HCS CSSB 123(FIN): "An Act relating to the public employees' and teachers' defined benefit retirement plans; relating to the public employees' and teachers' defined contribution retirement plans; relating to the judicial retirement system; relating to the health reimbursement arrangement plan for certain teachers and public employees; relating to the supplemental employee benefit program; relating to the public employees' deferred compensation program; relating to group insurance for public employees and retirees; making conforming amendments; and providing for an effective date."
00 HOUSE CS FOR CS FOR SENATE BILL NO. 123(FIN) 01 "An Act relating to the public employees' and teachers' defined benefit retirement 02 plans; relating to the public employees' and teachers' defined contribution retirement 03 plans; relating to the judicial retirement system; relating to the health reimbursement 04 arrangement plan for certain teachers and public employees; relating to the 05 supplemental employee benefit program; relating to the public employees' deferred 06 compensation program; relating to group insurance for public employees and retirees; 07 making conforming amendments; and providing for an effective date." 08 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 09 * Section 1. AS 14.25.065(b) is amended to read: 10 (b) The contributions of employers under AS 14.25.070 must be transmitted to 11 the plan for deposit in the retirement fund and the Alaska retiree health care trust at 12 the close of each pay period. If the contributions are not submitted within the 13 prescribed time limit [15 DAYS OF THE CLOSE OF EACH PAYROLL PERIOD],
01 interest must be assessed on the outstanding contributions at one and one-half times 02 the most recent actuarially determined rate of earnings for the plan from the date that 03 contributions were originally due. [IN ADDITION, THE AMOUNT OF THE 04 CONTRIBUTIONS AND INTEREST MAY BE DEDUCTED BY THE 05 DEPARTMENT OF EDUCATION AND EARLY DEVELOPMENT FROM THE 06 STATE FUNDS DUE THE SCHOOL DISTRICT AND THE AMOUNT SO 07 DEDUCTED TRANSMITTED TO THE PLAN FOR DEPOSIT IN THE 08 RETIREMENT FUND.] Amounts due from an employer [THE UNIVERSITY OF 09 ALASKA] and interest as prescribed in this section may be claimed [DEDUCTED] 10 by the administrator [COMMISSIONER OF ADMINISTRATION] from any agency 11 of the state or political subdivision that has in its possession funds of the 12 employer or that is authorized to disburse funds to the employer that are not 13 restricted by statute or appropriation to a specific purpose. The amount claimed 14 shall be certified by the administrator as sufficient to pay the contributions and 15 interest due from the employer. The amount claimed shall be submitted to the 16 administrator for deposit in the retirement fund and the Alaska retiree health 17 care trust [STATE FUNDS DUE THE UNIVERSITY OF ALASKA AND THE 18 AMOUNT DEDUCTED TRANSMITTED TO THE ADMINISTRATOR FOR 19 DEPOSIT IN THE RETIREMENT FUND]. 20 * Sec. 2. AS 14.25.070(a) is amended to read: 21 (a) An employer shall make contributions to the plan in accordance with this 22 section and as approved by the board in an amount sufficient, after subtracting 23 member contributions, to provide the benefits of AS 14.25.009 - 14.25.220. The 24 amount shall be calculated by applying the sum of the employer normal cost rate 25 and the past service rate to the sum total of the base salaries paid to members in 26 the system [AN EMPLOYER CONTRIBUTION RATE, CERTIFIED BY THE 27 BOARD, AGAINST THE SUM TOTAL OF THE BASE SALARIES PAID TO 28 MEMBERS], including any adjustments to contributions required by AS 14.25.173(a). 29 The employer shall remit this amount to the administrator in accordance with 30 AS 14.25.065. 31 * Sec. 3. AS 14.25.070 is amended by adding new subsections to read:
01 (d) Employer contributions shall be separately computed for benefits provided 02 by AS 14.25.168, and shall be deposited in the Alaska retiree health care trust 03 established under AS 39.30.097(a). 04 (e) In (a) of this section, 05 (1) "employer normal cost rate" means the percentage of compensation 06 of all active members in the system that, when combined with the member 07 contribution rate of active members in the plan, is sufficient to provide the benefits 08 that are expected to be credited with respect to service during the year beginning after 09 the last valuation date; this percentage is uniformly determined for all employers and 10 is applicable to each employer; 11 (2) "past service rate" means the percentage of compensation of all 12 active members in the system necessary to provide the annual amount required to 13 amortize the unfunded obligations of the employers for benefits earned by members in 14 the plan as of the date of the last actuarial valuation over a period not to exceed the 15 maximum period allowed by generally accepted accounting principles of the 16 Governmental Accounting Standards Board; this percentage is uniformly determined 17 for all employers and is applicable to each employer. 18 * Sec. 4. AS 14.25.075(f) is amended to read: 19 (f) The administrator may accept rollover contributions from a member, and 20 direct transfers as described in this subsection, for the purchase, in whole or in part, of 21 forfeited credited service under this section for the reinstatement, in whole or in part, 22 of forfeited credited service under AS 14.25.062. Contributions made under this 23 subsection may not be applied to purchase service being paid under (b) of this section. 24 A rollover contribution or transfer as described in this subsection shall be treated as 25 employer contributions for the purpose of determining tax treatment under the Internal 26 Revenue Code and may be made by any one or a combination of the following 27 methods: 28 (1) subject to the limitations prescribed in 26 U.S.C. 402(c), accepting 29 eligible rollover distributions directly from one or more eligible retirement plans as 30 defined by 26 U.S.C. 402(c)(8)(B) [PROGRAMS OF ANOTHER EMPLOYER 31 THAT ARE QUALIFIED UNDER 26 U.S.C. 401(a) OR ACCEPTING
01 ROLLOVERS DIRECTLY FROM A MEMBER]; 02 (2) [SUBJECT TO THE LIMITATIONS PRESCRIBED IN 26 U.S.C. 03 408(d)(3)(A)(ii), ACCEPTING FROM A MEMBER CONDUIT ROLLOVER 04 CONTRIBUTIONS THAT ARE RECEIVED BY THE MEMBER FROM ONE OR 05 MORE CONDUIT ROLLOVER INDIVIDUAL RETIREMENT ACCOUNTS 06 PREVIOUSLY ESTABLISHED BY THE MEMBER; 07 (3)] subject to the limitations prescribed in 26 U.S.C. 403(b)(13), 08 accepting direct trustee-to-trustee transfers of all or a portion of the accounts of the 09 member, on or after January 1, 2002, from a tax sheltered annuity described in 26 10 U.S.C. 403(b); 11 (3) [(4)] subject to the limitations prescribed in 26 U.S.C. 457(e)(17), 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 an eligible deferred compensation plan of a 14 tax-exempt organization or a state or local government described in 26 U.S.C. 457(b); 15 (4) [(5)] accepting direct trustee-to-trustee transfer from an account 16 established for the benefit of the member in AS 39.30.150 - 39.30.180 (Alaska 17 Supplemental Annuity Plan). 18 * Sec. 5. AS 14.25.075(f), as amended by sec. 4 of this Act, is amended to read: 19 (f) The administrator may accept rollover contributions from a member [, 20 AND DIRECT TRANSFERS AS DESCRIBED IN THIS SUBSECTION, FOR THE 21 PURCHASE, IN WHOLE OR IN PART, OF FORFEITED CREDITED SERVICE 22 UNDER THIS SECTION FOR THE REINSTATEMENT, IN WHOLE OR IN PART, 23 OF FORFEITED CREDITED SERVICE UNDER AS 14.25.062]. Contributions made 24 under this subsection may not be applied to purchase service being paid under (b) of 25 this section. A rollover contribution [OR TRANSFER] as described in this subsection 26 shall be treated as employer contributions for the purpose of determining tax treatment 27 under the Internal Revenue Code and may be made by any one or a combination of the 28 following methods: 29 (1) subject to the limitations prescribed in 26 U.S.C. 402(c), accepting 30 eligible rollover distributions directly from one or more eligible retirement plans as 31 defined by 26 U.S.C. 402(c)(8)(B);
01 (2) subject to the limitations prescribed in 26 U.S.C. 403(b)(13), 02 accepting direct trustee-to-trustee transfers of all or a portion of the accounts of the 03 member, on or after January 1, 2002, from a tax sheltered annuity described in 26 04 U.S.C. 403(b); 05 (3) subject to the limitations prescribed in 26 U.S.C. 457(e)(17), 06 accepting direct trustee-to-trustee transfers of all or a portion of the accounts of the 07 member, on or after January 1, 2002, from an eligible deferred compensation plan of a 08 tax-exempt organization or a state or local government described in 26 U.S.C. 457(b); 09 (4) accepting direct trustee-to-trustee transfer from an account 10 established for the benefit of the member in AS 39.30.150 - 39.30.180 (Alaska 11 Supplemental Annuity Plan). 12 * Sec. 6. AS 14.25.125(c) is amended to read: 13 (c) Membership service for which contributions were refunded is not 14 creditable under this section [UNLESS THE REFUNDED CONTRIBUTIONS HAVE 15 BEEN REPAID. FOR PURPOSES OF THIS SECTION, A MEMBER OR FORMER 16 MEMBER DOES NOT HAVE TO BE REEMPLOYED UNDER THIS PLAN IN 17 ORDER TO REPAY REFUNDED CONTRIBUTIONS. COMPOUND INTEREST 18 AT THE RATE PRESCRIBED BY REGULATION MUST BE ADDED TO THE 19 REINSTATEMENT INDEBTEDNESS FROM THE DATE OF THE REFUND TO 20 THE DATE OF REPAYMENT]. 21 * Sec. 7. AS 14.25.163(b) is amended to read: 22 (b) Except as provided by AS 14.25.075(f) [AS 14.25.075(f)(5)], the plan does 23 not accept contributions of eligible rollover distributions. 24 * Sec. 8. AS 14.25.163(c)(2) is amended to read: 25 (2) "distributee" means a member or a beneficiary who is the surviving 26 spouse of the member or an alternate payee; 27 * Sec. 9. AS 14.25.163(c)(3) is amended to read: 28 (3) "eligible retirement plan" 29 [(A)] means 30 (A) [(i)] an individual retirement account described in 26 31 U.S.C. 408(a);
01 (B) [(ii)] an individual retirement annuity defined in 26 U.S.C. 02 408(b); 03 (C) [(iii)] an annuity plan described in 26 U.S.C. 403(a); 04 (D) [(iv)] a qualified trust described in 26 U.S.C. 401(a); 05 (E) [(v)] on and after January 1, 2002, an annuity plan 06 described in 26 U.S.C. 403(b); [OR] 07 (F) [(vi)] on or after January 1, 2002, a governmental plan 08 described in 26 U.S.C. 457(b); or 09 (G) on or after January 1, 2008, a Roth IRA described in 26 10 U.S.C. 408A [AND 11 (B) NOTWITHSTANDING (A) OF THIS PARAGRAPH, 12 MEANS, WITH RESPECT TO DISTRIBUTIONS MADE BEFORE 13 JANUARY 1, 2002, AN INDIVIDUAL RETIREMENT ACCOUNT OR AN 14 INDIVIDUAL RETIREMENT ANNUITY ACCOUNT DESCRIBED OR 15 DEFINED IN 26 U.S.C. 408 IN THE CASE OF AN ELIGIBLE ROLLOVER 16 DISTRIBUTION TO A BENEFICIARY WHO IS THE SURVIVING 17 SPOUSE OF A MEMBER]; 18 * Sec. 10. AS 14.25.163(c)(4) is amended to read: 19 (4) "eligible rollover distribution" means a distribution of all or part of 20 a total account to a distributee, except for 21 (A) a distribution that is one of a series of substantially equal 22 installments payable not less frequently than annually over the life expectancy 23 of the distributee or the joint and last survivor life expectancy of the distributee 24 and the distributee's designated beneficiary, as defined in 26 U.S.C. 401(a)(9); 25 (B) a distribution that is one of a series of substantially equal 26 installments payable not less frequently than annually over a specified period 27 of 10 years or more; 28 (C) a distribution that is required under 26 U.S.C. 401(a)(9); 29 (D) the portion of any distribution that is not includable in 30 gross income; however, a portion under this subparagraph may be 31 transferred only to an individual retirement account or annuity described
01 in 26 U.S.C. 408(a) or (b), to a qualified plan described in 26 U.S.C. 401(a) 02 or 403(a), or to an annuity contract described in 26 U.S.C. 403(b), that 03 agrees to separately account for amounts transferred, including separately 04 accounting for the portion of the distribution that is includable in gross 05 income and the portion of the distribution that is not includable in gross 06 income; and 07 (E) [A DISTRIBUTION MADE ON OR AFTER JANUARY 08 1, 2002, THAT IS ON ACCOUNT OF HARDSHIP; AND 09 (F)] other distributions that are reasonably expected to total less 10 than $200 during a year. 11 * Sec. 11. AS 14.25.168 is amended by adding a new subsection to read: 12 (f) On and after July 1, 2007, benefits under this section shall be provided in 13 part by the Alaska retiree health care trust established under AS 39.30.097(a). 14 * Sec. 12. AS 14.25.181(b) is amended to read: 15 (b) If, upon termination of the plan, all liabilities are satisfied, any excess 16 assets [ARISING FROM ERRONEOUS ACTUARIAL COMPUTATION] shall 17 revert to the employers as determined by the administrator subject to the approval 18 of the termination by the Internal Revenue Service [ON A PRO RATA BASIS]. 19 * Sec. 13. AS 14.25.181 is amended by adding new subsections to read: 20 (c) The administrator shall use forfeitures that arise for any reason, including 21 from termination of employment or death, to reduce employer contributions. 22 Forfeitures may not be applied to increase the benefits of any member. 23 (d) The administrator shall determine the amount of any benefit that is 24 determined on the basis of actuarial tables using assumptions approved by the 25 commissioner of administration. The amount of benefits is not subject to employer 26 discretion. 27 (e) Employee contributions paid to, and retirement benefits paid from, the plan 28 may not exceed the annual limits on contributions and benefits, respectively, allowed 29 by 26 U.S.C. 415. Notwithstanding any contrary provision of law, the administrator 30 may modify a request by a member to make a contribution to the plan if the amount of 31 the contribution would exceed the limits provided in 26 U.S.C. 415 by using the
01 following methods: 02 (1) if the law requires a lump sum payment for the purchase of service 03 credit, the administrator may establish a periodic payment plan for the member to 04 avoid a contribution in excess of the limits under 26 U.S.C. 415(c) or (n); 05 (2) if a periodic payment plan under (1) of this subsection will not 06 avoid a contribution in excess of the limits imposed by 26 U.S.C. 415(c), the 07 administrator may either reduce the member's contribution to an amount within the 08 limits of that section or refuse the member's contribution. 09 * Sec. 14. AS 14.25.220(10) is amended to read: 10 (10) "compensation" means the total remuneration paid under contract 11 to a member for services rendered during a school year, including cost-of-living 12 differentials, payments for leave that is actually used by the member, the amount by 13 which the member's wages are reduced under AS 39.30.150(c), an amount that is 14 contributed by the employer under a salary reduction agreement and that is not 15 includable in the gross income of the employee under 26 U.S.C. 125 or 132(f)(4), 16 and the amount deferred under an employer-sponsored deferred compensation plan or 17 the tax shelter annuity plan approved by the Department of Education and Early 18 Development, but does not include retirement benefits, welfare benefits, per diem, 19 expense allowances, workers' compensation payments, or payments for leave not used 20 by the member, whether those leave payments are scheduled payments, lump-sum 21 payments, donations, or cash-ins; for purposes of AS 14.25.050, compensation paid 22 includes any payment made after June 30 of a school year for services rendered before 23 the end of the school year; 24 * Sec. 15. AS 14.25.220(16) is amended to read: 25 (16) "employer" means a public school district, the Board of Regents 26 of the University of Alaska, the Department of Education and Early Development, 27 [THE NATIONAL EDUCATION ASSOCIATION OF ALASKA,] the Regional 28 Resource Centers, or the state legislature with respect to a state legislator who elects 29 membership under AS 14.25.040(b); 30 * Sec. 16. AS 14.25.310 is amended to read: 31 Sec. 14.25.310. Applicability of AS 14.25.310 - 14.25.590. The provisions of
01 AS 14.25.310 - 14.25.590 apply only to teachers who first become members on or 02 after July 1, 2006, to members who are employed by employers that do not 03 participate in the defined benefit retirement plan established under AS 14.25.009 04 - 14.25.220, or to members who transfer into the defined contribution retirement plan 05 under AS 14.25.540. 06 * Sec. 17. AS 14.25.310, as amended by sec. 16 of this Act, is amended to read: 07 Sec. 14.25.310. Applicability of AS 14.25.310 - 14.25.590. The provisions of 08 AS 14.25.310 - 14.25.590 apply only to teachers who first become members on or 09 after July 1, 2006, to members who are employed by employers that do not participate 10 in the defined benefit retirement plan established under AS 14.25.009 - 14.25.220, to 11 former members under AS 14.25.220, or to members who transfer into the defined 12 contribution retirement plan under AS 14.25.540. 13 * Sec. 18. AS 14.25.320(c) is amended to read: 14 (c) The defined contribution retirement plan is intended to qualify under 26 15 U.S.C. 401(a), [AND] 414(d), and 414(k) (Internal Revenue Code) as a qualified 16 retirement plan established and maintained by the state for its employees and for the 17 employees of school districts and regional educational attendance areas in the state. 18 Benefits under AS 14.25.480 are not provided by the defined contribution 19 retirement plan. 20 * Sec. 19. AS 14.25.350(b) is amended to read: 21 (b) An employer shall also contribute an amount equal to a percentage, as 22 approved [CERTIFIED] by the board, of each member's compensation from July 1 to 23 the following June 30 to pay for retiree major medical insurance. This contribution 24 shall be paid into the Alaska retiree health care trust [GROUP HEALTH AND 25 LIFE BENEFITS FUND] established by the commissioner of administration under 26 AS 39.30.097(b) [AS 39.30.095] and shall be accounted for in accordance with 27 regulations adopted [ESTABLISHED] by the commissioner. 28 * Sec. 20. AS 14.25.350 is amended by adding a new subsection to read: 29 (e) An employer shall make annual contributions to a trust account in the plan, 30 applied as a percentage of each member's compensation from July 1 to the following 31 June 30, in an amount determined by the board to be actuarially required to fully fund
01 the cost of providing occupational disability and occupational death benefits under 02 AS 14.25.310 - 14.25.590. 03 * Sec. 21. AS 14.25.360(d)(3) is amended to read: 04 (3) "eligible retirement plan" means 05 (A) an [A CONDUIT] individual retirement account described 06 in 26 U.S.C. 408(d)(3)(A); 07 (B) an annuity plan described in 26 U.S.C. 403(a); 08 (C) a qualified trust described in 26 U.S.C. 401(a); 09 (D) an annuity plan described in 26 U.S.C. 403(b); [OR] 10 (E) a governmental plan described in 26 U.S.C. 457(b); 11 (F) an individual retirement annuity described in 26 U.S.C. 12 408(b); or 13 (G) on or after January 1, 2008, a Roth IRA described in 26 14 U.S.C. 408A; 15 * Sec. 22. AS 14.25.360(d)(4) is amended to read: 16 (4) "eligible rollover distribution" means a distribution of all or part of 17 a total account to a distributee, except for 18 (A) a distribution that is one of a series of substantially equal 19 installments payable not less frequently than annually over the life expectancy 20 of the distributee or the joint and last survivor life expectancy of the distributee 21 and the distributee's designated beneficiary, as defined in 26 U.S.C. 401(a)(9); 22 (B) a distribution that is one of a series of substantially equal 23 installments payable not less frequently than annually over a specified period 24 of 10 years or more; 25 (C) a distribution that is required under 26 U.S.C. 401(a)(9); 26 (D) the portion of any distribution that is not includable in 27 gross income; however, a portion under this subparagraph may be 28 transferred only to an individual retirement account or annuity described 29 in 26 U.S.C. 408(a) or (b), to a qualified plan described in 26 U.S.C. 401(a) 30 or 403(a), or to an annuity contract described in 26 U.S.C. 403(b), that 31 agrees to separately account for amounts transferred, including separately
01 accounting for the portion of the distribution that is includable in gross 02 income and the portion of the distribution that is not includable in gross 03 income; and 04 (E) [A DISTRIBUTION THAT IS ON ACCOUNT OF 05 HARDSHIP; AND 06 (F)] other distributions that are reasonably expected to total less 07 than $200 during a year. 08 * Sec. 23. AS 14.25.370 is amended to read: 09 Sec. 14.25.370. Transmittal of contributions. All contributions deducted in 10 accordance with AS 14.25.310 - 14.25.590 shall be transmitted to the plan for deposit 11 in the appropriate account or trusts [TRUST FUND] as soon as administratively 12 feasible, but in no event later than 15 days following the close of the payroll period, 13 with the final contributions due for any school year transmitted no later than 14 July 15. 15 * Sec. 24. AS 14.25.370 is amended by adding new subsections to read: 16 (b) If contributions are not transmitted within the prescribed time limit, 17 interest shall be assessed on the outstanding contributions at the rate established under 18 AS 14.25.065 from the date that contributions were originally due. Amounts due from 19 an employer and interest as prescribed in this subsection may be claimed by the 20 administrator from any agency of the state or political subdivision that has in its 21 possession funds of the employer or that is authorized to disburse funds to the 22 employer that are not restricted by statute or appropriation to a specific purpose. The 23 amount claimed shall be certified by the administrator as sufficient to pay the 24 contributions and interest due from the employer. The amount claimed shall be 25 submitted to the administrator for deposit in the appropriate account or trusts. 26 (c) An employer is responsible for administrative fees, investment fees, and 27 investment losses charged to accounts established under AS 14.25.340 resulting from 28 contribution adjustments because the employer enrolled a member in the plan before 29 the member was eligible for membership. Contributions made by an employee shall be 30 returned to the employer by reducing future employee contributions due. 31 Contributions, net of fees and investment losses, made by an employer shall be used to
01 reduce future employer contributions due. 02 * Sec. 25. AS 14.25.380 is amended to read: 03 Sec. 14.25.380. Limitations on contributions and benefits. Notwithstanding 04 any other provisions of this plan, the annual additions to each member's individual 05 account under this plan and under all defined contribution plans of the employer 06 required to be aggregated with the contributions from this plan under the provisions of 07 26 U.S.C. 415 may not exceed, for any limitation year, the amount permitted under 26 08 U.S.C. 415(c) [26 U.S.C. 415] at any time. If the amount of a member's individual 09 account [DEFINED CONTRIBUTION PLAN] contributions exceeds the limitation of 10 26 U.S.C. 415(c) for any limitation year, the administrator shall take any necessary 11 remedial action to correct an excess contribution. A fixed benefit provided under 12 this plan may not exceed, for or during a limitation year, the amount permitted 13 under 26 U.S.C. 415(b). If a fixed benefit provided under this plan exceeds, for or 14 during a limitation year, the amount permitted under 26 U.S.C. 415(b), the 15 administrator shall take remedial action necessary to comply with the limits on 16 the benefit amount in 26 U.S.C. 415(b). The provisions of 26 U.S.C. 415, and the 17 regulations adopted under that statute, as applied to qualified [DEFINED 18 CONTRIBUTION] plans of governmental employers [EMPLOYEES] are 19 incorporated as part of the terms and conditions of the plan. 20 * Sec. 26. AS 14.25.485(b) is amended to read: 21 (b) The occupational disability benefits accrue beginning the first day of the 22 month following termination of employment as a result of the disability and are 23 payable the last day of the month. If a final determination granting the benefit is not 24 made in time to pay the benefit when due, a retroactive payment shall be made to 25 cover the period of deferment. The last payment shall be for the first month in which 26 the disabled member 27 (1) dies; 28 (2) recovers from the disability; 29 (3) fails to meet the requirements under (f), [OR] (h), or (j) of this 30 section; or 31 (4) reaches normal retirement age.
01 * Sec. 27. AS 14.25.485(d) is amended to read: 02 (d) The monthly amount of an occupational disability benefit is 40 percent of 03 the disabled member's gross monthly compensation at the time of termination due to 04 disability. Notwithstanding AS 14.25.390(b), at the time a member is appointed to 05 disability, the member becomes fully vested in the employer contributions made 06 under AS 14.25.350(a). A disabled member is fully vested in the contributions to 07 the member's individual account made under this subsection. A member is not 08 entitled to elect distributions from the member's individual contribution account 09 under AS 14.25.410 while the member is receiving disability benefits under this 10 section. While a member is receiving disability benefits, based on the disabled 11 member's gross monthly compensation at the time of termination due to disability, the 12 employer shall make contributions to the 13 (1) member's individual account under AS 14.25.340 on behalf of the 14 member, without deduction from the member's disability payments; and 15 (2) appropriate accounts and funds on behalf of the member under 16 AS 14.25.350. 17 * Sec. 28. AS 14.25.485(g) is amended to read: 18 (g) A disabled member's occupational disability benefit terminates the last 19 day of the month in which [WHEN] the disabled member first qualifies [ATTAINS 20 ELIGIBILITY] for normal retirement. At that time, the member's retirement benefit 21 shall be determined under the provisions of AS 14.25.420 - 14.25.440, 14.25.470, and 22 14.25.480. A member whose occupational disability benefit terminates under this 23 subsection [RECEIVING DISABILITY BENEFITS UP UNTIL ELIGIBILITY FOR 24 RETIREMENT] shall be considered to have retired directly from the plan. 25 * Sec. 29. AS 14.25.485(i) is amended to read: 26 (i) Upon the death of a disabled member who is receiving or is entitled to 27 receive an occupational disability benefit, the administrator shall pay the surviving 28 spouse a surviving spouse's pension, equal to 40 percent of the member's monthly 29 compensation at the time of termination of employment because of occupational 30 disability. If there is no surviving spouse, the administrator shall pay the survivor's 31 pension in equal parts to the dependent children of the member. While the monthly
01 survivor's pension is being paid, the survivor is not entitled to elect distributions 02 from the member's individual contribution account under AS 14.25.410. The first 03 payment of the surviving spouse's pension or of a dependent child's pension shall 04 accrue from the first day of the month following the member's death and is payable the 05 last day of the month. The last payment shall be made the last day of [FOR] the last 06 month in which there is an eligible surviving spouse or dependent child, or the last 07 day of the month in which the member would have first qualified for normal 08 retirement if the member had survived, whichever day is sooner. A retirement 09 benefit shall be determined under the provisions of AS 14.25.420 - 14.25.440, 10 14.25.470, and 14.25.480 based on [. ON] the date the member would have first 11 qualified for normal retirement [OF THE MEMBER WOULD HAVE OCCURRED] 12 if the member had survived. In addition to the payment of the member's 13 individual account, the surviving spouse or, if there is no surviving spouse, the 14 surviving dependent children of the member, shall receive an additional benefit 15 in an amount equal to the accumulated contributions that would have been made 16 to the deceased member's individual account under AS 14.25.340(a) and 17 14.25.350(a), based on the deceased member's gross monthly compensation at the 18 time of occupational disability, from the time of the member's death to the date 19 the member would have first qualified for normal retirement if the member had 20 survived. Earnings shall be allocated to the additional benefit calculated under 21 this subsection based on the actual rate of return, net of expenses, of the trust 22 account established under AS 14.25.350(e) over the period that the contributions 23 would have been made. This additional amount and allocated earnings shall be 24 paid in the same manner as determined for the member's individual account 25 under AS 14.25.420 - 14.25.460 to the extent permitted by the Internal Revenue 26 Service. For the purpose of determining eligibility of a survivor who is receiving a 27 benefit under this subsection for medical benefits under AS 14.25.470 and 28 14.25.480, a [LIVED, THE RETIREMENT BENEFIT SHALL BE DETERMINED 29 UNDER THE PROVISIONS OF AS 14.25.420 - 14.25.440, 14.25.470, AND 30 14.25.480. A] member who died while receiving disability benefits shall be considered 31 to have retired directly from the plan on the date the member would have first
01 qualified for normal retirement [OF THE MEMBER WOULD HAVE OCCURRED] 02 if the member had survived. The period during which the member was eligible for 03 a disability benefit and the period during which a survivor's pension is paid to a 04 survivor under this subsection each constitute membership service for the 05 purposes of determining eligibility for medical benefits under AS 14.25.310 - 06 14.25.590 and AS 39.30.300 - 39.30.495 [LIVED]. 07 * Sec. 30. AS 14.25.485(j) is amended to read: 08 (j) In this section, "occupational disability" means a physical or mental 09 condition that the administrator determines presumably permanently prevents 10 an employee from satisfactorily performing the employee's usual duties or the 11 duties of another comparable position or job available to the employee and for 12 which the employee is qualified by training or education; however, the proximate 13 cause of the condition must be a bodily injury sustained, or a hazard undergone, 14 while in the performance and within the scope of the employee's duties and not 15 the proximate result of the wilful negligence of the employee [HAS THE 16 MEANING GIVEN IN AS 39.35.680]. 17 * Sec. 31. AS 14.25.485 is amended by adding a new subsection to read: 18 (k) While a survivor under (i) of this section is receiving a survivor's pension, 19 the employer of the deceased member shall make contributions with respect to the 20 survivor based on the deceased member's gross monthly compensation at the time of 21 termination due to disability 22 (1) that would have been paid to the member's individual account 23 under AS 14.25.340 and 14.25.350(a), to the trust account established under 24 AS 14.25.350(e), without deduction from the survivor's pension; and 25 (2) to the appropriate accounts and funds under AS 14.25.350(b) - (e). 26 * Sec. 32. AS 14.25 is amended by adding a new section to read: 27 Sec. 14.25.486. Disability benefit adjustment. (a) Once each year, the 28 administrator shall increase disability benefits. The amount of the increase is a 29 percentage of the current disability benefit equal to the lesser of 75 percent of the 30 increase in the cost of living in the preceding calendar year or nine percent. 31 (b) If a disabled member was not receiving a benefit during the entire
01 preceding calendar year, the increase in the benefit under this section shall be adjusted 02 by multiplying it by a fraction, the numerator of which is the number of months for 03 which the benefit was received in the preceding calendar year and the denominator of 04 which is 12. 05 (c) An increase in benefit payments under this section is effective July 1 of 06 each year and is based on the percentage increase in the Consumer Price Index for 07 urban wage earners and clerical workers for Anchorage, Alaska, during the previous 08 calendar year, as determined by the United States Department of Labor, Bureau of 09 Labor Statistics. 10 (d) Benefit adjustments under this section shall terminate the last day of the 11 month following the date on which a disabled member is no longer receiving a 12 disability benefit under AS 14.25.485. 13 * Sec. 33. AS 14.25.487(b) is amended to read: 14 (b) The first payment of the surviving spouse's pension or of a dependent 15 child's pension shall be made for the month following the month in which the member 16 dies. Payments [, AND PAYMENT] shall cease on the last day of the month in 17 which there is no longer an eligible spouse or eligible dependent child, or the last 18 day of the month following the earliest date [TO BE MADE BEGINNING WITH 19 THE MONTH IN WHICH] the member would have first qualified for normal 20 retirement if the member had survived, whichever day is sooner. 21 * Sec. 34. AS 14.25.487(c) is amended to read: 22 (c) The monthly survivor's pension in (b) of this section for survivors of 23 members is 40 percent of the member's monthly compensation in the month in which 24 the member dies. While the monthly survivor's pension is being paid, the survivor 25 is not entitled to elect distributions from the member's individual contribution 26 account under AS 14.25.410, except as required by AS 14.25.440. While the 27 monthly survivor's pension is being paid, the employer shall make contributions with 28 respect to [ON BEHALF OF] the member's surviving spouse and member's 29 surviving dependent children [BENEFICIARIES] based on the deceased member's 30 gross monthly compensation at the time of occupational death 31 (1) that would have been paid to the member's individual account
01 under AS 14.25.340 and AS 14.25.350(a), to the trust account established under 02 AS 14.25.350(e), without deduction from the survivor's pension; and 03 (2) to the appropriate accounts and funds [ON BEHALF OF THE 04 MEMBER] under AS 14.25.350(b) - (e) [AS 14.25.350]. 05 * Sec. 35. AS 14.25.487(e) is amended to read: 06 (e) On the date the member would have first qualified for normal retirement 07 [OF THE MEMBER WOULD HAVE OCCURRED] if the member had survived 08 [LIVED], the retirement benefit shall be determined under the provisions of 09 AS 14.25.420 - 14.25.440, 14.25.470, and 14.25.480. In addition to 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 the member's occupational death, from the time of 16 the 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 and allocated earnings shall be paid in the same manner as determined 22 for the member's individual account under AS 14.25.420 - 14.25.460 to the extent 23 permitted by the Internal Revenue Service. A member who died and whose 24 survivors receive occupational death benefits under this section shall be considered to 25 have retired directly from the plan on the date the [NORMAL RETIREMENT OF 26 THE] member would have first qualified for normal retirement [OCCURRED] if 27 the member had survived. The period during which a survivor's pension is paid 28 under this subsection constitutes membership service for the purposes of 29 determining vesting in employer contributions under AS 14.25.390(b) and 30 eligibility for medical benefits under AS 14.25.310 - 14.25.590 and AS 39.30.300 - 31 39.30.495 [LIVED].
01 * Sec. 36. AS 14.25 is amended by adding new sections to read: 02 Sec. 14.25.488. Survivors' pension adjustment. (a) Once each year, the 03 administrator shall increase payments to a person 60 years of age or older receiving a 04 survivor's pension under AS 14.25.485(i) or 14.25.487(c) and to a person who has 05 received a survivor's pension under AS 14.25.485(i) or 14.25.487(c) for at least eight 06 years, who is not otherwise eligible for an increase under this section. 07 (b) The amount of the increase is a percentage of the current survivor's 08 pension equal to the lesser of 50 percent of the increase in the cost of living in the 09 preceding calendar year or six percent. 10 (c) If a survivor was not receiving a pension during the entire preceding 11 calendar year, the increase in the survivor's pension under this section shall be 12 adjusted by multiplying it by a fraction, the numerator of which is the number of 13 months for which the pension was received in the preceding calendar year and the 14 denominator of which is 12. 15 (d) The administrator shall increase the initial survivor's pension paid to a 16 survivor of a member who died while receiving disability benefits by a percentage 17 equal to the total cumulative percentage that has been applied to the member's 18 disability benefit under AS 14.25.486. 19 (e) An increase in benefit payments under this section is effective July 1 of 20 each year and is based on the percentage increase in the Consumer Price Index for 21 urban wage earners and clerical workers for Anchorage, Alaska, during the previous 22 calendar year, as determined by the United States Department of Labor, Bureau of 23 Labor Statistics. 24 (f) Pension adjustments under this section shall terminate the last day of the 25 month following the date on which a survivor is no longer receiving a survivor's 26 pension under AS 14.25.485(i) or 14.25.487(c). 27 Sec. 14.25.489. Premiums for retiree major medical insurance coverage 28 upon termination of disability benefits or survivor's pension. The premium for 29 retiree major medical insurance coverage payable by a member whose disability 30 benefit is terminated under AS 14.25.485(g) or by an eligible survivor whose survivor 31 pension is terminated under AS 14.25.485(i) or 14.25.487(e) when the member would
01 have been eligible for normal retirement if the member had survived shall be 02 determined under AS 14.25.480(g)(2) as if the member or survivor were eligible for 03 Medicare. 04 * Sec. 37. AS 14.25.500 is amended by adding new subsections to read: 05 (d) The administrator shall use forfeitures in the fixed benefit account of the 06 plan that arise for any reason, including from termination of employment or death, to 07 reduce employer contributions. Forfeitures may not be applied to increase the benefits 08 of any member. 09 (e) The administrator shall determine the amount of any fixed benefit that is 10 determined on the basis of actuarial tables using assumptions approved by the 11 commissioner. The amount of benefits is not subject to employer discretion. 12 * Sec. 38. AS 14.25.510 is amended to read: 13 Sec. 14.25.510. Nonguarantee of returns, rates, or benefit amounts. The 14 plan created by AS 14.25.310 - 14.25.590 is, with respect to individual accounts, 15 treated as a defined contribution plan, and not a defined benefit plan. The amount of 16 money in the individual account of a participant depends on the amount of 17 contributions and the rate of return from investments of the account that varies over 18 time. If benefits are paid in the form of an annuity, the benefit amount payable is 19 dependent on the amount of money in the account and the interest rates applied and 20 service fees charged by the annuity payor at the time the annuity is purchased from 21 the carrier and benefits are first paid. Nothing in this plan guarantees a participant 22 (1) a rate of return or interest rate other than that actually earned by the 23 account of the participant, less applicable administrative expenses; or 24 (2) an annuity based on interest rates or service charges other than 25 interest rates available from and service charges by the annuity payor in effect at the 26 time the annuity is paid. 27 * Sec. 39. AS 14.25.540(c) is amended to read: 28 (c) Each eligible member who elects to participate in the defined contribution 29 retirement plan shall have transferred to a new account the member contribution 30 account balance held in trust for the member under the defined benefit retirement plan 31 of the teachers' retirement system. A matching employer contribution shall be made on
01 behalf of that employee to the new account. The employer shall make the matching 02 contribution from funds other than the trust funds of the defined benefit retirement 03 plan. The amount of the matching employer contribution is subject to, and may 04 not exceed, the limitation of 26 U.S.C. 415(c) during the applicable limitation 05 year as defined in AS 14.25.590. If the matching employer contribution would 06 exceed the limits during the limitation year in which the transfer occurs, the 07 remaining amount of the matching employer contribution shall be made in the 08 next limitation year, if the limits would not be exceeded. 09 * Sec. 40. AS 14.25.540(d) is amended to read: 10 (d) Upon a transfer, all membership service previously earned under the 11 defined benefit retirement plan shall be nullified for purposes of entitlement to a future 12 benefit under the defined benefit retirement plan but shall be credited for purposes of 13 determining vesting in employer contributions under AS 14.25.390(b) and 14 eligibility to elect medical benefits under AS 14.25.470. Membership service allowed 15 for credit toward medical benefits does not include any service credit purchased under 16 AS 14.25.075 for employment by an employer who is not a participating employer in 17 this chapter. 18 * Sec. 41. AS 14.25.540(h) is amended to read: 19 (h) A member who is eligible to elect transfer to the defined contribution 20 retirement plan must make the election not later than 12 months after the first 21 day of the month following the administrator's receipt of the notification that the 22 member's employer consents to transfers of its members under (i) of this section. 23 The election to participate in the defined contribution retirement plan must be made in 24 writing on forms and in the manner prescribed by the administrator. Before accepting 25 an election to participate in the defined contribution retirement plan, the administrator 26 must provide the employee planning on making an election to participate in the 27 defined contribution retirement plan with information, including calculations to 28 illustrate the effect of moving the employee's retirement plan from the defined benefit 29 retirement plan to the defined contribution retirement plan as well as other information 30 to clearly inform the employee of the potential consequences of the employee's 31 election. An election made under this subsection to participate in the defined
01 contribution retirement plan is irrevocable. Upon making the election, the participant 02 shall be enrolled as a member of the defined contribution retirement plan, the 03 member's participation in the plan shall be governed by the provisions of 04 AS 14.25.310 - 14.25.590, and the member's participation in the defined benefit 05 retirement plan under AS 14.25.009 - 14.25.220 shall terminate. The participant's 06 enrollment in the defined contribution retirement plan shall be effective the first day of 07 the month after the administrator receives the completed enrollment forms. An 08 election made by an eligible member who is married is not effective unless the 09 election is signed by the individual's spouse. 10 * Sec. 42. AS 14.25 is amended by adding a new section to read: 11 Sec. 14.25.582. Special rules for treatment of qualified military service. 12 Notwithstanding any contrary provisions of AS 14.25.310 - 14.25.590, with respect to 13 qualified military service, contributions shall be made and benefits and service credit 14 shall be provided in accordance with 26 U.S.C. 414(u). 15 * Sec. 43. AS 14.25.590(7) is amended to read: 16 (7) "compensation" 17 (A) means 18 (i) the total remuneration earned by an employee for 19 personal services rendered, including cost-of-living differentials, as 20 reported on the employee's Federal Income Tax Withholding Statement 21 (Form W-2) from the employer for the calendar year; 22 (ii) the member contribution to the teachers' retirement 23 system under AS 14.25.340; 24 (B) does not include retirement benefits, severance pay or other 25 separation bonuses, welfare benefits, per diem, expense allowances, workers' 26 compensation payments, payments for leave not used whether those leave 27 payments are scheduled payments, lump-sum payments, donations, or cash-ins, 28 any remuneration contributed by the employer for or on account of the 29 employee under this plan or under any other qualified or nonqualified 30 employee benefit plan, or any remuneration not specifically included above 31 that would have been excluded under 26 U.S.C. 3121(a) (Internal Revenue
01 Code) if the employer had remained in the Federal Social Security System [, 02 OR ANY REMUNERATION PAID BY THE EMPLOYER IN EXCESS OF 03 THE SOCIAL SECURITY TAXABLE WAGE BASE FOR THE 04 CALENDAR YEAR]; 05 (C) notwithstanding (B) of this paragraph, includes any amount 06 that is contributed by the employer under a salary reduction agreement and that 07 is not includible in the gross income of the employee under 26 U.S.C. 125, 08 132(f)(4), 402(e)(3), 402(h)(1)(B), or 403(b) (Internal Revenue Code); the 09 annual compensation limitation for the member, which is so taken into account 10 for those purposes, may not exceed $200,000, as adjusted for the cost of living 11 in accordance with 26 U.S.C. 401(a)(17)(B) (Internal Revenue Code), with the 12 limitation for a fiscal year being the limitation in effect for the calendar year 13 within which the fiscal year begins; 14 * Sec. 44. AS 22.25.022(c)(2) is amended to read: 15 (2) "distributee" means a member or a beneficiary who is the surviving 16 spouse of the member or an alternate payee; 17 * Sec. 45. AS 22.25.022(c)(3) is amended to read: 18 (3) "eligible retirement plan" 19 [(A)] means 20 (A) [(i)] an individual retirement account described in 26 21 U.S.C. 408(a); 22 (B) [(ii)] an individual retirement annuity defined in 26 U.S.C. 23 408(b); 24 (C) [(iii)] an annuity plan described in 26 U.S.C. 403(a); 25 (D) [(iv)] a qualified trust described in 26 U.S.C. 401(a); 26 (E) [(v)] on and after January 1, 2002, an annuity plan 27 described in 26 U.S.C. 403(b); or 28 (F) [(vi)] on or after January 1, 2002, a governmental plan 29 described in 26 U.S.C. 457(b); or 30 (G) on or after January 1, 2008, a Roth IRA described in 26 31 U.S.C. 408A [AND
01 (B) NOTWITHSTANDING (A) OF THIS PARAGRAPH, 02 MEANS, WITH RESPECT TO DISTRIBUTIONS MADE BEFORE 03 JANUARY 1, 2002, AN INDIVIDUAL RETIREMENT ACCOUNT OR AN 04 INDIVIDUAL RETIREMENT ANNUITY ACCOUNT DESCRIBED OR 05 DEFINED IN 26 U.S.C. 408 IN THE CASE OF AN ELIGIBLE ROLLOVER 06 DISTRIBUTION TO A BENEFICIARY WHO IS THE SURVIVING 07 SPOUSE OF A MEMBER]; 08 * Sec. 46. AS 22.25.022(c)(4) is amended to read: 09 (4) "eligible rollover distribution" means a distribution of all or part of 10 a total account to a distributee, except for 11 (A) a distribution that is one of a series of substantially equal 12 installments payable not less frequently than annually over the life expectancy 13 of the distributee or the joint and last survivor life expectancy of the distributee 14 and the distributee's designated beneficiary, as defined in 26 U.S.C. 401(a)(9); 15 (B) a distribution that is one of a series of substantially equal 16 installments payable not less frequently than annually over a specified period 17 of 10 years or more; 18 (C) a distribution that is required under 26 U.S.C. 401(a)(9); 19 (D) the portion of any distribution that is not includable in 20 gross income; however, a portion under this subparagraph may be 21 transferred only to an individual retirement account or annuity described 22 in 26 U.S.C. 408(a) or (b), to a qualified plan described in 26 U.S.C. 401(a) 23 or 403(a), or to an annuity contract described in 26 U.S.C. 403(b), that 24 agrees to separately account for amounts transferred, including separately 25 accounting for the portion of the distribution that is includable in gross 26 income and the portion of the distribution that is not includable in gross 27 income; and 28 (E) [A DISTRIBUTION MADE ON OR AFTER JANUARY 29 1, 2002, THAT IS ON ACCOUNT OF HARDSHIP; AND 30 (F)] other distributions that are reasonably expected to total less 31 than $200 during a year.
01 * Sec. 47. AS 22.25.046 is amended by adding a new subsection to read: 02 (c) Employer contributions shall be separately computed for benefits provided 03 by AS 22.25.090, and shall be deposited in the Alaska retiree health care trust 04 established under AS 39.30.097(a). 05 * Sec. 48. AS 22.25.090 is amended by adding a new subsection to read: 06 (f) On and after July 1, 2007, benefits under this section will be provided in 07 part by the Alaska retiree health care trust established under AS 39.30.097(a). 08 * Sec. 49. AS 37.10.210(a) is amended to read: 09 (a) The Alaska Retirement Management Board is established in the 10 Department of Revenue. The board's primary mission is to serve as the trustee of the 11 assets of the state's retirement systems, the State of Alaska Supplemental Annuity 12 Plan, and the deferred compensation program for state employees, and the Alaska 13 retiree health care trusts established under AS 39.30.097. Consistent with 14 standards of prudence, the board has the fiduciary obligation to manage and invest 15 these assets in a manner that is sufficient to meet the liabilities and pension obligations 16 of the systems, plan, [AND] program, and trusts. The board may, with the approval 17 of the commissioner of revenue and upon agreement with the responsible fiduciary, 18 manage and invest other state funds so long as the activity does not interfere with the 19 board's primary mission. In making investments, the board shall exercise the powers 20 and duties of a fiduciary of a state fund under AS 37.10.071. 21 * Sec. 50. AS 39.30 is amended by adding new sections to read: 22 Sec. 39.30.097. Alaska retiree health care trusts. (a) The commissioner of 23 administration is authorized to prefund medical benefits provided by AS 14.25.168, 24 AS 22.25.090, and AS 39.35.535 by establishing an irrevocable trust that is exempt 25 from federal income tax under 26 U.S.C. 115 and subject to the applicable financial 26 reporting, disclosure and actuarial requirements of the Governmental Accounting 27 Standards Board. 28 (b) The commissioner of administration is authorized to prefund medical 29 benefits provided by AS 14.25.480, AS 39.30.300, and AS 39.35.880 by establishing 30 an irrevocable trust that is exempt from federal income tax under 26 U.S.C. 115 and 31 subject to the applicable financial reporting, disclosure and actuarial requirements of
01 the Governmental Accounting Standards Board. 02 (c) The plans and assets of the Alaska retiree health care trusts shall be under 03 the governance and investment authority of the Alaska Retirement Management 04 Board, which shall serve as trustee of the trust as provided in AS 37.10.210. The 05 commissioner of administration or the commissioner's designee shall serve as 06 administrator of the Alaska retiree health care trusts. 07 (d) All employer contributions, appropriations, earnings, and reserves for the 08 payment of retiree medical obligations shall be credited to the retiree health care 09 trusts. The prefunded amounts shall be available without fiscal year limitations for 10 retiree medical benefits and administration costs. The amounts remaining in the trusts, 11 if any, after retiree medical benefits and administration costs have been paid in any 12 year shall be retained in the trusts for future payments, until the satisfaction of all 13 employer liabilities under the trusts for retiree medical benefits. All prefunded 14 amounts shall be used solely for the payment of retiree medical benefits and 15 administration costs and for no other purpose. 16 (e) The assets of the Alaska retiree health care trusts may be pooled, for 17 investment purposes, with assets of the retirement systems, so long as such assets are 18 accounted for separately. 19 Sec. 39.30.098. Regulations. The commissioner of administration may adopt 20 regulations to implement AS 39.30.090 - 39.30.097. Regulations adopted by the 21 commissioner under this section relate to the internal management of state agencies 22 and their adoption is not subject to AS 44.62 (Administrative Procedure Act.). 23 * Sec. 51. AS 39.30.154 is amended to read: 24 Sec. 39.30.154. Powers and duties of the administrator. The administrator 25 has the same powers and duties with regard to the plan as those set out in 26 AS 14.25.003 and 14.25.004 [AS 14.25.004]. 27 * Sec. 52. AS 39.30.160(a) is amended to read: 28 (a) The Department of Administration shall, in accordance with policies 29 prescribed by regulations adopted by the commissioner [OF THE ALASKA 30 RETIREMENT MANAGEMENT BOARD], provide to employees for whom special 31 individual employee benefit accounts are established under AS 39.30.150(c) the
01 following benefit options: 02 (1) supplemental health benefits; 03 (2) supplemental death benefits; 04 (3) supplemental disability benefits; and 05 (4) supplemental dependent care benefits. 06 * Sec. 53. AS 39.30.160(e) is amended to read: 07 (e) Regulations adopted by the commissioner [BOARD] implementing 08 AS 39.30.150 and this section are not subject to AS 44.62 (Administrative Procedure 09 Act). 10 * Sec. 54. AS 39.30 is amended by adding a new section to read: 11 Sec. 39.30.165. Appeals. A final decision made under AS 39.30.150 - 12 39.30.180 is subject to appeal under AS 44.64. 13 * Sec. 55. AS 39.30 is amended by adding a new section to read: 14 Sec. 39.30.335. Appeals. A final decision made under AS 39.30.300 - 15 39.30.495 is subject to appeal under AS 44.64. 16 * Sec. 56. AS 39.30.340 is amended to read: 17 Sec. 39.30.340. Powers and duties of the administrator. The administrator 18 shall establish a teachers' and public employees' retiree health reimbursement 19 arrangement plan trust fund in which the assets of the plan shall be deposited and held. 20 The retiree health reimbursement arrangement plan trust fund may be a sub- 21 trust of the Alaska retiree health care trust established under AS 39.30.097(b). 22 The administrator has the same powers and duties with regard to the plan and the trust 23 fund as provided in AS 14.25.003 and 14.25.004 [AS 14.25.004]. 24 * Sec. 57. AS 39.30.370 is amended to read: 25 Sec. 39.30.370. Contributions by employers. For each member of the plan, 26 an employer shall contribute to the teachers' and public employees' retiree health 27 reimbursement arrangement plan trust fund an amount equal to three percent of the 28 average annual compensation of all employees of all employers in the teachers' 29 retirement system and public employees' retirement system [EMPLOYER'S 30 AVERAGE ANNUAL EMPLOYEE COMPENSATION]. The administrator shall 31 maintain a record for each member to account for employer contributions on behalf of
01 that member. The board shall establish by regulation the rate of interest to be applied 02 annually to the amount in a member's individual account. 03 * Sec. 58. AS 39.35.115 is amended by adding new subsections to read: 04 (d) The retirement plan established by AS 39.35.095 - 39.35.680 is a joint 05 contributory plan. 06 (e) If, upon termination of the plan, all liabilities are satisfied, any excess 07 assets shall revert to the employers as determined by the administrator, subject to the 08 approval of the termination by the Internal Revenue Service. 09 * Sec. 59. AS 39.35.165(f) is amended to read: 10 (f) The board may accept rollover contributions from a member and direct 11 transfers, as described in this subsection, for the purchase, in whole or in part, of 12 credited service for the reinstatement, in whole or in part, of forfeited credited service 13 under AS 39.35.350. A rollover contribution or transfer as described in this subsection 14 shall also be treated as employer contributions for the purpose of determining tax 15 treatment under the Internal Revenue Code and may be made by any one or a 16 combination of the following methods: 17 (1) subject to the limitations prescribed in 26 U.S.C. 401(a)(3) and 26 18 U.S.C. 402(c), accepting eligible rollover distributions directly from one or more 19 eligible retirement plans as defined by 26 U.S.C. 402(c)(8)(B) [PROGRAMS OF 20 ANOTHER EMPLOYER THAT ARE QUALIFIED UNDER 26 U.S.C. 401(a) OR 21 ACCEPTING ROLLOVERS DIRECTLY FROM A MEMBER]; 22 (2) [SUBJECT TO THE LIMITATIONS PRESCRIBED IN 26 U.S.C. 23 408(d)(3)(A)(ii), ACCEPTING FROM A MEMBER CONDUIT ROLLOVER 24 CONTRIBUTIONS THAT ARE RECEIVED BY THE EMPLOYEE FROM ONE 25 OR MORE CONDUIT ROLLOVER INDIVIDUAL RETIREMENT ACCOUNTS 26 PREVIOUSLY ESTABLISHED BY THE MEMBER; 27 (3)] subject to the limitations prescribed in 26 U.S.C. 403(b)(13), 28 accepting direct trustee-to-trustee transfers of all or a portion of the accounts of the 29 member, on or after January 1, 2002, from a tax sheltered annuity described in 26 30 U.S.C. 403(b); 31 (3) [(4)] subject to the limitations prescribed in 26 U.S.C. 457(e)(17),
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 an eligible deferred compensation plan of a 03 tax-exempt organization or a state or local government described in 26 U.S.C. 457(b); 04 (4) [(5)] accepting direct trustee-to-trustee transfer from an account 05 established for the benefit of the member in AS 39.30.150 - 39.30.180 (Alaska 06 Supplemental Annuity Plan). 07 * Sec. 60. AS 39.35.165(f), as amended by sec. 59 of this Act, is amended to read: 08 (f) The board may accept rollover contributions from a member [AND 09 DIRECT TRANSFERS, AS DESCRIBED IN THIS SUBSECTION, FOR THE 10 PURCHASE, IN WHOLE OR IN PART, OF CREDITED SERVICE FOR THE 11 REINSTATEMENT, IN WHOLE OR IN PART, OF FORFEITED CREDITED 12 SERVICE UNDER AS 39.35.350]. A rollover contribution [OR TRANSFER] as 13 described in this subsection shall also be treated as employer contributions for the 14 purpose of determining tax treatment under the Internal Revenue Code and may be 15 made by any one or a combination of the following methods: 16 (1) subject to the limitations prescribed in 26 U.S.C. 401(a)(3) and 26 17 U.S.C. 402(c), accepting eligible rollover distributions directly from one or more 18 eligible retirement plans as defined by 26 U.S.C. 402(c)(8)(B); 19 (2) subject to the limitations prescribed in 26 U.S.C. 403(b)(13), 20 accepting direct trustee-to-trustee transfers of all or a portion of the accounts of the 21 member, on or after January 1, 2002, from a tax sheltered annuity described in 26 22 U.S.C. 403(b); 23 (3) subject to the limitations prescribed in 26 U.S.C. 457(e)(17), 24 accepting direct trustee-to-trustee transfers of all or a portion of the accounts of the 25 member, on or after January 1, 2002, from an eligible deferred compensation plan of a 26 tax-exempt organization or a state or local government described in 26 U.S.C. 457(b); 27 (4) accepting direct trustee-to-trustee transfer from an account 28 established for the benefit of the member in AS 39.30.150 - 39.30.180 (Alaska 29 Supplemental Annuity Plan). 30 * Sec. 61. AS 39.35.195(b) is amended to read: 31 (b) Except as provided by AS 39.35.165(f) [AS 39.35.165(f)(5)], the plan does
01 not accept contributions of eligible rollover distributions. 02 * Sec. 62. AS 39.35.195(c)(2) is amended to read: 03 (2) "distributee" means a member or a beneficiary who is the surviving 04 spouse of the member or an alternate payee; 05 * Sec. 63. AS 39.35.195(c)(3) is amended to read: 06 (3) "eligible retirement plan" 07 [(A)] means 08 (A) [(i)] an individual retirement account described in 26 09 U.S.C. 408(a); 10 (B) [(ii)] an individual retirement annuity defined in 26 U.S.C. 11 408(b); 12 (C) [(iii)] an annuity plan described in 26 U.S.C. 403(a); 13 (D) [(iv)] a qualified trust described in 26 U.S.C. 401(a); 14 (E) [(v)] on and after January 1, 2002, an annuity plan 15 described in 26 U.S.C. 403(b); or 16 (F) [(vi)] on or after January 1, 2002, a governmental plan 17 described in 26 U.S.C. 457(b); or 18 (G) on or after January 1, 2008, a Roth IRA described in 26 19 U.S.C. 408A [AND 20 (B) NOTWITHSTANDING (A) OF THIS PARAGRAPH, 21 MEANS, WITH RESPECT TO DISTRIBUTIONS MADE BEFORE 22 JANUARY 1, 2002, AN INDIVIDUAL RETIREMENT ACCOUNT OR AN 23 INDIVIDUAL RETIREMENT ANNUITY ACCOUNT DESCRIBED OR 24 DEFINED IN 26 U.S.C. 408 IN THE CASE OF AN ELIGIBLE ROLLOVER 25 DISTRIBUTION TO A BENEFICIARY WHO IS THE SURVIVING 26 SPOUSE OF A MEMBER]; 27 * Sec. 64. AS 39.35.195(c)(4) is amended to read: 28 (4) "eligible rollover distribution" means a distribution of all or part of 29 a total account to a distributee, except for 30 (A) a distribution that is one of a series of substantially equal 31 installments payable not less frequently than annually over the life expectancy
01 of the distributee or the joint and last survivor life expectancy of the distributee 02 and the distributee's designated beneficiary, as defined in 26 U.S.C. 401(a)(9); 03 (B) a distribution that is one of a series of substantially equal 04 installments payable not less frequently than annually over a specified period 05 of 10 years or more; 06 (C) a distribution that is required under 26 U.S.C. 401(a)(9); 07 (D) the portion of any distribution that is not includable in 08 gross income; however, a portion under this subparagraph may be 09 transferred only to an individual retirement account or annuity described 10 in 26 U.S.C. 408(a) or (b), to a qualified plan described in 26 U.S.C. 401(a) 11 or 403(a), or to an annuity contract described in 26 U.S.C. 403(b), that 12 agrees to separately account for amounts transferred, including separately 13 accounting for the portion of the distribution that is includable in gross 14 income and the portion of the distribution that is not includable in gross 15 income; and 16 (E) [A DISTRIBUTION MADE ON OR AFTER JANUARY 17 1, 2002, THAT IS ON ACCOUNT OF HARDSHIP; AND 18 (F)] other distributions that are reasonably expected to total less 19 than $200 during a year. 20 * Sec. 65. AS 39.35.250 is amended to read: 21 Sec. 39.35.250. Calculation of employer's contribution rate. (a) An 22 employer shall make contributions to the plan [IN AMOUNTS DETERMINED] in 23 accordance with this section. For the purposes of this section and AS 39.35.270, the 24 [PAST SERVICE DATE FOR EACH EMPLOYER IS THE ENTRY DATE OF THE 25 EMPLOYER OR DECEMBER 31, 1972, WHICHEVER IS LATER. AFTER 26 DECEMBER 31, 1972, IF AMENDMENTS TO AS 39.35.095 - 39.35.680 ARE 27 ENACTED THAT SUBSTANTIALLY AFFECT BENEFITS ACCRUED BEFORE 28 THE EFFECTIVE DATE OF THE AMENDMENT, THE PAST SERVICE DATE 29 WILL BE CHANGED TO DECEMBER 31 OF THE YEAR IMMEDIATELY 30 PRECEDING THAT IN WHICH THE AMENDMENT IS ENACTED. THE] 31 contribution rate is the sum of the consolidated employer normal cost rate and the
01 past service rate as approved by the board. 02 (b) In (a) of this section, "consolidated employer normal cost rate" means the 03 percentage of compensation of all active employees in the system [PLAN] which, [IF 04 PAID OVER THE PERIOD OF THEIR CREDITED SERVICE AFTER THEIR 05 PAST SERVICE DATE AND] when combined with all employee contributions to the 06 plan, is sufficient to provide the benefits earned during the year beginning after the 07 last valuation date [AFTER SUCH PAST SERVICE DATES]. This percentage is 08 [UNIFORMLY] determined at the plan level for all employers and is applicable to 09 each employer. 10 (c) In (a) of this section, "past service rate" means the percentage of 11 compensation of all active employees in the system [PLAN] necessary to provide the 12 annual amount required to amortize the unfunded obligations of the employer for 13 benefits earned by the employer's members in the plan as of [BEFORE] the date of 14 the last actuarial valuation [EMPLOYER'S PAST SERVICE DATE] over a period 15 not to exceed the maximum allowed by generally accepted accounting principles 16 of the Governmental Accounting Standards Board [40 YEARS. THE PERIOD OF 17 AMORTIZATION BEGINS AT THE PAST SERVICE DATE OF EACH 18 EMPLOYER]. The percentage is separately determined for each employer. 19 * Sec. 66. AS 39.35.250 is amended by adding a new subsection to read: 20 (d) Employer contributions shall be separately computed for benefits provided 21 by AS 39.35.535, and shall be deposited in the Alaska retiree health care trust 22 established under AS 39.30.097(a). 23 * Sec. 67. AS 39.35.270(a) is amended to read: 24 (a) The amount of each employer's contributions shall be determined by 25 applying the sum of the consolidated employer normal cost [EMPLOYER'S 26 CONTRIBUTION] rate and the employer's past service rate to the total 27 compensation paid to the employer's active employees in the system [, AS 28 CERTIFIED BY THE BOARD, TO THE TOTAL COMPENSATION PAID TO THE 29 ACTIVE EMPLOYEES OF THE EMPLOYER] for each payroll period, [AND BY] 30 including any adjustments to contributions required by AS 39.35.520(a). This amount 31 shall be remitted by the employer to the administrator in accordance with
01 AS 39.35.610. 02 * Sec. 68. AS 39.35.375(a) is amended to read: 03 (a) An active or inactive member who has never been vested in this plan or in 04 the teachers' retirement plan under AS 14.25.009 - 14.25.220, who has at least two 05 years of credited service in this plan, and who has membership service in the teachers' 06 retirement system may claim credited service in this plan in an amount equal to the 07 membership service the member has in the teachers' retirement system. The claimed 08 credited service may be added to service earned under AS 39.35.095 - 39.35.680 to 09 enable the member to qualify for a public service benefit under this section. The 10 member may not claim credited service for membership service for which the member 11 has received a refund under AS 14.25.150 [UNLESS THE MEMBER FULLY PAYS 12 THE INDEBTEDNESS AS ESTABLISHED UNDER AS 14.25.063]. The member 13 may not claim credited service in this plan based on unused sick leave under 14 AS 14.25.115. 15 * Sec. 69. AS 39.35.385(c) is amended to read: 16 (c) Credited service for which contributions were refunded is not creditable 17 under this section [UNLESS THE REFUNDED CONTRIBUTIONS HAVE BEEN 18 REPAID. FOR PURPOSES OF (a) AND (b) OF THIS SECTION, A MEMBER OR 19 FORMER MEMBER DOES NOT HAVE TO BE REEMPLOYED UNDER THIS 20 PLAN IN ORDER TO PAY REFUNDED CONTRIBUTIONS. COMPOUND 21 INTEREST AT THE RATE PRESCRIBED BY REGULATION SHALL BE ADDED 22 TO THE REINSTATEMENT INDEBTEDNESS FROM THE DATE OF THE 23 REFUND TO THE DATE OF REPAYMENT]. 24 * Sec. 70. AS 39.35.522(d) is amended to read: 25 (d) A decision of the [THE] commissioner of administration under this 26 section to deny a waiver under this section may be appealed to the office of 27 administrative hearings. The office of administrative hearings may reverse the 28 decision of the commissioner and may impose conditions on the granting of a waiver 29 which it considers equitable. These conditions may include requiring the member or 30 beneficiary to make additional contributions to the plan. 31 * Sec. 71. AS 39.35.535 is amended by adding a new subsection to read:
01 (f) On and after July 1, 2007, benefits under this section shall be provided in 02 part by the Alaska retiree health care trust established under AS 39.30.097(a). 03 * Sec. 72. AS 39.35.610 is amended by adding a new subsection to read: 04 (b) If contributions are not submitted within the prescribed time limit, the 05 amount of contributions and interest due may be claimed by the administrator from 06 any agency of the state or political subdivision that has in its possession funds of the 07 employer or that is authorized to disburse funds to the employer that are not restricted 08 by statute or appropriation to a specific purpose. The amount claimed shall be certified 09 by the administrator as sufficient to pay the contributions and interest due from the 10 employer. The amount claimed shall be submitted to the administrator for deposit in 11 the retirement fund and the Alaska retiree health care trust. 12 * Sec. 73. AS 39.35.615 is amended by adding new subsections to read: 13 (g) An employer terminating participation in the plan shall pay termination 14 costs determined by the administrator, or enter into a payment plan acceptable to the 15 administrator, within 60 days of the employer receiving notice of its termination costs 16 from the administrator. Termination costs not paid within the prescribed time limit or 17 in accordance with the approved payment plan shall be collected by the administrator 18 in accordance with AS 39.35.610(b). Termination of participation by an employer in 19 the plan does not bar future participation by the employer under AS 39.35.700 - 20 39.35.990 if the employer has paid in full its prior termination costs. 21 (h) A political subdivision or public organization considering or requesting 22 termination from the plan shall pay the cost associated with obtaining a termination 23 cost study associated with the employer's termination. 24 * Sec. 74. AS 39.35.620 is amended by adding new subsections to read: 25 (i) An employer terminating participation in the plan shall pay termination 26 costs determined by the administrator, or enter into a payment plan acceptable to the 27 administrator, within 60 days after the employer receives notice of the cost. 28 Termination costs not paid within the prescribed time limit or in accordance with the 29 approved payment plan shall be collected by the administrator in accordance with 30 AS 39.35.610(b). Termination of participation by an employer in the plan does not bar 31 future participation by the employer under AS 39.35.700 - 39.35.990 if the employer
01 has paid in full its prior termination costs. 02 (j) A political subdivision or public organization being terminated from the 03 plan shall pay the cost associated with obtaining a termination cost study associated 04 with the employer's termination. 05 * Sec. 75. AS 39.35.650 is amended to read: 06 Sec. 39.35.650. Refunds to employers. An employer may not receive an 07 amount from the plan, except as provided under AS 39.35.115(e), 39.35.615(e), or 08 [AS 39.35.615(e) AND] 39.35.620(g). 09 * Sec. 76. AS 39.35 is amended by adding a new section to read: 10 Sec. 39.35.678. Internal Revenue Code compliance. (a) The administrator 11 shall use forfeitures that arise for any reason, including from termination of 12 employment or death, to reduce employer contributions. Forfeitures may not be 13 applied to increase the benefits of any member. 14 (b) The administrator shall determine the amount of any benefit that is 15 determined on the basis of actuarial tables using assumptions approved by the 16 commissioner. The amount of benefits is not subject to employer discretion. 17 (c) Employee contributions paid to, and retirement benefits paid from, the plan 18 may not exceed the annual limits on contributions and benefits, respectively, allowed 19 by 26 U.S.C. 415. Notwithstanding any contrary provision of law, the administrator 20 may modify a request by a member to make a contribution to a plan if the amount of 21 the contribution would exceed the limits provided in 26 U.S.C. 415 by using the 22 following methods: 23 (1) if the law requires a lump sum payment for the purchase of service 24 credit, the administrator may establish a periodic payment plan for the member to 25 avoid a contribution in excess of the limits under 26 U.S.C. 415(c) or 415(n); 26 (2) if a periodic payment plan under (1) of this subsection will not 27 avoid a contribution in excess of the limits imposed by 26 U.S.C. 415(c), the 28 administrator may either reduce the member's contribution to an amount within the 29 limits of that section or refuse the member's contribution. 30 * Sec. 77. AS 39.35.680(3) is amended to read: 31 (3) "administrator" means [THE PERSON APPOINTED BY] the
01 commissioner of administration or the commissioner's designee appointed under 02 AS 39.35.003 [AS 39.35.050]; 03 * Sec. 78. AS 39.35.680(9) is amended to read: 04 (9) "compensation" means the remuneration earned by an employee 05 for personal services rendered to an employer, including employee contributions under 06 AS 39.35.160, cost-of-living differentials only as provided in AS 39.35.675, payments 07 for leave that is actually used by the employee, the amount by which the employee's 08 wages are reduced under AS 39.30.150(c), an amount that is contributed by the 09 employer under a salary reduction agreement and that is not includable in the 10 gross income of the employee under 26 U.S.C. 125 or 132(f)(4), and any amount 11 deferred under an employer-sponsored deferred compensation plan, but does not 12 include retirement benefits, severance pay or other separation bonuses, welfare 13 benefits, per diem, expense allowances, workers' compensation payments, or 14 payments for leave not used by the employee whether those leave payments are 15 scheduled payments, lump-sum payments, donations, or cash-ins; for a member first 16 hired on or after July 1, 1996, compensation does not include remuneration in excess 17 of the limitations set out in 26 U.S.C. 401(a)(17) (Internal Revenue Code); 18 * Sec. 79. AS 39.35.680(18) is amended to read: 19 (18) "employer" means 20 (A) the State of Alaska; [OR] 21 (B) a political subdivision or public organization of the state 22 that participates in the plan based on a resolution to participate in the plan 23 that was approved by the administrator on or before July 1, 2006; or 24 (C) a political subdivision or public organization of the 25 state that, as a result of consolidation or reorganization that occurs on or 26 after July 1, 2006, assumes liability under the plan of a political 27 subdivision or public organization described in (B) of this paragraph; 28 * Sec. 80. AS 39.35.700 is amended to read: 29 Sec. 39.35.700. Applicability of AS 39.35.700 - 39.35.990. The provisions of 30 AS 39.35.700 - 39.35.990 apply only to members first hired on or after July 1, 2006, 31 to members who are employed by employers that do not participate in the
01 defined benefit retirement plan established under AS 39.35.095 - 39.35.680, or to 02 members who transfer into the defined contribution retirement plan under 03 AS 39.35.940. 04 * Sec. 81. AS 39.35.700, as amended by sec. 80 of this Act, is amended to read: 05 Sec. 39.35.700. Applicability of AS 39.35.700 - 39.35.990. The provisions of 06 AS 39.35.700 - 39.35.990 apply only to members first hired on or after July 1, 2006, 07 to members who are employed by employers that do not participate in the defined 08 benefit retirement plan established under AS 39.35.095 - 39.35.680, to former 09 members as defined in AS 39.35.680, or to members who transfer into the defined 10 contribution retirement plan under AS 39.35.940. 11 * Sec. 82. AS 39.35.710(c) is amended to read: 12 (c) The retirement plan established by AS 39.35.700 - 39.35.990 is intended to 13 qualify under 26 U.S.C. 401(a), [AND] 414(d), and 414(k) (Internal Revenue Code) 14 as a qualified retirement plan established and maintained by the state for its 15 employees, for the employees of political subdivisions, public corporations, and public 16 organizations of the state, and for the employees of other employers whose 17 participation is authorized by AS 39.35.700 - 39.35.990 and who participate in the 18 plan set out in AS 39.35.700 - 39.35.990. Benefits under AS 39.35.880 are not 19 provided by the defined contribution retirement plan. 20 * Sec. 83. AS 39.35 is amended by adding a new section to read: 21 Sec. 39.35.725. Participation of elected officials of political subdivisions. (a) 22 An elected official of a political subdivision of the state that participates in both the 23 plan and the defined benefit plan of AS 39.35.095 - 39.35.680 is a member of the plan 24 if 25 (1) the political subdivision covers elected officials under 26 AS 39.35.550 - 39.35.650 and has designated elected officials under AS 39.35.957 as 27 a classification of employees entitled to participate in the plan; and 28 (2) the elected official receives compensation from the political 29 subdivision for services as an elected official in the amount of at least $2,001 a month. 30 (b) An elected official of a political subdivision of the state that participates in 31 the plan but not the defined benefit plan of AS 39.35.095 - 39.35.680 is a member of
01 the plan if 02 (1) the political subdivision has designated elected officials under 03 AS 39.35.957 as a classification of employees entitled to participate in the plan; and 04 (2) the elected official receives compensation from the political 05 subdivision for services as an elected official in the amount of at least $2,001 a month. 06 (c) An elected official entitled to participate under this section, and who either 07 has no previous service under the system with the political subdivision or is retired 08 under the system, may file a waiver of participation in the plan with the administrator 09 within 30 days after the later of the effective date of this section or the date that the 10 elected official's term of office begins. A waiver is irrevocable for the remainder of the 11 elected official's service as an elected official or employee of the political subdivision. 12 * Sec. 84. AS 39.35.750(b) is amended to read: 13 (b) An employer shall also contribute an amount equal to a percentage, as 14 adopted [CERTIFIED] by the board, of each member's compensation from July 1 to 15 the following June 30 to pay for retiree major medical insurance. This contribution 16 shall be paid into the Alaska retiree health care trust [GROUP HEALTH AND 17 LIFE BENEFITS FUND] established by the commissioner of administration under 18 AS 39.30.097(b) [AS 39.30.095] and shall be accounted for in accordance with 19 regulations established by the commissioner. 20 * Sec. 85. AS 39.35.750(e) is amended to read: 21 (e) An employer shall make annual contributions to a trust account in the 22 plan, applied as a percentage of each member's compensation from July 1 to the 23 following June 30, in an amount determined by the board to be actuarially required to 24 fully fund the cost of providing occupational disability and occupational death benefits 25 under AS 39.35.700 - 39.35.990 and retirement benefits elected by disabled peace 26 officers and fire fighters under AS 39.35.890(h)(2) [AS 39.35.890 AND 39.35.892]. 27 The contribution required under this subsection for peace officers and fire fighters and 28 the contribution required under this subsection for other employees shall be separately 29 calculated based on the actuarially calculated costs for each group of employees. 30 * Sec. 86. AS 39.35.760(d)(3) is amended to read: 31 (3) "eligible retirement plan" means
01 (A) an [A CONDUIT] individual retirement account described 02 in 26 U.S.C. 408(d)(3)(A); 03 (B) an annuity plan described in 26 U.S.C. 403(a); 04 (C) a qualified trust described in 26 U.S.C. 401(a); 05 (D) an annuity plan described in 26 U.S.C. 403(b); [OR] 06 (E) a governmental plan described in 26 U.S.C. 457(b); 07 (F) an individual retirement annuity defined in 26 U.S.C. 08 408(b); or 09 (G) on or after January 1, 2008, a Roth IRA described in 26 10 U.S.C. 408A; 11 * Sec. 87. AS 39.35.760(d)(4) is amended to read: 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; however, a portion under this subparagraph may be 24 transferred only to an individual retirement account or annuity described 25 in 26 U.S.C. 408(a) or (b), to a qualified plan described in 26 U.S.C. 401(a) 26 or 403(a), or to an annuity contract described in 26 U.S.C. 403(b), that 27 agrees to separately account for amounts transferred, including separately 28 accounting for the portion of the distribution that is includable in gross 29 income and the portion of the distribution that is not includable in gross 30 income; and 31 (E) [A DISTRIBUTION THAT IS ON ACCOUNT OF
01 HARDSHIP; AND 02 (F)] other distributions that are reasonably expected to total less 03 than $200 during a year. 04 * Sec. 88. AS 39.35.770 is amended to read: 05 Sec. 39.35.770. Transmittal of contributions. All contributions deducted in 06 accordance with AS 39.35.700 - 39.35.990 shall be transmitted to the plan for deposit 07 in the appropriate account or trusts [TRUST FUND] as soon as administratively 08 feasible, but in no event later than 15 days following the close of the payroll period. 09 * Sec. 89. AS 39.35.770 is amended by adding new subsections to read: 10 (b) If contributions are not transmitted within the prescribed time limit, 11 interest shall be assessed on the outstanding contributions at the rate established under 12 AS 39.35.610 from the date that contributions were originally due. Amounts due from 13 an employer and interest as prescribed in this subsection may be claimed by the 14 administrator from any agency of the state or political subdivision that has in its 15 possession funds of the employer or that is authorized to disburse funds to the 16 employer that are not restricted by statute or appropriation to a specific purpose. The 17 amount claimed shall be certified by the administrator as sufficient to pay the 18 contributions and interest due from the employer. The amount claimed shall be 19 submitted to the administrator for deposit in the appropriate account or trusts. 20 (c) Employers are responsible for administrative fees, investment fees, and 21 investment losses charged to accounts established under AS 39.35.730 resulting from 22 contribution adjustments due to employers enrolling members in the plan before the 23 members are eligible for membership. Contributions made by employees shall be 24 returned to the employer by reducing future employee contributions due. 25 Contributions, net of fees and investment losses, made by employers shall be used to 26 reduce future employer contributions due. 27 * Sec. 90. 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) [26 U.S.C. 415] at any time. If the amount of a member's individual 03 account [DEFINED CONTRIBUTION PLAN] contributions exceeds the limitation of 04 26 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. 91. 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), [OR] (j), or (l) of this 24 section; or 25 (4) reaches normal retirement age. 26 * Sec. 92. 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 contribution 03 account under AS 39.35.810 while the employee is receiving disability benefits 04 under this section. While an employee is receiving disability benefits, based on the 05 disabled employee's gross monthly compensation at the time of termination due to 06 disability, the employer 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. 93. 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. 94. 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, pension [RETIREMENT] benefits paid 28 under this paragraph must be paid first from the peace officer's or fire fighter's 29 individual contribution account, and the remaining benefits must be paid from 30 the trust account established under AS 39.35.750(e); the peace officer or fire 31 fighter may not elect other distributions from the peace officer's or fire fighter's
01 individual contribution account under AS 39.35.810 [MAY NOT BE MADE 02 FROM THE TRUST FUND OF THE PUBLIC EMPLOYEES' DEFINED BENEFIT 03 RETIREMENT PLAN]. 04 * Sec. 95. 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 time of termination of employment because of occupational 09 disability. If there is no surviving spouse, the administrator shall pay the survivor's 10 pension in equal parts to the dependent children of the employee. While the monthly 11 survivor's pension is being paid, the survivor is not entitled to elect distributions 12 from the employee's individual contribution account under AS 39.35.810. The 13 first payment of the surviving spouse's pension or of a dependent child's pension shall 14 accrue from the first day of the month following the employee's death and is payable 15 the last day of the month. The last payment shall be made the last day of [FOR] the 16 last month in which there is an eligible surviving spouse or dependent child, or the 17 last day of the month in which the employee would have first qualified for normal 18 retirement if the employee had survived, whichever day is sooner. A retirement 19 benefit shall be determined under the provisions of AS 39.35.820 - 39.35.840, 20 39.35.870, and 39.35.880 based on [. ON] the date the employee would have first 21 qualified for normal retirement [OF THE EMPLOYEE WOULD HAVE 22 OCCURRED] if the employee had survived. In addition to payment of the 23 member's individual account, the surviving spouse or, if there is no surviving 24 spouse, the surviving dependent children of the member, shall receive an 25 additional benefit in an amount equal to the accumulated contributions that 26 would have been made to the deceased member's individual account under 27 AS 39.35.730(a) and 39.35.750(a), based on the deceased member's gross monthly 28 compensation at the time of occupational disability, from the time of the 29 member's death to the date the member would have first qualified for normal 30 retirement if the member had survived. Earnings shall be allocated to the 31 additional benefit calculated under this subsection based on the actual rate of
01 return, net of expenses, of the trust account established under AS 39.35.750(e) 02 over the period that the contributions would have been made. This additional 03 amount and allocated earnings shall be paid in the same manner as determined 04 for the member's individual account under AS 39.35.820 - 39.35.860 to the extent 05 permitted by the Internal Revenue Service. For the purpose of determining 06 eligibility of an employee's survivor who is receiving a benefit under this 07 subsection for medical benefits under AS 39.35.870 - 39.35.880, an employee 08 [LIVED, THE RETIREMENT BENEFIT SHALL BE DETERMINED UNDER THE 09 PROVISIONS OF AS 39.35.820 - 39.35.840, 39.35.870, AND 39.35.880. AN 10 EMPLOYEE] who died while receiving disability benefits shall be considered to have 11 retired directly from the plan on the date the employee would have first qualified for 12 normal retirement if the employee had survived. The period during which the 13 employee was eligible for a disability benefit and the period during which a 14 survivor's pension is paid to a survivor under this subsection each constitute 15 membership service for the purposes of determining eligibility for medical 16 benefits under AS 39.30.300 - 39.30.495 and AS 39.35.700 - 39.35.990 [NORMAL 17 RETIREMENT OF THE EMPLOYEE WOULD HAVE OCCURRED IF THE 18 EMPLOYEE HAD LIVED]. 19 * Sec. 96. AS 39.35.890(l) is amended to read: 20 (l) In this section, "occupational disability" means a physical or mental 21 condition that the administrator determines presumably permanently prevents 22 an employee from satisfactorily performing the employee's usual duties or the 23 duties of another comparable position or job available to the employee and for 24 which the employee is qualified by training or education; however, the proximate 25 cause of the condition must be a bodily injury sustained, or a hazard undergone, 26 while in the performance and within the scope of the employee's duties and not 27 the proximate result of the wilful negligence of the employee [HAS THE 28 MEANING GIVEN IN AS 39.35.680]. 29 * Sec. 97. AS 39.35.890 is amended by adding a new subsection to read: 30 (m) While a survivor under (k) of this section is receiving a survivor's 31 pension, the employer of the deceased employee shall make contributions with respect
01 to the survivor based on the deceased employee's gross monthly compensation at the 02 time of termination due to disability 03 (1) that would have been paid to the employee's individual account 04 under AS 39.35.730 and 39.35.750(a), to the trust account established under 05 AS 39.35.750(e), without deduction from the survivor's pension; and 06 (2) to the appropriate accounts and funds under AS 39.35.750(b) - (e). 07 * Sec. 98. AS 39.35 is amended by adding a new section to read: 08 Sec. 39.35.891. Disability benefit and disabled peace officer or fire fighter 09 retirement benefit adjustment. (a) Once each year, the administrator shall increase 10 disability benefits and retirement benefits elected by disabled peace officers or fire 11 fighters under AS 39.35.890(h)(2). The amount of the increase is a percentage of the 12 current disability benefit or retirement benefit equal to the lesser of 75 percent of the 13 increase in the cost of living in the preceding calendar year or nine percent. 14 (b) If a disabled member was not receiving a benefit during the entire 15 preceding calendar year, the increase in the benefit under this section shall be adjusted 16 by multiplying it by a fraction, the numerator of which is the number of months for 17 which the benefit was received in the preceding calendar year and the denominator of 18 which is 12. 19 (c) If a disabled peace officer or fire fighter elects to receive a retirement 20 benefit in the amount calculated under AS 39.35.890(h)(2), the administrator shall, at 21 the time the disabled peace officer or fire fighter is appointed to retirement, increase 22 the retirement benefit by a percentage equal to the total cumulative percentage that has 23 been applied to the disabled peace officer's or fire fighter's disability benefit under this 24 section. 25 (d) An increase in benefit payments under this section is effective July 1 of 26 each year and is based on the percentage increase in the Consumer Price Index for 27 urban wage earners and clerical workers for Anchorage, Alaska, during the previous 28 calendar year, as determined by the United States Department of Labor, Bureau of 29 Labor Statistics. 30 (e) Benefit adjustments under this section shall terminate the last day of the 31 month following the date on which a disabled member is no longer receiving a
01 disability benefit under AS 39.35.890, unless the member is a disabled peace officer or 02 fire fighter and has chosen a retirement benefit under AS 39.35.890(h)(2). 03 * Sec. 99. AS 39.35.892(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 06 employee dies. Payments [, AND PAYMENT] shall cease on the last day of the 07 month in which there is no longer an eligible spouse or eligible dependent child, 08 or the last day of the month following the earliest date [TO BE MADE 09 BEGINNING WITH THE MONTH IN WHICH] the employee would have first 10 qualified for normal retirement if the employee had survived, whichever day is 11 sooner. 12 * Sec. 100. AS 39.35.892(c) is amended to read: 13 (c) The monthly survivor's pension in (b) of this section for survivors of 14 employees who were not peace officers or fire fighters is 40 percent of the employee's 15 monthly compensation in the month in which the employee dies. The monthly 16 survivor's pension in (b) of this section for survivors of employees who were peace 17 officers or fire fighters is 50 percent of the monthly compensation in the month in 18 which the employee dies. While the monthly survivor's pension is being paid, the 19 survivor is not entitled to elect distributions from the employee's individual 20 contribution account under AS 39.35.810, except as required by AS 39.35.840. 21 While the monthly survivor's pension is being paid, the employer shall make 22 contributions with respect to [ON BEHALF OF] the employee's surviving spouse 23 and employee's surviving dependent children [BENEFICIARIES] based on the 24 deceased employee's gross monthly compensation at the time of occupational death 25 (1) that would have been paid to the employee's individual account 26 under AS 39.35.730 and 39.35.750(a), to the trust account established under 27 AS 39.35.750(e), without deduction from the survivor's pension; and 28 (2) to the appropriate accounts and funds under AS 39.35.750(b) - (e) 29 [AS 39.35.750]. 30 * Sec. 101. AS 39.35.892(e) is amended to read: 31 (e) On the date the employee would have first qualified for normal
01 retirement [OF THE EMPLOYEE WOULD HAVE OCCURRED] if the employee 02 had survived [LIVED], the retirement benefit shall be determined under the 03 provisions of AS 39.35.820 - 39.35.840, 39.35.870, and 39.35.880. In addition to 04 payment of the member's individual account, the surviving spouse or, if there is 05 no surviving spouse, the surviving dependent children of the member, shall 06 receive an additional benefit in an amount equal to the accumulated 07 contributions that would have been made to the deceased member's individual 08 account under AS 39.35.730(a) and 39.35.750(a), based on the deceased member's 09 gross monthly compensation at the time of occupational death, from the time of 10 the member's death to the date the member would have first qualified for normal 11 retirement if the member had survived. Earnings shall be allocated to the 12 additional benefit calculated under this subsection based on the actual rate of 13 return, net of expenses, of the trust account established under AS 39.35.750(e) 14 over the period that such contributions would have been made. This additional 15 amount and allocated earnings shall be paid in the same manner as determined 16 for the member's individual account under AS 39.35.820 - 39.35.860 to the extent 17 permitted by the Internal Revenue Service. An employee who died and whose 18 survivors receive occupational death benefits under this section shall be considered to 19 have retired directly from the plan on the date the [NORMAL RETIREMENT OF 20 THE] employee would have first qualified for normal retirement [OCCURRED] if 21 the employee had survived. The period of time during which a survivor's pension 22 is paid under this section constitutes membership service for the purpose of 23 determining vesting in employer contributions under AS 39.35.790(b) and 24 eligibility for medical benefits under AS 39.30.300 - 39.30.495 and AS 39.35.700 - 25 39.35.990 [LIVED]. 26 * Sec. 102. AS 39.35 is amended by adding new sections to read: 27 Sec. 39.35.893. Survivor's pension adjustment. (a) Once each year, the 28 administrator shall increase payments to a person 60 years of age or older receiving a 29 survivor's pension under AS 39.35.890(k) or 39.35.892(c) and to a person who has 30 received a survivor's pension under AS 39.35.890(k) or 39.35.892(c) for at least five 31 years, who is not otherwise eligible for an increase under this section.
01 (b) The amount of the increase is a percentage of the current survivor's 02 pension equal to the lesser of 50 percent of the increase in the cost of living in the 03 preceding calendar year or six percent. 04 (c) If a survivor was not receiving a pension during the entire preceding 05 calendar year, the increase in the survivor's pension under this section shall be 06 adjusted by multiplying it by a fraction, the numerator of which is the number of 07 months for which the pension was received in the preceding calendar year and the 08 denominator of which is 12. 09 (d) The administrator shall increase the initial survivor's pension paid to a 10 survivor of a member who died while receiving disability benefits by a percentage 11 equal to the total cumulative percentage that has been applied to the member's 12 disability benefit under AS 39.35.891. 13 (e) An increase in benefit payments under this section is effective July 1 of 14 each year and is based on the percentage increase in the Consumer Price Index for 15 urban wage earners and clerical workers for Anchorage, Alaska, during the previous 16 calendar year, as determined by the United States Department of Labor, Bureau of 17 Labor Statistics. 18 (f) Pension adjustments under this section shall terminate the last day of the 19 month following the date on which a survivor is no longer receiving a survivor's 20 pension under AS 39.35.890(k) or 39.35.892(c). 21 Sec. 39.35.894. Premiums for retiree major medical insurance coverage 22 upon termination of disability benefits or survivor's pension. The premium for 23 retiree major medical insurance coverage payable by an employee whose disability 24 benefit is terminated under AS 39.35.890(g) or by an eligible survivor whose survivor 25 pension is terminated under AS 39.35.890(k) or 39.35.892(e) when the employee 26 would have been eligible for normal retirement if the employee had survived shall be 27 determined under AS 39.35.880(g)(2) as if the employee or survivor were eligible for 28 Medicare. 29 * Sec. 103. AS 39.35.900 is amended by adding new subsections to read: 30 (d) The administrator will use forfeitures in the fixed benefit account of the 31 plan that arise for any reason, including from termination of employment or death, to
01 reduce employer contributions. Forfeitures may not be applied to increase the benefits 02 of any member. 03 (e) The administrator will determine the amount of any fixed benefit that is 04 determined on the basis of actuarial tables using assumptions approved by the 05 commissioner. The amount of benefits is not subject to employer discretion. 06 * Sec. 104. AS 39.35.910 is amended to read: 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, with respect to individual accounts, 09 treated as a defined contribution plan, and not a defined benefit plan. The amount of 10 money in the individual account of a participant depends on the amount of 11 contributions and the rate of return from investments of the account that varies over 12 time. If benefits are paid in the form of an annuity, the benefit amount payable is 13 dependent on the amount of money in the account and the interest rates applied and 14 service fees charged by the annuity payor at the time the annuity is purchased from 15 the carrier and benefits are first paid. Nothing in this plan guarantees a participant 16 (1) a rate of return or interest rate other than that actually earned by the 17 account of the participant, less applicable administrative expenses; or 18 (2) an annuity based on interest rates or service charges other than 19 interest rates available from and service charges by the annuity payor in effect at the 20 time the annuity is paid. 21 * Sec. 105. AS 39.35.940(c) is amended to read: 22 (c) Each eligible member who elects to participate in the defined contribution 23 retirement plan shall have transferred to a new account the employee contribution 24 account balance held in trust for the member under the defined benefit retirement plan 25 of the public employees' retirement system. A matching employer contribution shall 26 be made on behalf of that employee to the new account. The employer shall make the 27 matching contribution from funds other than the trust funds of the defined benefit 28 retirement plan established under AS 39.35.095 - 39.35.680. The amount of the 29 matching employer contribution shall be subject to, and may not exceed, the 30 limitation of 26 U.S.C. 415(c) during the applicable limitation year as defined by 31 AS 39.35.990. If the matching employer contribution would exceed the limits
01 during the limitation year in which the transfer occurs, the remaining amount of 02 the matching employer contribution shall be made in the next limitation year, if 03 the limits would not be exceeded. 04 * Sec. 106. AS 39.35.940(d) is amended to read: 05 (d) Upon a transfer, all membership service previously earned under the 06 defined benefit retirement plan shall be nullified for purposes of entitlement to a future 07 benefit under the defined benefit retirement plan but shall be credited for purposes of 08 determining vesting in employer contributions under AS 39.35.790(b) and 09 eligibility to elect medical benefits under AS 39.35.870. Membership service allowed 10 for credit toward medical benefits does not include any service credit purchased for 11 employment by an employer who is not a participating employer in this chapter. 12 * Sec. 107. AS 39.35.940(h) is amended to read: 13 (h) An employee who is eligible to elect transfer to the defined 14 contribution retirement plan must make the election not later than 12 months 15 after the first day of the month following the administrator's receipt of the 16 notification that the employee's employer consents to transfers of its employees 17 under (i) of this section. The election to participate in the defined contribution 18 retirement plan must be made in writing on forms and in the manner prescribed by the 19 administrator. Before accepting an election to participate in the defined contribution 20 retirement plan, the administrator must provide the employee planning on making an 21 election to participate in the defined contribution retirement plan with information, 22 including calculations to illustrate the effect of moving the employee's retirement plan 23 from the defined benefit retirement plan to the defined contribution retirement plan as 24 well as other information to clearly inform the employee of the potential consequences 25 of the employee's election. An election made under this subsection to participate in the 26 defined contribution retirement plan is irrevocable. Upon making the election, the 27 participant shall be enrolled as a member of the defined contribution retirement plan, 28 the member's participation in the plan shall be governed by the provisions of 29 AS 39.35.700 - 39.35.990, and the member's participation in the defined benefit 30 retirement plan under AS 39.35.115 shall terminate. The participant's enrollment in the 31 defined contribution retirement plan shall be effective the first day of the month after
01 the administrator receives the completed enrollment forms. An election made by an 02 eligible member who is married is not effective unless the election is signed by the 03 individual's spouse. 04 * Sec. 108. AS 39.35 is amended by adding new sections to read: 05 Sec. 39.35.957. Designation of eligible employees, agreement to contribute, 06 and amendment of participation. (a) A political subdivision or public organization 07 participating in the defined contribution retirement plan under AS 39.35.700 - 08 39.35.990 shall designate the departments, groups, or other classifications of 09 employees eligible to participate in the plan and, by participating, shall legally be 10 presumed to have agreed to make contributions each year in the amounts required for 11 members of the plan under AS 39.35.750. 12 (b) If the employer does not participate in the defined benefit retirement plan 13 under AS 39.35.095 - 39.35.680, an employee who is eligible under (a) of this section 14 and who is a member of the defined benefit retirement plan under AS 39.35.095 - 15 39.35.680 does not accrue credited service or make contributions under that defined 16 benefit retirement plan, but shall be a member of the defined contribution retirement 17 plan under AS 39.35.700 - 39.35.990 and make contributions under that plan. 18 (c) An employer may request to amend its participation in the plan to add or 19 exclude departments, groups, or other classifications of employees by filing a 20 resolution as provided by AS 39.35.950 or 39.35.955 with the administrator. 21 Sec. 39.35.958. Termination of participation in the plan. (a) A political 22 subdivision or public organization may request that its participation in the plan be 23 terminated. The request may be made only after adoption of a resolution by the 24 legislative body of the political subdivision and approval of the resolution by the 25 person required by law to approve the resolution, or, in the case of a public 26 organization, after adoption of a resolution by the governing body of that public 27 organization. A certified copy of the resolution shall be filed with the administrator. 28 (b) If contributions are not transmitted to the plan within the prescribed time 29 limit, the administrator may grant an extension and shall assess interest on the 30 outstanding contributions at the rate established under AS 39.35.610. If the political 31 subdivision or public organization is in default at the end of the extension,
01 participation in the plan is terminated, and it shall be sent notice of termination. 02 (c) When an employer's participation in the plan is terminated, or when an 03 employer terminates coverage of a department, group, or other classification of 04 employees under AS 39.35.957(c), the administrator shall assess the employer a 05 termination cost that the administrator determines is actuarially required to fully fund 06 the costs to the plan for employees whose coverage is terminated, including the cost of 07 providing the employer's share of retiree health benefits under AS 39.35.880, 08 occupational disability and occupational death benefits under AS 39.35.890 and 09 39.35.892, and pension benefits elected under AS 39.35.890(h)(2). 10 (d) An employee whose coverage under the plan is terminated as a result of 11 termination of an employer's participation under this section or amendment of the 12 employer's agreement under AS 39.35.957(c) shall be considered fully vested in 13 employer contributions under AS 39.35.790(b) and in the individual account 14 established for the employee under AS 39.30.730. If the employee is later employed 15 with a participating employer, the employee's membership service earned under the 16 plan during employment with a terminated employer shall be credited for purposes of 17 determining vesting in employer contributions under AS 39.35.790(b) and eligibility 18 for medical benefits under this chapter and AS 39.30.300 - 39.30.495. 19 (e) An employer terminating participation in the plan shall pay termination 20 costs determined by the administrator, or enter into a payment plan acceptable to the 21 administrator, within 60 days of the employer receiving notice of its termination costs 22 from the administrator. Termination costs not paid within the prescribed time limit or 23 in accordance with the approved payment plan shall be collected by the administrator 24 in accordance with AS 39.35.610(b). Termination of participation by an employer in 25 the plan does not bar future participation by the employer if the employer has paid in 26 full its prior termination costs. 27 (f) A political subdivision or public organization considering or requesting 28 termination from the plan shall pay the cost associated with obtaining a termination 29 cost study associated with the employer's termination. 30 * Sec. 109. AS 39.35 is amended by adding a new section to read: 31 Sec. 39.35.972. Special rules for treatment of qualified military service.
01 Notwithstanding any contrary provisions of AS 39.35.700 - 39.35.990, with respect to 02 qualified military service, contributions shall be made and benefits and service credit 03 shall be provided in accordance with 26 U.S.C. 414(u). 04 * Sec. 110. AS 39.35.990(7) is amended to read 05 (7) "compensation" 06 (A) means 07 (i) the total remuneration earned by an employee for 08 personal services rendered, including cost-of-living differentials, as 09 reported on the employee's Federal Income Tax Withholding Statement 10 (Form W-2) from the employer for the calendar year; 11 (ii) the member contribution to the public employees' 12 retirement system under AS 39.35.730, employee deferrals under 13 AS 39.45.010, the wage reduction amount contributed to the Alaska 14 Supplemental Annuity Plan under AS 39.30.150(a), and the wage 15 reduction amount contributed to the Alaska Supplemental Benefit Plan 16 under AS 39.30.150(c), as those statutes may be amended from time to 17 time; 18 (B) does not include retirement benefits, severance pay or other 19 separation bonuses, welfare benefits, per diem, expense allowances, workers' 20 compensation payments, payments for leave not used whether those leave 21 payments are scheduled payments, lump-sum payments, donations, or cash-ins, 22 any remuneration contributed by the employer for or on account of the 23 employee under this plan or under any other qualified or nonqualified 24 employee benefit plan, or any remuneration not specifically included above 25 which would have been excluded under 26 U.S.C. 3121(a) (Internal Revenue 26 Code) if the employer had remained in the Federal Social Security System [, 27 OR ANY REMUNERATION PAID BY THE EMPLOYER IN EXCESS OF 28 THE SOCIAL SECURITY TAXABLE WAGE BASE FOR THE 29 CALENDAR YEAR]; 30 (C) notwithstanding (B) of this paragraph, includes any amount 31 that is contributed by the employer under a salary reduction agreement and that
01 is not includible in the gross income of the employee under 26 U.S.C. 125, 02 132(f)(4), 402(e)(3), 402(h)(1)(B), or 403(b) (Internal Revenue Code); the 03 annual compensation limitation for the member, which is so taken into account 04 for those purposes, may not exceed $200,000, as adjusted for the cost of living 05 in accordance with 26 U.S.C. 401(a)(17)(B) (Internal Revenue Code), with the 06 limitation for a fiscal year being the limitation in effect for the calendar year 07 within which the fiscal year begins; 08 * Sec. 111. AS 39.35.990(16) is amended to read: 09 (16) "member" or "employee" means a person who is eligible to 10 participate in the plan and who is covered by [AN EMPLOYEE OF AN 11 EMPLOYER OR FORMER EMPLOYEE OF AN EMPLOYER WHO RETAINS A 12 RIGHT TO BENEFITS UNDER] the plan, including the governor, the lieutenant 13 governor, and a member of the legislature, but does not include full-time or part- 14 time instructors of the Department of Labor and Workforce Development and the 15 Department of Education and Early Development in positions that require a 16 teaching certificate; 17 * Sec. 112. AS 39.35.990(20) is amended to read: 18 (20) "peace officer" or "fire fighter" means an employee occupying a 19 position as a peace officer, chief of police, regional public safety officer, 20 correctional officer, correctional superintendent, fire fighter, fire chief, or 21 probation officer, but does not include a village public safety officer employed by 22 a village public safety officer program established under AS 18.65.670 [HAS THE 23 MEANING GIVEN IN AS 39.35.680]; 24 * Sec. 113. AS 39.45.020 is amended by adding a new subsection to read: 25 (d) The administrator of a deferred compensation program under this chapter 26 has the powers and duties with regard to the program as set out in AS 14.25.003 and 27 14.25.004, as though those provisions applied to the program. 28 * Sec. 114. AS 39.45 is amended by adding a new section to read: 29 Sec. 39.45.055. Appeals. A final decision made under AS 39.45.010 - 30 39.45.060 is subject to appeal under AS 44.64. 31 * Sec. 115. AS 44.64.030(a) is amended by adding new paragraphs to read:
01 (35) AS 14.25.175 (waiver of adjustments under teachers' defined 02 benefit plan); 03 (36) AS 39.30.165 (supplemental benefits system); 04 (37) AS 39.30.335 (teachers' and public employees' health 05 reimbursement arrangement plan); 06 (38) AS 39.35.522 (waiver of adjustments under public employees' 07 defined benefit plan); 08 (39) AS 39.45.055 (public employees' deferred compensation 09 program). 10 * Sec. 116. (a) AS 14.25.045, 14.25.340(b), 14.25.570; AS 39.35.050(a), 39.35.370(k), 11 39.35.615(d), 39.35.615(f), 39.35.620(c), 39.35.620(f), 39.35.620(h), and 39.35.730(b) are 12 repealed. 13 (b) AS 39.35.375(f) is repealed. 14 (c) Sections 15 and 91, ch. 9, FSSLA 2005, are repealed. 15 * Sec. 117. The uncodified law of the State of Alaska is amended by adding a new section 16 to read: 17 EMPLOYER CONTRIBUTIONS FOR FISCAL YEAR 2008 FOR 18 OCCUPATIONAL DISABILITY AND OCCUPATIONAL DEATH BENEFITS IN THE 19 TEACHERS' DEFINED CONTRIBUTION RETIREMENT PLAN. Notwithstanding 20 AS 14.25.350(e), enacted by sec. 20 of this Act, for fiscal year 2008 the employer 21 contribution to fully finance the cost of providing occupational disability and occupational 22 death benefits under AS 14.25.485 and 14.25.487 shall be equal to 0.62 percent of the amount 23 of compensation paid to all teachers who work for the employer in that year and are members 24 of the teachers' defined contribution retirement plan. 25 * Sec. 118. The uncodified law of the State of Alaska is amended by adding a new section 26 to read: 27 TRANSFER OF FUNDS TO ALASKA RETIREE HEALTH CARE TRUSTS. The 28 commissioner of administration shall transfer to the Alaska retiree health care trusts 29 established under AS 39.30.097, enacted by sec. 50 of this Act, all funds for payment of 30 retiree health benefits that have been deposited in the group health and life benefits fund 31 under AS 39.30.095, including funds in the retiree health insurance fund, and all funds from
01 any fund or account into which funds for provision of retiree health benefits have been 02 deposited. The commissioner of administration shall make the transfer on July 1, 2007, or 03 immediately after July 1, 2007 when the funds become available to the commissioner for 04 transfer. 05 * Sec. 119. Sections 5, 6, 17, 60, 68, 69, 81, and 116(b) of this Act take effect July 1, 2010. 06 * Sec. 120. Except as provided in sec. 119 of this Act, this Act takes effect immediately 07 under AS 01.10.070(c).