SCS HB 385(FIN): "An Act relating to the past service liabilities of the defined benefit plan in the teachers' retirement system and the defined benefit plan in the public employees' retirement system, and to excess assets of those plans on termination of the plans; and providing for an effective date."
00 SENATE CS FOR HOUSE BILL NO. 385(FIN) 01 "An Act relating to the past service liabilities of the defined benefit plan in the teachers' 02 retirement system and the defined benefit plan in the public employees' retirement 03 system, and to excess assets of those plans on termination of the plans; and providing for 04 an effective date." 05 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 06 * Section 1. AS 14.25.181(b) is amended to read: 07 (b) If, upon termination of the plan, all liabilities are satisfied, any excess 08 assets shall be deposited in the general fund, [REVERT TO THE EMPLOYERS AS 09 DETERMINED BY THE ADMINISTRATOR] subject to the approval of the 10 termination by the Internal Revenue Service. 11 * Sec. 2. AS 37.10.220(a) is amended to read: 12 (a) The board shall 13 (1) hold regular and special meetings at the call of the chair or of at 14 least five members; meetings are open to the public, and the board shall keep a full
01 record of all its proceedings; 02 (2) after reviewing recommendations from the Department of 03 Revenue, adopt investment policies for each of the funds entrusted to the board; 04 (3) determine the appropriate investment objectives for the defined 05 benefit plans established under the teachers' retirement system under AS 14.25 and the 06 public employees' retirement system under AS 39.35; 07 (4) assist in prescribing the policies for the proper operation of the 08 systems and take other actions necessary to carry out the intent and purpose of the 09 systems in accordance with AS 37.10.210 - 37.10.390; 10 (5) provide a range of investment options and establish the rules by 11 which participants can direct their investments among those options with respect to 12 accounts established under 13 (A) AS 14.25.340 - 14.25.350 (teachers' retirement system 14 defined contribution individual accounts); 15 (B) AS 39.30.150 - 39.30.180 (State of Alaska Supplementary 16 Annuity Plan); 17 (C) AS 39.35.730 - 39.35.750 (public employees' retirement 18 system defined contribution individual accounts); and 19 (D) AS 39.45.010 - 39.45.060 (public employees' deferred 20 compensation program); 21 (6) establish the rate of interest that shall be annually credited to each 22 member's individual contribution account in accordance with AS 14.25.145 and 23 AS 39.35.100 and the rate of interest that shall be annually credited to each member's 24 account in the health reimbursement arrangement plan under AS 39.30.300 - 25 39.30.495; the rate of interest shall be adopted on the basis of the probable effective 26 rate of interest on a long-term basis, and the rate may be changed from time to time; 27 (7) adopt a contribution surcharge as necessary under AS 39.35.160(c); 28 (8) coordinate with the retirement system administrator to have an 29 annual actuarial valuation of each retirement system prepared to determine system 30 assets, accrued liabilities, and funding ratios and to certify to the appropriate 31 budgetary authority of each employer in the system
01 (A) an appropriate contribution rate for normal costs; and 02 (B) an appropriate contribution rate for liquidating any past 03 service liability; in this subparagraph, the appropriate contribution rate 04 for liquidating the past service liability of the defined benefit retirement 05 plan under AS 14.25.009 - 14.25.220 or the past service liability of the 06 defined benefit retirement plan under AS 39.35.095 - 39.35.680 must be 07 determined by a level percent of pay method based on amortization of the 08 past service liability for a closed term of 25 years; 09 (9) review actuarial assumptions prepared and certified by a member 10 of the American Academy of Actuaries and conduct experience analyses of the 11 retirement systems not less than once every four years, except for health cost 12 assumptions, which shall be reviewed annually; the results of all actuarial assumptions 13 prepared under this paragraph shall be reviewed and certified by a second member of 14 the American Academy of Actuaries before presentation to the board; 15 (10) contract for an independent audit of the state's actuary not less 16 than once every four years; 17 (11) contract for an independent audit of the state's performance 18 consultant not less than once every four years; 19 (12) obtain an external performance review to evaluate the investment 20 policies of each fund entrusted to the board and report the results of the review to the 21 appropriate fund fiduciary; 22 (13) by the first day of each regular legislative session, report to the 23 governor, the legislature, and the individual employers participating in the state's 24 retirement systems on the financial condition of the systems in regard to 25 (A) the valuation of trust fund assets and liabilities; 26 (B) current investment policies adopted by the board; 27 (C) a summary of assets held in trust listed by the categories of 28 investment; 29 (D) the income and expenditures for the previous fiscal year; 30 (E) the return projections for the next calendar year; 31 (F) one-year, three-year, five-year, and 10-year investment
01 performance for each of the funds entrusted to the board; and 02 (G) other statistical data necessary for a proper understanding 03 of the financial status of the systems; 04 (14) submit quarterly updates of the investment performance reports to 05 the Legislative Budget and Audit Committee; 06 (15) develop an annual operating budget; and 07 (16) administer pension forfeitures required under AS 37.10.310 using 08 the procedures of AS 44.62 (Administrative Procedure Act). 09 * Sec. 3. AS 39.35.115(e) is amended to read: 10 (e) If, upon termination of the plan, all liabilities are satisfied, any excess 11 assets shall be deposited in the general fund [REVERT TO THE EMPLOYERS AS 12 DETERMINED BY THE ADMINISTRATOR], subject to the approval of the 13 termination by the Internal Revenue Service. 14 * Sec. 4. The uncodified law of the State of Alaska is amended by adding a new section to 15 read: 16 TRANSITION: REINITIALIZE AMORTIZATION OF PAST SERVICE LIABILITY 17 OF RETIREMENT SYSTEMS. The Alaska Retirement Management Board shall, based on a 18 level percent of pay method, reinitialize the amortization of the past service liability of 19 (1) the defined benefit retirement plan under AS 14.25.009 - 14.25.220 for a 20 term beginning July 1, 2014, and ending June 30, 2039; 21 (2) the defined benefit retirement plan under AS 39.35.095 - 39.35.680 for a 22 term beginning July 1, 2014, and ending June 30, 2039. 23 * Sec. 5. The uncodified law of the State of Alaska is amended by adding a new section to 24 read: 25 RETROACTIVITY. Sections 2 and 4 of this Act are retroactive to April 21, 2014. 26 * Sec. 6. This Act takes effect immediately under AS 01.10.070(c).