HB 236: "An Act relating to the public employees' retirement system and the teachers' retirement system; and providing for an effective date."
00 HOUSE BILL NO. 236 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 AS 14.25.009 is repealed and reenacted to read: 05 Sec. 14.25.009.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. (a) The provisions 06 of AS 14.25.009 - 14.25.220 apply to teachers who are eligible to be members of the 07 teachers' retirement system under AS 14.25.009 - 14.25.220 and are not members of 08 the defined contribution retirement plan under AS 14.25.310 - 14.25.590. 09 (b) An employer that participates in the plan shall also participate in the 10 defined contribution retirement plan under AS 14.25.310 - 14.25.590. 11 * Sec. 2. AS 14.25.040(a) is amended to read: 12 (a) Unless a teacher or member participates in a university retirement program 13 under AS 14.40.661 - 14.40.799 or has elected under AS 14.25.330 or former 14 AS 14.25.540 to participate in the plan established in AS 14.25.310 - 14.25.590, a
01 teacher or member contracting for service with a participating employer is subject to 02 AS 14.25.009 - 14.25.220. 03 * Sec. 3. AS 14.25.130(c) is amended to read: 04 (c) Once each year during the first five years following appointment to 05 disability under this section, and once every three-year period thereafter, the 06 administrator may require a disabled member who first became a member before 07 July 1, 2011, and who has not attained eligibility for normal retirement to undergo a 08 medical or mental examination by a competent physician. The administrator shall 09 suspend any disability benefit for a disabled member who refuses to undergo a 10 physical or mental examination when requested under this section. 11 * Sec. 4. AS 14.25.130 is amended by adding new subsections to read: 12 (g) A person who first becomes a member after June 30, 2011, and who is 13 receiving a benefit under this section shall undergo a medical examination as often as 14 the administrator considers advisable, but not more frequently than once each year. 15 The administrator shall determine the place of the examination and engage the 16 physician or physicians. If, in the judgment of the administrator, the examination 17 indicates that the disabled member is no longer incapacitated because of a total and 18 apparently permanent occupational disability, the administrator may not issue further 19 disability benefits to the member. 20 (h) A person who first becomes a member after June 30, 2011, and who is 21 appointed to disability benefits shall apply to the division of vocational rehabilitation 22 of the Department of Labor and Workforce Development within 30 days after the date 23 disability benefits commence. The member shall be enrolled in a rehabilitation 24 program if the member meets the eligibility requirements of the division of vocational 25 rehabilitation. Unless the member demonstrates cause, benefits shall terminate at the 26 end of the first month in which a disabled member 27 (1) fails to report to the division of vocational rehabilitation; 28 (2) is certified by the division of vocational rehabilitation as failing to 29 cooperate in a vocational rehabilitation program; 30 (3) fails to interview for a job; or 31 (4) fails to accept a position offered.
01 * Sec. 5. AS 14.25.168(d) is amended to read: 02 (d) A person who first becomes a benefit recipient before July 1, 2011, may 03 elect major medical insurance coverage in accordance with regulations and under the 04 following conditions: 05 (1) a person who has less than 25 years of membership service and 06 who is younger than 60 years of age must pay an amount equal to the full monthly 07 group premium for retiree major medical insurance coverage; 08 (2) a disabled member, a disabled member who is appointed to normal 09 retirement, a person 60 years of age or older, or a person who has at least 25 years of 10 membership service is not required to make premium payments. 11 * Sec. 6. AS 14.25.168 is amended by adding a new subsection to read: 12 (g) A person who first becomes a benefit recipient after June 30, 2011, may 13 elect major medical insurance coverage in accordance with regulations and under the 14 following conditions: 15 (1) a person who has less than 25 years of membership service and 16 who is younger than the age set for Medicare eligibility at the time the member retires 17 must pay an amount equal to the full monthly group premium for retiree major 18 medical insurance coverage; 19 (2) a disabled member, a disabled member who is appointed to normal 20 retirement, a person who has reached the age set for Medicare eligibility at the time 21 the member retires and who has at least eight years of membership service, or a person 22 who has at least 25 years of membership service is not required to make premium 23 payments. 24 * Sec. 7. AS 14.25.310 is amended to read: 25 Sec. 14.25.310. Applicability of AS 14.25.310 - 14.25.590. The provisions of 26 AS 14.25.310 - 14.25.590 apply only to 27 (1) teachers who first become members on or after July 1, 2006, and 28 before the effective date of this section who do not transfer to a defined benefit 29 retirement plan under AS 14.25.009 - 14.25.220 or AS 39.35.095 - 39.35.680; 30 (2) teachers described in AS 14.25.330 who elect under that section 31 to become [TO MEMBERS WHO ARE EMPLOYED BY EMPLOYERS THAT DO
01 NOT PARTICIPATE IN THE DEFINED BENEFIT RETIREMENT PLAN 02 ESTABLISHED UNDER AS 14.25.009 - 14.25.220, TO FORMER MEMBERS 03 UNDER AS 14.25.220, OR TO] members; and 04 (3) teachers who transferred [TRANSFER] into the defined 05 contribution retirement plan under former AS 14.25.540. 06 * Sec. 8. AS 14.25.310 is amended by adding a new subsection to read: 07 (b) An employer that participates in the plan shall also participate in the 08 defined benefit retirement plan under AS 14.25.009 - 14.25.220. 09 * Sec. 9. AS 14.25.330 is repealed and reenacted to read: 10 Sec. 14.25.330. Retirement plan election option. (a) A teacher who is first 11 hired on or after the effective date of this section may make a one-time election to 12 participate in the defined contribution retirement plan under AS 14.25.310 - 14.25.590 13 and transfer to that plan employee contributions, if any, and employer contributions, if 14 any, that have been made to the defined benefit retirement plan under AS 14.25.009 - 15 14.25.220. Before employer contributions are transferred under this subsection, the 16 administrator shall recalculate them under AS 14.25.070. 17 (b) The election to participate in the defined contribution retirement plan 18 under (a) of this section must be made within 60 days after the date of hire, and be 19 made in writing on a form and in the manner prescribed by the administrator. Before 20 accepting an election to participate in the defined contribution retirement plan, the 21 administrator shall, within five days after the teacher's hire, provide the teacher 22 eligible to make an election to participate in the defined contribution retirement plan 23 under AS 14.25.310 - 14.25 590 with 24 (1) information, including calculations to illustrate the effect of 25 moving the teacher's retirement plan from the defined benefit retirement plan to the 26 defined contribution retirement plan; and 27 (2) other information to clearly inform the teacher of the potential 28 consequences of the teacher's election. 29 (c) An election made under (a) of this section to participate in the defined 30 contribution retirement plan is irrevocable. On the effective date of the election, the 31 teacher shall be enrolled as a member of the defined contribution retirement plan
01 under AS 14.25.310 - 14.25.590, the member's participation in the plan shall be 02 governed by the provisions for the defined contribution retirement plan, and the 03 member's participation in the defined benefit retirement plan under AS 14.25.009 - 04 14.25.220 shall terminate. The member's enrollment in the defined contribution 05 retirement plan is effective the first day of the month after the administrator receives 06 the completed enrollment forms. An election made by an eligible member who is 07 married is not effective unless the election is signed by the member's spouse. 08 (d) When a member makes an election under (a) of this section, the Alaska 09 Retirement Management Board shall cause the total amount of the member's employee 10 and employer contributions, with interest through the effective date of the member's 11 participation in the defined contribution retirement plan, to be actuarially calculated 12 and transferred to the member's designated account in the defined contribution 13 retirement plan. The board shall establish transfer procedures by regulation, but the 14 actual transfer may not be later than 30 days after the effective date of the member's 15 participation in the defined contribution retirement plan, unless the major financial 16 markets for securities available for a transfer are seriously disrupted by an unforeseen 17 event that also causes the suspension of trading on any national securities exchange in 18 the country where the securities were issued. In that event, the 30-day period of time 19 may be extended by a resolution of the board. Transfers are not commissionable or 20 subject to other fees and may be in the form of securities or cash as determined by the 21 board. Securities shall be valued on the date of receipt in the member's account. 22 (e) An election made by an eligible member who is married is not effective 23 unless the election is signed by the individual's spouse. An eligible member whose 24 accounts are subject to a qualified domestic relations order may not make an election 25 to participate in the defined contribution retirement plan under this section unless the 26 qualified domestic relations order is amended or vacated and court-certified copies of 27 the order are received by the administrator. 28 * Sec. 10. AS 39.35.095 is repealed and reenacted to read: 29 Sec. 39.35.095. Applicability of AS 39.35.095 - 39.35.680. (a) The provisions 30 of AS 39.35.095 - 39.35.680 apply to public employees who are eligible to be 31 members of the public employees' retirement system under AS 39.35.095 - 39.35.680
01 and are not members of the defined contribution retirement plan under AS 39.35.700 - 02 39.35.990. 03 (b) A municipality or other political subdivision of the state that participates in 04 the plan shall also participate in the defined contribution retirement plan under 05 AS 39.35.700 - 39.35.900. 06 * Sec. 11. AS 39.35 is amended by adding a new section to read: 07 Sec. 39.35.128. Participation of elected officials of political subdivisions. (a) 08 A person who is an elected official of a political subdivision of the state and who has 09 not participated in the plan or waived participation in the plan before July 1, 2011, is a 10 member of the plan if 11 (1) the political subdivision has elected under AS 39.35.600 - 12 39.35.650 to designate elected officials in the classifications of employees entitled to 13 participate in the plan; and 14 (2) the elected official receives compensation from the political 15 subdivision for services as an elected official in the amount of at least $2,001 a month. 16 (b) An elected official entitled to participate under this section, and who either 17 has no previous service under the system with the political subdivision or is retired 18 under the system, may file a waiver of participation in the plan with the administrator 19 within 30 days after the later of July 1, 2011, or the date that the elected official's term 20 of office begins. A waiver is irrevocable for the remainder of the elected official's 21 service as an elected official or employee of the political subdivision. 22 * Sec. 12. AS 39.35.410(g) is amended to read: 23 (g) A disabled employee who first became a member before July 1, 2011, 24 and who is receiving an occupational disability benefit shall undergo a medical 25 examination as often as the administrator considers advisable but not more frequently 26 than once each year. The administrator shall determine the place of the examination 27 and engage the physician or physicians. If, in the judgment of the administrator, the 28 examination indicates that the retired employee is no longer incapacitated because of a 29 total and apparently permanent occupational disability, the administrator may not issue 30 further disability benefits to the employee. 31 * Sec. 13. AS 39.35.410 is amended by adding a new subsection to read:
01 (k) A person who first becomes a member after June 30, 2011, and who is 02 appointed to disability benefits shall apply to the division of vocational rehabilitation 03 within 30 days after the date disability benefits commence. The employee shall be 04 enrolled in a rehabilitation program if the employee meets the eligibility requirements 05 of the division of vocational rehabilitation. Unless the employee demonstrates cause, 06 benefits shall terminate at the end of the first month in which a disabled employee 07 (1) fails to report to the division of vocational rehabilitation; 08 (2) is certified by the division of vocational rehabilitation as failing to 09 cooperate in a vocational rehabilitation program; 10 (3) fails to interview for a job; or 11 (4) fails to accept a position offered. 12 * Sec. 14. AS 39.35.535(c) is amended to read: 13 (c) A benefit recipient may elect major medical insurance coverage in 14 accordance with regulations and under the following conditions: 15 (1) a person who becomes a member before July 1, 2011, other than 16 a disabled member or a disabled member who is appointed to normal retirement, must 17 pay an amount equal to the full monthly group premium for retiree major medical 18 insurance coverage if the person is 19 (A) younger than 60 years of age and has less than 20 (i) 25 years of credited service as a peace officer under 21 AS 39.35.360 and 39.35.370; or 22 (ii) 30 years of credited service under AS 39.35.360 and 23 39.35.370 that is not service as a peace officer; or 24 (B) of any age and has less than 10 years of credited service; 25 (2) a person who becomes a member before July 1, 2011, is not 26 required to make premium payments for retiree major medical coverage if the person 27 (A) is a disabled member; 28 (B) is a disabled member who is appointed to normal 29 retirement; 30 (C) is 60 years of age or older and has at least 10 years of 31 credited service; or
01 (D) has at least 02 (i) 25 years of credited service as a peace officer under 03 AS 39.35.360 and 39.35.370; or 04 (ii) 30 years of credited service under AS 39.35.360 and 05 39.35.370 not as a peace officer; 06 (3) a person who first becomes a member after June 30, 2011, is 07 not required to make premium payments for retiree major medical coverage if 08 the person 09 (A) is a disabled member; 10 (B) is a disabled member who is appointed to normal 11 retirement; 12 (C) has at least 25 years of credited service as a peace 13 officer or firefighter; 14 (D) has at least 30 years of credited service that is not 15 service as a peace officer or firefighter; or 16 (E) has at least 10 years of credited service and has reached 17 the age set for Medicare eligibility. 18 * Sec. 15. AS 39.35.620(k) is amended to read: 19 (k) Termination of an employer's participation in the plan does not bar future 20 participation in the system by that employer if the employer is current with payments 21 on amounts due under AS 39.35.625. [IF A PREVIOUSLY TERMINATED 22 EMPLOYER RETURNS TO THE SYSTEM, THE EMPLOYER MAY ONLY 23 PARTICIPATE IN THE PLAN ESTABLISHED UNDER AS 39.35.700 - 39.35.990. 24 EMPLOYEES MAY BE CREDITED UNDER AS 39.35.700 - 39.35.990 ONLY 25 WITH SERVICE SUBSEQUENT TO THE DATE OF RETURN.] 26 * Sec. 16. AS 39.35.680(18) is amended to read: 27 (18) "employer" means 28 (A) the State of Alaska; 29 (B) a political subdivision or public organization of the state 30 that participates in the plan based on a resolution to participate in the plan that 31 was approved by the administrator [ON OR BEFORE JULY 1, 2006]; or
01 (C) a political subdivision or public organization of the state 02 that, as a result of consolidation or reorganization [THAT OCCURS ON OR 03 AFTER JULY 1, 2006], assumes liability under the plan of a political 04 subdivision or public organization described in (B) of this paragraph; 05 * Sec. 17. AS 39.35.700 is amended to read: 06 Sec. 39.35.700. Applicability of AS 39.35.700 - 39.35.990. The provisions of 07 AS 39.35.700 - 39.35.990 apply only to 08 (1) members first hired on or after July 1, 2006, and before the 09 effective date of this section who do not transfer to a defined benefit retirement 10 plan under AS 14.25.009 - 14.25.220 or AS 39.35.095 - 39.35.680; 11 (2) public employees described in AS 39.35.720 who elect under 12 that section to become [TO MEMBERS WHO ARE EMPLOYED BY 13 EMPLOYERS THAT DO NOT PARTICIPATE IN THE DEFINED BENEFIT 14 RETIREMENT PLAN ESTABLISHED UNDER AS 39.35.095 - 39.35.680, TO 15 FORMER MEMBERS AS DEFINED IN AS 39.35.680, OR TO] members; and 16 (3) members who transferred [TRANSFER] into the defined 17 contribution retirement plan under former AS 39.35.940. 18 * Sec. 18. AS 39.35.700 is amended by adding a new subsection to read: 19 (b) A municipality or other political subdivision of the state that participates in 20 the plan shall also participate in the defined benefit retirement plan under 21 AS 39.35.095 - 39.35.680. 22 * Sec. 19. AS 39.35.720 is repealed and reenacted to read: 23 Sec. 39.35.720. Retirement plan election option. (a) A public employee who 24 is first hired on or after the effective date of this section may make a one-time election 25 to participate in the defined contribution retirement plan under AS 39.35.700 - 26 39.35.990 and to transfer to that plan employee contributions, if any, and employer 27 contributions, if any, that have been made to the defined benefit retirement plan under 28 AS 39.35.095 - 39.35.680. Before employer contributions are transferred under this 29 subsection, the administrator shall recalculate them under AS 39.35.255. 30 (b) The election to participate in the defined contribution retirement plan 31 under (a) of this section must be made within 60 days after the date of hire, and be
01 made in writing on a form and in the manner prescribed by the administrator. Before 02 accepting an election to participate in the defined contribution retirement plan under 03 AS 39.35.700 - 39.35.990, the administrator shall, within five days after the public 04 employee's hire, provide the employee eligible to make an election to participate in the 05 defined contribution retirement plan with 06 (1) information, including calculations to illustrate the effect of 07 moving the employee's retirement plan from the defined benefit retirement plan to the 08 defined contribution retirement plan; and 09 (2) other information to clearly inform the employee of the potential 10 consequences of the employee's election. 11 (c) An election made under (a) of this section to participate in the defined 12 contribution retirement plan is irrevocable. On the effective date of the election, the 13 employee shall be enrolled as a member of the defined contribution retirement plan 14 under AS 39.35.700 - 39.35.990, the member's participation in the plan shall be 15 governed by the provisions for the defined contribution retirement plan, and the 16 member's participation in the defined benefit retirement plan under AS 39.35.095 - 17 39.35.680 shall terminate. The member's enrollment in the defined contribution 18 retirement plan is effective the first day of the month after the administrator receives 19 the completed enrollment forms. An election made by an eligible member who is 20 married is not effective unless the election is signed by the member's spouse. 21 (d) When a member makes an election under (a) of this section, the Alaska 22 Retirement Management Board shall cause the total amount of the member's employee 23 and employer contributions, with interest through the effective date of the member's 24 participation in the defined contribution retirement plan, to be actuarially calculated 25 and transferred to the member's designated account in the defined contribution 26 retirement plan. The board shall establish transfer procedures by regulation, but the 27 actual transfer may not be later than 30 days after the effective date of the member's 28 participation in the defined contribution retirement plan, unless the major financial 29 markets for securities available for a transfer are seriously disrupted by an unforeseen 30 event that also causes the suspension of trading on any national securities exchange in 31 the country where the securities were issued. In that event, the 30-day period of time
01 may be extended by a resolution of the board. Transfers are not commissionable or 02 subject to other fees and may be in the form of securities or cash as determined by the 03 board. Securities shall be valued on the date of receipt in the member's account. 04 (e) An election made by an eligible member who is married is not effective 05 unless the election is signed by the individual's spouse. An eligible member whose 06 accounts are subject to a qualified domestic relations order may not make an election 07 to participate in the defined contribution retirement plan under this section unless the 08 qualified domestic relations order is amended or vacated and court-certified copies of 09 the order are received by the administrator. 10 * Sec. 20. AS 14.25.012(c), 14.25.540; AS 39.35.940, and 39.35.957(b) are repealed. 11 * Sec. 21. The uncodified law of the State of Alaska is amended by adding a new section to 12 read: 13 RETIREMENT PLAN ELECTION CHOICE. (a) A teacher who was first hired on or 14 after July 1, 2006, and before the effective date of this section and who is a member of the 15 defined contribution plan of the teachers' retirement system under AS 14.25.310 - 14.25.590 16 may make a one-time election, within 60 days after the effective date of this section, to 17 participate in the defined benefit retirement plan under AS 14.25.009 - 14.25.220 and to 18 transfer all contributions, including employer contributions, that have been made or should be 19 made to the defined contribution retirement plan for service the member completes before the 20 effective date of the member's participation in the defined benefit retirement plan. 21 (b) A public employee who was first hired on or after July 1, 2006, and before the 22 effective date of this section and who is a member of the defined contribution plan of the 23 public employees' retirement system under AS 39.35.700 - 39.35.990 may make a one-time 24 election, within 60 days after the effective date of this section, to participate in the defined 25 benefit retirement plan under AS 39.35.095 - 39.35.680 and to transfer all contributions, 26 including employer contributions, that have been made or should be made to the defined 27 contribution retirement plan for any service the member completes before the effective date of 28 the member's participation in the defined benefit retirement plan. 29 * Sec. 22. The uncodified law of the State of Alaska is amended by adding a new section to 30 read: 31 RETIREMENT PLAN ELECTION PROCEDURE; REGULATIONS REQUIRED.
01 (a) The election to participate in the defined benefit retirement plan under sec. 21 of this Act 02 must be made in writing on forms and in the manner prescribed by the administrator. Before 03 accepting an election to participate in the defined benefit retirement plan, the administrator 04 shall provide the employee planning on making an election to participate in the defined 05 benefit retirement plan with information, including calculations to illustrate the effect of 06 moving the employee's retirement plan from the defined contribution retirement plan to the 07 defined benefit retirement plan as well as other information to clearly inform the employee of 08 the potential consequences of the employee's election. 09 (b) An election made under sec. 21 of this Act to participate in the defined benefit 10 retirement plan is irrevocable. On the effective date of the election, the participant shall be 11 enrolled as a member of the defined benefit retirement plan, the member's participation in the 12 plan shall be governed by the provisions for the defined benefit retirement plan, and the 13 member's participation in the defined contribution retirement plan shall terminate. The 14 participant's enrollment in the defined benefit retirement plan shall be effective the first day of 15 the month after the administrator receives the completed enrollment forms. An election made 16 by an eligible member who is married is not effective unless the election is signed by the 17 individual's spouse. 18 (c) When a member makes a one-time election under sec. 21 of this Act, the Alaska 19 Retirement Management Board shall cause the total amount of the member's employee and 20 employer contributions, with interest through the effective date of the member's participation 21 in the defined contribution retirement plan, to be actuarially calculated and, subject to (d) of 22 this section, transferred to the pension fund in the defined benefit retirement plan. On the 23 effective date of the member's participation in the defined benefit retirement plan, the member 24 shall be credited with service in the defined benefit retirement plan that is equal to the 25 member's service in years, including fractional years, recognized for computing benefits that 26 may be due from the defined contribution retirement plan. The board shall establish transfer 27 procedures by regulation, but the actual transfer may not be later than 30 days after the 28 effective date of the member's participation in the defined benefit retirement plan unless the 29 major financial markets for securities available for a transfer are seriously disrupted by an 30 unforeseen event that also causes the suspension of trading on any national securities 31 exchange in the country where the securities were issued. In that event, the 30-day period of
01 time may be extended by a resolution of the board. Transfers are not commissionable or 02 subject to other fees and may be in the form of securities or cash as determined by the board. 03 Securities shall be valued on the date of receipt in the participant's account. 04 (d) If the value actuarially calculated under (c) of this section is insufficient to pay for 05 a service credit equal to the participant's actual service, the administrator shall cause the 06 amount of the deficit to be paid from the general fund; however, if the value exceeds the 07 amount needed to pay for a service credit equal to the participant's actual service, the 08 administrator shall cause the excess to be paid into an individual employee annuity account in 09 the Department of Administration under the terms of AS 39.30.150 - 39.30.180 (Alaska 10 Supplemental Annuity Plan). 11 (e) The provisions of this section are subject to the requirements of the Internal 12 Revenue Code and the limitations under AS 14.25.010, 14.25.320(c) and (d), 14.25.490, 13 AS 39.35.115, 39.35.678, 39.35.710(c) and (d), and 39.35.895. 14 (f) In this section, 15 (1) "administrator" means the person appointed or designated by the 16 commissioner of administration under AS 39.35.003 for a public employees' retirement plan 17 and under AS 14.25.003 for a teachers' retirement plan; 18 (2) "board" means the Alaska Retirement Management Board established 19 under AS 37.10.210; 20 (3) "defined benefit retirement plan" means the retirement plan established 21 under 22 (A) AS 14.25.009 - 14.25.220 for a teacher; or 23 (B) AS 39.35.095 - 39.35.680 for a public employee; 24 (4) "defined contribution retirement plan" means the retirement plan 25 established under 26 (A) AS 14.25.310 - 14.25.590 for a teacher; or 27 (B) AS 39.35.700 - 39.35.990 for a public employee; 28 (5) "Internal Revenue Code" the meaning given in AS 39.35.990. 29 * Sec. 23. The uncodified law of the State of Alaska is amended by adding a new section to 30 read: 31 ADOPTION OF REGULATIONS. The commissioner of administration shall adopt
01 regulations consistent with this Act, but in no event may the regulations take effect before the 02 effective date of sec. 21 of this Act. 03 * Sec. 24. Sections 22 and 23 of this Act take effect immediately under AS 01.10.070(c).