62 25 (Administrative Procedure Act) and the board of trustees of the Alaska Retirement 26 Management [STATE PENSION INVESTMENT] Board shall adopt regulations 27 under AS 37.10.240 to govern the procurement of supplies, services, professional 28 services, and construction for the respective public corporation and board. The 29 regulations must reflect competitive bidding principles and provide vendors 30 reasonable and equitable opportunities to participate in the procurement process and 31 must include procurement methods to meet emergency and extraordinary
01 circumstances. Notwithstanding the other provisions of this subsection, the Alaska 02 Housing Finance Corporation, the Knik Arm Bridge and Toll Authority, and the 03 Alaska Retirement Management [STATE PENSION INVESTMENT] Board shall 04 comply with AS 36.30.170(b). 05 * Sec. 56. AS 36.30.990(1) is amended to read: 06 (1) "agency" 07 (A) means a department, institution, board, commission, 08 division, authority, public corporation, the Alaska Pioneers' Home, the Alaska 09 Veterans' Home, or other administrative unit of the executive branch of state 10 government; 11 (B) does not include 12 (i) the University of Alaska; 13 (ii) the Alaska Railroad Corporation; 14 (iii) the Alaska Housing Finance Corporation; 15 (iv) a regional Native housing authority created under 16 AS 18.55.996 or a regional electrical authority created under 17 AS 18.57.020; 18 (v) the Department of Transportation and Public 19 Facilities, in regard to the repair, maintenance, and reconstruction of 20 vessels, docking facilities, and passenger and vehicle transfer facilities 21 of the Alaska marine highway system; 22 (vi) the Alaska Aerospace Development Corporation; 23 (vii) the Alaska Retirement Management [STATE 24 PENSION INVESTMENT] Board; 25 (viii) the Alaska Seafood Marketing Institute; 26 * Sec. 57. AS 37.10.071(d) is amended to read: 27 (d) In exercising investment, custodial, or depository powers or duties under 28 this section, the fiduciary or the fiduciary's designee is liable for a breach of a duty 29 that is assigned or delegated under this section, or under [AS 14.25.180,] 30 AS 14.40.255, 14.40.280(c), 14.40.400(b), AS 37.10.070, AS 37.14.110(c), 37.14.160, 31 or 37.14.170 [, OR AS 39.35.080]. However, the fiduciary or the designee is not
01 liable for a breach of a duty that has been delegated to another person if the delegation 02 is prudent under the applicable standard of prudence set out in statute or if the duty is 03 assigned by law to another person, except to the extent that the fiduciary or designee 04 (1) knowingly participates in, or knowingly undertakes to conceal, an 05 act or omission of another person knowing that the act or omission is a breach of that 06 person's duties under this chapter; 07 (2) by failure to comply with this section in the administration of 08 specific responsibilities, enables another person to commit a breach of duty; or 09 (3) has knowledge of a breach of duty by another person, unless the 10 fiduciary or designee makes reasonable efforts under the circumstances to remedy the 11 breach. 12 * Sec. 58. AS 37.10.071(f) is amended to read: 13 (f) In this section, "fiduciary of a state fund" or "fiduciary" means 14 (1) the commissioner of revenue for investments under AS 37.10.070; 15 or 16 (2) with respect to the Alaska Retirement Management [STATE 17 PENSION INVESTMENT] Board, for investments of the collective funds that it 18 manages and administers [UNDER OR SUBJECT TO AS 14.25.180], 19 (A) each trustee who serves on the board of trustees; and 20 (B) any other person who exercises control or authority with 21 respect to management or disposition of assets for which the board is 22 responsible or who gives investment advice to the board; or 23 (3) the person or body provided by law to manage the investments for 24 investments not subject to [AS 14.25.180 OR] AS 37.10.070. 25 * Sec. 59. AS 37.10.210 is repealed and reenacted to read: 26 Sec. 37.10.210. Alaska Retirement Management Board. (a) The Alaska 27 Retirement Management Board is established in the Department of Revenue. The 28 board's primary mission is to serve as the trustee of the assets of the state's retirement 29 systems, the State of Alaska Supplemental Annuity Plan, and the deferred 30 compensation program for state employees. Consistent with standards of prudence, 31 the board has the fiduciary obligation to manage and invest these assets in a manner
01 that is sufficient to meet the liabilities and pension obligations of the systems, plan, 02 and program. The board may, with the approval of the commissioner of revenue and 03 upon agreement with the responsible fiduciary, manage and invest other state funds so 04 long as the activity does not interfere with the board's primary mission. In making 05 investments, the board shall exercise the powers and duties of a fiduciary of a state 06 fund under AS 37.10.071. 07 (b) The Alaska Retirement Management Board consists of nine trustees, as 08 follows: 09 (1) two members, consisting of the commissioner of administration 10 and the commissioner of revenue; 11 (2) three trustees appointed by the governor who meet the eligibility 12 requirements for an Alaska permanent fund dividend and who are professionally 13 credentialed or have recognized competence in investment management, finance, 14 banking, economics, accounting, pension administration, or actuarial analysis as 15 follows: 16 (A) one trustee who is a member of the general public; the 17 trustee appointed under this subparagraph may not hold another state office, 18 position, or employment and may not be a member or beneficiary of a 19 retirement system managed by the board; 20 (B) one trustee who is employed as a finance officer for a 21 political subdivision participating in the public employees' retirement system; 22 (C) one trustee who is employed as a finance officer for a 23 political subdivision participating in the teachers' retirement system; 24 (3) four trustees, two of whom are members of the public employees' 25 retirement system elected by members of the public employees' retirement system and 26 two of whom are members of the teachers' retirement system elected by members of 27 the teachers' retirement system; elections for the trustees elected under this paragraph 28 shall be conducted by the board; the candidate for each retirement system who 29 receives the most votes cast in an election is elected to the applicable seat for that 30 retirement system; if two seats are to be filled at an election for trustees representing a 31 retirement system, the candidate who receives the highest number of votes cast is
01 elected to the seat with the longer term, and the candidate who receives the second 02 highest number of votes cast is elected to the seat with the next longer term; the 03 governor shall fill a vacancy in an unexpired elective term by appointment for the 04 period remaining before the next regularly scheduled election held under this 05 paragraph. 06 (c) The trustees, other than the two commissioners, shall serve for staggered 07 terms of six years and may be reappointed or elected to the board for a total of two 08 consecutive terms. A person who has served two consecutive terms may not be 09 reappointed to the board for at least one year. 10 (d) The governor may, by written notice to the trustee, remove an appointed 11 trustee for cause. After an appointed trustee receives written notice of removal, the 12 trustee may not participate in board business and may not be counted for purposes of 13 establishing a quorum. 14 (e) A vacancy on the board of trustees shall be promptly filled. A person 15 filling a vacancy holds office for the balance of the unexpired term of the person's 16 predecessor, and the balance of the unexpired term served is not included in the three- 17 term limitation under (c) of this section. A vacancy on the board does not impair the 18 authority of a quorum of the board to exercise all the powers and perform all the duties 19 of the board. 20 (f) Five trustees constitute a quorum for the transaction of business and the 21 exercise of the powers and duties of the board. 22 (g) A trustee may not designate another person to serve on the board in the 23 absence of the trustee. 24 (h) The board shall provide annual training to its members on the duties and 25 powers of a fiduciary of a state fund and other training as necessary to keep the 26 members of the board educated about pension management and investment. 27 (i) The board shall elect a trustee to serve as chair and a trustee to serve as 28 vice-chair for one-year terms. A trustee may be reelected to serve additional terms as 29 chair or vice-chair. 30 * Sec. 60. AS 37.10 is amended by adding a new section to read: 31 Sec. 37.10.215. Attorney general. The attorney general is the legal counsel
01 for the board and shall advise the board and represent it in a legal proceeding. 02 * Sec. 61. AS 37.10.220 is repealed and reenacted to read: 03 Sec. 37.10.220. Powers and duties of the board. (a) The board shall 04 (1) hold regular and special meetings at the call of the chair or of at 05 least five members; meetings are open to the public, and the board shall keep a full 06 record of all its proceedings; 07 (2) after reviewing recommendations from the Department of 08 Revenue, adopt investment policies for each of the funds entrusted to the board; 09 (3) determine the appropriate investment objectives for the defined 10 benefit plans established under the teachers' retirement system under AS 14.25 and the 11 public employees' retirement system under AS 39.35; 12 (4) provide a range of investment options and establish the rules by 13 which participants can direct their investments among those options with respect to 14 accounts established under 15 (A) AS 14.25.340 and 14.25.350 (teachers' retirement system 16 defined contribution individual accounts); 17 (B) AS 39.30.150 - 39.30.180 (State of Alaska Supplementary 18 Annuity Plan); 19 (C) AS 39.35.730 - 39.35.750 (public employees' retirement 20 system defined contribution individual accounts); and 21 (D) AS 39.45.010 - 39.45.060 (public employees' deferred 22 compensation program); 23 (5) establish the rate of interest that shall be annually credited to each 24 member's individual contribution account in accordance with AS 14.25.145 and 25 AS 39.35.100 and the rate of interest that shall be annually credited to each member's 26 account in the health reimbursement arrangement plan under AS 39.30.300 - 27 39.30.495; the rate of interest shall be adopted on the basis of the probable effective 28 rate of interest on a long-term basis, and the rate may be changed from time to time; 29 (6) adopt a contribution surcharge as necessary under AS 39.35.160(c); 30 (7) coordinate with the retirement system administrator to have an 31 annual actuarial valuation of each retirement system prepared to determine system
01 assets, accrued liabilities, and funding ratios and to certify to the appropriate 02 budgetary authority of each employer in the system 03 (A) an appropriate contribution rate for normal costs; and 04 (B) an appropriate contribution rate for liquidating any past 05 service liability; 06 (8) review actuarial assumptions prepared and certified by a member 07 of the American Academy of Actuaries and conduct experience analyses of the 08 retirement systems not less than once every four years, except for health cost 09 assumptions, which shall be reviewed annually; the results of all actuarial assumptions 10 prepared under this paragraph shall be reviewed and certified by a second member of 11 the American Academy of Actuaries before presentation to the board; 12 (9) contract for an independent audit of the state's actuary not less than 13 once every four years; 14 (10) contract for an independent audit of the state's performance 15 consultant not less than once every four years; 16 (11) obtain an external performance review to evaluate the investment 17 policies of each fund entrusted to the board and report the results of the review to the 18 appropriate fund fiduciary; 19 (12) by the first day of each regular legislative session, report to the 20 governor, the legislature, and the individual employers participating in the state's 21 retirement systems on the financial condition of the systems in regard to 22 (A) the valuation of trust fund assets and liabilities; 23 (B) current investment policies adopted by the board; 24 (C) a summary of assets held in trust listed by the categories of 25 investment; 26 (D) the income and expenditures for the previous fiscal year; 27 (E) the return projections for the next calendar year; 28 (F) one-year, three-year, five-year, and 10-year investment 29 performance for each of the funds entrusted to the board; and 30 (G) other statistical data necessary for a proper understanding 31 of the financial status of the systems;
01 (13) submit quarterly updates of the investment performance reports to 02 the Legislative Budget and Audit Committee; and 03 (14) develop an annual operating budget. 04 (b) The board may 05 (1) employ outside investment advisors to review investment policies; 06 (2) enter into an agreement with the fiduciary of another state fund in 07 order to assume the management and investment of those assets; 08 (3) contract for other services necessary to execute the board's powers 09 and duties; 10 (4) enter into confidentiality agreements that would exempt records 11 from AS 40.25.110 and 40.25.120 if the records contain information that could affect 12 the value of investment by the board or that could impair the ability of the board to 13 acquire, maintain, or dispose of investments. 14 (c) Expenses for the board and the operations of the board shall be paid from 15 the retirement fund. 16 * Sec. 62. AS 37.10.250 is amended to read: 17 Sec. 37.10.250. Compensation of trustees. Trustees, other than trustees who 18 are employees of the state, [OR] a political subdivision of the state, or a school 19 district or regional educational attendance area in the state, receive an honorarium 20 of $150 for each day spent at a meeting of the board or at a meeting of a subcommittee 21 of the board or at a public meeting as a representative of the board, including a day in 22 which a trustee travels to or from a meeting. Trustees who are state employees are 23 entitled to administrative leave for service as a trustee. Trustees who are employees of 24 a political subdivision of the state or a school district or regional educational 25 attendance area in the state are entitled to leave benefits provided by their employers 26 comparable to those provided to state employees for service as a trustee. Trustees are 27 entitled to per diem and travel expenses authorized for boards and commissions under 28 AS 39.20.180. 29 * Sec. 63. AS 37.10.270(a) is amended to read: 30 (a) The board may [SHALL] appoint an investment advisory council 31 composed of at least three and not more than five members. Members of the council
01 shall possess experience and expertise in financial investments and management of 02 investment portfolios for public, corporate, or union pension benefit funds, 03 foundations, or endowments. 04 * Sec. 64. AS 37.10.390 is amended to read: 05 Sec. 37.10.390. Definitions. In AS 37.10.210 - 37.10.390, unless the context 06 otherwise requires, 07 (1) "board" means the board of trustees of the Alaska Retirement 08 Management [STATE PENSION INVESTMENT] Board; 09 (2) "fund" means the fund or funds composed of the assets of each 10 of the retirement systems administered and managed by the board; 11 (3) "recognized competence" means a minimum of 10 years' 12 professional experience working or teaching in the field of investment 13 management, finance, banking, economics, accounting, pension administration, 14 or actuarial analysis; 15 (4) "retirement systems" or "systems" means the teachers' retirement 16 system, the judicial retirement system, the Alaska National Guard and Alaska Naval 17 Militia retirement system, [AND] the public employees' retirement system, the State 18 of Alaska teachers' and public employees' retiree health reimbursement 19 arrangement plan, and the elected public officers' retirement system under 20 former AS 39.37. 21 * Sec. 65. AS 37.14.160 is amended to read: 22 Sec. 37.14.160. Duties of the commissioner of revenue. The commissioner 23 of revenue is the treasurer of the trust fund created in AS 37.14.110 and shall 24 (1) in carrying out investment duties under this section, exercise the 25 same powers and duties established for the Alaska Retirement Management [STATE 26 PENSION INVESTMENT] Board in AS 37.10.210 [AS 14.25.180(c)]; 27 (2) deposit the principal and income from investments in separate 28 principal and income accounts for the fund; 29 (3) invest and maintain accounting records that distinguish between the 30 principal and income of the fund; 31 (4) provide reports to the board established under AS 37.14.120 on the
01 condition and investment performance of the fund. 02 * Sec. 66. AS 37.14.210(4) is amended to read: 03 (4) invest and reinvest the assets of the trust as provided in this section 04 and as provided for the investment of funds under [AS 14.25.180(c) AND] 05 AS 37.14.170; 06 * Sec. 67. AS 37.14.520(4) is amended to read: 07 (4) invest and reinvest the assets of the fund as provided in this section 08 and as provided for the investment of funds under [AS 14.25.180(c) AND] 09 AS 37.14.170; 10 * Sec. 68. AS 37.14.610 is amended to read: 11 Sec. 37.14.610. Duties of the commissioner. The commissioner of revenue 12 has the power and duty to 13 (1) act as official custodian of the cash and investments belonging to 14 the Arctic Winter Games Team Alaska trust by securing adequate and safe custodial 15 facilities; 16 (2) exercise the same powers and duties as those established for the 17 Alaska Retirement Management [STATE PENSION INVESTMENT] Board in 18 AS 37.10.210 [AS 14.25.180(b) AND (c)]; 19 (3) invest the assets of the trust in a manner likely to yield at least five 20 percent real rate of return over time; 21 (4) maintain accounting records of the trust in accordance with 22 investment accounting principles; 23 (5) enter into and enforce contracts or agreements considered 24 necessary for the investment purposes of the trust; 25 (6) report annually to the board of directors of the Arctic Winter 26 Games Team Alaska the condition and performance of the trust; 27 (7) monitor use of trust money by the Arctic Winter Games Team 28 Alaska; and 29 (8) do all acts that the commissioner of revenue considers necessary or 30 proper in administering the assets of the trust. 31 * Sec. 69. AS 39.30.090(a) is amended to read:
01 (a) The Department of Administration may obtain a policy or policies of group 02 insurance covering state employees, persons entitled to coverage under AS 14.25.168, 03 14.25.480, AS 22.25.090, AS 39.35.535, 39.35.880, or former AS 39.37.145, 04 employees of other participating governmental units, or persons entitled to coverage 05 under AS 23.15.136, subject to the following conditions: 06 (1) A group insurance policy shall provide one or more of the 07 following benefits: life insurance, accidental death and dismemberment insurance, 08 weekly indemnity insurance, hospital expense insurance, surgical expense insurance, 09 dental expense insurance, audiovisual insurance, or other medical care insurance. 10 (2) Each eligible employee of the state, the spouse and the unmarried 11 children chiefly dependent on the eligible employee for support, and each eligible 12 employee of another participating governmental unit shall be covered by the group 13 policy, unless exempt under regulations adopted by the commissioner of 14 administration. 15 (3) A governmental unit may participate under a group policy if 16 (A) its governing body adopts a resolution authorizing 17 participation, and payment of required premiums; 18 (B) a certified copy of the resolution is filed with the 19 Department of Administration; and 20 (C) the commissioner of administration approves the 21 participation in writing. 22 (4) In procuring a policy of group health or group life insurance as 23 provided under this section or excess loss insurance as provided in AS 39.30.091, the 24 Department of Administration shall comply with the dual choice requirements of 25 AS 21.86.310, and shall obtain the insurance policy from an insurer authorized to 26 transact business in the state under AS 21.09, a hospital or medical service corporation 27 authorized to transact business in this state under AS 21.87, or a health maintenance 28 organization authorized to operate in this state under AS 21.86. An excess loss 29 insurance policy may be obtained from a life or health insurer authorized to transact 30 business in this state under AS 21.09 or from a hospital or medical service corporation 31 authorized to transact business in this state under AS 21.87.
01 (5) The Department of Administration shall make available bid 02 specifications for desired insurance benefits or for administration of benefit claims and 03 payments to (A) all insurance carriers authorized to transact business in this state 04 under AS 21.09 and all hospital or medical service corporations authorized to transact 05 business under AS 21.87 who are qualified to provide the desired benefits; and (B) to 06 insurance carriers authorized to transact business in this state under AS 21.09, hospital 07 or medical service corporations authorized to transact business under AS 21.87, and 08 third-party administrators licensed to transact business in this state and qualified to 09 provide administrative services. The specifications shall be made available at least 10 once every five years. The lowest responsible bid submitted by an insurance carrier, 11 hospital or medical service corporation, or third-party administrator with adequate 12 servicing facilities shall govern selection of a carrier, hospital or medical service 13 corporation, or third-party administrator under this section or the selection of an 14 insurance carrier or a hospital or medical service corporation to provide excess loss 15 insurance as provided in AS 39.30.091. 16 (6) If the aggregate of dividends payable under the group insurance 17 policy exceeds the governmental unit's share of the premium, the excess shall be 18 applied by the governmental unit for the sole benefit of the employees. 19 (7) A person receiving benefits under AS 14.25.110, AS 22.25, 20 AS 39.35, or former AS 39.37 may continue the life insurance coverage that was in 21 effect under this section at the time of termination of employment with the state or 22 participating governmental unit. 23 (8) A person electing to have insurance under (7) of this subsection 24 shall pay the cost of this insurance. 25 (9) For each permanent part-time employee electing coverage under 26 this section, the state shall contribute one-half the state contribution rate for permanent 27 full-time state employees, and the permanent part-time employee shall contribute the 28 other one-half. 29 (10) A person receiving benefits under AS 14.25, AS 22.25, AS 39.35, 30 or former AS 39.37 may obtain auditory, visual, and dental insurance for that person 31 and eligible dependents under this section. The level of coverage for persons over 65
01 shall be the same as that available before reaching age 65 except that the benefits 02 payable shall be supplemental to any benefits provided under the federal old age, 03 survivors, and disability insurance program. A person electing to have insurance 04 under this paragraph shall pay the cost of the insurance. The commissioner of 05 administration shall adopt regulations implementing this paragraph. 06 (11) A person receiving benefits under AS 14.25, AS 22.25, AS 39.35, 07 or former AS 39.37 may obtain long-term care insurance for that person and eligible 08 dependents under this section. A person who elects insurance under this paragraph 09 shall pay the cost of the insurance premium. The commissioner of administration 10 shall adopt regulations to implement this paragraph. 11 (12) Each licensee holding a current operating agreement for a vending 12 facility under AS 23.15.010 - 23.15.210 shall be covered by the group policy that 13 applies to governmental units other than the state. 14 * Sec. 70. AS 39.30.095(d) is amended to read: 15 (d) If the commissioner of administration determines that there is more money 16 in the fund than the amount needed to pay premiums, benefits, and administrative 17 costs for the current fiscal year, the surplus, or so much of it as the commissioner of 18 administration considers advisable, may be invested by the commissioner of revenue 19 in the same manner as retirement funds are invested under AS 37.10.210 and 20 37.10.220 [AS 14.25.180]. 21 * Sec. 71. AS 39.30.150(b) is amended to read: 22 (b) Employees of the division of marine transportation included in 23 AS 39.35.095 - 39.35.680 [THE PUBLIC EMPLOYEES' RETIREMENT SYSTEM] 24 through the process of collective bargaining under AS 39.35.680(21)(D) may, under 25 the terms of a collective bargaining agreement, utilize contributions made under (a) of 26 this section on their behalf to offset the costs of inclusion in the public employees' 27 retirement system; however, 28 (1) the state is placed under no obligation to continue making 29 contributions under this section if the state resumes participation in the federal social 30 security system; 31 (2) the bargaining agreement must provide a mechanism for satisfying
01 any residual liabilities that might exist if the state resumes participation in the federal 02 social security system; and 03 (3) funds contributed under (a) of this section on behalf of employees 04 who are not covered by maritime union contracts may not be obligated or expended to 05 pay any costs associated with the inclusion of marine transportation employees in 06 AS 39.35.095 - 39.35.680 [THE PUBLIC EMPLOYEES' RETIREMENT SYSTEM]. 07 * Sec. 72. AS 39.30 is amended by adding a new section to read: 08 Sec. 39.30.151. Administrator. The commissioner of administration or the 09 commissioner's designee is the administrator of the system. 10 * Sec. 73. AS 39.30 is amended by adding a new section to read: 11 Sec. 39.30.154. Powers and duties of the administrator. The administrator 12 has the same powers and duties with regard to the plan as those set out in 13 AS 14.25.004. 14 * Sec. 74. AS 39.30.155 is repealed and reenacted to read: 15 Sec. 39.30.155. Management and investment of fund. The Alaska 16 Retirement Management Board is the fiduciary of the fund and has the same powers 17 and duties under this section in regard to the fund as are provided under AS 37.10.210. 18 * Sec. 75. AS 39.30.160(a) is amended to read: 19 (a) The Department of Administration shall, in accordance with policies 20 prescribed by regulations of the Alaska Retirement Management [PUBLIC 21 EMPLOYEES RETIREMENT] Board, provide to employees for whom special 22 individual employee benefit accounts are established under AS 39.30.150 the 23 following benefit options: 24 (1) supplemental health benefits; [,] 25 (2) supplemental death benefits; [,] 26 (3) supplemental disability benefits; [,] and 27 (4) supplemental dependent care benefits. 28 * Sec. 76. AS 39.30.160(e) is amended to read: 29 (e) Regulations adopted by the board [PUBLIC EMPLOYEES 30 RETIREMENT BOARD] implementing AS 39.30.150 and this section are not subject 31 to AS 44.62 (Administrative Procedure Act).
01 * Sec. 77. AS 39.30.175(a) is amended to read: 02 (a) The board [ALASKA STATE PENSION INVESTMENT BOARD] is the 03 fiduciary of the mandatory receipts, under AS 39.30.150(a), of the employee benefits 04 program established under AS 39.30.150 - 39.30.180 and has the same powers and 05 duties concerning the management and investment in regard to those receipts as are 06 provided under AS 37.10.210 [AS 14.25.180]. 07 * Sec. 78. AS 39.30.180 is amended by adding a new paragraph to read: 08 (3) "board" means the board of trustees of the Alaska Retirement 09 Management Board established under AS 37.10.210. 10 * Sec. 79. AS 39.30 is amended by adding new sections to read: 11 Article 5. State of Alaska Teachers' and Public Employees' Retiree Health 12 Reimbursement Arrangement Plan. 13 Sec. 39.30.300. State of Alaska Teachers' and Public Employees' Retiree 14 Health Reimbursement Arrangement Plan established. The State of Alaska 15 Teachers' and Public Employees' Retiree Health Reimbursement Arrangement Plan is 16 established for teachers who first become members of the defined contribution plan of 17 the teachers' retirement system under AS 14.25.310 - 14.25.590 on or after July 1, 18 2005, and employees of the state, political subdivisions of the state, and public 19 organizations of the state who first become members of the defined contribution plan 20 of the public employees' retirement system under AS 39.35.700 - 39.35.990 on or after 21 July 1, 2005. 22 Sec. 39.30.310. Purpose and effective date. (a) The purpose of the plan is to 23 allow medical care expenses to be reimbursed from individual savings accounts 24 established for eligible persons. 25 (b) The plan becomes effective July 1, 2005, at which time contributions by 26 employers begin. 27 Sec. 39.30.320. Attorney general. The attorney general of the state is the 28 legal counsel for the plan and shall advise the administrator and represent the plan in a 29 legal proceeding. 30 Sec. 39.30.330. Administrator. The commissioner of administration or the 31 commissioner's designee is the administrator of the plan.
01 Sec. 39.30.340. Powers and duties of the administrator. The administrator 02 shall establish a teachers' and public employees' retiree health reimbursement 03 arrangement plan trust fund in which the assets of the plan shall be deposited and held. 04 The administrator has the same powers and duties with regard to the plan and the trust 05 fund as provided in AS 14.25.004. 06 Sec. 39.30.350. Employer contribution fund. The fund established under 07 AS 39.30.340 is an employer contribution fund. The value of the fund reflects 08 employer contributions, expenses, and investment gains and losses. Employee 09 contributions to the fund are not permitted. 10 Sec. 39.30.360. Management and investment of the fund. The Alaska 11 Retirement Management Board is the fiduciary of the fund and has the same powers 12 and duties under this section in regard to the fund as are provided under AS 37.10.220. 13 Sec. 39.30.370. Contributions by employers. For each member of the plan, 14 an employer shall contribute to the teachers' and public employees' retiree health 15 reimbursement arrangement plan trust fund an amount equal to two percent of the 16 employer's average annual employee compensation. The administrator shall maintain 17 a record for each member to account for employer contributions on behalf of that 18 member. The board shall establish by regulation the rate of interest to be applied 19 annually to the amount in a member's individual account. 20 Sec. 39.30.380. Termination of employment. A person who terminates 21 employment before meeting the eligibility requirements of AS 14.25.470 or 22 AS 39.35.870 loses any right to the contributions made on behalf of the person to the 23 teachers' and public employees' retiree health reimbursement arrangement trust fund. 24 If a person returns to employment with a participating employer, the person's account 25 balance shall be restored in the amount recorded on the date of termination from the 26 trust, with interest. The earlier period of employment with a participating employer 27 shall be credited towards eligibility for medical benefits. 28 Sec. 39.30.390. Eligibility and reimbursement. Persons who meet the 29 eligibility requirements of AS 14.25.470 and AS 39.35.870 are eligible for 30 reimbursements from the individual account established for a member under the plan, 31 except members do not have to retire directly from the system. A person who is the
01 dependent child of an eligible member is eligible for reimbursements if the eligible 02 member and surviving spouse have both died so long as the person meets the 03 definition of dependent child. 04 Sec. 39.30.400. Benefits payable from the individual account. (a) The 05 administrator may deduct the cost of monthly premiums from the individual account 06 for retiree major medical insurance on behalf of an eligible person who elected retiree 07 major medical insurance under AS 14.25.480 or AS 39.35.880. 08 (b) Upon application of an eligible person, the administrator shall reimburse to 09 the eligible person the costs for medical care expenses as defined in 26 U.S.C. 213(d). 10 Reimbursement is limited to the medical expenses of 11 (1) an eligible member, the spouse of an eligible member, and the 12 dependent children of an eligible member; or 13 (2) a surviving spouse and the dependent children of an eligible 14 member dependent on the surviving spouse. 15 (c) When the member's individual account balance is exhausted, the insurance 16 premium deductions under (a) of this section and the reimbursement of medical care 17 expenses under (b) of this section end. 18 (d) If all eligible persons die before exhausting the member's individual 19 account, the account balance shall revert to the plan. 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) "eligible person" means a person who meets the eligibility 02 requirements of AS 14.25.470 or AS 39.35.870; 03 (5) "dependent child" has the meaning given in AS 39.35.680; 04 (6) "employer" has the meaning given in AS 14.25.590 for employers 05 of teachers in the defined contribution plan established in AS 14.25.310 - 14.25.590 06 and has the meaning given in AS 39.35.990 for employers of public employees in the 07 defined contribution plan established in AS 39.35.700 - 39.35.990; 08 (7) "fund" means the assets of the teachers' and public employees' 09 retiree health reimbursement arrangement plan trust fund; 10 (8) "individual account" means the record established by the 11 administrator for individual employees under the teachers' and public employees' 12 retiree health reimbursement arrangement plan; 13 (9) "member" means a member of the defined contribution plan of the 14 teachers' retirement system in AS 14.25.310 - 14.25.590 or a member of the public 15 employees' retirement system in AS 39.35.700 - 39.35.990; 16 (10) "plan" means the State of Alaska Teachers' and Public Employees' 17 Retiree Health Reimbursement Arrangement Plan established in AS 39.30.300; 18 (11) "qualified domestic relations order" has the meaning given in 19 AS 14.25.220. 20 * Sec. 80. AS 39.35 is amended by adding new sections to read: 21 Article 1. Administration of the Public Employees' Retirement System of Alaska. 22 Sec. 39.35.001. Purpose. The purpose of this chapter is to encourage 23 qualified personnel to enter and remain in service with participating employers by 24 establishing plans for the payment of retirement, disability, and death benefits to or on 25 behalf of the members. 26 Sec. 39.35.002. Attorney general. The attorney general of the state is the 27 legal counsel for the system and shall advise the administrator and represent the 28 system in a legal proceeding. 29 Sec. 39.35.003. Administrator. (a) The commissioner of administration or 30 the commissioner's designee is the administrator of the system. 31 (b) The commissioner of administration shall adopt regulations to govern the
01 operation of the system. 02 Sec. 39.35.004. Powers and duties of the administrator. (a) The 03 administrator shall 04 (1) establish and maintain an adequate system of accounts; 05 (2) transmit the funds deposited in the system to the retirement fund 06 established and maintained by the Alaska Retirement Management Board; 07 (3) approve or disapprove claims for retirement benefits; 08 (4) make payments for the various purposes specified; 09 (5) submit periodic reports or statements of account that are needed; 10 (6) issue a statement of account to an employee not less than once each 11 year showing the amount of the employee's contributions to the applicable plan in the 12 system; 13 (7) formulate and recommend to the commissioner of administration 14 regulations to govern the operation of the system; 15 (8) as soon as possible after the close of each fiscal year, and not later 16 than six months after the close of each fiscal year, send to the governor and the 17 legislature an annual statement on the operations of each of the plans in the system 18 containing 19 (A) a balance sheet; 20 (B) a statement of income and expenditures for the year; 21 (C) a report on valuation of trust fund assets; 22 (D) a summary of assets held in the trust fund listed by the 23 categories of investment, as provided by the Alaska Retirement Management 24 Board; 25 (E) other statistical financial data that are necessary for proper 26 understanding of the financial condition of the system as a whole and each plan 27 in the system and the result of its operations; 28 (9) engage an independent certified public accountant to conduct an 29 annual audit of each plan's accounts and the annual report of the system's financial 30 condition and activity; 31 (10) report to the Legislative Budget and Audit Committee concerning
01 the condition and administration of each plan and distribute the report to the members 02 of each plan in the system; 03 (11) publish an information handbook for each plan in the system at 04 intervals that the administrator considers appropriate; 05 (12) meet at least annually with the board to review the condition and 06 management of the retirement systems and to review significant changes to policies, 07 regulations or benefits; and 08 (13) do whatever else may be necessary to carry out the purposes of 09 each plan in the system. 10 (b) The administrator is authorized to charge uniform fees to members' 11 accounts to cover the ongoing cost of operating each plan in the system. 12 (c) The administrator is authorized to contract with public and private entities 13 to provide record keeping, benefits payments, and other functions necessary for the 14 administration of each plan in the system. 15 Sec. 39.35.005. Regulations. (a) Regulations adopted by the commissioner 16 of administration under this chapter relate to the internal management of state 17 agencies, and the adoption of these regulations is not subject to AS 44.62 18 (Administrative Procedure Act). 19 (b) Notwithstanding (a) of this section, a regulation adopted under this chapter 20 shall be published in the Alaska Administrative Register and Code for informational 21 purposes. 22 (c) Each regulation adopted under this chapter must conform to the style and 23 format requirements of the drafting manual for administrative regulations that is 24 published under AS 44.62.050. 25 (d) At least 30 days before the adoption, amendment, or repeal of a regulation 26 under this chapter, the commissioner shall provide notice of the action that is being 27 considered. The notice shall be 28 (1) posted in public buildings throughout the state; 29 (2) published in one or more newspapers of general circulation in each 30 judicial district of the state; 31 (3) mailed to each person or group that has filed a request for notice of
01 proposed action with the commissioner; and 02 (4) furnished to each member of the legislature and to the Legislative 03 Affairs Agency. 04 (e) Failure to mail notice to a person as required under (d)(3) of this section 05 does not invalidate an action taken by the commissioner. 06 (f) The commissioner may hold a public hearing on a proposed regulation. 07 (g) A regulation adopted under this chapter takes effect 30 days after adoption 08 by the commissioner. 09 (h) Notwithstanding the other provisions of this section, a regulation may be 10 adopted, amended, or repealed, effective immediately, as an emergency regulation by 11 the commissioner. For an emergency regulation to be effective the commissioner 12 must find that the adoption, amendment, or repeal of the regulation is necessary for the 13 immediate preservation of the orderly operation of the system. The commissioner 14 shall, within 10 days after adoption of an emergency regulation, give notice of the 15 adoption under (d) of this section. 16 (i) In this section, "regulation" has the meaning given in AS 44.62.640(a). 17 Sec. 39.35.006. Appeals. An employer, member, annuitant, or beneficiary 18 may appeal a decision made by the administrator to the office of administrative 19 hearings established under AS 44.64. An aggrieved party may appeal a final decision 20 to the superior court. 21 Sec. 39.35.007. Investment management of retirement system funds. The 22 Alaska Retirement Management Board established under 37.10.210 is the fiduciary of 23 the system funds. 24 Sec. 39.35.008. Definitions. In AS 39.35.001 - 39.35.008, 25 (1) "commissioner" means the commissioner of administration; 26 (2) "plan" means the retirement plan established in AS 39.35.095 - 27 39.35.680 or the retirement plan established in AS 39.35.700 - 39.35.990; 28 (3) "system" means all retirement plans established under the public 29 employees' retirement system. 30 * Sec. 81. AS 39.35 is amended by adding a new section to read: 31 Article 2. Public Employees First Hired before July 1, 2005.
01 Sec. 39.35.095. Applicability of AS 39.35.095 - 39.35.680 to employees first 02 hired before July 1, 2005. The following provisions of this chapter apply only to 03 members first hired before July 1, 2005: AS 39.35.095 - 39.35.680. 04 * Sec. 82. AS 39.35.100 is amended to read: 05 Sec. 39.35.100. Accounting. (a) The commissioner of administration shall 06 establish and maintain an adequate system of accounts and records for the plan 07 [SYSTEM]. The accounts and records shall be integrated with the accounts, records, 08 and procedures of the employers to the end that they operate most effectively and at 09 minimum expense, and that duplication of records and accounts is avoided. 10 (b) All income of the pension fund and all disbursements made by the fund 11 shall be credited or charged, whichever is appropriate, to the following accounts: 12 (1) An individual account shall be maintained for each employee to 13 record the amount of the employee's mandatory contributions collected under 14 AS 39.35.160(a). As of the last day of each calendar year and each fiscal year 15 beginning with June 30, 1969, this account shall be credited with interest, by applying 16 [ONE HALF OF] the prescribed rate of interest as determined by the board to the 17 balance in the account as of that date. Within one year following retirement, the 18 amount actuarially determined as necessary to fully fund the benefits to be received 19 shall be transferred first from the employee contribution account and, after the 20 employee contribution account has been exhausted, then from the employer 21 contribution account into the retirement reserve account. 22 (2) An individual account shall be maintained for each employee to 23 record the amount of the employee's voluntary contributions. As of the last day of 24 each calendar year and each fiscal year beginning with June 30, 1969, this account 25 shall be credited with interest, by applying [ONE HALF OF] the prescribed rate of 26 interest as determined by the board to the balance in the account as of that date. 27 Amounts that, before termination of employment, are withdrawn by an employee from 28 the employee's savings account shall be charged to that account. Upon retirement, the 29 amount actuarially determined as necessary to fully fund the benefits to be received 30 shall be transferred first from the employee savings account and, after the employee 31 savings account has been exhausted, then from the employer contribution account into
01 the retirement reserve account. 02 (3) A separate account for each employer shall be maintained. The 03 account shall be credited with contributions of the employer. This account shall be 04 charged with the employer's actuarial charge for pension, death benefits, and other 05 benefits paid under this plan [SYSTEM] to or on behalf of the employee of the 06 employer. After an allowance for interest credited to employee contribution accounts 07 and employee savings accounts, the investment income of the pension fund shall be 08 allocated to the retirement reserve account and to each employer asset share account 09 according to the ratio that the average of the assets in the account as of the beginning 10 and as of the end of the fiscal year bears to the total of the average balance of the 11 retirement reserve account and all employer accounts. 12 (4) An expense account shall be maintained for the plan [SYSTEM]. 13 This account shall be charged with all disbursements representing administrative 14 expenses incurred by the plan [SYSTEM]. At the end of the year the expense account 15 shall be allocated to each employer in accordance with (3) of this subsection. 16 Expenditures from this account shall be included in the governor's budget for each 17 fiscal year and are subject to approval by the legislature. 18 * Sec. 83. AS 39.35 is amended by adding a new section to article 1 to read: 19 Sec. 39.35.115. Defined benefit retirement plan. (a) A defined benefit 20 retirement plan for employees of the state, political subdivisions, and public 21 organizations is created. The plan becomes effective January 1, 1961, at which time 22 contributions by the employers and members begin. 23 (b) The retirement plan established by AS 39.35.095 - 39.35.680 is intended to 24 qualify under 26 U.S.C. 401(a) and 414(d) (Internal Revenue Code) as a qualified 25 retirement plan established and maintained by the state for its employees and for the 26 employees of political subdivisions, public corporations, and public organizations of 27 the state, and for the employees of other employers whose participation is authorized 28 by AS 39.35.095 - 39.35.680 and who participate in this plan. 29 (c) An amendment to AS 39.35.095 - 39.35.680 does not provide a person 30 with a vested right to a benefit if the Internal Revenue Service determines that the 31 amendment will result in disqualification of the plan under the Internal Revenue Code.
01 * Sec. 84. AS 39.35.120 is amended to read: 02 Sec. 39.35.120. Commencement of participation. (a) An employee of the 03 state shall be included in this system upon commencement of employment with the 04 state, or on January 1, 1961, whichever is later. Unless an employee participates in a 05 [HAS ELECTED TO PARTICIPATE IN THE OPTIONAL] university retirement 06 program under AS 14.40.661 - 14.40.799, an employee of a political subdivision or 07 public organization that becomes an employer shall be included in the system on the 08 effective date of the employer's participation or the date of the employee's 09 commencement of employment with the employer, whichever is later. 10 (b) Inclusion in the system is a condition of employment for an employee 11 except as otherwise provided for 12 (1) an elected official; 13 (2) an employee making an election under AS 39.35.150(b); and 14 (3) an employee of the university who participates in a [HAS 15 ELECTED TO PARTICIPATE IN THE OPTIONAL] university retirement program 16 under AS 14.40.661 - 14.40.799. 17 * Sec. 85. AS 39.35.131 is amended to read: 18 Sec. 39.35.131. Membership in teachers' and public employees' 19 retirement systems. (a) A person who is employed at least half-time in the plan 20 [SYSTEM] during the same period that the person is employed at least half-time in a 21 position in the teachers' retirement plan [SYSTEM] under AS 14.25.009 - 14.25.220 22 [AS 14.25] shall receive credited service under each plan [SYSTEM] for half-time 23 employment. However, the amount of credited service a person receives under the 24 plan [SYSTEM] during a school year may not exceed the amount necessary, when 25 added to the amount of credited service earned during the school year under the 26 teachers' retirement system, to equal one year of credited service. 27 (b) A person who was employed at least half-time in a position in the teachers' 28 retirement plan [SYSTEM] under AS 14.25.009 - 14.25.220 [AS 14.25] in the same 29 period that the person was employed at least half-time in a position in this plan 30 [SYSTEM] may claim credited service in both plan [SYSTEMS] for employment 31 before May 31, 1989. To obtain this credited service, the person shall claim the
01 service and verify the period of half-time employment. When eligibility for half-time 02 service credit has been established, an indebtedness shall be determined to the 03 retirement plan [SYSTEM] in which the person did not participate. The amount of 04 the indebtedness is the full actuarial cost of providing benefits for the credited service 05 claimed. Interest as prescribed by regulation accrues on that indebtedness beginning 06 on the later of July 1, 1989, or the date on which the member is first eligible to claim 07 the service. Any outstanding indebtedness existing at the time the person retires will 08 require an actuarial adjustment to the benefits payable based on that service. 09 * Sec. 86. AS 39.35.158 is amended to read: 10 Sec. 39.35.158. Administrative director of courts. An administrative 11 director of the Alaska court system who withdraws from the judicial retirement system 12 under AS 22.25.012 is eligible for membership in the plan [SYSTEM] and shall 13 receive credited service in the plan [SYSTEM] for service rendered as administrative 14 director. To be eligible for membership in the plan [SYSTEM] under this subsection, 15 the administrative director must contribute to the plan [SYSTEM] 16 (1) the amount the director would have contributed if the director had 17 been a member during the director's period of membership in the judicial retirement 18 system; and 19 (2) any contributions for services as administrative director refunded 20 by the plan [SYSTEM] at the time the director became a member of the judicial 21 retirement system. 22 * Sec. 87. AS 39.35.165(a) is amended to read: 23 (a) An employee who is eligible to purchase credited service under 24 AS 39.35.310, 39.35.330, 39.35.340, 39.35.342, 39.35.345, [39.35.350,] 39.35.360, or 25 39.35.370, a member who is eligible to purchase credited service under AS 39.35.375, 26 or an elected public official who is eligible to purchase credited service under 27 AS 39.35.381 is an employee for purposes of this section. An employee may, in lieu 28 of making payments directly to the plan, elect to have the employee's employer make 29 payments as provided in this section. 30 * Sec. 88. AS 39.35.165(b) is amended to read: 31 (b) An employee may elect to have the employer make payments for all or any
01 portion of the amounts payable for the employee's purchase of credited service 02 through a salary reduction program as follows: 03 (1) the amounts paid under a salary reduction program are in lieu of 04 contributions by the employee making the election; the electing employee's salary or 05 other compensation shall be reduced by the amount paid by the employer under this 06 subsection; 07 (2) the employee shall make an irrevocable election under this section 08 to purchase credited service as permitted in AS 39.35.310, 39.35.330, 39.35.340, 09 39.35.342, 39.35.345, [39.35.350,] 39.35.360, 39.35.370, 39.35.375, or 39.35.381 and 10 before the employee's termination of employment; the irrevocable election must 11 specify the number of payroll periods that deductions will be made from the 12 employee's compensation and the dollar amount of deductions for each payroll period 13 during the specified number of payroll periods; the deductions made under this 14 paragraph cease upon the earlier of the member's termination of employment with the 15 employer or the member's death; amounts paid by an employer under (f) of this 16 section may not be applied toward the payment of the dollar amount of the deductions 17 representing the portion of the credited service that is being purchased by the member 18 through payroll deduction in accordance with the member's irrevocable election under 19 this subsection; 20 (3) amounts paid by an employer under this subsection shall be treated 21 as employer contributions for the purpose of determining tax treatment under the 22 Internal Revenue Code; the amounts paid by the employer under this section may not 23 be included in the member's gross income for income tax purposes until those amounts 24 are distributed by refund or retirement benefit payments. 25 * Sec. 89. AS 39.35.165(f) is amended to read: 26 (f) The commissioner may accept rollover contributions from a member [AND 27 DIRECT TRANSFERS, AS DESCRIBED IN THIS SUBSECTION, FOR THE 28 PURCHASE, IN WHOLE OR IN PART, OF CREDITED SERVICE FOR THE 29 REINSTATEMENT, IN WHOLE OR IN PART, OF FORFEITED CREDITED 30 SERVICE UNDER AS 39.35.350]. A rollover contribution [OR TRANSFER] as 31 described in this subsection shall also be treated as employer contributions for the
01 purpose of determining tax treatment under the Internal Revenue Code and may be 02 made by any one or a combination of the following methods: 03 (1) subject to the limitations prescribed in 26 U.S.C. 401(a)(3) and 26 04 U.S.C. 402(c), accepting eligible rollover distributions directly from one or more 05 retirement programs of another employer that are qualified under 26 U.S.C. 401(a) or 06 accepting rollovers directly from a member; 07 (2) subject to the limitations prescribed in 26 U.S.C. 408(d)(3)(A)(ii), 08 accepting from a member conduit rollover contributions that are received by the 09 employee from one or more conduit rollover individual retirement accounts previously 10 established by the member; 11 (3) subject to the limitations prescribed in 26 U.S.C. 403(b)(13), 12 accepting direct trustee-to-trustee transfers of all or a portion of the accounts of the 13 member, on or after January 1, 2002, from a tax sheltered annuity described in 26 14 U.S.C. 403(b); 15 (4) subject to the limitations prescribed in 26 U.S.C. 457(e)(17), 16 accepting direct trustee-to-trustee transfers of all or a portion of the accounts of the 17 member, on or after January 1, 2002, from an eligible deferred compensation plan of a 18 tax-exempt organization or a state or local government described in 26 U.S.C. 457(b); 19 (5) accepting direct trustee-to-trustee transfer from an account 20 established for the benefit of the member in AS 39.30.150 - 39.30.180 (Alaska 21 Supplemental Annuity Plan). 22 * Sec. 90. AS 39.35.165(g) is amended to read: 23 (g) Payments made under this section shall be applied to reduce the 24 employee's outstanding indebtedness described in AS 39.35.310, 39.35.330, 25 39.35.340, 39.35.342, 39.35.345, [39.35.350,] 39.35.360, 39.35.370, 39.35.375, or 26 39.35.381 at the time that the contributions are received by the plan. 27 * Sec. 91. AS 39.35.165(i) is amended to read: 28 (i) On satisfaction of the eligibility requirements of AS 39.35.310, 39.35.330, 29 39.35.340, 39.35.341, 39.35.345, [39.35.350,] 39.35.360, 39.35.370, 39.35.375, or 30 39.35.381, the requirements of this section, and the administrative filing requirements 31 specified by the commissioner, the plan shall adjust the employee's credited service
01 history and add any additional service credits acquired. 02 * Sec. 92. AS 39.35.200 is amended by adding a new subsection to read: 03 (d) An employee who receives a refund of contributions in accordance with 04 this section forfeits corresponding credited service under AS 39.35.095 - 39.35.680. 05 * Sec. 93. AS 39.35.270 is amended to read: 06 Sec. 39.35.270. Amount of employer's contributions. The amount of each 07 employer's contributions shall be determined by applying the employer's contribution 08 rate, as certified by the board, to the total compensation paid to the active employees 09 of the employer for each payroll period and by including any adjustments to 10 contributions required by AS 39.35.520(a). This amount shall be remitted by the 11 employer to the administrator in accordance with AS 39.35.610. 12 * Sec. 94. AS 39.35.270 is amended by adding a new subsection to read: 13 (b) When added to the member contribution determined under AS 39.35.250, 14 the employer contribution may not result in an amount less than the amount required, 15 as actuarially calculated, to fully fund the future liabilities of active members nor may 16 the employer contribution percentage under (a) of this section be set at less than 10 17 percent. 18 * Sec. 95. AS 39.35.340(f) is amended to read: 19 (f) An employee may not [CANNOT] be credited with a period of active 20 military service in the armed forces of the United States under this section if credit for 21 that military service was granted under AS 14.25.009 - 14.25.220 [AS 14.25]. 22 * Sec. 96. AS 39.35.340(h) is amended to read: 23 (h) The combined period of military service claimed under this section and 24 under AS 14.25.009 - 14.25.220 [AS 14.25] may not exceed five years. 25 * Sec. 97. AS 39.35.360(i) is amended to read: 26 (i) An employee who completes three years of credited service with an 27 employer, for which the employee makes contributions required by AS 39.35.095 - 28 39.35.680 [THIS CHAPTER], is entitled to credited service on a year-for-year basis 29 for service credited in the Civil Service Retirement System, rendered as an employee 30 of an Alaska Bureau of Indian Affairs (BIA) school, other than service as a teacher. 31 When eligibility for retroactive credited service under this subsection has been
01 established, an indebtedness of the employee to the plan [SYSTEM] shall be 02 determined as follows: (1) the employee's actual annual compensation, or the 03 calculated annual compensation for an employee who works fewer than 12 months, for 04 the most recent calendar year in which service is rendered to an employer before the 05 calendar year in which the employee first becomes eligible to claim service under this 06 subsection, multiplied by (2) the number of years of service in Alaska BIA schools 07 that is credited under this subsection, and this product multiplied by (3) six percent for 08 employees first eligible to claim this service before January 1, 1987, or eight and one- 09 half percent for employees first eligible to claim this service on or after January 1, 10 1987. Interest as prescribed by regulation accrues on the indebtedness beginning on 11 the date the employee may first claim the retroactive credited service. Any 12 outstanding indebtedness that exists at the time the employee retires requires an 13 actuarial adjustment to the benefits that are based on retroactive credited service under 14 this subsection. A retirement benefit payable under this subsection for Alaska BIA 15 service shall be reduced by an amount equal to the retirement benefits paid to the 16 member by the United States government for the same service. 17 * Sec. 98. AS 39.35.360(l) is amended to read: 18 (l) An administrative director of the Alaska Court System who withdraws 19 from the judicial retirement system under AS 22.25.012(b) is eligible for membership 20 in the plan [PUBLIC EMPLOYEES' RETIREMENT SYSTEM] and shall receive 21 credited service in this plan [SYSTEM] for service rendered as administrative 22 director. To be eligible for membership in this plan [SYSTEM] under this subsection, 23 the administrative director must contribute to the plan [SYSTEM] 24 (1) the amount that would have been contributed if the administrative 25 director had been a member during the period of the membership in the judicial 26 retirement system; and 27 (2) any contributions for service as administrative director refunded 28 from the plan [PUBLIC EMPLOYEES' RETIREMENT SYSTEM] at the time the 29 administrative director became a member of the judicial retirement system. 30 * Sec. 99. AS 39.35.370(g) is amended to read: 31 (g) When an employee who was employed as a dispatcher in a state trooper
01 office or in a police or fire department in the plan [PUBLIC EMPLOYEES' 02 RETIREMENT SYSTEM] applies for appointment to retirement, the employee may 03 convert the credited service for that position to credited service as a peace officer by 04 claiming the service as peace officer service. An employee who has converted 05 credited service to peace officer service under this subsection shall be treated as a 06 peace officer for purposes of AS 39.35.095 - 39.35.680 [THIS CHAPTER]. When the 07 member claims this credited service as peace officer service, an indebtedness of the 08 member to the plan [SYSTEM] shall be established. The indebtedness is equal to the 09 full actuarial cost of the conversion of the credited service to treatment as peace 10 officer service. Any outstanding indebtedness that exists at the time the member is 11 appointed to retirement shall [WILL] require an actuarial adjustment to the benefits 12 payable based upon the conversion of the credited service. 13 * Sec. 100. AS 39.35.375(a) is amended to read: 14 (a) An active or inactive member who has never been vested in this plan 15 [SYSTEM] or in the teachers' retirement plan [SYSTEM] under AS 14.25.009 - 16 14.25.220 [AS 14.25], who has at least two years of credited service in this plan 17 [SYSTEM], and who has membership service in the teachers' retirement system may 18 claim credited service in this plan [SYSTEM] in an amount equal to the membership 19 service the member has in the teachers' retirement system. The claimed credited 20 service may be added to service earned under AS 39.35.095 - 39.35.680 [THIS 21 CHAPTER] to enable the member to qualify for a public service benefit under this 22 section. The member may not claim credited service for membership service for 23 which the member has received a refund under AS 14.25.150 unless the member fully 24 pays the indebtedness as established under AS 14.25.063. The member may not claim 25 credited service in this plan [SYSTEM] based on unused sick leave under 26 AS 14.25.115. 27 * Sec. 101. AS 39.35.375(b) is amended to read: 28 (b) To claim credited service under this section, the member shall file a 29 written request with the administrator when the member applies to retire. The 30 administrator shall determine the full actuarial cost of benefits based on the member's 31 total credited service and shall transfer from the teachers' retirement system to this
01 plan [SYSTEM] an amount equal to the sum of the member contributions and any 02 indebtedness payments to the teachers' retirement system and the employer 03 contributions to the teachers' retirement system made on behalf of the employee 04 together with interest earned on those contributions and indebtedness payments. If the 05 amount to be transferred, when combined with the amount of employee contributions 06 and indebtedness payments to this plan [SYSTEM] and the amount of employer 07 contributions on behalf of the employee in this plan [SYSTEM], and interest earned 08 on contributions and indebtedness payments for the employee, is less than the full 09 actuarial cost computed under this subsection, an indebtedness to the plan [SYSTEM] 10 equal to the amount of the difference is established. Interest as prescribed by 11 regulation accrues on the indebtedness. The member must pay any outstanding 12 indebtedness existing at the time the member applies for retirement in full before the 13 member is appointed to retirement under this section. 14 * Sec. 102. AS 39.35.375(c) is amended to read: 15 (c) A member is entitled to receive a public service benefit under this section 16 if the member has at least a total of five years credited service under AS 39.35.095 - 17 39.35.680 [THIS CHAPTER] and credited service from the teachers' retirement plan 18 under AS 14.25.009 - 14.25.220 [SYSTEM] claimed under this section. A public 19 service benefit shall be calculated using the higher of the average monthly 20 compensation for service in this plan [SYSTEM] or the average base salary for 21 service in the teachers' retirement plan under AS 14.25.009 - 14.25.220 [SYSTEM]. 22 The amount of the benefit shall be calculated in accordance with AS 39.35.370(c). 23 * Sec. 103. AS 39.35.375(d) is amended to read: 24 (d) Credited service earned under either this plan [SYSTEM] or the teachers' 25 retirement system that has been claimed for a public service benefit under this section 26 may not be used for any other purpose. A member who claims credited service under 27 this section loses all rights to benefits under AS 14.25 based on the claimed credited 28 service. A member may not claim credited service under this section unless the 29 member claims all of the membership service the member has in the teachers' 30 retirement system. A public service benefit does not constitute a normal or early 31 retirement benefit for purposes of qualifying for a conditional service retirement
01 benefit under AS 14.25.125 or AS 39.35.385. 02 * Sec. 104. AS 39.35.375(f) is amended to read: 03 (f) Notwithstanding AS 14.25.063 and AS 39.35.350, a former member of the 04 teachers' retirement system who is an active member or inactive member of this plan 05 [SYSTEM] may reinstate, under this section, membership service earned under 06 AS 14.25 for which the member received a refund of contributions. 07 * Sec. 105. AS 39.35.375(f) is amended to read: 08 (f) Notwithstanding AS 14.25.063 [AND AS 39.35.350], a former member of 09 the teachers' retirement system who is an active member or inactive member of this 10 plan may reinstate, under this section, membership service earned under AS 14.25 for 11 which the member received a refund of contributions. 12 * Sec. 106. AS 39.35.375(g) is amended to read: 13 (g) If a member retires under this section and subsequently returns to work for 14 an employer under this plan [SYSTEM] or the teachers' retirement system, benefits 15 under this section shall cease during the period of reemployment and shall 16 recommence when the reemployment is ended. The credited service earned during the 17 period of reemployment may not be added to the credited service claimed for a public 18 service benefit under this section. If a member vests and meets the other eligibility 19 requirements under this system or the teachers' retirement system during the 20 reemployment, the member is entitled to a benefit under AS 14.25.009 - 14.25.220 21 [AS 14.25] or 39.35.095 - 39.35.680 [AS 39.35], as appropriate. 22 * Sec. 107. AS 39.35.375 is amended by adding a new subsection to read: 23 (h) In this section, 24 (1) "teachers' retirement system" and "teachers' retirement system 25 under AS 14.25" means the teachers' retirement plan established in AS 14.25.009 - 26 14.25.220; 27 (2) "membership service earned under AS 14.25" means membership 28 service earned under AS 14.25.009 - 14.25.220. 29 * Sec. 108. AS 39.35.381(a) is amended to read: 30 (a) An elected public officer is eligible for a public officer benefit if the officer 31 is retired under AS 14.25.009 - 14.25.220 [AS 14.25 (TEACHERS' RETIREMENT
01 SYSTEM)]. Only fully paid credited service as an elected public officer of a 02 municipality or other political subdivision, earned while the municipality or political 03 subdivision was an employer under this plan [SYSTEM] and while the person was 04 employed full-time under AS 14.25.009 - 14.25.220 [AS 14.25], may be counted 05 under this section. 06 * Sec. 109. AS 39.35.385(f) is amended to read: 07 (f) Subject to AS 39.35.450, an employee is eligible for a normal retirement 08 benefit at age 60 or an early retirement benefit at age 55 if the employee was first 09 hired as a legislative employee before May 30, 1987, and has at least 120 [60] days of 10 credited service as an employee of the legislature, other than as an employee of the 11 Office of the Ombudsman or the office of victims' rights, during each of five 12 legislative sessions. An employee who was first hired as a legislative employee on or 13 after May 30, 1987, and is otherwise eligible under this subsection must have at least 14 120 [80] days of credited service during each of five legislative sessions to receive 15 benefits under this subsection. 16 * Sec. 110. AS 39.35.410(f) is amended to read: 17 (f) An employee is not entitled to an occupational disability benefit unless the 18 employee files an application for it with the administrator within 90 days of the date of 19 terminating employment. If the employee is unable to meet a filing requirement of 20 this subsection, it may be waived by the commissioner [PUBLIC EMPLOYEES' 21 RETIREMENT BOARD] if there are extraordinary circumstances that resulted in the 22 employee's inability to meet the filing requirement. [THE BOARD MAY 23 DELEGATE THE AUTHORITY TO WAIVE A FILING DEADLINE UNDER THIS 24 SUBSECTION TO THE ADMINISTRATOR.] 25 * Sec. 111. AS 39.35.475(a), as that subsection read following amendment by sec. 34, ch. 26 146, SLA 1980, until amended by sec. 41, ch. 82, SLA 1986, is amended to read: 27 (a) When the administrator determines that the cost of living has increased and 28 that the financial condition of the retirement fund permits, the administrator [HE] 29 shall increase benefit payments to persons receiving benefits under this plan. For 30 purposes of this subsection, the financial condition of the fund would only permit 31 an increase in benefits when the ratio of total fund assets to the accrued liability
01 meets or exceeds 110 percent. In this subsection, "accrued liability" means the 02 present value of all member benefits accrued by member service in this plan 03 [SYSTEM]. 04 * Sec. 112. AS 39.35.485(a) is amended to read: 05 (a) An employee who is eligible for a benefit calculated in accordance with 06 AS 39.35.370(c) is entitled to a benefit of at least $25 a month for each year of 07 credited service, not including adjustments made under AS 39.35.340 for military 08 service, [AS 39.35.350 FOR REINSTATEMENT OF CREDITED SERVICE,] 09 AS 39.35.360 for credit for earlier service, AS 39.35.370(c) for early retirement, 10 AS 39.35.420 for nonoccupational death benefits, AS 39.35.450 for the survivor's 11 option, former AS 39.35.460 for the level income option, AS 39.35.475 for the post- 12 retirement pension adjustment, and AS 39.35.480 for the cost of living. 13 * Sec. 113. AS 39.35.520(c) is amended to read: 14 (c) At least quarterly, [AT EACH REGULARLY SCHEDULED MEETING 15 OF THE PUBLIC EMPLOYEES' RETIREMENT BOARD,] the administrator shall 16 report to the commissioner of administration [BOARD] on all situations since the 17 administrator's last report in which an adjustment has been prohibited under (b) of this 18 section. If the commissioner of administration [BOARD] finds that there is reason 19 to believe that one or more of the conditions set out in (b) of this section have not been 20 met, the administrator shall notify the member or beneficiary that an adjustment will 21 be made to recover the overpayment. A member or beneficiary who receives notice of 22 adjustment under this subsection may file a request with the commissioner of 23 administration [APPEAL TO THE BOARD] for a waiver of the adjustment under 24 AS 39.35.522. An adjustment may not be required while the waiver request 25 [APPEAL] is pending. 26 * Sec. 114. AS 39.35.522(a) is amended to read: 27 (a) Upon request [APPEAL] by an affected member or beneficiary under (b) 28 of this section, the commissioner of administration [BOARD] may waive an 29 adjustment or any portion of an adjustment made under AS 39.35.520 if, in the 30 opinion of the commissioner of administration [BOARD], 31 (1) the adjustment or portion of the adjustment will cause undue
01 hardship to the member or beneficiary; 02 (2) [REPEALED 03 (3) REPEALED 04 (4)] the adjustment was not the result of erroneous information 05 supplied by the member or beneficiary; 06 (3) [(5)] before the adjustment was made, the member or beneficiary 07 received confirmation from the administrator that the employee's or beneficiary's 08 records were correct; and 09 (4) [(6)] the member or beneficiary had no reasonable grounds to 10 believe the employee's or beneficiary's records were incorrect before the adjustment 11 was made. 12 * Sec. 115. AS 39.35.680(2) is amended to read: 13 (2) "actuarial adjustment" means the adjustment necessary to obtain 14 equality in value of the aggregate expected payments under two different forms of 15 pension payments, considering expected mortality and interest earnings on the basis of 16 assumptions, factors, and methods specified in regulations issued under this plan 17 [SYSTEM] that are formally adopted [UNDER AS 39.35.042] by the board that 18 clearly preclude employer discretion in the determination of the amount of any 19 member's benefit; 20 * Sec. 116. AS 39.35.680(6) is amended to read: 21 (6) "board" means the Alaska Retirement Management [PUBLIC 22 EMPLOYEES RETIREMENT] Board; 23 * Sec. 117. AS 39.35.680(21) is amended to read: 24 (21) "member" or "employee" 25 (A) means a person eligible to participate in the system and 26 who is covered by the system; 27 (B) includes 28 (i) an active member; 29 (ii) an inactive member; 30 (iii) a vested member; 31 (iv) a deferred vested member;
01 (v) a nonvested member; 02 (vi) a disabled member; 03 (vii) a retired member; 04 (viii) an elected public officer under AS 39.35.381; 05 (C) does not include 06 (i) former members; 07 (ii) persons compensated on a contractual or fee basis; 08 (iii) casual or emergency workers or nonpermanent 09 employees as defined in AS 39.25.200; 10 (iv) persons covered by the Alaska Teachers' 11 Retirement System except as provided under AS 39.35.131 and 12 39.35.381, or persons covered by a [THE OPTIONAL] university 13 retirement program; 14 (v) employees of the division of marine transportation 15 engaged in operating the state ferry system who are covered by a union 16 or group retirement system to which the state makes contributions; 17 (vi) justices of the supreme court or judges of the court 18 of appeals or of the superior or district courts of Alaska; 19 (vii) the administrative director of courts appointed 20 under art. IV, sec. 16 of the state constitution unless the director 21 becomes a member under AS 39.35.158; 22 (viii) members of the elected public officers' retirement 23 system (former AS 39.37); and 24 (ix) contractual employees of the legislative branch of 25 state government under AS 24.10.060(f); 26 (x) full-time or part-time instructors of the 27 Department of Labor and Workforce Development who have a 28 teaching certificate, regardless of whether the position as instructor 29 requires a teaching certificate as a condition of employment and 30 have earlier credited service under AS 14.25.009 - 14.25.220; 31 (D) may include employees of the division of marine
01 transportation excluded under (C)(v) of this paragraph provided that 02 (i) the State of Alaska formally agrees to their inclusion 03 through the process of collective bargaining; and 04 (ii) no collective bargaining agreement has the effect of 05 obligating contributions made by the state under AS 39.30.150 in the 06 event the state resumes participation in the federal social security 07 system; 08 * Sec. 118. AS 39.35.680(34) is amended to read: 09 (34) "qualified domestic relations order" means a divorce or 10 dissolution judgment under AS 25.24, including an order approving a property 11 settlement, that 12 (A) creates or recognizes the existence of an alternate payee's 13 right to, or assigns to an alternate payee the right to, receive all or a portion of 14 employee contribution account or the benefits payable with respect to an 15 employee; 16 (B) sets out the name and last known mailing address, if any, of 17 the employee and of each alternate payee covered by the order; 18 (C) sets out the amount or percentage of the employee's benefit, 19 or of any survivor's benefit, to be paid to the alternate payee, or sets out the 20 manner in which that amount or percentage is to be determined; 21 (D) sets out the number of payments or period to which the 22 order applies; 23 (E) sets out the retirement plan [SYSTEM] to which the order 24 applies; 25 (F) does not require any type or form of benefit or any option 26 not otherwise provided by AS 39.35.095 - 39.35.680 [THIS CHAPTER]; 27 (G) does not require an increase of benefits in excess of the 28 amount provided by AS 39.35.095 - 39.35.680 [THIS CHAPTER], determined 29 on the basis of 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 * Sec. 119. AS 39.35.680 is amended by adding new paragraphs to read: 03 (41) "commissioner" means the commissioner of administration; 04 (42) "plan" means the retirement plan established in AS 39.35.095 - 05 39.35.680. 06 * Sec. 120. AS 39.35 is amended by adding new sections to read: 07 Article 9. Employees First Hired on or after July 1, 2005. 08 Sec. 39.35.700. Applicability of AS 39.35.700 - 39.35.990. The provisions of 09 AS 39.35.700 - 39.35.990 apply only to members first hired on or after July 1, 2005 or 10 to members who transfer into the defined contribution plan under AS 39.35.940. 11 Sec. 39.35.710. Defined contribution retirement plan established; federal 12 qualification requirements. (a) A defined contribution retirement plan is established 13 for employees of the state or a political subdivision or public organization of the state. 14 (b) The defined contribution retirement plan is a plan in which savings are 15 accumulated in an individual retirement account for the exclusive benefit of the 16 member or beneficiaries. The plan is established effective July 1, 2005, at which time 17 contributions by employers and members begin. 18 (c) The retirement plan established by AS 39.35.700 - 39.35.990 is intended to 19 qualify under 26 U.S.C. 401(a) and 414(d) (Internal Revenue Code) as a qualified 20 retirement plan established and maintained by the state for its employees, for the 21 employees of political subdivisions, public corporations, and public organizations of 22 the state, and for the employees of other employers whose participation is authorized 23 by AS 39.35.700 - 39.35.990 and who participate in the plan set out in AS 39.35.700 - 24 39.35.990. 25 (d) An amendment to AS 39.35.700 - 39.35.990 does not provide a person 26 with a vested right to a benefit if the Internal Revenue Service determines that the 27 amendment will result in disqualification of the plan under the Internal Revenue Code. 28 Sec. 39.35.720. Membership. An employee who becomes a member on or 29 after July 1, 2005, shall participate in the plan set out in AS 39.35.700 - 39.35.990. 30 Sec. 39.35.730. Contributions by members. (a) Each member shall 31 contribute to the member's individual account an amount equal to eight percent of the
01 member's compensation from July 1 to the following June 30. 02 (b) Subject to the limitations on contributions under AS 39.35.780, a member 03 may elect to make additional contributions to the member's individual account. 04 (c) The employer shall deduct the contribution from the member's 05 compensation at the end of each payroll period, and the contribution shall be credited 06 by the plan to the member's individual account. The contributions shall be deducted 07 from member's compensation before the computation of applicable federal taxes and 08 shall be treated as employer contributions under 26 U.S.C. 414(h)(2). A member may 09 not have the option of making the payroll deduction directly in cash instead of having 10 the contribution picked up by the employer. 11 Sec. 39.35.740. Employment contributions mandatory. Contributions of 12 employees shall be made by payroll deductions. Every included employee shall be 13 considered to consent to payroll deductions. It is of no consequence that a payroll 14 deduction may cause the compensation paid in cash to an employee to be reduced 15 below the minimum required by law. Payment of an employee's compensation, less 16 payroll deductions, is a full and complete discharge and satisfaction of all claims and 17 demands by the employee relating to remuneration of services during the period 18 covered by the payment, except with respect to the benefits provided under the plan. 19 Sec. 39.35.750. Contributions by employers. (a) An employer shall 20 contribute to each member's individual account an amount equal to 4.5 percent of the 21 member's compensation from July 1 to the following June 30. 22 (b) An employer shall also contribute an amount equal to 3.5 percent of each 23 member's compensation from July 1 to the following June 30 to pay for retiree major 24 medical insurance. This contribution shall be paid into the group health and life 25 benefits fund established by the commissioner of administration under AS 39.30.095 26 and shall be accounted for in accordance with regulations established by the 27 commissioner. 28 (c) An employer shall also make contributions to the health reimbursement 29 arrangement plan under AS 39.30.300. 30 Sec. 39.35.760. Rollover contributions and distributions. (a) An employee 31 entering the plan may elect, at the time and in the manner prescribed by the
01 administrator, to have all or part of a direct rollover distribution from an eligible 02 retirement plan owned by the member paid directly into the member's individual 03 account. 04 (b) Rollover contributions do not count as a purchase of membership service 05 for the purpose of determining years of service. 06 (c) A distributee may elect, at the time and in the manner prescribed by the 07 administrator, to have all or part of an eligible rollover distribution paid directly to an 08 eligible retirement plan specified by the distributee in the direct rollover. 09 (d) In this section, 10 (1) "direct rollover" means the payment of an eligible rollover 11 distribution by the plan to an eligible retirement plan specified by a distributee who is 12 eligible to elect a direct rollover; 13 (2) "distributee" means a member, or a beneficiary who is the 14 surviving spouse of the member, or an alternate payee; 15 (3) "eligible retirement plan" means 16 (A) a conduit individual retirement account described in 26 17 U.S.C. 408(d)(3)(A); 18 (B) an annuity plan described in 26 U.S.C. 403(a); 19 (C) a qualified trust described in 26 U.S.C. 401(a); 20 (D) an annuity plan described in 26 U.S.C. 403(b); or 21 (E) a governmental plan described in 26 U.S.C. 457(b); 22 (4) "eligible rollover distribution" means a distribution of all or part of 23 a total account to a distributee, except for 24 (A) a distribution that is one of a series of substantially equal 25 installments payable not less frequently than annually over the life expectancy 26 of the distributee or the joint and last survivor life expectancy of the distributee 27 and the distributee's designated beneficiary, as defined in 26 U.S.C. 401(a)(9); 28 (B) a distribution that is one of a series of substantially equal 29 installments payable not less frequently than annually over a specified period 30 of 10 years or more; 31 (C) a distribution that is required under 26 U.S.C. 401(a)(9);
01 (D) the portion of any distribution that is not includable in 02 gross income; 03 (E) a distribution that is on account of hardship; and 04 (F) other distributions that are reasonably expected to total less 05 than $200 during a year. 06 Sec. 39.35.770. Transmittal of contributions. All contributions deducted in 07 accordance with AS 39.35.700 - 39.35.990 shall be transmitted to the plan for deposit 08 in the trust fund as soon as administratively feasible, but in no event later than 15 days 09 following the close of the payroll period. 10 Sec. 39.35.780. Limitations on contributions. Notwithstanding any other 11 provisions of this plan, the annual additions to each member's individual account 12 under this plan and under all defined contribution plans of the employer required to be 13 aggregated with the contributions from this plan under the provisions of 26 U.S.C. 415 14 may not exceed, for any limitation year, the amount permitted under 26 U.S.C. 415 at 15 any time. If the amount of a member's defined contribution plan contributions exceeds 16 the limitation of 26 U.S.C. 415(c) for any limitation year, the administrator shall take 17 any necessary remedial action to correct an excess contribution. The provisions of 26 18 U.S.C. 415, and the regulations adopted under that statute, as applied to qualified 19 defined contribution plans of governmental employees are incorporated as part of the 20 terms and conditions of the plan. 21 Sec. 39.35.790. Vesting. (a) A participating member is immediately and 22 fully vested in that member's contributions and related earnings. 23 (b) A member shall be fully vested in the employer contributions made on that 24 member's behalf, and related earnings, after five years of service. A member is 25 partially vested in the employer contributions made on that member's behalf, and the 26 related earnings, in the ratio of 27 (1) 25 percent with two years of service; 28 (2) 50 percent with three years of service; and 29 (3) 75 percent with four years of service. 30 Sec. 39.35.800. Investment of individual accounts. (a) The board shall 31 provide a range of investment options and permit a participant to exercise investment
01 control over the participant's assets in the member's individual account as provided in 02 this section. If a participant exercises control over the assets in the individual account, 03 the participant is not considered a fiduciary for any reason on the basis of exercising 04 that control. 05 (b) A participant may direct investment of plan funds held in an account 06 among available investment funds in accordance with rules established by the board. 07 (c) A participant may elect to change or transfer all or a portion of the 08 participant's existing account balance among available investment funds not more 09 often than once each day in accordance with the rules established by the administrator. 10 Only the last election received by the administrator before the transmittal of 11 contributions to the trust fund for allocation to the individual account shall be used to 12 direct the investment of the contributions received. 13 (d) Except to the extent clearly set out in the terms of the investment plans 14 offered by the employer to the employee, the employer is not liable to the participant 15 for investment losses if the prudent investment standard has been met. 16 (e) The employer, administrator, state, board, or a person or entity who is 17 otherwise a fiduciary is not liable by reason for any participant's investment loss that 18 results from the participant's directing the investment of plan assets allocated to the 19 participant's account. 20 (f) To the extent that a member's individual account has been divided as 21 provided in a qualified domestic relations order between participants, each participant 22 shall be treated as the holder of a separate individual account for purposes of 23 investment yields, decisions, transfers, and time limitations imposed by this section. 24 Sec. 39.35.810. Distribution election at termination. (a) A member is 25 eligible to elect distribution of the member's account in accordance with this section 26 60 days after termination of employment. 27 (b) Notwithstanding (a) of this section, distribution of all or a portion of the 28 individual account of a member may take place before the 60th day after the 29 termination of employment with the approval of the administrator if the member 30 makes a written request for a distribution under this subsection. The member's spouse 31 must consent to the request in writing if the member is married. Distribution of an
01 individual account may only be made on account of an immediate and heavy financial 02 need of the member for the following reasons and in the amount the need is 03 demonstrated for 04 (1) medical care described in 26 U.S.C. 213(d) incurred by the 05 member, the member's spouse, or the member's dependent, or necessary to obtain that 06 medical care; 07 (2) the purchase of a principal residence for the member; 08 (3) postsecondary education tuition and related educational fees for the 09 next 12-month period for the member, the member's spouse, or a dependent of the 10 member; in this paragraph, "dependent" has the meaning given in 26 U.S.C. 152; 11 (4) prevention of the eviction of the member from the member's 12 principal residence or foreclosure on the mortgage of the member's principal 13 residence; or 14 (5) any need prescribed by the United States Department of the 15 Treasury, Internal Revenue Service, in a revenue ruling, notice, or other document of 16 general applicability that satisfies the safe harbor definition of hardship under 17 regulations adopted under 26 U.S.C. 401(k). 18 (c) If a member dies before benefits commence, the member's beneficiary is 19 immediately eligible to elect distribution of the member's share of the member's 20 individual account. 21 (d) Distributions are payable to an alternate payee in accordance with the 22 terms and conditions of a qualified domestic relations order that is received and 23 approved by the administrator as specified in AS 39.35.860. 24 (e) Distributions that are being paid to a member may not be affected by the 25 member's subsequent reemployment with the employer. Upon reemployment, a new 26 individual account shall be established for the member to which any future 27 contributions shall be allocated. Upon subsequent termination of employment, the 28 member's new individual account shall be distributed in accordance with this section. 29 Sec. 39.35.820. Forms of distribution. (a) A participant may elect to receive 30 the participant's share of the individual account in a 31 (1) lump sum payment, which is a single payment of the entire balance
01 in the account; 02 (2) periodic lump sum payment, which is a payment of a portion of the 03 balance in the account, not more than twice each year; 04 (3) period certain annuity payment, which is an annuity payable in a 05 fixed number of monthly installments for a duration of 60, 120, or 180 months; 06 (4) life annuity with a period certain payment, which is an annuity 07 payable until the later of the first day of the month in which the annuitant's death 08 occurs, or the date on which the payment of a fixed number of monthly installments is 09 completed; the period certain for installments is 120 or 180 months; 10 (5) single life annuity payment, which is an annuity payable monthly 11 until the first of the month in which the annuitant's death occurs; or 12 (6) joint and survivor annuity payment, which is an annuity payable 13 monthly to the member until the first of the month in which the member's death 14 occurs; after the member's death, a survivor annuity equal to 50 percent or 100 percent 15 of the member's benefit, as previously elected by the member, shall be paid monthly to 16 the joint annuitant for the remainder of the survivor's lifetime. 17 (b) Upon the death of an annuitant whose payments have commenced, an 18 annuitant's beneficiary shall receive further payments only to the extent provided in 19 accordance with the form of payment that was being made to the annuitant. The 20 remaining portion of the interest shall continue to be distributed at least as rapidly as 21 under the method of distribution being used before the annuitant's death. 22 (c) If a participant dies before the distribution commencement date, 23 distribution of the participant's entire interest to a beneficiary shall be payable in any 24 form other than a joint and survivor annuity. 25 (d) If an unmarried member or other participant fails to elect a form of 26 payment before the distribution commencement date, the account shall be paid to a 27 beneficiary in the form of a lump sum to the extent required by the minimum 28 distribution requirements set out in the Internal Revenue Code. If a married member 29 fails to elect a form of payment before the distribution commencement date, the 30 account shall be paid in the form of a 50 percent joint and survivor annuity, with the 31 member's spouse as the joint annuitant.
01 Sec. 39.35.830. Manner of electing distributions. (a) Any election or any 02 alteration or revocation of a prior election by a participant for any purpose under this 03 plan shall be on forms or made in a manner prescribed for that purpose by the plan 04 administrator. To be effective, the forms required or the required action for any 05 purpose under this plan must be completed and received in accordance with 06 regulations adopted by the commissioner of administration. 07 (b) At any time, but not less than seven days before the benefit 08 commencement date, a member, alternate payee, or beneficiary may change 09 (1) the form of payment election; 10 (2) an election to commence benefits; or 11 (3) the joint annuitant designation. 12 (c) Changes in elections are not allowed on or after seven days before the 13 benefit commencement date. 14 Sec. 39.35.840. Distribution requirements. (a) Payments to a participant 15 shall commence as soon as administratively feasible following the distribution 16 commencement date. The distribution commencement date is the first date on which 17 one of the following occurs: 18 (1) a member meets the requirements of AS 39.35.810 and has made a 19 complete application for payment under AS 39.35.830; 20 (2) a participant has elected to defer receipt of the account to a date 21 specified, the date has been attained, and the participant has made a complete 22 application for payment; 23 (3) a member attains normal retirement age and has not made an 24 application for payment or elected to defer receipt of the account to a date later than 25 normal retirement age; 26 (4) a member's beneficiary does not make an application for benefits 27 and five years have elapsed since the member's death; 28 (5) notwithstanding (a) of this section, a participant whose account has 29 a balance of $1,000 or less meets the requirements of AS 39.35.810, at which time the 30 participant must take payment of the participant's account. 31 (b) The entire interest of a member must be distributed or must begin to be
01 distributed not later than the member's required beginning date. 02 (c) If a member dies after the distribution of the member's interest has begun 03 but before the distribution has been completed, the remaining portion of the interest 04 shall continue to be distributed at least as rapidly as under the method of distribution 05 being used before the member's death. 06 (d) If a member has made a distribution election and dies before the 07 distribution of the member's interest begins, distribution of the member's entire interest 08 shall be completed by December 31 of the calendar year containing the fifth 09 anniversary of the member's death. However, if any portion of the member's interest 10 is payable to a designated beneficiary, distributions may be made over the life of the 11 designated beneficiary or over a period certain not greater than the life expectancy of 12 the designated beneficiary, commencing on or before December 31 of the calendar 13 year immediately following the calendar year in which the member died, and, if the 14 designated beneficiary is the member's surviving spouse, the date distributions are 15 required to begin may not be earlier than the later of December 31 of the calendar year 16 (1) immediately following the calendar year in which the member died, or (2) in which 17 the member would have attained 70 1/2 years of age, whichever is earlier. If the 18 surviving spouse dies after the member but before payments to the spouse have begun, 19 the provisions of this subsection apply as if the surviving spouse were the member. 20 An amount paid to a child of the member shall be treated as if it were paid to the 21 surviving spouse if the amount becomes payable to the surviving spouse when the 22 child reaches the age of majority. 23 (e) If a member has not made a distribution election before the member's 24 death, the member's designated beneficiary must elect the method of distribution not 25 later than December 31 of the calendar year (1) in which distributions would be 26 required to begin under this section, or (2) that contains the fifth anniversary of the 27 date of death of the member, whichever is earlier. If the member does not have a 28 designated beneficiary or if the designated beneficiary does not elect a method of 29 distribution, distribution of the member's entire interest must be completed by 30 December 31 of the calendar year containing the fifth anniversary of the member's 31 death.
01 (f) For purposes of (b) of this section, distribution of a member's interest is 02 considered to begin (1) on the member's required beginning date, or (2) if the 03 designated beneficiary is the member's surviving spouse and the surviving spouse dies 04 after the member but before payments to the spouse have begun, on the date 05 distribution is required to begin to the surviving spouse. If distribution in the form of 06 an annuity irrevocably commences to the member before the required beginning date, 07 the date distribution is considered to begin is the date that the distribution actually 08 commences. 09 (g) Notwithstanding any contrary provisions of AS 39.35.700 - 39.35.990, the 10 requirements of this section apply to all distributions of a member's interest and take 11 precedence over any inconsistent provisions of AS 39.35.700 - 39.35.990. 12 (h) All distributions required under this section are determined and made in 13 accordance with 26 U.S.C. 401(a)(9) and regulations adopted under that statute, 14 including any minimum distribution incidental benefit requirement. 15 (i) In this section, 16 (1) "designated beneficiary" means the individual who is designated as 17 the beneficiary under the plan in accordance with 26 U.S.C. 401(a)(9) and regulations 18 adopted under that statute; 19 (2) "required beginning date" means the first day of April of the 20 calendar year following the calendar year in which the member either attains 70 1/2 21 years of age or actually terminates employment, whichever is later. 22 Sec. 39.35.850. Designation of beneficiary. (a) Each participant shall have 23 the right to designate a beneficiary and shall have the right, at any time, to revoke the 24 designation or to substitute another beneficiary, subject to the following limitation: if a 25 married member elects a nonspouse beneficiary, the value of the benefit payable to the 26 beneficiary may not exceed 50 percent of the member's portion of the account balance, 27 and the member's spouse shall automatically be considered the beneficiary for the 28 remaining 50 percent of the account balance, unless the spouse consents to the 29 beneficiary designation in a writing that is notarized or witnessed by the administrator. 30 If the spouse consents in this manner, a married member may designate a nonspouse 31 beneficiary for the entire benefit or any portion the benefit as part of an available form
01 of payment contained in this plan, 02 (1) except to the extent a qualified domestic relations order filed with 03 the administrator provides for payment to a former spouse or other dependent of the 04 member; or 05 (2) unless the member filed a revocation of beneficiary accompanied 06 by a written consent to the revocation from the present spouse and each person entitled 07 under the order; however, consent of the present spouse is not required if the member 08 and the present spouse had been married for less than one year on the date of the 09 member's death and if the member established when filing the revocation that the 10 member and the present spouse were not cohabiting. 11 (b) Except as provided in (a) of this section, the member may change or 12 revoke the designation without notice to the beneficiary or beneficiaries at any time. 13 If a member designates more than one beneficiary, each shares equally unless the 14 member specifies a different allocation or preference. The designation of a 15 beneficiary, a change or revocation of a beneficiary, and a consent to revocation of a 16 beneficiary shall be made on a form provided by the administrator and is not effective 17 until filed with the administrator. 18 (c) If a member fails to designate a beneficiary, or if no designated beneficiary 19 survives the member, the death benefit shall be paid 20 (1) to the surviving spouse or, if there is none surviving; 21 (2) to the surviving children of the member in equal parts or, if there 22 are none surviving; 23 (3) to the surviving parents in equal parts or, if there are none 24 surviving; 25 (4) to the estate. 26 (d) A person claiming entitlement to benefits payable under AS 39.35.700 - 27 39.35.990 as a consequence of a member's death shall provide the administrator with a 28 marriage certificate, divorce or dissolution judgment, or other evidence of entitlement. 29 Documents establishing entitlement may be filed with the administrator immediately 30 after a change in the member's marital status. If the administrator does not receive 31 notification of a claim before the date 10 days after the member's death, the person
01 claiming entitlement is not entitled to receive from the division of retirement and 02 benefits any benefit already paid by the administrator. 03 Sec. 39.35.860. Rights under qualified domestic relations order. (a) 04 Notwithstanding the nonalienation provisions in AS 39.35.900(a), the plan 05 administrator may direct that benefits be paid to someone other than a member or 06 beneficiary under a valid qualified domestic relations order that is executed by the 07 judge of a competent court in accordance with applicable state law and that has been 08 accepted by the administrator. 09 (b) The administrator shall determine whether an order meets the requirements 10 of this section within a reasonable period after receiving an order. The administrator 11 shall notify the member and any alternate payee that an order has been received and 12 indicate to the member and any alternate payee when the order is accepted. A separate 13 account for the alternate payee portion shall be established as soon as administratively 14 feasible after the order has been accepted by the administrator. 15 Sec. 39.35.870. Retirement. (a) In order to obtain medical benefits under 16 AS 39.35.880 an active member must retire directly from the plan. A member is 17 eligible to retire from the plan if the member has been an active member for at least 12 18 months before application for retirement and 19 (1) the member has at least 30 years of membership service; or 20 (2) the member reaches the normal retirement age and has at least 10 21 years of membership service. 22 (b) The normal retirement age is 60 months less than the age set for Medicare 23 eligibility at the time the member retires. 24 (c) A member must apply to the administrator for appointment to retirement. 25 Application shall be made on forms and in the manner prescribed by the administrator. 26 (d) A member who continues in the employ of the employer after reaching 27 normal retirement age shall continue to participate in the plan and to have 28 contributions allocated to the member's account. 29 Sec. 39.35.880. Medical benefits. (a) The medical benefits available to 30 eligible persons are access to the retiree major medical plan. Access to the retiree 31 major medical plan means that an eligible person may not be denied medical coverage
01 except for failure to pay the required premium. 02 (b) The following persons are eligible for the retiree major medical insurance 03 plan provided under this section and may elect coverage under it: 04 (1) a member with at least 30 years of service and who retires directly 05 from the plan; 06 (2) the surviving spouse of a member who elected coverage under (1) 07 of this subsection; 08 (3) a member who reaches the normal retirement age as provided in 09 AS 39.35.860, has at least 10 years of service, and retires directly from the plan; 10 (4) the surviving spouse of a member who elected coverage under (3) 11 of this subsection. 12 (c) Retiree major medical plan coverage elected by an eligible member under 13 this section covers the eligible member, the spouse of the eligible member, and the 14 dependent children of the qualified member. 15 (d) Retiree major medical plan coverage elected by the surviving spouse of an 16 eligible member under this section covers the surviving spouse and the dependent 17 children of the eligible member who are dependent on the surviving spouse. 18 (e) A person other than an eligible member is not eligible for coverage if, 19 during the time the eligible member was an active member, the person was 20 (1) not married to the member; or 21 (2) not a dependent child of the member. 22 (f) Major medical coverage takes effect on the first day of the month 23 following the date of the election and stops when the person who elects coverage 24 under (b) of this section dies or fails to make a required premium payment. 25 (g) The coverage for persons who are eligible for Medicare is the same as that 26 available for persons who are not yet eligible for Medicare. The benefits payable to 27 those Medicare eligible persons supplement any benefits provided under the Medicare 28 program. 29 (h) The medical and optional insurance premiums owed by the person who 30 elects coverage under (b) of this section shall be deducted from the health 31 reimbursement arrangement. If the amount of the health reimbursement arrangement
01 becomes insufficient to pay the premiums, the person who elects coverage under (b) of 02 this section shall pay the premiums directly. 03 (i) The administrator shall set on an annual basis separate retiree health 04 coverage premiums for participants who are Medicare eligible and for participants 05 who are not yet Medicare eligible. A participant's share of the applicable premium 06 shall be determined according to (j) and (k) of this section. 07 (j) Participants who have not attained normal retirement age are required to 08 pay the full amount of the applicable medical health coverage premium. 09 (k) Participants who have attained normal retirement age are eligible for a 10 subsidy applicable to the cost of the applicable premium. The subsidy percentage 11 applicable to the cost of premiums payable by the participant is 30 percent if the 12 member had 10 years of service; for each additional year of service after the member's 13 10th year of service, the discount increases by three percentage points; however, the 14 maximum discount is 90 percent if the member has 30 or more years of service. The 15 applicable subsidy percentage shall be applied to the subsidy base to determine the 16 dollar amount of the subsidy that is applied against the cost of the premium. 17 (l) Participants who are eligible for Medicare will use the subsidy base for 18 Medicare-eligible premiums. Participants who are not yet eligible for Medicare will 19 use the subsidy base for non-Medicare eligible premiums. 20 (m) The subsidy base for Medicare-eligible participants will be the same as 21 the premium amount for Medicare-eligible participants in the first year of this plan and 22 the subsidy base for non-Medicare eligible participants will be the same as the 23 premium amount for non-Medicare-eligible participants in the first year of this plan. 24 Each subsidy base will increase five percent each year or the rate at which the actual 25 premium amount increases for the corresponding aged participants, whichever is less. 26 (n) The eligibility for retiree major medical coverage for an alternate payee 27 under a qualified domestic relations order shall be determined based on the eligibility 28 of the member to elect coverage. The alternate payee shall pay the full monthly 29 premium for retiree major medical coverage. 30 (o) The administrator shall establish the monthly group premiums for retiree 31 major medical coverage. Nothing in AS 39.35.700 - 39.35.895 guarantees a person
01 who elects coverage under (b) of this section a monthly group premium rate for retiree 02 major medical coverage other than the premium in effect for the month in which the 03 premium is due for coverage for that month. 04 (p) A member is eligible to apply for reimbursement from the health 05 reimbursement arrangement plan after a minimum of 10 years of service and does not 06 have to retire directly from the system. 07 (q) In this section, 08 (1) "health reimbursement arrangement" means the plan established in 09 AS 39.30.300; 10 (2) "retires directly from the plan" means that the member has been an 11 active member for at least 12 consecutive months immediately before the time that the 12 member applies to the administrator for appointment to retirement and that the 13 member continues as an active member up through the day before the day the member 14 is appointed to retirement." 15 Sec. 39.35.890. Amendment and termination of plan. (a) The state has the 16 right to amend the plan at any time and from time to time, in whole or in part, 17 including the right to make retroactive amendments referred to in 26 U.S.C. 401(b). 18 (b) The plan administrator may not modify or amend the plan retroactively in 19 such a manner as to reduce the benefits of any member accrued to date under the plan 20 by reason of contributions made before the modification or amendment except to the 21 extent that the reduction is permitted by the Internal Revenue Code. 22 (c) The state may, in its discretion, terminate the plan in whole or part at any 23 time without liability for the termination. If the plan is terminated, all investments 24 remain in force until all individual accounts have been completely distributed under 25 the plan, and, after all plan liabilities are satisfied, excess assets revert to the employer. 26 (d) Any contribution made by an employer to the plan because of a mistake of 27 fact must be returned to the employer by the administrator within one year after the 28 contribution or discovery, whichever is later. 29 Sec. 39.35.900. Exclusive benefit. (a) The corpus or income of the assets 30 held in trust as required by the plan may not be diverted or used for other than the 31 exclusive benefit of the participants.
01 (b) If plan benefits are provided through the distribution of annuity or 02 insurance contracts, any refunds or credits in excess of plan benefits due to dividends, 03 earnings, or other experience rating credits, or surrender or cancellation credits, shall 04 be paid to the trust fund. 05 (c) The assets of the plan may not be used to pay premiums or contributions of 06 the employer under another plan maintained by the employer. 07 Sec. 39.35.910. Nonguarantee of returns, rates, or benefit amounts. The 08 plan created by AS 39.35.700 - 39.35.990 is a defined contribution plan, not a defined 09 benefit plan. The amount of money in the account of a participant depends on the 10 amount of contributions and the rate of return from investments of the account that 11 varies over time. If benefits are paid in the form of an annuity, the benefit amount 12 payable is dependent on the amount of money in the account and the interest rates 13 applied and service fees charged by the annuity payor at the time benefits are first 14 paid. Nothing in this plan guarantees a participant 15 (1) a rate of return or interest rate other than that actually earned by the 16 account of the participant, less applicable administrative expenses; or 17 (2) an annuity based on interest rates or service charges other than 18 interest rates available from and service charges by the annuity payor in effect at the 19 time the annuity is paid. 20 Sec. 39.35.920. Nonguarantee of employment. The provisions of 21 AS 39.35.700 - 39.35.990 are not a contract of employment between an employer and 22 an employee, nor do they confer a right of an employee to be continued in the 23 employment of an employer, nor are they a limitation of the right of an employer to 24 discharge an employee with or without cause. 25 Sec. 39.35.930. Fraud. (a) A person who knowingly makes a false statement 26 or falsifies or permits to be falsified a record of this plan in an attempt to defraud the 27 plan is guilty of a class A misdemeanor. 28 (b) In this section, "knowingly" has the meaning given in AS 11.81.900(a). 29 Sec. 39.35.940. Transfer into defined contribution plan by nonvested 30 members of defined benefit plan. (a) Subject to (g) of this section, an active 31 member of the defined benefit retirement plan of the public employees' retirement
01 system is eligible to participate in the defined contribution retirement plan established 02 under AS 39.35.700 - 39.35.990, if that member has not vested. Participation in the 03 defined contribution retirement plan is in lieu of participation in the defined benefit 04 retirement plan established under AS 39.35.095 - 39.35.680. 05 (b) A member who has vested in a defined benefit retirement plan is not 06 eligible to transfer under this section. 07 (c) Each eligible member who elects to participate in the defined contribution 08 retirement plan shall have transferred to a new account the present value of the 09 member contribution account balance held in trust for the member under the defined 10 benefit retirement plan of the public employees' retirement system. A matching 11 employer contribution shall be made on behalf of that employee to the new account. 12 Upon a transfer, all service credit previously earned under the defined benefit 13 retirement plan shall be nullified for purposes of entitlement to a future benefit under 14 the defined benefit retirement plan but shall be credited for purposes of eligibility to 15 elect medical benefits under AS 39.35.870. An eligible member whose accounts are 16 subject to a qualified domestic relations order may not make an election to participate 17 in the defined contribution retirement plan under this subsection unless the qualified 18 domestic relations order is amended or vacated and court-certified copies of the order 19 are received by the administrator. 20 (d) As directed by the participant, the board shall transfer or cause to be 21 transferred the appropriate amounts to the designated account. The board shall 22 establish transfer procedures by regulation, but the actual transfer may not be later 23 than 30 days after the effective date of the member's participation in the defined 24 contribution retirement plan unless the major financial markets for securities available 25 for a transfer are seriously disrupted by an unforeseen event that also causes the 26 suspension of trading on any national securities exchange in the country where the 27 securities were issued. In that event, the 30-day period of time may be extended by a 28 resolution of the board of trustees. Transfers are not commissionable or subject to 29 other fees and may be in the form of securities or cash as determined by the board. 30 Securities shall be valued as of the date of receipt in the participant's account. 31 (e) If the board or the administrator receives notification from the United
01 States Department of the Treasury, Internal Revenue Service, that this section or a 02 portion of this section will cause the retirement system under this chapter, or a portion 03 of the retirement system under this chapter, to be disqualified for tax purposes under 04 the Internal Revenue Code, the portion that will cause the disqualification does not 05 apply, and the board and the administrator shall notify the presiding officers of the 06 legislature. 07 (f) The election to participate in the defined contribution retirement plan must 08 be made in writing on forms and in the manner prescribed by the administrator. 09 Before accepting an election to participate in the defined contribution retirement plan, 10 the administrator must provide the employee planning on making an election to 11 participate in the defined contribution retirement plan with information, including 12 calculations to illustrate the effect of moving the employee's retirement plan from the 13 defined benefit retirement plan to the defined contribution retirement plan as well as 14 other information to clearly inform the employee of the potential consequences of the 15 employee's election. An election made under this subsection to participate in the 16 defined contribution retirement plan is irrevocable. Upon making the election, the 17 participant shall be enrolled as a member of the defined contribution retirement plan, 18 the member's participation in the plan shall be governed by the provisions of 19 AS 39.35.700 - 39.35.990, and the member's participation in the defined benefit 20 retirement plan under AS 39.35.115 shall terminate. The participant's enrollment in 21 the defined contribution retirement plan shall be effective the first day of the month 22 after the administrator receives the completed enrollment forms. An election made by 23 an eligible member who is married is not effective unless the election is signed by the 24 individual's spouse. 25 (g) A member may make an election under this section only if the member's 26 employer participates in both the defined benefits retirement plan and the defined 27 contribution retirement plan and consents to transfers under this section. The 28 employer shall notify the administrator if the employer consents to allowing the 29 employer's members to choose to transfer from the defined benefits retirement plan to 30 the defined contribution retirement plan under this section. An employer's notice to 31 allow transfers is irrevocable and applicable to all eligible employees of the employer.
01 (h) In this section, 02 (1) "defined benefit retirement plan" means the retirement plan 03 established in AS 39.35.095 - 39.35.680; 04 (2) "defined contribution retirement plan" means the retirement plan 05 established in AS 39.35.700 - 39.35.990. 06 Sec. 39.35.950. Request by political subdivision to participate and 07 adoption of resolution. A municipality or other political subdivision of the state may 08 request to become an employer in this plan. The request shall be made after adoption 09 of a resolution by the legislative body of the political subdivision and after approval of 10 the resolution by the person required by law to approve the resolution. A certified 11 copy of the resolution shall be filed with the administrator. If the administrator 12 approves the request for participation, the political subdivision is an employer of the 13 plan. 14 Sec. 39.35.955. Request by public organization to participate and 15 adoption of resolution. A public organization may request to become an employer in 16 this plan. The request shall be made after adoption of a resolution by the governing 17 body of the public organization. A certified copy of the resolution shall be filed with 18 the administrator. If the administrator approves the request for participation, the 19 public organization is an employer of the plan. 20 Sec. 39.35.960. Membership in teachers' and public employees' 21 retirement systems. A person who is employed at least half-time in the public 22 employees' defined contribution retirement plan (AS 39.35.700 - 39.35.990) during the 23 same period that the person is employed at least half-time in a position in the teachers' 24 defined contribution retirement plan (AS 14.25.310 - 14.25.590) shall receive credited 25 service under each plan for half-time employment. However, the amount of credited 26 service a person receives under the public employees' defined contribution retirement 27 plan during a school year may not exceed the amount necessary, when added to the 28 amount of credited service earned during the school year under the teachers' defined 29 contribution retirement plan, to equal one year of credited service. 30 Sec. 39.35.965. Army and air national guard employees. A regular full- 31 time civilian employee of the Alaska Army National Guard and Air National Guard
01 whose entire salary is paid from allotted federal funds is included in the public 02 employees' defined contribution retirement plan (AS 39.35.700 - 39.35.990) if the 03 federal or state government pays the employer's contributions. If the amount that the 04 federal government may legally contribute to the plan is lower than the required 05 employer's contribution, the state government shall contribute the difference. If the 06 employer's contributions are not paid when due, service credit for the period of 07 delinquency may not be granted until the contributions are paid. 08 Sec. 39.35.970. North Pacific Fishery Management Council employees. 09 An employee of the North Pacific Fishery Management Council appointed under 16 10 U.S.C. 1852(f)(1) (Sec. 302(f)(1) of P.L. 94-265) whose compensation is paid from 11 allotted federal funds is included in the public employees' defined contribution 12 retirement plan (AS 39.35.700 - 39.35.990) if the council pays the employer's 13 contributions. If the employer's contributions are not paid when due, credited service 14 for the period of delinquency may not be granted until the contributions are paid. 15 Sec. 39.35.990. Definitions. In AS 39.35.700 - 39.35.990, unless the context 16 requires otherwise, 17 (1) "administrator" means the commissioner of administration or the 18 commissioner's designee; 19 (2) "alternate payee" means the person for whom an amount has been 20 separated into an account under a qualified domestic relations order; 21 (3) "annuitant" means a member, beneficiary, or alternate payee who is 22 receiving a benefit under this plan; 23 (4) "beneficiary" means the person or persons entitled under the 24 provisions of this plan to receive benefits after the death of a member or alternate 25 payee; 26 (5) "board" has the meaning given in AS 39.35.680; 27 (6) "calendar year" has the meaning given in AS 39.35.680; 28 (7) "compensation" 29 (A) means 30 (i) the total remuneration earned by an employee for 31 personal services rendered, including cost-of-living differentials, as
01 reported on the employee's Federal Income Tax Withholding Statement 02 (Form W-2) from the employer for the calendar year; 03 (ii) the member contribution to the public employees' 04 retirement system under AS 39.35.730, employee deferrals under 05 AS 39.45.010, the wage reduction amount contributed to the Alaska 06 Supplemental Annuity Plan under AS 39.30.150(a), and the wage 07 reduction amount contributed to the Alaska Supplemental Benefit Plan 08 under AS 39.30.150(c), as those statutes may be amended from time to 09 time; 10 (B) does not include retirement benefits, severance pay or other 11 separation bonuses, welfare benefits, per diem, expense allowances, workers' 12 compensation payments, payments for leave not used whether those leave 13 payments are scheduled payments, lump-sum payments, donations, or cash-ins, 14 any remuneration contributed by the employer for or on account of the 15 employee under this plan or under any other qualified or nonqualified 16 employee benefit plan, any remuneration not specifically included above 17 which would have been excluded under 26 U.S.C. 3121(a) (Internal Revenue 18 Code) if the employer had remained in the Federal Social Security System, or 19 any remuneration paid by the employer in excess of the Social Security 20 Taxable Wage Base for the calendar year; 21 (C) notwithstanding (B) of this paragraph, includes any amount 22 that is contributed by the employer under a salary reduction agreement and that 23 is not includible in the gross income of the employee under 26 U.S.C. 125, 24 132(f)(4), 402(e)(3), 402(h)(1)(B) or 403(b) (Internal Revenue Code); the 25 annual compensation limitation for the member, which is so taken into account 26 for those purposes, may not exceed $200,000, as adjusted for the cost of living 27 in accordance with 26 U.S.C. 401(a)(17)(B) (Internal Revenue Code), with the 28 limitation for a fiscal year being the limitation in effect for the calendar year 29 within which the fiscal year begins; 30 (8) "dependent child" has the meaning given in AS 39.35.680; 31 (9) "distribution commencement date" has the meaning given in
01 AS 39.35.840(a); 02 (10) "employer" means 03 (A) the State of Alaska; or 04 (B) a political subdivision or public organization of the state 05 that participates in the plan; 06 (11) "fund" means the assets of the plan; 07 (12) "individual account" means the total maintained by the plan in an 08 investment account within the trust fund, established for each member for the purposes 09 of allocation of the member's contributions, the employer's contributions on behalf of 10 the member, and earnings credited to each of those contributions, investment gains 11 and losses, and expenses; as well as reporting of the member's benefit under the plan; 12 (13) "Internal Revenue Code" means the Internal Revenue Code of 13 1986, as amended; 14 (14) "investment funds" means those separate funds that are provided 15 within and that make up the trust fund and that are established for the purpose of 16 directing investment through the exercise of the sole control of a member, beneficiary, 17 or alternate payee under the terms of the plan and trust agreement; 18 (15) "limitation year" means the year for which contributions are made 19 to a member's individual account as reported to the Internal Revenue Service and as 20 meets the limits described in 26 U.S.C. 415(c); 21 (16) "member" means an employee of an employer or former 22 employee of an employer who retains a right to benefits under the plan, but does not 23 include full-time or part-time instructors of the Department of Labor and Workforce 24 Development who have a teaching certificate, regardless of whether the position as 25 instructor requires a teaching certificate as a condition of employment and who have 26 earlier credited service under AS 14.25.310 - 14.25.590; 27 (17) "membership service" means full-time or part-time employment 28 with an employer in the plan; 29 (18) "normal retirement age" means 60 months less than the age set for 30 Medicare eligibility at the time the member retires; 31 (19) "participant" means the person who has a vested right to an
01 individual account, such as a member, an alternate payee if the account is subject to a 02 qualified domestic relations order, the member's beneficiary if the member is 03 deceased, or an alternate payee's beneficiary if the alternate payee is deceased; 04 (20) "peace officer" or "fire fighter" has the meaning given in 05 AS 39.35.680; 06 (21) "plan" means the retirement plan established in AS 39.35.700 - 07 39.35.990; 08 (22) "prudent investment standard" means the degree of care, skill, 09 prudence, and diligence under the circumstances then prevailing that a prudent person 10 acting in a like capacity and familiar with such matters would use in the conduct of an 11 enterprise of a like character and with like aims; 12 (23) "qualified domestic relations order" means a divorce or 13 dissolution judgment under AS 25.24, including an order approving a property 14 settlement, that 15 (A) creates or recognizes the existence of an alternate payee's 16 right to, or assigns to an alternate payee the right to, receive all or a portion of 17 an individual account or the benefits payable with respect to a member; 18 (B) sets out the name and last known mailing address, if any, of 19 the member and of each alternate payee covered by the order; 20 (C) sets out the amount or percentage of the member's benefit, 21 or of any survivor's benefit, to be paid to the alternate payee, or sets out the 22 manner in which that amount or percentage is to be determined; 23 (D) sets out the number of payments or period to which the 24 order applies; 25 (E) sets out the retirement plan to which the order applies; 26 (F) does not require any type or form of benefit or any option 27 not otherwise provided by AS 39.35.700 - 39.35.990; 28 (G) does not require an increase of benefits in excess of the 29 amount provided by AS 39.35.700 - 39.35.990; 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 (24) "retiree" means an eligible person who has elected to receive 03 medical benefits under AS 39.35.880; 04 (25) "surviving spouse" means the spouse of an employee who has 05 been married to the employee for at least one year at the time of the employee's death; 06 (26) "system" has the meaning given in AS 39.35.680; 07 (27) "year of service" means the equivalent of 52 weeks of permanent 08 full-time employment, which may consist of a combination of permanent full-time or 09 permanent part-time membership service; in this paragraph, "permanent full-time" and 10 "permanent part-time" have the meanings given in AS 39.35.680. 11 * Sec. 121. AS 39.45.030(a) is amended to read: 12 (a) The Alaska Retirement Management [STATE PENSION 13 INVESTMENT] Board is authorized, subject to contracts with individual employees, 14 to invest the funds held under a deferred compensation program. The board has the 15 same powers and duties concerning the management and investment in regard to those 16 funds as are provided under AS 37.10.220 [AS 14.25.180]. 17 * Sec. 122. AS 39.45.030(g) is amended to read: 18 (g) In this section, "board" means the Alaska Retirement Management 19 [STATE PENSION INVESTMENT] Board. 20 * Sec. 123. AS 39.45.060 is amended by adding a new paragraph to read: 21 (2) "board" means the trustees of the Alaska Retirement Management 22 Board established under AS 37.10.210. 23 * Sec. 124. AS 39.50.200(a)(9) is amended to read: 24 (9) "public official" means 25 (A) a judicial officer; 26 (B) the governor or the lieutenant governor; 27 (C) a person hired or appointed in a department in the 28 executive branch as 29 (i) the head or deputy head of the department; 30 (ii) the director or deputy director of a division; 31 (iii) a special assistant to the head of the department;
01 (iv) a person serving as the legislative liaison for the 02 department; 03 (D) an assistant to the governor or the lieutenant governor; 04 (E) the chair or a member of a state commission or board 05 [OTHER THAN PHYSICIAN MEMBERS OR ALTERNATES OF THE 06 ALASKA TEACHERS' RETIREMENT BOARD APPOINTED UNDER 07 AS 14.25.035(a)(2) OR OF THE PUBLIC EMPLOYEES' RETIREMENT 08 BOARD APPOINTED UNDER AS 39.35.030(d);] 09 (F) state investment officers and the state comptroller in the 10 Department of Revenue; 11 (G) [REPEALED 12 (H)] the chief procurement officer appointed under 13 AS 36.30.010; 14 (H) [(I)] the executive director of the Alaska Workforce 15 Investment Board; and 16 (I) [(J)] each appointed or elected municipal officer; 17 * Sec. 125. AS 39.50.200(b)(54) is amended to read: 18 (54) Alaska Retirement Management [STATE PENSION 19 INVESTMENT] Board (AS 37.10.210); 20 * Sec. 126. AS 44.25.020(2) is amended to read: 21 (2) collect, account for, have custody of, invest, and manage all state 22 funds and all revenues of the state except revenues incidental to a program of licensing 23 and regulation carried on by another state department, funds managed and invested by 24 the Alaska Retirement Management [STATE PENSION INVESTMENT] Board, 25 and as otherwise provided by law; 26 * Sec. 127. AS 44.25.028(a) is amended to read: 27 (a) The commissioner of revenue may designate employees of the Department 28 of Revenue who are subject to the provisions of AS 39.50 because of their 29 responsibility for participating in the management or investment of the funds for 30 which the Alaska Retirement Management [STATE PENSION INVESTMENT] 31 Board is responsible.
01 * Sec. 128. AS 44.25.028(b) is amended to read: 02 (b) If an officer or employee of the Department of Revenue with responsibility 03 for funds for which the Alaska Retirement Management [STATE PENSION 04 INVESTMENT] Board is responsible acquires, owns, or controls an interest, direct or 05 indirect, in an entity or project in which assets under the control of the board are 06 invested, the officer or employee shall immediately disclose the interest to the board. 07 The disclosure is a matter of public record and shall be included in the minutes of the 08 board meeting next following the disclosure. The commissioner shall adopt 09 regulations to restrict officers and employees of the department from having a 10 substantial interest in an entity or project in which assets under the control of the board 11 are invested. 12 * Sec. 129. AS 44.64.030(a) is amended by adding new paragraphs to read: 13 (36) AS 14.25.006 (teachers' retirement system); 14 (37) AS 39.35.006 (public employees' retirement system). 15 * Sec. 130. AS 14.25.012(a), 14.25.015, 14.25.020, 14.25.022, 14.25.030, 14.25.035, 16 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); 17 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, 18 39.35.080, 39.35.090, 39.35.520(c), 39.35.522(c), 39.35.522(e); AS 39.45.025; 19 AS 39.50.200(b)(23), and 39.50.200(b)(29) are repealed. 20 * Sec. 131. AS 14.25.061(c), 14.25.062; and AS 39.35.350 are repealed. 21 * Sec. 132. The uncodified law of the State of Alaska is amended by adding a new section 22 to read: 23 TRANSITION: INITIAL STAGGERED TERMS OF TRUSTEES OF THE 24 ALASKA RETIREMENT MANAGEMENT BOARD. Notwithstanding AS 37.10.210(c), as 25 repealed and reenacted by sec. 59 of this Act, the terms of the initially appointed trustees of 26 the Alaska Retirement Management Board who are not commissioners shall be set by the 27 governor to achieve staggered terms in the manner provided for nine-member boards by 28 AS 39.05.055(7). Notwithstanding AS 39.05.055(7), the terms of the two finance officers 29 appointed under AS 37.10.210(b)(2)(B) and 37.10.210(b)(2)(C), as repealed and reenacted by 30 sec. 59 of this Act, shall be set so that the term of one of the finance officers expires three 31 years apart from the term of the other finance officer, and the terms of each of the two
01 members of the two retirement systems appointed under AS 37.10.210(b)(3), as repealed and 02 reenacted by sec. 59 of this Act, shall be set so that the term of one of each of the members in 03 each system expires three years apart from the term of the other member representing that 04 system. 05 * Sec. 133. The uncodified law of the State of Alaska is amended by adding a new section 06 to read: 07 TERMS OF MEMBERS OF THE ALASKA TEACHERS' RETIREMENT BOARD, 08 AND THE PUBLIC EMPLOYEES' RETIREMENT BOARD. The terms of all board 09 members appointed to the Alaska Teachers' Retirement Board, and the Public Employees' 10 Retirement Board expire on the effective date of this section. 11 * Sec. 134. The uncodified law of the State of Alaska is amended by adding a new section 12 to read: 13 TERMS OF MEMBERS OF THE ALASKA STATE PENSION INVESTMENT 14 BOARD. The terms of all board members appointed to the Alaska State Pension Investment 15 Board expire on September 30, 2005. 16 * Sec. 135. The uncodified law of the State of Alaska is amended by adding a new section 17 to read: 18 TRANSITION OF DUTIES BETWEEN ALASKA STATE PENSION 19 INVESTMENT BOARD AND THE ALASKA RETIREMENT MANAGEMENT BOARD. 20 (a) After the effective date of this section and until September 30, 2005, the Alaska State 21 Pension Investment Board shall continue to exercise the powers and duties assigned in this 22 Act to the Alaska Retirement Management Board. The Alaska State Pension Investment 23 Board shall take actions to facilitate the transition of duties formerly assigned to the Alaska 24 State Pension Investment Board to the duties assigned in this Act to the Alaska Retirement 25 Management Board. A member of the Alaska Retirement Management Board appointed to 26 serve as a trustee before September 30, 2005, shall be invited to observe and train with the 27 Alaska State Pension Investment Board. 28 (b) The Alaska Retirement Management Board may not assume the duties and 29 responsibilities assigned to the Alaska Retirement Management Board in this Act until 30 October 1, 2005. 31 * Sec. 136. The uncodified law of the State of Alaska is amended by adding a new section
01 to read: 02 TRANSITION. Hearings and other proceedings pending under a law amended or 03 repealed by this Act or in connection with functions transferred by this Act continue in effect 04 and may be continued and completed notwithstanding a transfer or amendment or repeal 05 provided for in this Act. Orders and regulations issued or adopted under authority of a law 06 amended or repealed by this Act remain in effect for the term issued, or until revoked, 07 vacated, or otherwise modified under the provisions of this Act. Contracts, rights, liabilities, 08 and obligations created by or under a law amended or repealed by this Act, and in effect on 09 the effective date of this section, remain in effect notwithstanding this Act's taking effect. 10 Records, equipment, appropriations, funds, and other property of boards or agencies of the 11 state whose functions are transferred under this Act shall be transferred to implement the 12 provisions of this Act. 13 * Sec. 137. The uncodified law of the State of Alaska is amended by adding a new section 14 to read: 15 TRANSITION: REGULATIONS. (a) The Department of Administration and the 16 Department of Revenue may proceed to develop and adopt regulations required to implement 17 this Act. 18 (b) Regulations adopted by the Department of Administration and the Department of 19 Revenue under this Act relate to the internal management of a state agency, and the adoption 20 of the regulations is not subject to AS 44.62 (Administrative Procedure Act). 21 * Sec. 138. The uncodified law of the State of Alaska is amended by adding a new section 22 to read: 23 REPORT TO THE LEGISLATURE BY ALASKA RETIREMENT MANAGEMENT 24 BOARD. It is the intent of the legislature that there will be a moratorium after the effective 25 date of this Act on legislation affecting all public employees' retirement plans until the Alaska 26 Retirement Management Board can present a report to the legislature containing the board's 27 assessment and recommendations as provided in this section. The Alaska Retirement 28 Management Board shall report to the legislature 120 days after all members are appointed to 29 the board, or 15 days after the first day of the first regular legislative session following the 30 effective date of this section, whichever is first. The report must include the board's 31 (1) preliminary assessment of the financial health of all public employees'
01 retirement plans and all teachers' retirement plans; 02 (2) assessment of the actuarial services purchased by the board; 03 (3) recommendations for additional legislative or administrative policy to 04 improve the financial health of the retirement plans; 05 (4) short-term and long-term recommendations for addressing the unfunded 06 liability of the retirement plans; and 07 (5) recommendations for legislative procedures regarding fiscal notes for new 08 legislation affecting the retirement plans. 09 * Sec. 139. The uncodified law of the State of Alaska is amended by adding a new section 10 to read: 11 REPORT TO THE LEGISLATURE BY THE DIVISION OF RETIREMENT AND 12 BENEFITS. The division of retirement and benefits will provide an annual report to the 13 legislature regarding the cost savings measures it has implemented by regulation as described 14 in sec. 1 of this Act. 15 * Sec. 140. The uncodified law of the State of Alaska is amended by adding a new section 16 to read: 17 INSTRUCTION REGARDING ALASKA TEACHERS' RETIREMENT SYSTEM 18 BOARD, ALASKA PUBLIC EMPLOYEES' RETIREMENT SYSTEM BOARD, AND 19 ALASKA STATE PENSION INVESTMENT BOARD. Wherever in the Alaska Statutes and 20 the Alaska Administrative Code the terms "Alaska Teachers' Retirement System Board," 21 "Alaska Public Employees' Retirement System Board," or "Alaska State Pension Investment 22 Board" are used, they shall be read as "Alaska Retirement Management Board" when to do so 23 would be consistent with the changes made by this Act. 24 * Sec. 141. The uncodified law of the State of Alaska is amended by adding a new section 25 to read: 26 SPECIFIC INSTRUCTIONS TO REVISOR OF STATUTES CONCERNING 27 SPECIFIC REFERENCES. (a) The revisor of statutes shall change references to "this 28 chapter" to "AS 14.25.009 - 14.25.220" in the following statutes: AS 14.25.040(b), 29 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), 30 14.25.105, 14.25.107, 14.25.110(k), 14.25.142, 14.25.150(b), 14.25.153, 14.25.160(h), 31 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
01 in 14.25.220 in each place that the phrase appears. 02 (b) The revisor of statutes shall change the reference to "board" to "administrator" in 03 the following statutes: AS 14.25.075 and 14.25.130(f). 04 (c) The revisor of statutes shall change the reference to "system" to "plan" in the 05 following statutes: AS 14.25.040(b), 14.25.040(c), 14.25.045, 14.25.047, 14.25.050(a), 06 14.25.055, 14.25.060, 14.25.061(a), 14.25.062, 14.25.063(a), 14.25.065, 14.25.070, 07 14.25.075(c), 14.25.075(d), 14.25.075(g), 14.25.075(h), 14.25.075(i), 14.25.100(a), 08 14.25.105(c), 14.25.107, 14.25.110, 14.25.125(c), 14.25.143, 14.25.163, 14.25.165(i), 09 14.25.167(g), 14.25.168, 14.25.169, 14.25.173(a), 14.25.173(d), 14.25.181, 14.25.200, 10 14.25.210, 14.25.220(1), 14.25.220(4), 14.25.220(7), 14.25.220(14), 14.25.220(20), 11 14.25.220(22), 14.25.220(23), 14.25.220(31), 14.25.220(34), 14.25.220(36), 14.25.220(37), 12 14.25.220(42); AS 39.35.120, 39.35.125, 39.35.160, 39.35.165(a), 39.35.165(c), 13 39.35.165(d), 39.35.165(e), 39.35.165(g), 39.35.165(h), 39.35.165(i), 39.35.170, 39.35.180, 14 39.35.195(b), 39.35.195(c), 39.35.250, 39.35.280, 39.35.300(c), 39.35.310(a), 39.35.310(c), 15 39.35.340(a), 39.35.342(a), 39.35.342(d), 39.35.345(a), 39.35.345(d), 39.35.360(a), 16 39.35.360(g), 39.35.360(h), 39.35.360(k), 39.35.370(f), 39.35.370(h), 39.35.370(i), 17 39.35.370(j), 39.35.370(k), 39.35.371(i), 39.35.381(b), 39.35.381(g), 39.35.385(c), 18 39.35.400(e), 39.35.450(g), 39.35.475(a), 39.35.475(b), 39.35.475(d), 39.35.500(a), 19 39.35.505, 39.35.520(a), 39.35.520(d), 39.35.522(d), 39.35.527(a), 39.35.527(b), 39.35.530, 20 39.35.535(a), 39.35.535(d), 39.35.550, 39.35.560, 39.35.570, 39.35.580, 39.35.590, 21 39.35.600, 39.35.610, 39.35.620(a), 39.35.620(h), 39.35.650, 39.35.670, 39.35.675(a), 22 39.35.680(1), 39.35.680(5), 39.35.680(9), 39.35.680(12), 39.35.680(15), 39.35.680(16), 23 39.35.680(17), 39.35.680(20), 39.35.680(21)(A), 39.35.680(29), 39.35.680(32), 24 39.35.680(33), and 39.35.680(35). 25 (d) The revisor of statutes shall change the reference to "board" to "commissioner" in 26 the following statutes: AS 39.35.290, 39.35.522(a), 39.35.522(b), and 39.35.522(d). 27 (e) The revisor of statutes shall change references to "this chapter" to "AS 39.35.095 - 28 39.35.680" in the following statutes: AS 39.35.165, 39.35.200, 39.35.250, 39.35.300, 29 39.35.340, 39.35.350, 39.35.360, 39.35.370, 39.35.371, 39.35.375, 39.35.381, 39.35.480, 30 39.35.490, 39.35.495, 39.35.505, 39.35.530, 39.35.546, 39.35.547, 39.35.615(c), 31 39.35.620(e), 39.35.660, 39.35.675(b), 39.35.677, and 39.35.680.
01 (f) The revisor of statutes shall renumber AS 39.35.690 to follow AS 39.35.990. 02 * Sec. 142. The uncodified law of the State of Alaska is amended by adding a new section 03 to read: 04 IMPLEMENTATION OF SECTIONS 140 AND 141 OF THIS ACT. Under 05 AS 01.05.031, the revisor of statutes shall implement secs. 140 and 141 of this Act in the 06 Alaska Statutes, and, under AS 44.62.125(b)(6), the regulations attorney shall implement secs. 07 139 and 140 of this Act in the administrative code. 08 * Sec. 143. Sections 10, 11, 13, 14, 19, 87 - 92, 105, 112, and 131 of this Act take effect 09 June 30, 2010. 10 * Sec. 144. Section 142 of this Act takes effect immediately under AS 01.10.070(c). 11 * Sec. 145. Except as provided in secs. 143 and 144 of this Act, this Act takes effect July 1, 12 2005.