CSSB 23(L&C): "An Act relating to the public employees' retirement system and the teachers' retirement system; and providing for an effective date."
00 CS FOR SENATE BILL NO. 23(L&C) 01 "An Act relating to the public employees' retirement system and the teachers' 02 retirement system; and providing for an effective date." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 14.25.009 is repealed and reenacted to read: 05 Sec. 14.25.009. Applicability of AS 14.25.009 - 14.25.220. The provisions of 06 AS 14.25.009 - 14.25.220 apply to teachers who are eligible to be members of the 07 teachers' retirement system under 14.25.009 - 14.25.220 and are not members of the 08 defined contribution retirement plan under AS 14.25.310 - 14.25.590. 09 * Sec. 2. AS 14.25.040(a) is amended to read: 10 (a) Unless a teacher or member participates in a university retirement program 11 under AS 14.40.661 - 14.40.799, has filed an election under AS 14.25.043(b), or has 12 elected under AS 14.25.330 or former AS 14.25.540 to participate in the plan 13 established in AS 14.25.310 - 14.25.590, a teacher or member contracting for service 14 with a participating employer is subject to AS 14.25.009 - 14.25.220.
01 * Sec. 3. AS 14.25.143(a), as that subsection read following amendment by sec. 3, ch. 146, 02 SLA 1980, until amended by sec. 12, ch. 106, SLA 1988, as amended by sec. 18, ch. 9, 03 FSSLA 2005, is amended to read: 04 (a) When the board [ADMINISTRATOR] determines that the cost of living 05 has increased and that the financial condition of the retirement fund permits, the 06 administrator shall increase benefit payments to persons receiving benefits under this 07 plan. [FOR PURPOSES OF THIS SUBSECTION, THE FINANCIAL CONDITION 08 OF THE FUND WOULD ONLY PERMIT AN INCREASE IN BENEFITS WHEN 09 THE RATIO OF TOTAL FUND ASSETS TO THE ACCRUED LIABILITY MEETS 10 OR EXCEEDS 105 PERCENT. IN THIS SUBSECTION, "ACCRUED LIABILITY" 11 MEANS THE PRESENT VALUE OF ALL MEMBER BENEFITS ACCRUED BY 12 MEMBER SERVICE IN THIS PLAN.] 13 * Sec. 4. AS 14.25.143(a), as that subsection read following amendment by sec. 12, ch. 106, 14 SLA 1988, until amended by sec. 12, ch. 97, SLA 1990, as amended by sec. 19, ch. 9, FSSLA 15 2005, is amended to read: 16 (a) When the board [ADMINISTRATOR] determines that the cost of living 17 has increased and that the financial condition of the retirement fund permits, the 18 administrator shall increase benefit payments to persons receiving benefits under this 19 plan. [FOR PURPOSES OF THIS SUBSECTION, THE FINANCIAL CONDITION 20 OF THE FUND WOULD ONLY PERMIT AN INCREASE IN BENEFITS WHEN 21 THE RATIO OF TOTAL FUND ASSETS TO THE ACCRUED LIABILITY MEETS 22 OR EXCEEDS 105 PERCENT. IN THIS SUBSECTION, "ACCRUED LIABILITY" 23 MEANS THE PRESENT VALUE OF ALL MEMBER BENEFITS ACCRUED BY 24 MEMBER SERVICE IN THIS PLAN.] 25 * Sec. 5. AS 14.25.310 is amended to read: 26 Sec. 14.25.310. Applicability of AS 14.25.310 - 14.25.590. The provisions of 27 AS 14.25.310 - 14.25.590 apply only to teachers 28 (1) who first become members on or after July 1, 2006, and do not 29 transfer to a defined benefit retirement plan under AS 14.25.009 - 14.25.220 or 30 AS 39.35.095 - 39.35.680; and 31 (2) described in AS 14.25.330 who elect under that section to
01 become [TO MEMBERS WHO ARE EMPLOYED BY EMPLOYERS THAT DO 02 NOT PARTICIPATE IN THE DEFINED BENEFIT RETIREMENT PLAN 03 ESTABLISHED UNDER AS 14.25.009 - 14.25.220, OR TO] members [WHO 04 TRANSFER INTO THE DEFINED CONTRIBUTION RETIREMENT PLAN 05 UNDER AS 14.25.540]. 06 * Sec. 6. AS 14.25.330 is repealed and reenacted to read: 07 Sec. 14.25.330. Retirement plan election option. (a) A teacher who is first 08 hired on or after the effective date of this section and has not previously been a 09 member of a defined benefit retirement plan or a defined contribution retirement plan 10 under this chapter or AS 39.35, and who, at the time of hire, is fully vested in a 11 defined benefit retirement plan that is outside of this chapter and AS 39.35, may make 12 a one-time election to participate in the defined contribution retirement plan under 13 AS 14.25.310 - 14.25.590 and transfer employee contributions, if any, and employer 14 contributions, if any, that have been made to the defined benefit retirement plan under 15 AS 14.25.009 - 14.25.220 since the date of hire. Before employer contributions are 16 transferred under this subsection, the administrator shall recalculate them under 17 AS 14.25.350. 18 (b) The election to participate in the defined contribution retirement plan 19 under (a) of this section must be made within 60 days after the date of hire, and be 20 made in writing on a form and in the manner prescribed by the administrator. Before 21 accepting an election to participate in the defined contribution retirement plan, the 22 administrator shall, within five days after the teacher's hire, provide the teacher 23 eligible to make an election to participate in the defined contribution retirement plan 24 under AS 14.25.310 - 14.25 590 with 25 (1) information, including calculations to illustrate the effect of 26 moving the teacher's retirement plan from the defined benefit retirement plan to the 27 defined contribution retirement plan; and 28 (2) other information to clearly inform the teacher of the potential 29 consequences of the teacher's election. 30 (c) An election made under (a) of this section to participate in the defined 31 contribution retirement plan is irrevocable. On making the election, the teacher shall
01 be enrolled as a member of the defined contribution retirement plan under 02 AS 14.25.310 - 14.25.590, the member's participation in the plan shall be governed by 03 the provisions for the defined contribution retirement plan, and the member's 04 participation in the defined benefit retirement plan under AS 14.25.009 - 14.25.220 05 shall terminate. The member's enrollment in the defined contribution retirement plan is 06 effective the first day of the month after the administrator receives the completed 07 enrollment forms. An election made by an eligible member who is married is not 08 effective unless the election is signed by the member's spouse. 09 (d) As directed by the member, the Alaska Retirement Management Board 10 shall transfer or cause to be transferred the appropriate amounts to the designated 11 account. The administrator shall credit the member with a service credit that is equal 12 to the member's actual service or the actuarially calculated value of the employer and 13 employee contributions transferred, whichever is less. The board shall establish 14 transfer procedures by regulation, but the actual transfer may not be later than 30 days 15 after the effective date of the member's participation in the defined contribution 16 retirement plan, unless the major financial markets for securities available for a 17 transfer are seriously disrupted by an unforeseen event that also causes the suspension 18 of trading on any national securities exchange in the country where the securities were 19 issued. In that event, the 30-day period of time may be extended by a resolution of the 20 board. Transfers are not commissionable or subject to other fees and may be in the 21 form of securities or cash as determined by the board. Securities shall be valued on the 22 date of receipt in the member's account. 23 * Sec. 7. AS 39.35.095 is repealed and reenacted to read: 24 Sec. 39.35.095. Applicability of AS 39.35.095 - 39.35.680. The provisions of 25 AS 39.35.095 - 39.35.680 apply to public employees who are eligible to be members 26 of the public employees' retirement system under AS 39.35.095 - 39.35.680 and are 27 not members of the defined contribution retirement plan under AS 39.35.700 - 28 39.35.990. 29 * Sec. 8. AS 39.35.475(a), as that subsection read following amendment by sec. 34, ch. 146, 30 SLA 1980, until amended by sec. 41, ch. 82, SLA 1986, as amended by sec. 112, ch. 9, 31 FSSLA 2005, is amended to read:
01 (a) When the board [ADMINISTRATOR] determines that the cost of living 02 has increased and that the financial condition of the retirement fund permits, the 03 administrator shall increase benefit payments to persons receiving benefits under this 04 plan. [FOR PURPOSES OF THIS SUBSECTION, THE FINANCIAL CONDITION 05 OF THE FUND WOULD ONLY PERMIT AN INCREASE IN BENEFITS WHEN 06 THE RATIO OF TOTAL FUND ASSETS TO THE ACCRUED LIABILITY MEETS 07 OR EXCEEDS 105 PERCENT. IN THIS SUBSECTION, "ACCRUED LIABILITY" 08 MEANS THE PRESENT VALUE OF ALL MEMBER BENEFITS ACCRUED BY 09 MEMBER SERVICE IN THIS PLAN.] 10 * Sec. 9. AS 39.35.620(k) is amended to read: 11 (k) Termination of an employer's participation in the plan does not bar future 12 participation in the system by that employer if the employer is current with payments 13 on amounts due under AS 39.35.625. [IF A PREVIOUSLY TERMINATED 14 EMPLOYER RETURNS TO THE SYSTEM, THE EMPLOYER MAY ONLY 15 PARTICIPATE IN THE PLAN ESTABLISHED UNDER AS 39.35.700 - 39.35.990. 16 EMPLOYEES MAY BE CREDITED UNDER AS 39.35.700 - 39.35.990 ONLY 17 WITH SERVICE SUBSEQUENT TO THE DATE OF RETURN.] 18 * Sec. 10. AS 39.35.700 is amended to read: 19 Sec. 39.35.700. Applicability of AS 39.35.700 - 39.35.990. The provisions of 20 AS 39.35.700 - 39.35.990 apply only to 21 (1) members first hired on or after July 1, 2006, who do not transfer 22 to a defined benefit retirement plan under AS 14.25.009 - 14.25.220 or 23 AS 39.35.095 - 39.35.680; and 24 (2) public employees described in AS 39.35.720 who elect under 25 that section to become [TO MEMBERS WHO ARE EMPLOYED BY 26 EMPLOYERS THAT DO NOT PARTICIPATE IN THE DEFINED BENEFIT 27 RETIREMENT PLAN ESTABLISHED UNDER AS 39.35.095 - 39.35.680, OR TO] 28 members [WHO TRANSFER INTO THE DEFINED CONTRIBUTION 29 RETIREMENT PLAN UNDER AS 39.35.940]. 30 * Sec. 11. AS 39.35.720 is repealed and reenacted to read: 31 Sec. 39.35.720. Retirement plan election option. (a) A public employee who
01 is first hired on or after the effective date of this section and has not previously been a 02 member of a defined benefit retirement plan or a defined contribution retirement plan 03 under AS 14.25 or this chapter, and who, at the time of the hire, is fully vested in a 04 defined benefit retirement plan that is outside AS 14.25 and this chapter, may make a 05 one-time election to participate in the defined contribution retirement plan under 06 AS 39.35.700 - 39.35.990 and to transfer employee contributions, if any, and 07 employer contributions, if any, that have been made to the defined benefit retirement 08 plan under AS 39.35.095 - 39.35.680. Before employer contributions are transferred 09 under this subsection the administrator shall recalculate them under AS 39.35.255. 10 (b) The election to participate in the defined contribution retirement plan 11 under (a) of this section must be made within 60 days after the date of hire, and be 12 made in writing on a form and in the manner prescribed by the administrator. Before 13 accepting an election to participate in the defined contribution retirement plan under 14 AS 39.35.700 - 39.35.990, the administrator shall, within five days after the public 15 employee's hire, provide the employee eligible to make an election to participate in the 16 defined contribution retirement plan with 17 (1) information, including calculations to illustrate the effect of 18 moving the employee's retirement plan from the defined benefit retirement plan to the 19 defined contribution retirement plan; and 20 (2) other information to clearly inform the employee of the potential 21 consequences of the employee's election. 22 (c) An election made under (a) of this section to participate in the defined 23 contribution retirement plan is irrevocable. On making the election, the employee shall 24 be enrolled as a member of the defined contribution retirement plan under 25 AS 39.35.700 - 39.35.990, the member's participation in the plan shall be governed by 26 the provisions for the defined contribution retirement plan, and the member's 27 participation in the defined benefit retirement plan under AS 39.35.095 - 39.35.680 28 shall terminate. The member's enrollment in the defined contribution retirement plan is 29 effective the first day of the month after the administrator receives the completed 30 enrollment forms. An election made by an eligible member who is married is not 31 effective unless the election is signed by the member's spouse.
01 (d) As directed by the member, the Alaska Retirement Management Board 02 shall transfer or cause to be transferred the appropriate amounts to the designated 03 account. The administrator shall credit the member with a service credit that is equal 04 to the member's actual service or the actuarially calculated value of the employer and 05 employee contributions transferred, whichever is less. The board shall establish 06 transfer procedures by regulation, but the actual transfer may not be later than 30 days 07 after the effective date of the member's participation in the defined contribution 08 retirement plan, unless the major financial markets for securities available for a 09 transfer are seriously disrupted by an unforeseen event that also causes the suspension 10 of trading on any national securities exchange in the country where the securities were 11 issued. In that event, the 30-day period of time may be extended by a resolution of the 12 board. Transfers are not commissionable or subject to other fees and may be in the 13 form of securities or cash as determined by the board. Securities shall be valued on the 14 date of receipt in the member's account. 15 * Sec. 12. AS 14.25.012(c), 14.25.540; AS 39.35.940, 39.35.957(b); and secs. 17 and 81, 16 ch. 20, SLA 2007, are repealed. 17 * Sec. 13. The uncodified law of the State of Alaska is amended by adding a new section to 18 read: 19 RETIREMENT PLAN ELECTION OPTION. (a) A teacher who was first hired on or 20 after July 1, 2006, and before the effective date of this section and who is a member of the 21 defined contribution plan of the teachers' retirement system under AS 14.25.310 - 14.25.590 22 may make a one-time election before September 1, 2009, or within 90 days after the effective 23 date of this section, whichever is later, to participate in the defined benefit retirement plan 24 under AS 14.25.009 - 14.25.220 and to transfer any contributions, including employer 25 contributions, made to the defined contribution plan before that date. 26 (b) A public employee who was first hired on or after July 1, 2006, and before the 27 effective date of this section and who is a member of the defined contribution plan of the 28 public employees' retirement system under AS 39.35.700 - 39.35.990 may make a one-time 29 election before September 1, 2009, or within 90 days after the effective date of this section, 30 whichever is later, to participate in the defined benefit retirement plan under AS 39.35.095 - 31 39.35.680 and to transfer any contributions, including employer contributions, made to the
01 defined contribution plan before that date. 02 * Sec. 14. The uncodified law of the State of Alaska is amended by adding a new section to 03 read: 04 RETIREMENT PLAN ELECTION PROCEDURE; REGULATIONS REQUIRED. 05 (a) The election to participate in the defined benefit retirement plan under sec. 13 of this Act 06 must be made in writing on forms and in the manner prescribed by the administrator. Before 07 accepting an election to participate in the defined benefit retirement plan, the administrator 08 shall provide the employee planning on making an election to participate in the defined 09 benefit retirement plan with information, including calculations to illustrate the effect of 10 moving the employee's retirement plan from the defined contribution retirement plan to the 11 defined benefit retirement plan as well as other information to clearly inform the employee of 12 the potential consequences of the employee's election. 13 (b) An election made under sec. 13 of this Act to participate in the defined benefit 14 retirement plan is irrevocable. On making the election, the participant shall be enrolled as a 15 member of the defined benefit retirement plan, the member's participation in the plan shall be 16 governed by the provisions for the defined benefit retirement plan, and the member's 17 participation in the defined contribution retirement plan shall terminate. The participant's 18 enrollment in the defined benefit retirement plan shall be effective the first day of the month 19 after the administrator receives the completed enrollment forms. An election made by an 20 eligible member who is married is not effective unless the election is signed by the 21 individual's spouse. 22 (c) As directed by the participant, the Alaska Retirement Management Board shall 23 transfer or cause to be transferred the appropriate amounts to the designated account. The 24 administrator shall credit the participant with a service credit that is equal to the participant's 25 actual service or the actuarially calculated value of the employer and employee contribution 26 transferred, whichever is less. The board shall establish transfer procedures by regulation, but 27 the actual transfer may not be later than 30 days after the effective date of the member's 28 participation in the defined benefit retirement plan unless the major financial markets for 29 securities available for a transfer are seriously disrupted by an unforeseen event that also 30 causes the suspension of trading on any national securities exchange in the country where the 31 securities were issued. In that event, the 30-day period of time may be extended by a
01 resolution of the board. Transfers are not commissionable or subject to other fees and may be 02 in the form of securities or cash as determined by the board. Securities shall be valued on the 03 date of receipt in the participant's account. 04 (d) In this section, 05 (1) "administrator" means the person appointed or designated by the 06 commissioner of administration under AS 39.35.050 for a public employees' retirement plan 07 and under AS 14.25.003 for a teachers' retirement plan; 08 (2) "board" means the Alaska Retirement Management Board established 09 under AS 37.10.210; 10 (3) "defined benefit retirement plan" means the retirement plan established 11 under 12 (A) AS 14.25.009 - 14.25.220 for a teacher; or 13 (B) AS 39.35.095 - 39.35.680 for a public employee; 14 (4) "defined contribution retirement plan" means the retirement plan 15 established under 16 (A) AS 14.25.310 - 14.25.590 for a teacher; or 17 (B) AS 39.35.700 - 39.35.990 for a public employee. 18 * Sec. 15. The uncodified law of the State of Alaska is amended by adding a new section to 19 read: 20 ADOPTION OF REGULATIONS. The commissioner of administration shall proceed 21 immediately to adopt regulations consistent with this Act, but in no event may the regulations 22 take effect before the effective date of sec. 13 of this Act. 23 * Sec. 16. Sections 14 and 15 of this Act take effect immediately under AS 01.10.070(c).