CSHB 179(STA): "An Act relating to insurance for public employees, teachers, and certain retired public employees and teachers and to supplemental employee benefits; relating to teachers' and public employees' defined benefit retirement plans, to teachers' and public employees' defined contribution retirement plans, to employee and employer contributions to the teachers' retirement system and the public employees' retirement system, and to the administration of the Public Employees' Retirement System of Alaska and the deferred compensation program for state employees; establishing in the Department of Revenue the teachers' retirement system past service cost liability account and the public employees' retirement system past service cost liability account; relating to benefits of, references to federal law in, and investments in the teachers' retirement system and the public employees' retirement system; modifying the jurisdiction of the independent office of administrative hearings as related to retirement and related personnel benefits; and providing for an effective date."
00 CS FOR HOUSE BILL NO. 179(STA) 01 "An Act relating to insurance for public employees, teachers, and certain retired public 02 employees and teachers and to supplemental employee benefits; relating to teachers' and 03 public employees' defined benefit retirement plans, to teachers' and public employees' 04 defined contribution retirement plans, to employee and employer contributions to the 05 teachers' retirement system and the public employees' retirement system, and to the 06 administration of the Public Employees' Retirement System of Alaska and the deferred 07 compensation program for state employees; establishing in the Department of Revenue 08 the teachers' retirement system past service cost liability account and the public 09 employees' retirement system past service cost liability account; relating to benefits of, 10 references to federal law in, and investments in the teachers' retirement system and the 11 public employees' retirement system; modifying the jurisdiction of the independent 12 office of administrative hearings as related to retirement and related personnel benefits;
01 and providing for an effective date." 02 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 03 * Section 1. AS 14.25.070(a) is amended to read: 04 (a) An employer shall make contributions to the plan in accordance with this 05 section and as certified by the board in an amount sufficient, after subtracting 06 member contributions, to provide the benefits of AS 14.25.009 - 14.25.220. The 07 amount shall be calculated by applying the employer normal cost rate to the sum 08 total of the base salaries paid to members in the plan and by applying the past 09 service rate to the sum total of the base salaries paid to members in the system 10 [AN EMPLOYER CONTRIBUTION RATE, CERTIFIED BY THE BOARD, 11 AGAINST THE SUM TOTAL OF THE BASE SALARIES PAID TO MEMBERS], 12 including any adjustments to contributions required by AS 14.25.173(a). The 13 employer shall remit this amount to the administrator in accordance with 14 AS 14.25.065. 15 * Sec. 2. AS 14.25.070 is amended by adding new subsections to read: 16 (d) In (a) of this section, "employer normal cost rate" means the percentage of 17 compensation of all active members in the plan that, when combined with the member 18 contribution rate of active members in the plan, is sufficient to provide the benefits 19 that are expected to be credited with respect to service during the year beginning after 20 the last valuation date. This percentage is uniformly determined for all employers and 21 is applicable to each employer. 22 (e) In (a) of this section, "past service rate" means the percentage of 23 compensation of all active members in the system necessary to provide the annual 24 amount required to amortize the unfunded obligations of the employers for benefits 25 earned by members in the plan before the date of the last actuarial valuation over a 26 period not to exceed the maximum period allowed by generally accepted accounting 27 principles of the Governmental Accounting Standards Board. This percentage is 28 uniformly determined for all employers and is applicable to each employer. 29 * Sec. 3. AS 14.25.125(c) is amended to read: 30 (c) Membership service for which contributions were refunded is not
01 creditable under this section [UNLESS THE REFUNDED CONTRIBUTIONS HAVE 02 BEEN REPAID. FOR PURPOSES OF THIS SECTION, A MEMBER OR FORMER 03 MEMBER DOES NOT HAVE TO BE REEMPLOYED UNDER THIS PLAN IN 04 ORDER TO REPAY REFUNDED CONTRIBUTIONS. COMPOUND INTEREST 05 AT THE RATE PRESCRIBED BY REGULATION MUST BE ADDED TO THE 06 REINSTATEMENT INDEBTEDNESS FROM THE DATE OF THE REFUND TO 07 THE DATE OF REPAYMENT]. 08 * Sec. 4. AS 14.25.310 is amended to read: 09 Sec. 14.25.310. Applicability of AS 14.25.310 - 14.25.590. The provisions of 10 AS 14.25.310 - 14.25.590 apply only to teachers who first become members on or 11 after July 1, 2006, to members who are employed by employers that do not 12 participate in the retirement benefit plan established under AS 14.25.009 - 13 14.25.220, to former members as that term is defined under AS 14.25.220, or to 14 members who transfer into the defined contribution plan under AS 14.25.540. 15 * Sec. 5. AS 14.25.320(c) is amended to read: 16 (c) The defined contribution retirement plan is intended to qualify under 26 17 U.S.C. 401(a), [AND] 414(d), and 414(k) (Internal Revenue Code) as a qualified 18 retirement plan established and maintained by the state for its employees and for the 19 employees of school districts and regional educational attendance areas in the state. 20 * Sec. 6. AS 14.25.350 is amended by adding a new subsection to read: 21 (e) An employer shall make annual contributions to a trust account in the plan, 22 applied as a percentage of each member's compensation from July 1 to the following 23 June 30, in an amount determined by the board to be actuarially required to fully fund 24 the cost of providing occupational disability and occupational death benefits under 25 AS 14.25.310 - 14.25.590. 26 * Sec. 7. AS 14.25.380 is amended to read: 27 Sec. 14.25.380. Limitations on contributions and benefits. Notwithstanding 28 any other provisions of this plan, the annual additions to each member's individual 29 account under this plan and under all defined contribution plans of the employer 30 required to be aggregated with the contributions from this plan under the provisions of 31 26 U.S.C. 415 may not exceed, for any limitation year, the amount permitted under 26
01 U.S.C. 415(c) at any time. If the amount of a member's individual account 02 [DEFINED CONTRIBUTION PLAN] contributions exceeds the limitation of 26 03 U.S.C. 415(c) for any limitation year, the administrator shall take any necessary 04 remedial action to correct an excess contribution. A fixed benefit provided under 05 this plan may not exceed, for or during a limitation year, the amount permitted 06 under 26 U.S.C. 415(b). If a fixed benefit provided under this plan exceeds, for or 07 during a limitation year, the amount permitted under 26 U.S.C. 415(b), the 08 administrator shall take remedial action necessary to comply with the limits on 09 the benefit amount in 26 U.S.C. 415(b). The provisions of 26 U.S.C. 415, and the 10 regulations adopted under that statute, as applied to qualified [DEFINED 11 CONTRIBUTION] plans of governmental employees are incorporated as part of the 12 terms and conditions of the plan. 13 * Sec. 8. AS 14.25.400(b) is amended to read: 14 (b) A participant may direct investment of plan funds held in an individual 15 account among available investment funds in accordance with rules established by the 16 board. 17 * Sec. 9. AS 14.25.485(b) is amended to read: 18 (b) The occupational disability benefits accrue beginning the first day of the 19 month following termination of employment as a result of the disability and are 20 payable the last day of the month. If a final determination granting the benefit is not 21 made in time to pay the benefit when due, a retroactive payment shall be made to 22 cover the period of deferment. The last payment shall be for the first month in which 23 the disabled member 24 (1) dies; 25 (2) recovers from the disability; 26 (3) fails to meet the requirements under (f), (h), or (j) [(h)] of this 27 section; or 28 (4) reaches normal retirement age. 29 * Sec. 10. AS 14.25.485(d) is amended to read: 30 (d) The monthly amount of an occupational disability benefit is 40 percent of 31 the disabled member's gross monthly compensation at the time of termination due to
01 disability. Notwithstanding AS 14.25.390(b), at the time a member is appointed to 02 disability, the member becomes fully vested in the employer contributions made 03 under AS 14.25.350(a). A disabled member is fully vested in the contributions to 04 the member's individual account made under this subsection. A member is not 05 entitled to elect distributions from the member's individual account under 06 AS 14.25.410 while the member is receiving disability benefits under this section. 07 While a member is receiving disability benefits, based on the disabled member's gross 08 monthly compensation at the time of termination due to disability, the employer shall 09 make contributions to the 10 (1) member's individual account under AS 14.25.340 on behalf of the 11 member, without deduction from the member's disability payments; and 12 (2) appropriate accounts and funds on behalf of the member under 13 AS 14.25.350. 14 * Sec. 11. AS 14.25.485(g) is amended to read: 15 (g) A disabled member's occupational disability benefit terminates the last 16 day of the month in which [WHEN] the disabled member first qualifies [ATTAINS 17 ELIGIBILITY] for normal retirement. At that time, the member's retirement benefit 18 shall be determined under the provisions of AS 14.25.420 - 14.25.440, 14.25.470, and 19 14.25.480. A member whose occupational disability benefit terminates under this 20 subsection [RECEIVING DISABILITY BENEFITS UP UNTIL ELIGIBILITY FOR 21 RETIREMENT] shall be considered to have retired directly from the plan. 22 * Sec. 12. AS 14.25.485(i) is amended to read: 23 (i) Upon the death of a disabled member who is receiving or is entitled to 24 receive an occupational disability benefit, the administrator shall pay the surviving 25 spouse a surviving spouse's pension, equal to 40 percent of the member's monthly 26 compensation at the termination of employment because of occupational disability. If 27 there is no surviving spouse, the administrator shall pay the survivor's pension in equal 28 parts to the dependent children of the member. While the monthly survivor's 29 pension is being paid, the survivor is not entitled to elect distributions from the 30 employee's individual contribution account under AS 14.25.410. The first payment 31 of the surviving spouse's pension or of a dependent child's pension shall accrue from
01 the first day of the month following the member's death and is payable the last day of 02 the month. The last payment shall be made the last day of [FOR] the last month in 03 which there is an eligible surviving spouse or dependent child, or the last day of the 04 month in which date the member would have first qualified for normal 05 retirement if the member had survived, whichever day comes sooner. A 06 retirement benefit shall be determined under the provisions of AS 14.25.420 - 07 14.25.440, 14.25.470, and 14.25.480 based on [. ON] the date the member would 08 have first qualified for normal retirement [OF THE MEMBER WOULD HAVE 09 OCCURRED] if the member had survived. In addition to the payment of the 10 member's individual account, the surviving spouse or, if there is no surviving 11 spouse, the surviving dependent children of the member, shall receive an 12 additional benefit in an amount equal to the accumulated contributions that 13 would have been made to the deceased member's individual account under 14 AS 14.25.340(a) and 14.25.350(a), based on the deceased member's gross monthly 15 compensation at the time of occupational disability, from the time of the 16 member's death to the date the member would have first qualified for normal 17 retirement if the member had survived. Earnings shall be allocated to the 18 additional benefit calculated under this subsection based on the actual rate of 19 return, net of expenses, of the trust account established under AS 14.25.350(e) 20 over the period that the contributions would have been made. This additional 21 amount shall be paid in the same manner as determined for the member's 22 individual account under AS 14.25.420 - 14.25.460. For the purpose of 23 determining eligibility of a survivor who is receiving a benefit under this 24 subsection for medical benefits under AS 14.25.470 - 14.25.480, a [LIVED, THE 25 RETIREMENT BENEFIT SHALL BE DETERMINED UNDER THE PROVISIONS 26 OF AS 14.25.420 - 14.25.440, 14.25.470, AND 14.25.480. A] member who died 27 while receiving disability benefits shall be considered to have retired directly from the 28 plan on the date the member would have first qualified for normal retirement [OF 29 THE MEMBER WOULD HAVE OCCURRED] if the member had survived. The 30 period during which the member was eligible for a disability benefit and the 31 period during which a survivor's pension is paid to a survivor under this
01 subsection each constitute membership service for the purposes of determining 02 vesting in employer contributions under AS 14.25.390(b) and eligibility for 03 retirement and medical benefits under this chapter and AS 39.30.300 - 39.30.495 04 [LIVED]. 05 * Sec. 13. AS 14.25.485(j) is repealed and reenacted to read: 06 (j) For the purposes of this section, a condition qualifies as an occupational 07 disability if 08 (1) the condition is a physical or mental condition that the 09 administrator determines presumably permanently prevents an employee from 10 satisfactorily performing the employee's usual duties or the duties of another 11 comparable position or job available to the employee and for which the employee is 12 qualified by training or education; and 13 (2) the proximate cause of the condition is a bodily injury sustained, or 14 a hazard undergone, while in the performance and within the scope of the employee's 15 duties and is not the proximate result of the wilful negligence of the employee. 16 * Sec. 14. AS 14.25 is amended by adding a new section to read: 17 Sec. 14.25.486. Disability benefit adjustment. (a) Once each year, the 18 administrator shall increase disability benefits. The amount of the increase is a 19 percentage of the current disability benefit equal to the lesser of 75 percent of the 20 increase in the cost of living in the preceding calendar year or nine percent. 21 (b) If a disabled member was not receiving a benefit during the entire 22 preceding calendar year, the increase in the benefit under this section shall be adjusted 23 by multiplying it by a fraction, the numerator of which is the number of months for 24 which the benefit was received in the preceding calendar year and the denominator of 25 which is 12. 26 (c) An increase in benefit payments under this section is effective July 1 of 27 each year and is based on the percentage increase in the Consumer Price Index for 28 urban wage earners and clerical workers for Anchorage, Alaska, during the previous 29 calendar year, as determined by the United States Department of Labor, Bureau of 30 Labor Statistics. 31 (d) Benefit adjustments under this section shall terminate the last day of the
01 month following the date on which a disabled member is no longer receiving a 02 disability benefit under AS 14.25.485. 03 * Sec. 15. AS 14.25.487(b) is amended to read: 04 (b) The first payment of the surviving spouse's pension or of a dependent 05 child's pension shall be made for the month following the month in which the member 06 dies. Payments [, AND PAYMENT] shall cease on the last day of the month in 07 which there is no longer an eligible spouse or eligible dependent child, or the last 08 day of the month following the earliest date [TO BE MADE BEGINNING WITH 09 THE MONTH IN WHICH] the member would have first qualified for normal 10 retirement if the member had survived, whichever day is earlier. 11 * Sec. 16. AS 14.25.487(c) is amended to read: 12 (c) The monthly survivor's pension in (b) of this section for survivors of 13 members is 40 percent of the member's monthly compensation in the month in which 14 the member dies. While the monthly survivor's pension is being paid, the survivor 15 is not entitled to elect distributions from the member's individual contribution 16 account under AS 14.25.410, except as required by AS 14.25.440. While the 17 monthly survivor's pension is being paid, the employer shall make contributions on 18 behalf of the member's surviving spouse and member's surviving dependent 19 children [BENEFICIARIES BASED ON THE DECEASED MEMBER'S GROSS 20 MONTHLY COMPENSATION AT THE TIME OF OCCUPATIONAL DEATH 21 (1) TO THE MEMBER'S INDIVIDUAL ACCOUNT UNDER 22 AS 14.25.340, WITHOUT DEDUCTION FROM THE SURVIVOR'S PENSION; 23 AND 24 (2)] to the appropriate accounts and funds [ON BEHALF OF THE 25 MEMBER] under AS 14.25.350(b) - (e). 26 * Sec. 17. AS 14.25.487(e) is amended to read: 27 (e) On the date the member would have first qualified for normal retirement 28 [OF THE MEMBER WOULD HAVE OCCURRED] if the member had survived 29 [LIVED], the retirement benefit shall be determined under the provisions of 30 AS 14.25.420 - 14.25.440, 14.25.470, and 14.25.480. In addition to payment of the 31 member's individual account, the surviving spouse or, if there is no surviving
01 spouse, the surviving dependent children of the member, shall receive an 02 additional benefit in an amount equal to the accumulated contributions that 03 would have been made to the deceased member's individual account under 04 AS 14.25.340(a) and 14.25.350(a), based on the deceased member's gross monthly 05 compensation at the time of the member's occupational death, from the time of 06 the member's death to the date the member would have first qualified for normal 07 retirement if the member had survived. Earnings shall be allocated to the 08 additional benefit calculated under this subsection based on the actual rate of 09 return, net of expenses, of the trust account established under AS 14.25.350(e) 10 over the period that the contributions would have been made. This additional 11 amount shall be paid in the same manner as determined for the member's 12 individual account under AS 14.25.420 - 14.25.460. A member who died and whose 13 survivors receive occupational death benefits under this section shall be considered to 14 have retired directly from the plan on the date the [NORMAL RETIREMENT OF 15 THE] member would have first qualified for normal retirement [OCCURRED] if 16 the member had survived. The period of time during which a survivor's pension is 17 paid under this section constitutes membership service for the purposes of 18 determining vesting in employer contributions under AS 14.25.390(b) and 19 eligibility for retirement and medical benefits under this chapter and 20 AS 39.30.300 - 39.30.495 [LIVED]. 21 * Sec. 18. AS 14.25 is amended by adding new sections to read: 22 Sec. 14.25.488. Survivor's pension adjustment. (a) Once each year, the 23 administrator shall increase payments to a person 60 years of age or older receiving a 24 survivor's pension under AS 14.25.485(i) or 14.25.487(c), and to a person who has 25 received a survivor's pension under AS 14.25.485(i) or 14.25.487(c) for at least eight 26 years if the person is not otherwise eligible for an increase under this section. 27 (b) The amount of the increase is a percentage of the current survivor's 28 pension equal to the lesser of 50 percent of the increase in the cost of living in the 29 preceding calendar year or six percent. 30 (c) If a survivor was not receiving a pension during the entire preceding 31 calendar year, the increase in the survivor's pension under this section shall be
01 adjusted by multiplying it by a fraction, the numerator of which is the number of 02 months for which the pension was received in the preceding calendar year and the 03 denominator of which is 12. 04 (d) The administrator shall increase the initial survivor's pension paid to a 05 survivor of a member who died while receiving disability benefits by a percentage 06 equal to the total cumulative percentage that has been applied to the member's 07 disability benefit under AS 14.25.486. 08 (e) An increase in benefit payments under this section is effective July 1 of 09 each year and is based on the percentage increase in the Consumer Price Index for 10 urban wage earners and clerical workers for Anchorage, Alaska, during the previous 11 calendar year, as determined by the United States Department of Labor, Bureau of 12 Labor Statistics. 13 (f) Pension adjustments under this section shall terminate the last day of the 14 month following the date on which a survivor is no longer receiving a survivor's 15 pension under AS 14.25.485(i) or 14.25.487(c). 16 Sec. 14.25.489. Premiums for retiree major medical insurance coverage 17 upon termination of disability benefits or survivor's pension. The premium for 18 retiree major medical insurance coverage payable by a member whose disability 19 benefit is terminated under AS 14.25.485(g) or by an eligible survivor whose survivor 20 pension is terminated under AS 14.25.485(i) or 14.25.487(e) when the member would 21 have been eligible for normal retirement if the member had survived shall be 22 determined under AS 14.25.480(g)(2) as if the member or survivor were eligible for 23 Medicare. 24 * Sec. 19. AS 14.25.510 is amended to read: 25 Sec. 14.25.510. Nonguarantee of returns, rates, or benefit amounts. The 26 plan created by AS 14.25.310 - 14.25.590 is, with respect to individual accounts, 27 treated as a defined contribution plan and [PLAN,] not as a defined benefit plan. The 28 amount of money in the individual account of a participant depends on the amount of 29 contributions and the rate of return from investments of the account that varies over 30 time. If benefits are paid in the form of an annuity, the benefit amount payable is 31 dependent on the amount of money in the account and the interest rates applied and
01 service fees charged by the annuity payor at the time the annuity is purchased from 02 the carrier and benefits are first paid. Nothing in this plan guarantees a participant 03 (1) a rate of return or interest rate other than that actually earned by the 04 account of the participant, less applicable administrative expenses; or 05 (2) an annuity based on interest rates or service charges other than 06 interest rates available from and service charges by the annuity payor in effect at the 07 time the annuity is paid. 08 * Sec. 20. AS 14.25.540(c) is amended to read: 09 (c) Each eligible member who elects to participate in the defined contribution 10 retirement plan shall have transferred to a new individual account the member 11 contribution account balance held in trust for the member under the defined benefit 12 retirement plan of the teachers' retirement system. A matching employer contribution 13 shall be made on behalf of that employee to the new account. The employer shall 14 make the matching contribution from funds other than the trust funds of the defined 15 benefit retirement plan. The amount of the matching employer contribution shall 16 be subject to, and may not exceed, the limitation of 26 U.S.C. 415(c) during the 17 applicable limitation year in which the contribution is made. 18 * Sec. 21. AS 14.25.540(d) is amended to read: 19 (d) Upon a transfer, all membership service previously earned under the 20 defined benefit retirement plan shall be nullified for purposes of entitlement to a future 21 benefit under the defined benefit retirement plan but shall be credited for purposes of 22 determining vesting in employer contributions under AS 14.25.390(b) and 23 eligibility to elect medical benefits under AS 14.25.470. Membership service allowed 24 for credit toward medical benefits does not include any service credit purchased under 25 AS 14.25.075 for employment by an employer who is not a participating employer in 26 this chapter. 27 * Sec. 22. AS 14.25.540(h) is amended to read: 28 (h) A member who is eligible to elect transfer to the defined contribution 29 plan must make the election not later than 12 months after the first day of the 30 month following the administrator's receipt of notification that the member's 31 employer consents to transfers of its members under (i) of this section. The
01 election to participate in the defined contribution retirement plan must be made in 02 writing on forms and in the manner prescribed by the administrator. Before accepting 03 an election to participate in the defined contribution retirement plan, the administrator 04 must provide the employee planning on making an election to participate in the 05 defined contribution retirement plan with information, including calculations to 06 illustrate the effect of moving the employee's retirement plan from the defined benefit 07 retirement plan to the defined contribution retirement plan as well as other information 08 to clearly inform the employee of the potential consequences of the employee's 09 election. An election made under this subsection to participate in the defined 10 contribution retirement plan is irrevocable. Upon making the election, the participant 11 shall be enrolled as a member of the defined contribution retirement plan, the 12 member's participation in the plan shall be governed by the provisions of 13 AS 14.25.310 - 14.25.590, and the member's participation in the defined benefit 14 retirement plan under AS 14.25.009 - 14.25.220 shall terminate. The participant's 15 enrollment in the defined contribution retirement plan shall be effective the first day of 16 the month after the administrator receives the completed enrollment forms. An 17 election made by an eligible member who is married is not effective unless the 18 election is signed by the individual's spouse. 19 * Sec. 23. AS 14.25.590(7) is amended to read: 20 (7) "compensation" 21 (A) means 22 (i) the total remuneration earned by an employee for 23 personal services rendered, including cost-of-living differentials, as 24 reported on the employee's Federal Income Tax Withholding Statement 25 (Form W-2) from the employer for the calendar year; 26 (ii) the member contribution to the teachers' retirement 27 system under AS 14.25.340; 28 (B) does not include retirement benefits, severance pay or other 29 separation bonuses, welfare benefits, per diem, expense allowances, workers' 30 compensation payments, payments for leave not used whether those leave 31 payments are scheduled payments, lump-sum payments, donations, or cash-ins,
01 any remuneration contributed by the employer for or on account of the 02 employee under this plan or under any other qualified or nonqualified 03 employee benefit plan, or any remuneration not specifically included above 04 that would have been excluded under 26 U.S.C. 3121(a) (Internal Revenue 05 Code) if the employer had remained in the Federal Social Security System [, 06 OR ANY REMUNERATION PAID BY THE EMPLOYER IN EXCESS OF 07 THE SOCIAL SECURITY TAXABLE WAGE BASE FOR THE 08 CALENDAR YEAR]; 09 (C) notwithstanding (B) of this paragraph, includes any amount 10 that is contributed by the employer under a salary reduction agreement and that 11 is not includible in the gross income of the employee under 26 U.S.C. 125, 12 132(f)(4), 402(e)(3), 402(h)(1)(B), or 403(b) (Internal Revenue Code); the 13 annual compensation limitation for the member, which is so taken into account 14 for those purposes, may not exceed $200,000, as adjusted for the cost of living 15 in accordance with 26 U.S.C. 401(a)(17)(B) (Internal Revenue Code), with the 16 limitation for a fiscal year being the limitation in effect for the calendar year 17 within which the fiscal year begins; 18 * Sec. 24. AS 37.10 is amended by adding new sections to read 19 Article 4A. Teachers' and Public Employees' Retirement System Past Service 20 Cost Liability Accounts. 21 Sec. 37.10.200. Teachers' retirement system past service cost 22 liability account. (a) There is established in the Department of Revenue the 23 teachers' retirement system past service cost liability account, consisting of 24 appropriations to the account. The commissioner of revenue shall develop and adopt 25 regulations necessary to accomplish the requirements of this section and shall manage 26 the account according to the requirements of AS 37.10.071. 27 (b) At the end of each fiscal year, after all distributions under (c) of 28 this section are completed, money appropriated for use in that fiscal year 29 reverts to the general fund and all income earned on the money shall be 30 paid to the general fund. 31 (c) During each fiscal year, the commissioner of revenue shall
01 distribute from the account established in (a) of this section, to each 02 employer other than the state that is a member of the Teachers' 03 Retirement System of Alaska, a payment that the employer shall pay to the 04 state for that fiscal year toward eliminating the employer's past service 05 cost liability to the Teachers' Retirement System of Alaska. 06 (d) A payment to an employer under (c) of this section must be 07 based on 80 percent of the payroll on which employer contributions to the 08 Teachers' Retirement System of Alaska were required and that the 09 employer reported to the Department of Administration for the fiscal year 10 preceding by three fiscal years the fiscal year for which a distribution is 11 made under this section, and the past service cost rate of the system for 12 the fiscal year preceding by three fiscal years the fiscal year for which a 13 distribution is made under this section. 14 (e) For any fiscal year that the money available for distribution 15 from the account is insufficient to pay every eligible employer the amount 16 due under this section, the amount distributed in that fiscal year to every 17 eligible employer shall be decreased pro rata. 18 (f) An employer who receives an overpayment in excess of a 19 distribution authorized by this section or in excess of the employer's past 20 service cost liability shall immediately return the overpayment to the 21 commissioner of revenue, who shall cause it to be returned to the account. 22 Sec. 37.10.202. Public employees' retirement system past 23 service cost liability account. (a) There is established in the Department of 24 Revenue the public employees' retirement system past service cost liability 25 account, consisting of appropriations to the account. The commissioner of revenue 26 shall develop and adopt regulations necessary to accomplish the requirements of this 27 section and shall manage the account according to the requirements of AS 37.10.071. 28 (b) At the end of each fiscal year, after all distributions under (c) 29 and (d) of this section are completed, money appropriated for use in that 30 fiscal year reverts to the general fund and all income earned on the money
01 shall be paid to the general fund. 02 (c) During each fiscal year, the commissioner of revenue shall 03 distribute from the account established in (a) of this section, to each 04 municipal employer or school district employer member of the Public 05 Employees' Retirement System of Alaska, a payment that the employer shall 06 pay to the state for that fiscal year toward eliminating the employer's past 07 service cost liability to the Public Employees' Retirement System of 08 Alaska. 09 (d) A payment to an employer under (c) of this section must be 10 based on the payroll on which employer contributions to the Public 11 Employees' Retirement System of Alaska were required and that the 12 employer reported to the Department of Administration for the fiscal year 13 preceding by three fiscal years the fiscal year for which a distribution is 14 made under (c) of this section and 80 percent of the employer's past service 15 cost rate during the fiscal year that precedes the distribution fiscal year 16 under (c) of this section by three fiscal years. 17 (e) In addition to the distribution under (c) of this section, an 18 employer that paid to the Public Employees' Retirement System of Alaska 19 in excess of the amount the employer was required to pay for the fiscal 20 year preceding by three fiscal years the fiscal year that a distribution is 21 made under this section shall receive, in unrestricted funds, an incentive 22 distribution from the account in an amount equal to 50 percent of the 23 excess. 24 (f) For any fiscal year that the money available for distribution from 25 the account is insufficient to pay every eligible employer the amount due 26 under this section, the amount distributed in that fiscal year to every 27 eligible employer shall be decreased pro rata. 28 (g) An employer who receives an overpayment in excess of a 29 distribution or incentive distribution authorized by this section shall 30 immediately return the overpayment to the commissioner of revenue, who
01 shall cause it to be returned to the account. 02 Sec. 37.10.204. Definition. In AS 37.10.200 - AS 37.10.204, "past 03 service cost rate" means the annual payment required to eliminate an employer's 04 unfunded liability over the amortization period, divided by the payroll for which 05 employer contributions are required and that is reported by the employer to the 06 Department of Administration for the fiscal year preceding by three fiscal years the 07 fiscal year that a distribution is made under AS 37.10.200 or 37.10.202. 08 * Sec. 25. AS 39.30 is amended by adding a new section to read: 09 Sec. 39.30.097. Regulations. The administrator may adopt regulations to 10 administer AS 39.30.090 - 39.30.095. Regulations adopted under this section relate to 11 the internal management of a state agency and are not subject to AS 44.62 12 (Administrative Procedure Act). 13 * Sec. 26. AS 39.30.154 is amended to read: 14 Sec. 39.30.154. Powers and duties of the administrator. The administrator 15 has the same powers and duties with regard to the plan as those set out in 16 AS 14.25.003 and 14.25.004 [AS 14.25.004]. 17 * Sec. 27. AS 39.30.160(a) is amended to read: 18 (a) The Department of Administration shall, in accordance with policies 19 prescribed by regulations adopted by the commissioner [OF THE ALASKA 20 RETIREMENT MANAGEMENT BOARD], provide to employees for whom special 21 individual employee benefit accounts are established under AS 39.30.150(c) the 22 following benefit options: 23 (1) supplemental health benefits; 24 (2) supplemental death benefits; 25 (3) supplemental disability benefits; and 26 (4) supplemental dependent care benefits. 27 * Sec. 28. AS 39.30.160(e) is amended to read: 28 (e) Regulations adopted by the commissioner [BOARD] implementing 29 AS 39.30.150 and this section are not subject to AS 44.62 (Administrative Procedure 30 Act). 31 * Sec. 29. AS 39.30 is amended by adding a new section to read:
01 Sec. 39.30.165. Appeals. A final decision made under AS 39.30.150 - 02 39.30.180 is subject to appeal under AS 44.64. 03 * Sec. 30. AS 39.30 is amended by adding a new section to read: 04 Sec. 39.30.335. Appeals. A final decision made under AS 39.30.300 - 05 39.30.495 is subject to appeal under AS 44.64. 06 * Sec. 31. AS 39.30.340 is amended to read: 07 Sec. 39.30.340. Powers and duties of the administrator. The administrator 08 shall establish a teachers' and public employees' retiree health reimbursement 09 arrangement plan trust fund in which the assets of the plan shall be deposited and held. 10 The administrator has the same powers and duties with regard to the plan and the trust 11 fund as provided in AS 14.25.003 and 14.25.004 [AS 14.25.004]. 12 * Sec. 32. AS 39.30.370 is amended to read: 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 three percent of the 16 average annual compensation of all employees of employers in the plan 17 [EMPLOYER'S AVERAGE ANNUAL EMPLOYEE COMPENSATION]. The 18 administrator shall maintain a record for each member to account for employer 19 contributions on behalf of that member. The board shall establish by regulation the 20 rate of interest to be applied annually to the amount in a member's individual account. 21 * Sec. 33. AS 39.35.250 is amended to read: 22 Sec. 39.35.250. Calculation of employer's contribution rate. (a) An 23 employer shall make contributions to the plan in amounts determined in accordance 24 with this section. For the purposes of this section and AS 39.35.270, the [PAST 25 SERVICE DATE FOR EACH EMPLOYER IS THE ENTRY DATE OF THE 26 EMPLOYER OR DECEMBER 31, 1972, WHICHEVER IS LATER. AFTER 27 DECEMBER 31, 1972, IF AMENDMENTS TO AS 39.35.095 - 39.35.680 ARE 28 ENACTED THAT SUBSTANTIALLY AFFECT BENEFITS ACCRUED BEFORE 29 THE EFFECTIVE DATE OF THE AMENDMENT, THE PAST SERVICE DATE 30 WILL BE CHANGED TO DECEMBER 31 OF THE YEAR IMMEDIATELY 31 PRECEDING THAT IN WHICH THE AMENDMENT IS ENACTED. THE]
01 contribution rate is the sum of the consolidated employer normal cost rate and the 02 past service rate as certified by the board. 03 (b) In (a) of this section, "consolidated employer normal cost rate" means the 04 percentage of compensation of all active members [EMPLOYEES] in the plan which, 05 [IF PAID OVER THE PERIOD OF THEIR CREDITED SERVICE AFTER THEIR 06 PAST SERVICE DATE AND] when combined with all employee contributions to the 07 plan, is sufficient to provide the benefits earned during the year beginning after the 08 last valuation date [AFTER SUCH PAST SERVICE DATES]. This percentage is 09 [UNIFORMLY] determined at the plan level for all employers and is applicable to 10 each employer. 11 (c) In (a) of this section, "past service rate" means the percentage of 12 compensation of all active members [EMPLOYEES] in the system [PLAN] 13 necessary to provide the annual amount required to amortize the unfunded obligations 14 of the plan [EMPLOYER] for benefits earned by members in the plan before the 15 date of the last actuarial valuation [EMPLOYER'S PAST SERVICE DATE] over a 16 period not to exceed the maximum allowed by generally accepted accounting 17 principles of the Governmental Accounting Standards Board [40 YEARS. THE 18 PERIOD OF AMORTIZATION BEGINS AT THE PAST SERVICE DATE OF 19 EACH EMPLOYER. THE PERCENTAGE IS SEPARATELY DETERMINED FOR 20 EACH EMPLOYER.] 21 * Sec. 34. AS 39.35.270(a) is amended to read: 22 (a) The amount of each employer's contributions shall be determined by 23 applying the consolidated employer normal cost [EMPLOYER'S 24 CONTRIBUTION] rate [, AS CERTIFIED BY THE BOARD,] to the total 25 compensation paid to the employer's active members [EMPLOYEES] of the plan 26 and by applying the employer's past service rate to the total compensation paid 27 to the employer's active members in the system [EMPLOYER] for each payroll 28 period, [AND BY] including any adjustments to contributions required by 29 AS 39.35.520(a). This amount shall be remitted by the employer to the administrator 30 in accordance with AS 39.35.610. 31 * Sec. 35. AS 39.35.375(a) is amended to read:
01 (a) An active or inactive member who has never been vested in this plan or in 02 the teachers' retirement plan under AS 14.25.009 - 14.25.220, who has at least two 03 years of credited service in this plan, and who has membership service in the teachers' 04 retirement system may claim credited service in this plan in an amount equal to the 05 membership service the member has in the teachers' retirement system. The claimed 06 credited service may be added to service earned under AS 39.35.095 - 39.35.680 to 07 enable the member to qualify for a public service benefit under this section. The 08 member may not claim credited service for membership service for which the member 09 has received a refund under AS 14.25.150 [UNLESS THE MEMBER FULLY PAYS 10 THE INDEBTEDNESS AS ESTABLISHED UNDER AS 14.25.063]. The member 11 may not claim credited service in this plan based on unused sick leave under 12 AS 14.25.115. 13 * Sec. 36. AS 39.35.385(c) is amended to read: 14 (c) Credited service for which contributions were refunded is not creditable 15 under this section [UNLESS THE REFUNDED CONTRIBUTIONS HAVE BEEN 16 REPAID. FOR PURPOSES OF (a) AND (b) OF THIS SECTION, A MEMBER OR 17 FORMER MEMBER DOES NOT HAVE TO BE REEMPLOYED UNDER THIS 18 PLAN IN ORDER TO PAY REFUNDED CONTRIBUTIONS. COMPOUND 19 INTEREST AT THE RATE PRESCRIBED BY REGULATION SHALL BE ADDED 20 TO THE REINSTATEMENT INDEBTEDNESS FROM THE DATE OF THE 21 REFUND TO THE DATE OF REPAYMENT]. 22 * Sec. 37. AS 39.35.522(d) is amended to read: 23 (d) A ruling of the [THE] commissioner of administration denying a waiver 24 under this section may be appealed under AS 44.64. The administrative law 25 judge may reverse the ruling of the commissioner and may impose conditions on 26 the granting of a waiver that the administrative law judge [WHICH IT] considers 27 equitable. These conditions may include requiring the member or beneficiary to make 28 additional contributions to the plan. 29 * Sec. 38. AS 39.35.680(3) is amended to read: 30 (3) "administrator" means [THE PERSON APPOINTED BY] the 31 commissioner of administration or the commissioner's designee appointed under
01 AS 39.35.003 [AS 39.35.050]; 02 * Sec. 39. AS 39.35.700 is amended to read: 03 Sec. 39.35.700. Applicability of AS 39.35.700 - 39.35.990. The provisions of 04 AS 39.35.700 - 39.35.990 apply only to members first hired on or after July 1, 2006, 05 to members who are employed by employers that do not participate in the 06 retirement benefit plan established under AS 39.35.095 - 39.35.680, to former 07 members as that term is defined under AS 39.35.680, or to members who transfer 08 into the defined contribution plan under AS 39.35.940. 09 * Sec. 40. AS 39.35.710(c) is amended to read: 10 (c) The retirement plan established by AS 39.35.700 - 39.35.990 is intended to 11 qualify under 26 U.S.C. 401(a), [AND] 414(d), and 414(k) (Internal Revenue Code) 12 as a qualified retirement plan established and maintained by the state for its 13 employees, for the employees of political subdivisions, public corporations, and public 14 organizations of the state, and for the employees of other employers whose 15 participation is authorized by AS 39.35.700 - 39.35.990 and who participate in the 16 plan set out in AS 39.35.700 - 39.35.990. 17 * Sec. 41. AS 39.35.750(e) is amended to read: 18 (e) An employer shall make annual contributions to a trust account in the 19 plan, applied as a percentage of each member's compensation from July 1 to the 20 following June 30, in an amount determined by the board to be actuarially required to 21 fully fund the cost of providing occupational disability and occupational death benefits 22 under AS 39.35.700 - 39.35.990 and retirement benefits elected by disabled peace 23 officers and fire fighters under AS 39.35.890(h)(2) [AS 39.35.890 AND 39.35.892]. 24 The contribution required under this subsection for peace officers and fire fighters and 25 the contribution required under this subsection for other employees shall be separately 26 calculated based on the actuarially calculated costs for each group of employees. 27 * Sec. 42. AS 39.35.780 is amended to read: 28 Sec. 39.35.780. Limitations on contributions and benefits. Notwithstanding 29 any other provisions of this plan, the annual additions to each member's individual 30 account under this plan and under all defined contribution plans of the employer 31 required to be aggregated with the contributions from this plan under the provisions of
01 26 U.S.C. 415 may not exceed, for any limitation year, the amount permitted under 26 02 U.S.C. 415(c) at any time. If the amount of a member's individual account 03 [DEFINED CONTRIBUTION PLAN] contributions exceeds the limitation of 26 04 U.S.C. 415(c) for any limitation year, the administrator shall take any necessary 05 remedial action to correct an excess contribution. A fixed benefit provided under 06 this plan may not exceed, for or during a limitation year, the amount permitted 07 under 26 U.S.C. 415(b). If a fixed benefit provided under this plan exceeds, for or 08 during a limitation year, the amount permitted under 26 U.S.C. 415(b), the 09 administrator shall take remedial action necessary to comply with the limits on 10 the benefit amount in 26 U.S.C. 415(b). The provisions of 26 U.S.C. 415, and the 11 regulations adopted under that statute, as applied to qualified [DEFINED 12 CONTRIBUTION] plans of governmental employees are incorporated as part of the 13 terms and conditions of the plan. 14 * Sec. 43. AS 39.35.890(b) is amended to read: 15 (b) The occupational disability benefits accrue beginning the first day of the 16 month following termination of employment as a result of the disability and are 17 payable the last day of the month. If a final determination granting the benefit is not 18 made in time to pay the benefit when due, a retroactive payment shall be made to 19 cover the period of deferment. The last payment shall be for the first month in which 20 the disabled employee 21 (1) dies; 22 (2) recovers from the disability; 23 (3) fails to meet the requirements under (f), (j), or (l) [(j)] of this 24 section; or 25 (4) reaches normal retirement age. 26 * Sec. 44. AS 39.35.890(d) is amended to read: 27 (d) The monthly amount of an occupational disability benefit is 40 percent of 28 the disabled employee's gross monthly compensation at the time of termination due to 29 disability. Notwithstanding AS 39.35.790(b), at the time a member is appointed to 30 disability, the member becomes fully vested in the employer contributions made 31 under AS 39.35.750(a). A disabled member is fully vested in the contributions to
01 the member's individual account made under this subsection. An employee is not 02 entitled to elect distributions from the employee's individual account under 03 AS 39.35.810 while the employee is receiving disability benefits under this section. 04 While an employee is receiving disability benefits, based on the disabled employee's 05 gross monthly compensation at the time of termination due to disability, the employer 06 shall make contributions 07 (1) to the employee's individual account under AS 39.35.730 on behalf 08 of the employee, without deduction from the employee's disability payments; and 09 (2) on behalf of the employee under AS 39.35.750. 10 * Sec. 45. AS 39.35.890(g) is amended to read: 11 (g) A disabled employee's occupational disability benefit terminates the last 12 day of the month in which [WHEN] the disabled employee first qualifies 13 [ATTAINS ELIGIBILITY] for normal retirement. At that time, the employee's 14 retirement benefit shall be determined under the provisions of AS 39.35.820 - 15 39.35.840, 39.35.870, and 39.35.880. An employee whose occupational disability 16 benefit terminates under this subsection [RECEIVING DISABILITY BENEFITS 17 UP UNTIL ELIGIBILITY FOR RETIREMENT] shall be considered to have retired 18 directly from the plan. 19 * Sec. 46. AS 39.35.890(h) is amended to read: 20 (h) Notwithstanding (g) of this section, at the time a peace officer or fire 21 fighter receiving occupational disability benefits under this section first attains 22 eligibility for normal retirement, the employee shall irrevocably elect to receive 23 retirement benefits in the amount calculated as the 24 (1) employee's retirement benefit calculated under the provisions of 25 AS 39.35.820 - 39.35.840; or 26 (2) employee's retirement benefit calculated as if the provisions of 27 AS 39.35.370(c) were to apply; however, retirement benefits paid under this paragraph 28 must be paid first from the peace officer's or fire fighter's individual account, 29 and the remaining benefits must be paid from the trust account established under 30 AS 39.35.750(e); the peace officer or fire fighter may not elect other distributions 31 from the peace officer's or fire fighter's individual account under AS 39.35.810
01 while receiving retirement benefits under this paragraph [MAY NOT BE MADE 02 FROM THE TRUST FUND OF THE PUBLIC EMPLOYEES' DEFINED BENEFIT 03 RETIREMENT PLAN]. 04 * Sec. 47. AS 39.35.890(k) is amended to read: 05 (k) Upon the death of a disabled employee who is receiving or is entitled to 06 receive an occupational disability benefit, the administrator shall pay the surviving 07 spouse a surviving spouse's pension, equal to 40 percent of the employee's monthly 08 compensation at the termination of employment because of occupational disability. If 09 there is no surviving spouse, the administrator shall pay the survivor's pension in equal 10 parts to the dependent children of the employee. While the monthly survivor's 11 pension is being paid, the survivor is not entitled to elect distributions from the 12 employee's individual account under AS 39.35.810. The first payment of the 13 surviving spouse's pension or of a dependent child's pension shall accrue from the first 14 day of the month following the employee's death and is payable the last day of the 15 month. The last payment shall be made the last day of [FOR] the last month in which 16 there is an eligible surviving spouse or dependent child, or the last day of the month 17 in which the employee would have first qualified for normal retirement if the 18 employee had survived, whichever day comes sooner. A retirement benefit shall 19 be determined under the provisions of AS 39.35.820 - 39.35.840, 39.35.870, and 20 39.35.880 based on [. ON] the date the employee would have first qualified for 21 normal retirement [OF THE EMPLOYEE WOULD HAVE OCCURRED] if the 22 employee had survived. In addition to payment of the member's individual 23 account, the surviving spouse or, if there is no surviving spouse, the surviving 24 dependent children of the member, shall receive an additional benefit in an 25 amount equal to the accumulated contributions that would have been made to the 26 deceased member's individual account under AS 39.35.730(a) and 39.35.750(a), 27 based on the deceased member's gross monthly compensation at the time of 28 occupational disability, from the time of the member's death to the date the 29 member would have first qualified for normal retirement if the member had 30 survived. Earnings shall be allocated to the additional benefit calculated under 31 this subsection based on the actual rate of return, net of expenses, of the trust
01 account established under AS 39.35.750(e) over the period that the contributions 02 would have been made. This additional amount shall be paid in the same manner 03 as determined for the member's individual account under AS 39.35.820 - 04 39.35.860. For the purpose of determining eligibility of an employee's survivor 05 who is receiving a benefit under this subsection for medical benefits under 06 AS 39.35.870 - 39.35.880, an employee [LIVED, THE RETIREMENT BENEFIT 07 SHALL BE DETERMINED UNDER THE PROVISIONS OF AS 39.35.820 - 08 39.35.840, 39.35.870, AND 39.35.880. AN EMPLOYEE] who died while receiving 09 disability benefits shall be considered to have retired directly from the plan on the date 10 the employee would have first qualified for normal retirement if the employee 11 had survived. The period during which the employee was eligible for a disability 12 benefit and the period during which a survivor's pension is paid to a survivor 13 under this subsection each constitute membership service for the purposes of 14 determining vesting in employer contributions under AS 39.35.790(b) and 15 eligibility for retirement and medical benefits under this chapter and 16 AS 39.30.300 - 39.30.495 [NORMAL RETIREMENT OF THE EMPLOYEE 17 WOULD HAVE OCCURRED IF THE EMPLOYEE HAD LIVED]. 18 * Sec. 48. AS 39.35.890(l) is repealed and reenacted to read: 19 (l) For the purposes of this section, a condition qualifies an occupational 20 disability if 21 (1) the condition is a physical or mental condition that the 22 administrator determines presumably permanently prevents an employee from 23 satisfactorily performing the employee's usual duties or the duties of another 24 comparable position or job available to the employee and for which the employee is 25 qualified by training or education; and 26 (2) the proximate cause of the condition is a bodily injury sustained, or 27 a hazard undergone, while in the performance and within the scope of the employee's 28 duties and not the proximate result of the wilful negligence of the employee. 29 * Sec. 49. AS 39.35 is amended by adding a new section to read: 30 Sec. 39.35.891. Disability benefit and disabled peace officer or fire fighter 31 retirement benefit adjustment. (a) Once each year, the administrator shall increase
01 disability benefits and retirement benefits elected by disabled peace officers or fire 02 fighters under AS 39.35.890(h)(2). The amount of the increase is a percentage of the 03 current disability benefit or retirement benefit equal to the lesser of 75 percent of the 04 increase in the cost of living in the preceding calendar year or nine percent. 05 (b) If a disabled member was not receiving a benefit during the entire 06 preceding calendar year, the increase in the benefit under this section shall be adjusted 07 by multiplying it by a fraction, the numerator of which is the number of months for 08 which the benefit was received in the preceding calendar year and the denominator of 09 which is 12. 10 (c) If a disabled peace officer or fire fighter elects to receive a retirement 11 benefit in the amount calculated under AS 39.35.890(h)(2), the administrator shall, at 12 the time the disabled peace officer or fire fighter is appointed to retirement, increase 13 the retirement benefit by a percentage equal to the total cumulative percentage that has 14 been applied to the disabled peace officer's or fire fighter's disability benefit under this 15 section. 16 (d) An increase in benefit payments under this section is effective July 1 of 17 each year and is based on the percentage increase in the Consumer Price Index for 18 urban wage earners and clerical workers for Anchorage, Alaska, during the previous 19 calendar year, as determined by the United States Department of Labor, Bureau of 20 Labor Statistics. 21 (e) Benefit adjustments under this section shall terminate the last day of the 22 month following the date on which a disabled member is no longer receiving a 23 disability benefit under AS 39.35.890, unless the member is a disabled peace officer or 24 fire fighter and has chosen a retirement benefit under AS 39.35.890(h)(2). 25 * Sec. 50. AS 39.35.892(b) is amended to read: 26 (b) The first payment of the surviving spouse's pension or of a dependent 27 child's pension shall be made for the month following the month in which the 28 employee dies. Payments [, AND PAYMENT] shall cease on the last day of the 29 month in which there is no longer an eligible spouse or eligible dependent child, 30 or the last day of the month following the earliest date [TO BE MADE 31 BEGINNING WITH THE MONTH IN WHICH] the employee would have first
01 qualified for normal retirement if the employee had survived, whichever day is 02 earlier. 03 * Sec. 51. AS 39.35.892(c) is amended to read: 04 (c) The monthly survivor's pension in (b) of this section for survivors of 05 employees who were not peace officers or fire fighters is 40 percent of the employee's 06 monthly compensation in the month in which the employee dies. The monthly 07 survivor's pension in (b) of this section for survivors of employees who were peace 08 officers or fire fighters is 50 percent of the monthly compensation in the month in 09 which the employee dies. While the monthly survivor's pension is being paid, the 10 survivor is not entitled to elect distributions from the employee's individual 11 contribution account under AS 39.35.810, except as required by AS 39.35.840. 12 While the monthly survivor's pension is being paid, the employer shall make 13 contributions on behalf of the employee's surviving spouse and employee's 14 surviving dependent children [BENEFICIARIES BASED ON THE DECEASED 15 EMPLOYEE'S GROSS MONTHLY COMPENSATION AT THE TIME OF 16 OCCUPATIONAL DEATH 17 (1) TO THE EMPLOYEE'S INDIVIDUAL ACCOUNT UNDER 18 AS 39.35.730, WITHOUT DEDUCTION FROM THE SURVIVOR'S PENSION; 19 AND 20 (2)] to the appropriate accounts and funds under AS 39.35.750(b) - (e). 21 * Sec. 52. AS 39.35.892(e) is amended to read: 22 (e) On the date the employee would have first qualified for normal 23 retirement [OF THE EMPLOYEE WOULD HAVE OCCURRED] if the employee 24 had survived [LIVED], the retirement benefit shall be determined under the 25 provisions of AS 39.35.820 - 39.35.840, 39.35.870, and 39.35.880. In addition to 26 payment of the member's individual account, the surviving spouse or, if there is 27 no surviving spouse, the surviving dependent children of the member, shall 28 receive an additional benefit in an amount equal to the accumulated 29 contributions that would have been made to the deceased member's individual 30 account under AS 39.35.730(a) and 39.35.750(a), based on the deceased member's 31 gross monthly compensation at the time of occupational death, from the time of
01 the member's death to the date the member would have first qualified for normal 02 retirement if the member had survived. Earnings shall be allocated to the 03 additional benefit calculated under this subsection based on the actual rate of 04 return, net of expenses, of the trust account established under AS 39.35.750(e) 05 over the period that such contributions would have been made. This additional 06 amount shall be paid in the same manner as determined for the member's 07 individual account under AS 39.35.820 - 39.35.860. An employee who died and 08 whose survivors receive occupational death benefits under this section shall be 09 considered to have retired directly from the plan on the date the [NORMAL 10 RETIREMENT OF THE] employee would have first qualified for normal 11 retirement [OCCURRED] if the employee had survived. The period of time during 12 which a survivor's pension is paid under this section constitutes membership 13 service for the purposes of determining vesting in employer contributions under 14 AS 39.35.790(b) and eligibility for retirement and medical benefits under this 15 chapter and AS 39.30.300 - 39.30.495 [LIVED]. 16 * Sec. 53. AS 39.35 is amended by adding new sections to read: 17 Sec. 39.35.893. Survivor's pension adjustment. (a) Once each year, the 18 administrator shall increase payments to a person 60 years of age or older receiving a 19 survivor's pension under AS 39.35.890(k) or 39.35.892(c), and to a person who has 20 received a survivor's pension under AS 39.35.890(k) or 39.35.892(c) for at least five 21 years if the person who is not otherwise eligible for an increase under this section. 22 (b) The amount of the increase is a percentage of the current survivor's 23 pension equal to the lesser of 50 percent of the increase in the cost of living in the 24 preceding calendar year or six percent. 25 (c) If a survivor was not receiving a pension during the entire preceding 26 calendar year, the increase in the survivor's pension under this section shall be 27 adjusted by multiplying it by a fraction, the numerator of which is the number of 28 months for which the pension was received in the preceding calendar year and the 29 denominator of which is 12. 30 (d) The administrator shall increase the initial survivor's pension paid to a 31 survivor of a member who died while receiving disability benefits by a percentage
01 equal to the total cumulative percentage that has been applied to the member's 02 disability benefit under AS 39.35.891. 03 (e) An increase in benefit payments under this section is effective July 1 of 04 each year and is based on the percentage increase in the Consumer Price Index for 05 urban wage earners and clerical workers for Anchorage, Alaska, during the previous 06 calendar year, as determined by the United States Department of Labor, Bureau of 07 Labor Statistics. 08 (f) Pension adjustments under this section shall terminate the last day of the 09 month following the date on which a survivor is no longer receiving a survivor's 10 pension under AS 39.35.890(k) or 39.35.892(c). 11 Sec. 39.35.894. Premiums for retiree major medical insurance coverage 12 upon termination of disability benefits or survivor's pension. The premium for 13 retiree major medical insurance coverage payable by an employee or survivor shall be 14 determined under AS 39.35.880(g)(2) as if the employee or survivor were eligible for 15 Medicare 16 (1) if the employee's disability benefit is terminated under 17 AS 39.35.890(g); 18 (2) if the survivor pension paid to an eligible survivor under 19 AS 39.35.892(e) is terminated; 20 (3) if the survivor pension paid to an eligible survivor is terminated 21 under AS 39.35.890(k). 22 * Sec. 54. AS 39.35.910 is amended to read: 23 Sec. 39.35.910. Nonguarantee of returns, rates, or benefit amounts. The 24 plan created by AS 39.35.700 - 39.35.990 is, with respect to individual accounts, 25 treated as a defined contribution plan and [PLAN,] not a defined benefit plan. The 26 amount of money in the individual account of a participant depends on the amount of 27 contributions and the rate of return from investments of the account that varies over 28 time. If benefits are paid in the form of an annuity, the benefit amount payable is 29 dependent on the amount of money in the account and the interest rates applied and 30 service fees charged by the annuity payor at the time the annuity is purchased from 31 the carrier and benefits are first paid. Nothing in this plan guarantees a participant
01 (1) a rate of return or interest rate other than that actually earned by the 02 account of the participant, less applicable administrative expenses; or 03 (2) an annuity based on interest rates or service charges other than 04 interest rates available from and service charges by the annuity payor in effect at the 05 time the annuity is paid. 06 * Sec. 55. AS 39.35.940(c) is amended to read: 07 (c) Each eligible member who elects to participate in the defined contribution 08 retirement plan shall have transferred to a new account the employee contribution 09 account balance held in trust for the member under the defined benefit retirement plan 10 of the public employees' retirement system. A matching employer contribution shall 11 be made on behalf of that employee to the new account. The employer shall make the 12 matching contribution from funds other than the trust funds of the defined benefit 13 retirement plan established under AS 39.35.095 - 39.35.680. The amount of the 14 matching employer contribution shall be subject to, and may not exceed, the 15 limitation of 26 U.S.C. 415(c) during the applicable limitation year. 16 * Sec. 56. AS 39.35.940(d) is amended to read: 17 (d) Upon a transfer, all membership service previously earned under the 18 defined benefit retirement plan shall be nullified for purposes of entitlement to a future 19 benefit under the defined benefit retirement plan but shall be credited for purposes of 20 determining vesting in employer contributions under AS 39.35.790(b) and 21 eligibility to elect medical benefits under AS 39.35.870. Membership service allowed 22 for credit toward medical benefits does not include any service credit purchased for 23 employment by an employer who is not a participating employer in this chapter. 24 * Sec. 57. AS 39.35.940(h) is amended to read: 25 (h) An employee who is eligible to elect transfer to the defined 26 contribution plan must make the election not later than 12 months after the first 27 day of the month that follows the administrators receipt of the notification that 28 the employee's employer consents to transfers of its employees under (i) of this 29 section. The election to participate in the defined contribution retirement plan must be 30 made in writing on forms and in the manner prescribed by the administrator. Before 31 accepting an election to participate in the defined contribution retirement plan, the
01 administrator must provide the employee planning on making an election to participate 02 in the defined contribution retirement plan with information, including calculations to 03 illustrate the effect of moving the employee's retirement plan from the defined benefit 04 retirement plan to the defined contribution retirement plan as well as other information 05 to clearly inform the employee of the potential consequences of the employee's 06 election. An election made under this subsection to participate in the defined 07 contribution retirement plan is irrevocable. Upon making the election, the participant 08 shall be enrolled as a member of the defined contribution retirement plan, the 09 member's participation in the plan shall be governed by the provisions of 10 AS 39.35.700 - 39.35.990, and the member's participation in the defined benefit 11 retirement plan under AS 39.35.115 shall terminate. The participant's enrollment in the 12 defined contribution retirement plan shall be effective the first day of the month after 13 the administrator receives the completed enrollment forms. An election made by an 14 eligible member who is married is not effective unless the election is signed by the 15 individual's spouse. 16 * Sec. 58. AS 39.35 is amended by adding new sections to read: 17 Sec. 39.35.957. Designation of eligible employees, agreement to contribute, 18 and amendment of participation. (a) A political subdivision or public organization 19 participating in the defined contribution retirement plan under AS 39.35.700 - 20 39.35.990 shall designate the departments, groups, or other classifications of 21 employees eligible to participate in the plan and, by participating, shall legally be 22 presumed to have agreed to make contributions each year in the amounts required for 23 members of the plan under AS 39.35.750. 24 (b) If the employer does not participate in the defined benefit retirement plan 25 under AS 39.35.095 - 39.35.680, an employee who is eligible under (a) of this section 26 and who is a member of the defined benefit retirement plan under AS 39.35.095 - 27 39.35.680 does not accrue credited service or make contributions under that defined 28 benefit retirement plan, but shall be a member of the defined contribution retirement 29 plan under AS 39.35.700 - 39.35.990 and make contributions under that plan. 30 (c) An employer may request to amend its participation in the plan to add or 31 exclude departments, groups, or other classifications of employees by filing a
01 resolution as provided by AS 39.35.950 or 39.35.955 with the administrator. 02 Sec. 39.35.958. Termination of participation in the plan. (a) A political 03 subdivision or public organization may request that its participation in the plan be 04 terminated. The request may be made only after adoption of a resolution by the 05 legislative body of the political subdivision and approval of the resolution by the 06 person required by law to approve the resolution, or, in the case of a public 07 organization, after adoption of a resolution by the governing body of that public 08 organization. A certified copy of the resolution shall be filed with the administrator. 09 (b) If contributions are not transmitted to the plan within the prescribed time 10 limit, the commissioner of administration may grant an extension and shall assess 11 interest on the outstanding contributions at the rate established under AS 39.35.610. If 12 the political subdivision or public organization is in default at the end of the extension, 13 participation in the plan is terminated, and it shall be sent notice of termination. 14 (c) When an employer's participation in the plan is terminated, or when an 15 employer terminates coverage of a department, group, or other classification of 16 employees under AS 39.35.957(c), the administrator shall assess the employer an 17 amount that the administrator determines is actuarially required to fully fund the costs 18 to the plan for employees whose coverage is terminated, including the cost of 19 providing the employer's share of retiree health benefits under AS 39.35.880, 20 occupational disability and occupational death benefits under AS 39.35.890 and 21 39.35.892, and retirement benefits elected under AS 39.35.890(h)(2). 22 (d) An employee whose coverage under the plan is terminated as a result of 23 termination of an employer's participation under this section or amendment of the 24 employer's agreement under AS 39.35.957(c) shall be considered fully vested in 25 employer contributions under AS 39.35.790(b) and in the individual account 26 established for the employee under AS 39.30.370. If the employee is later employed 27 with a participating employer, the employee's membership service earned under the 28 plan during employment with a terminated employer shall be credited for purposes of 29 determining vesting in employer contributions under AS 39.35.790(b) and eligibility 30 for retirement and medical benefits under this chapter and AS 39.30.300 - 39.30.495. 31 * Sec. 59. AS 39.35.990(7) is amended to read:
01 (7) "compensation" 02 (A) means 03 (i) the total remuneration earned by an employee for 04 personal services rendered, including cost-of-living differentials, as 05 reported on the employee's Federal Income Tax Withholding Statement 06 (Form W-2) from the employer for the calendar year; 07 (ii) the member contribution to the public employees' 08 retirement system under AS 39.35.730, employee deferrals under 09 AS 39.45.010, the wage reduction amount contributed to the Alaska 10 Supplemental Annuity Plan under AS 39.30.150(a), and the wage 11 reduction amount contributed to the Alaska Supplemental Benefit Plan 12 under AS 39.30.150(c), as those statutes may be amended from time to 13 time; 14 (B) does not include retirement benefits, severance pay or other 15 separation bonuses, welfare benefits, per diem, expense allowances, workers' 16 compensation payments, payments for leave not used whether those leave 17 payments are scheduled payments, lump-sum payments, donations, or cash-ins, 18 any remuneration contributed by the employer for or on account of the 19 employee under this plan or under any other qualified or nonqualified 20 employee benefit plan, or any remuneration not specifically included above 21 which would have been excluded under 26 U.S.C. 3121(a) (Internal Revenue 22 Code) if the employer had remained in the Federal Social Security System [, 23 OR ANY REMUNERATION PAID BY THE EMPLOYER IN EXCESS OF 24 THE SOCIAL SECURITY TAXABLE WAGE BASE FOR THE 25 CALENDAR YEAR]; 26 (C) notwithstanding (B) of this paragraph, includes any amount 27 that is contributed by the employer under a salary reduction agreement and that 28 is not includible in the gross income of the employee under 26 U.S.C. 125, 29 132(f)(4), 402(e)(3), 402(h)(1)(B), or 403(b) (Internal Revenue Code); the 30 annual compensation limitation for the member, which is so taken into account 31 for those purposes, may not exceed $200,000, as adjusted for the cost of living
01 in accordance with 26 U.S.C. 401(a)(17)(B) (Internal Revenue Code), with the 02 limitation for a fiscal year being the limitation in effect for the calendar year 03 within which the fiscal year begins; 04 * Sec. 60. AS 39.35.990(16) is amended to read: 05 (16) "member" or "employee" means a person who is eligible to 06 participate in the plan and who is covered by [AN EMPLOYEE OF AN 07 EMPLOYER OR FORMER EMPLOYEE OF AN EMPLOYER WHO RETAINS A 08 RIGHT TO BENEFITS UNDER] the plan, including the governor, the lieutenant 09 governor, or a member of the legislature, but does not include full-time or part-time 10 instructors of the Department of Labor and Workforce Development and the 11 Department of Education and Early Development in positions that require a 12 teaching certificate; 13 * Sec. 61. AS 39.35.990(20) is amended to read: 14 (20) "peace officer" or "fire fighter" means an employee occupying a 15 position as a peace officer, chief of police, regional public safety officer, 16 correctional officer, correctional superintendent, fire fighter, fire chief, or 17 probation officer, but does not include a village public safety officer employed by 18 a village public safety officer program established under AS 18.65.670 [HAS THE 19 MEANING GIVEN IN AS 39.35.680]; 20 * Sec. 62. AS 39.45.020(a) is amended to read: 21 (a) The administration of the deferred compensation program for state 22 employees is under the direction of the Department of Administration, and the 23 administrator has the same powers and duties with regard to the plan and the 24 program as those set out in AS 14.25.003. A political subdivision coming under the 25 provisions of this chapter shall designate the office or official to manage 26 [ADMINISTER] its program. 27 * Sec. 63. AS 39.45.020(c) is amended to read: 28 (c) The manager [ADMINISTRATOR] of a deferred compensation program 29 may contract with a private person for providing consolidated billing and other 30 administrative services [. THE ADMINISTRATOR] may contract with an insurance 31 carrier to reimburse the state or political subdivision of the state for the cost of
01 administering the [DEFERRED COMPENSATION] program. 02 * Sec. 64. AS 39.45 is amended by adding a new section to read: 03 Sec. 39.45.055. Appeals. A final decision made under AS 39.45.010 - 04 39.45.060 is subject to appeal under AS 44.64. 05 * Sec. 65. AS 44.64.030(a) is amended by adding new paragraphs to read: 06 (35) AS 14.25.175 (waiver of adjustments under teachers' defined 07 benefit plan); 08 (36) AS 39.30.165 (supplemental benefits system); 09 (37) AS 39.30.335 (teachers' and public employees' health 10 reimbursement arrangement plan); 11 (38) AS 39.35.522 (waiver of adjustments under public employees' 12 defined benefit plan); 13 (39) AS 39.45.055 (public employees' deferred compensation 14 program). 15 * Sec. 66. AS 14.25.045, 14.25.340(b), 14.25.570; AS 39.35.050(a), 39.35.375(f), and 16 39.35.730(b) are repealed. 17 * Sec. 67. Section 107, ch. 9, FSSLA 2005, is repealed. 18 * Sec. 68. Sections 3, 35, and 36 of this Act take effect July 1, 2010. 19 * Sec. 69. Except as provided in sec. 68 of this Act, this Act takes effect July 1, 2007.