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SB 83: "An Act relating to the Protective Occupation Retirement Council; relating to participation of certain employees in the defined benefit and defined contribution plans of the public employees' retirement system; and providing for an effective date."

00                             SENATE BILL NO. 83                                                                          
01 "An Act relating to the Protective Occupation Retirement Council; relating to                                           
02 participation of certain employees in the defined benefit and defined contribution plans                                
03 of the public employees' retirement system; and providing for an effective date."                                       
04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
05    * Section 1. AS 37.10 is amended by adding a new section to read:                                                  
06            Sec. 37.10.222. Protective occupation employees cost-of-living allowance.                                  
07       (a) The board shall authorize a monthly cost-of-living allowance under                                            
08       AS 39.35.480(a), for protective occupation employees who first participate in the                                 
09       defined benefit retirement plan under AS 39.35.095 - 39.35.680 after June 30, 2006,                               
10       for each year in which the board determines that the trust fund of the defined benefit                            
11       retirement plan does not have an unfunded liability.                                                              
12            (b)  The board may not establish a monthly cost-of-living allowance amount                                   
13       that, for an individual, would exceed the greater of $50 or the dollar amount equal to                            
14       10 percent of the individual's monthly benefit under AS 39.35.370.                                                
01    * Sec. 2. AS 37.10.390 is amended by adding a new paragraph to read:                                               
02                 (5)  "protective occupation employee" has the meaning given in                                          
03       AS 37.10.490.                                                                                                     
04    * Sec. 3. AS 37.10 is amended by adding new sections to read:                                                      
05               Article 8. Protective Occupation Retirement Council.                                                    
06            Sec. 37.10.450. Protective Occupation Retirement Council. (a) The                                          
07       Protective Occupation Retirement Council is established in the Department of                                      
08       Administration and shall carry out its duties and powers in a manner consistent with                              
09       standards of prudence and the state's obligation to meet the liabilities and pension                              
10       obligations of the plan.                                                                                          
11            (b)  The Protective Occupation Retirement Council consists of nine members.                                  
12       The governor shall appoint                                                                                        
13                 (1)  six protective occupation employees who are members of the                                         
14       defined benefit retirement plan under AS 39.35.095 - 39.35.680, including                                         
15                      (A)  one member of the Public Safety Employees Association;                                        
16                      (B)  one member of the Alaska Correctional Officers                                                
17            Association;                                                                                                 
18                      (C)  one member of the Alaska Professional Fire Fighters                                           
19            Association;                                                                                                 
20                      (D)  one member of the Anchorage Police Department                                                 
21            Employees Association;                                                                                       
22                      (E)  one employee who is employed as a firefighter by a                                            
23            municipal fire department;                                                                                   
24                      (F)  one employee who is employed in a position other than a                                       
25            peace officer or firefighter position;                                                                       
26                 (2)  one member of the public at large;                                                                 
27                 (3)  before July 1, 2033, two retirees who participate in the defined                                   
28       benefit retirement plan under AS 39.35.095 - 39.35.680 for terms that end after three                             
29       years or on June 30, 2033, whichever occurs first; and                                                            
30                 (4)  after June 30, 2033, two retirees who were first hired after June 30,                              
31       2006, and who participate in the defined benefit retirement plan under AS 39.35.095 -                             
01       39.35.680.                                                                                                        
02            (c)  Subject to (b)(3) of this section, members of the Protective Occupation                                 
03       Retirement Council shall serve for staggered terms of three years and may be                                      
04       reappointed.                                                                                                      
05            (d)  The governor may remove a member for cause by providing written notice                                  
06       to the member. After a member receives the notice, the member may not participate on                              
07       the Protective Occupation Retirement Council.                                                                     
08            Sec. 37.10.455. Per diem and travel expenses. Members of the Protective                                    
09       Occupation Retirement Council are entitled to per diem and travel expenses authorized                             
10       for boards and commissions under AS 39.20.180.                                                                    
11            Sec. 37.10.460. Powers and duties. (a) Subject to AS 37.10.450(a), the                                     
12       Protective Occupation Retirement Council shall                                                                    
13                 (1)  make recommendations to the Alaska Retirement Management                                           
14       Board concerning the board's investment policies, strategies, and procedures that                                 
15       affect the retirement benefits of protective occupation employees;                                                
16                 (2)  determine the amount of a contribution under AS 39.35.160(h);                                      
17                 (3)  determine an assumed variable benefit as required under                                            
18       AS 39.35.370(m) and (n);                                                                                          
19                 (4)  reduce the amounts of annual stipends for a benefit recipient who is                               
20       65 years of age or older as required under AS 39.35.535(g).                                                       
21            (b)  Subject to AS 37.10.450(a), the Protective Occupation Retirement Council                                
22       may                                                                                                               
23                 (1)  enter into contracts for actuarial services that are necessary to carry                            
24       out the powers and duties of the council under this section;                                                      
25                 (2)  establish employee contribution rates under AS 39.35.160(e) and                                    
26       (f);                                                                                                              
27                 (3)  adjust the amount of the increase in benefits payable under                                        
28       AS 39.35.475 to a protective occupation employee who first becomes a member after                                 
29       June 30, 2006;                                                                                                    
30                 (4)  adjust annual stipends for purchasing major medical insurance                                      
31       under AS 39.35.535(h).                                                                                            
01            Sec. 37.10.490. Definitions. In AS 37.10.450 - 37.10.490, "protective                                      
02       occupation employee" means                                                                                        
03                 (1)  a peace officer as defined in AS 39.35.680;                                                        
04                 (2)  a firefighter as defined in AS 39.35.680; or                                                       
05                 (3)  an administrative, professional, or clerical employee of                                           
06                      (A)  a municipal police or fire department;                                                        
07                      (B)  a University of Alaska police or fire department; or                                          
08                      (C)  the Department of Public Safety.                                                              
09    * Sec. 4. AS 39.35.095 is amended to read:                                                                         
10            Sec. 39.35.095. Applicability of AS 39.35.095 - 39.35.680. The following                                   
11       provisions of this chapter apply [ONLY] to members first hired before July 1, 2006,                           
12       and, regardless of the date of hire, members who are protective occupation                                    
13       employees: AS 39.35.095 - 39.35.680.                                                                          
14    * Sec. 5. AS 39.35.160(a) is amended to read:                                                                      
15            (a)  Subject to (e) of this section, beginning [BEGINNING] January 1, 1987,                              
16       each peace officer or firefighter shall contribute to the plan an amount equal to seven                           
17       and one-half percent of the peace officer's or firefighter's compensation. Except as                              
18       provided in (d) and (e) of this section, beginning January 1, 1987, each other                                
19       employee shall contribute to the plan an amount equal to six and three-quarters percent                           
20       of the employee's compensation. [THE CONTRIBUTIONS SHALL BE DEDUCTED                                              
21       BY THE EMPLOYER AT THE END OF EACH PAYROLL PERIOD. THE                                                            
22       CONTRIBUTIONS SHALL BE DEDUCTED FROM EMPLOYEE                                                                     
23       COMPENSATION BEFORE COMPUTATION OF APPLICABLE FEDERAL                                                             
24       TAXES, AND THE CONTRIBUTIONS SHALL BE TREATED AS EMPLOYER                                                         
25       CONTRIBUTIONS UNDER 26 U.S.C. 414(h)(2). A MEMBER MAY NOT HAVE                                                    
26       THE OPTION OF MAKING THE PAYROLL DEDUCTION DIRECTLY INSTEAD                                                       
27       OF HAVING THE CONTRIBUTION PICKED UP BY THE EMPLOYER.]                                                            
28    * Sec. 6. AS 39.35.160 is amended by adding new subsections to read:                                               
29            (e)  Except as provided in (a) of this section, a protective occupation employee                             
30       who is employed as a peace officer or firefighter and who first participates in the plan                          
31       after June 30, 2006, shall contribute to the plan an amount equal to nine percent of the                          
01       employee's compensation, excluding overtime compensation. The Protective                                          
02       Occupation Retirement Council may, from time to time, adjust the employee                                         
03       contribution under this subsection to an amount that is                                                           
04                 (1)  not less than eight percent of the employee's compensation,                                        
05       excluding overtime compensation; and                                                                              
06                 (2)  not more than 12 percent of the employee's compensation,                                           
07       excluding overtime compensation.                                                                                  
08            (f)  Except as provided in (a) of this section, a protective occupation employee                             
09       who is not employed as a peace officer or firefighter and who first participates in the                           
10       plan after June 30, 2006, shall contribute to the plan an amount equal to eight percent                           
11       of the employee's compensation, excluding overtime compensation. The Protective                                   
12       Occupation Retirement Council may, from time to time, adjust the employee                                         
13       contribution under this subsection to an amount that is                                                           
14                 (1)  not less than seven percent of the employee's compensation,                                        
15       excluding overtime compensation; and                                                                              
16                 (2)  not more than 11 percent of the employee's compensation,                                           
17       excluding overtime compensation.                                                                                  
18            (g)  Contributions under (a), (e), and (f) of this section shall be deducted by the                          
19       employer at the end of each payroll period. The contributions shall be deducted from                              
20       employee compensation before computation of applicable federal taxes, and the                                     
21       contributions shall be treated as employer contributions under 26 U.S.C. 414(h)(2). A                             
22       member may not have the option of making the payroll deduction directly instead of                                
23       having the contribution picked up by the employer.                                                                
24            (h)  In addition to other employee contributions required under this section, a                              
25       protective occupation employee who first participates in the plan after June 30, 2006,                            
26       and who earns overtime compensation shall contribute to the member's individual                                   
27       account in the defined contribution retirement plan established under AS 39.35.700 -                              
28       39.35.990 an amount, determined by the Protective Occupation Retirement Council                                   
29       under AS 37.10.460(a), that is                                                                                    
30                 (1)  not less than seven percent of the employee's overtime                                             
31       compensation; and                                                                                                 
01                 (2)  not more than 12 percent of the employee's overtime compensation.                                  
02    * Sec. 7. AS 39.35.255 is amended by adding a new subsection to read:                                              
03            (i)  The requirements of this section are in addition to the requirements under                              
04       AS 39.35.257.                                                                                                     
05    * Sec. 8. AS 39.35 is amended by adding a new section to read:                                                     
06            Sec. 39.35.257. Employer contributions for protective occupation                                           
07       employees. (a) An employer that employs a peace officer or firefighter who first                                
08       participates in the plan after June 30, 2006, shall contribute monthly to the plan a per                          
09       capita amount that is equal to 14 percent of the total monthly compensation, excluding                            
10       overtime compensation, that the employer pays to all protective occupation employees                              
11       combined.                                                                                                         
12            (b)  An employer who employs a protective occupation employee who is not                                     
13       employed as a peace officer or firefighter and who first participates in the plan after                           
14       June 30, 2006, shall contribute monthly to the plan a per capita amount that is equal to                          
15       12 percent of the total monthly compensation, excluding overtime compensation, that                               
16       the employer pays to all protective occupation employees combined.                                                
17            (c)  In addition to other employer contributions required under this section, an                             
18       employer of a protective occupation employee who first participates in the plan after                             
19       June 30, 2006, shall contribute an amount equal to 14 percent of the employee's                                   
20       overtime compensation to the employee's individual account in the defined                                         
21       contribution retirement plan established under AS 39.35.700 - 39.35.990.                                          
22    * Sec. 9. AS 39.35.370(a) is amended to read:                                                                      
23            (a)  Subject to AS 39.35.450, a terminated employee who first became a                                   
24       member before July 1, 2006, is eligible for a normal retirement benefit                                       
25                 (1)  at age 60 with at least five years of credited service;                                        
26                 (2)  with at least 20 years of credited service as a peace officer or                                   
27       firefighter; or                                                                                                   
28                 (3)  with at least 30 years of credited service for all other employees.                                
29    * Sec. 10. AS 39.35.370(c) is amended to read:                                                                     
30            (c)  Except as provided in (m) and (n) of this section, the [THE] monthly                                
31       amount of a retirement benefit for a peace officer or firefighter is two percent of the                           
01       average monthly compensation times the years of credited service through 10 years,                                
02       plus two and one-half percent of the average monthly compensation times the years of                              
03       service over 10 years. For all other employees, it is                                                         
04                 (1)  two percent of the average monthly compensation times all years of                                 
05       service before July 1, 1986, and for years of service through a total of 10 years; plus                           
06                 (2)  two and one-quarter percent of the average monthly compensation                                    
07       times all years of service after June 30, 1986, over 10 years of total service through 20                         
08       years; plus                                                                                                       
09                 (3)  two and one-half percent of the average monthly compensation                                       
10       times all years of service after June 30, 1986, over 20 years of total service.                                   
11    * Sec. 11. AS 39.35.370 is amended by adding new subsections to read:                                              
12            (l)  Subject to AS 39.35.450, a terminated employee who first becomes a                                      
13       member after June 30, 2006, is eligible for a normal retirement benefit                                           
14                 (1)  at age 63 with at least five years of credited service as a protective                             
15       occupation employee;                                                                                              
16                 (2)  at age 55 with at least 20 years of credited service as a peace                                    
17       officer or firefighter; or                                                                                        
18                 (3)  at age 60 with at least 30 years of credited service as a protective                               
19       occupation employee who is not employed as a peace officer or firefighter.                                        
20            (m)  Subject to (o) of this section, the monthly amount of a retirement benefit                              
21       for a protective occupation employee who first participates in the plan after June 30,                            
22       2006, is two percent of the employee's average monthly compensation, excluding                                    
23       overtime compensation, times the employee's years of credited service plus an                                     
24       assumed variable benefit calculated under (n) of this section by the Protective                                   
25       Occupation Retirement Council established under AS 37.10.450.                                                     
26            (n)  The Protective Occupation Retirement Council established under                                          
27       AS 37.10.450 shall actuarially calculate the assumed variable benefit under (m) of this                           
28       section for each eligible employee individually based on a percentage of the                                      
29       employee's annual compensation rate in the year the employee is appointed to                                      
30       retirement, the employee's age, and the employee's credited service on the date the                               
31       employee is appointed to retirement. The employee shall have a vested right to the                                
01       assumed variable benefit that is calculated in the year in which the employee is                                  
02       appointed to retirement and may not receive an assumed variable benefit that is                                   
03       calculated before then.                                                                                           
04            (o)  A protective occupation employee's monthly retirement benefit under (m)                                 
05       of this section may not exceed the monthly retirement benefit the employee would be                               
06       eligible to receive under AS 39.35.370(c) if the employee first participated in the plan                          
07       before July 1, 2006.                                                                                              
08    * Sec. 12. AS 39.35.375(c) is amended to read:                                                                     
09            (c)  A member is entitled to receive a public service benefit under this section                             
10       if the member has at least a total of five years credited service under AS 39.35.095 -                            
11       39.35.680 and credited service from the teachers' retirement plan under AS 14.25.009                              
12       - 14.25.220 claimed under this section. A public service benefit shall be calculated                              
13       using the higher of the average monthly compensation for service in this plan or the                              
14       average base salary for service in the teachers' retirement plan under AS 14.25.009 -                             
15       14.25.220. The amount of the benefit shall be calculated in accordance with                                       
16       AS 39.35.370(c) or (m).                                                                                       
17    * Sec. 13. AS 39.35.385(d) is amended to read:                                                                     
18            (d)  The monthly amount of a conditional service retirement benefit shall be                                 
19       calculated on the years of fully paid credited service in accordance with                                         
20       AS 39.35.370(c) or (m), except that the member may irrevocably elect to substitute                            
21       one-twelfth of the "average base salary" as defined in AS 14.25.220(5) in place of                                
22       average monthly compensation.                                                                                     
23    * Sec. 14. AS 39.35.400(d) is repealed and reenacted to read:                                                      
24            (d)  The monthly amount of the nonoccupational disability benefit                                            
25                 (1)  for a disabled employee who first became a member before July 1,                                   
26       2006, shall be determined in accordance with AS 39.35.370(c), based on the                                        
27       employee's credited service and compensation before termination of employment;                                    
28                 (2)  for a disabled employee who first becomes a member after June 30,                                  
29       2006, shall be determined in accordance with AS 39.35.370(m) and (n).                                             
30    * Sec. 15. AS 39.35.400(f) is amended to read:                                                                     
31            (f)  A disabled employee's nonoccupational disability benefit terminates when                                
01       the employee first attains eligibility for normal retirement. At that time, retirement                            
02       benefits will be calculated under AS 39.35.370(c) or (m).                                                     
03    * Sec. 16. AS 39.35.410(h) is amended to read:                                                                     
04            (h)  A disabled employee's occupational disability benefit terminates when the                               
05       disabled employee first attains eligibility for normal retirement. At that time, if the                       
06       employee first became a member before July 1, 2006, the employee's retirement                                 
07       benefit shall be calculated under the provisions of AS 39.35.370(c).                                              
08    * Sec. 17. AS 39.35.410(i) is repealed and reenacted to read:                                                      
09            (i)  Notwithstanding (h) of this section, a peace officer or firefighter who first                           
10       became a member before July 1, 2006, and who is receiving occupational disability                                 
11       benefits under this section at the time the peace officer or firefighter first attains                            
12       eligibility for normal retirement shall, within 30 days after attaining eligibility for                           
13       normal retirement, irrevocably elect to receive benefits in an amount calculated as                               
14                 (1)  the monthly occupational disability benefit calculated under (d) of                                
15       this section; or                                                                                                  
16                 (2)  the employee's retirement benefit calculated under the provisions of                               
17       AS 39.35.370(c).                                                                                                  
18    * Sec. 18. AS 39.35.410 is amended by adding a new subsection to read:                                             
19            (k)  Notwithstanding (h) of this section, a protective occupation employee who                               
20       first becomes a member after June 30, 2006, and who is receiving occupational                                     
21       disability benefits under this section at the time the employee first attains eligibility for                     
22       normal retirement shall, within 30 days after attaining eligibility for normal retirement,                        
23       irrevocably elect to receive retirement benefits in the amount calculated as                                      
24                 (1)  the monthly occupational disability benefit calculated under (d) of                                
25       this section; or                                                                                                  
26                 (2)  the employee's retirement benefit calculated under                                                 
27       AS 39.35.370(m) and (n).                                                                                          
28    * Sec. 19. AS 39.35.430(g) is amended to read:                                                                     
29            (g)  The monthly survivor's pension in (b) of this section for survivors of                                  
30       employees who were not peace officers or firefighters is 40 percent of the employee's                             
31       monthly compensation in the month in which the employee dies. The monthly                                         
01       survivor's pension in (b) of this section for survivors of employees who were peace                               
02       officers or firefighters is the greater of                                                                        
03                 (1)  50 percent of the monthly compensation in the month in which the                                   
04       employee dies; or                                                                                                 
05                 (2)  75 percent of the employee's retirement benefit calculated under                                   
06       the provisions of AS 39.35.370(c) or (m) if the employee had survived to normal                               
07       retirement age.                                                                                                   
08    * Sec. 20. AS 39.35.475(a) is amended to read:                                                                     
09            (a)  Subject to (g) of this section, once [ONCE] each year the administrator                             
10       shall increase benefit payments to eligible disabled members, to persons age 60 or                                
11       older receiving benefits under this plan in the preceding calendar year, and to persons                           
12       who have received benefits under this plan for at least five years who are not                                    
13       otherwise eligible for an increase under this section.                                                            
14    * Sec. 21. AS 39.35.475(b) is amended to read:                                                                     
15            (b)  Subject to (h) of this section, the [THE] increase in benefit payments                              
16       applies to total benefit payments except for the cost-of-living allowance under                                   
17       AS 39.35.480. The amount of the increase is a percentage of the current benefit equal                             
18       to                                                                                                                
19                 (1)  the lesser of 75 percent of the increase in the cost of living in the                              
20       preceding calendar year or nine percent, for recipients who on July 1 are at least 65                             
21       years old and for members receiving disability benefits; and                                                      
22                 (2)  the lesser of 50 percent of the increase in the cost of living in the                              
23       preceding calendar year or six percent, for recipients who on July 1 are at least 60 but                          
24       less than 65 years old or for recipients who are less than 60 years old on July 1 but                             
25       who have received benefits from the plan for at least five years.                                                 
26    * Sec. 22. AS 39.35.475 is amended by adding new subsections to read:                                              
27            (g)  A person who receives a benefit under AS 39.35.370(l) is not eligible to                                
28       receive an increase in benefits under this section.                                                               
29            (h)  Annually, the Protective Occupation Retirement Council may reduce the                                   
30       amount of the increase under (b) of this section that is payable to a protective                                  
31       occupation employee who first becomes a member after June 30, 2006. At any time,                                  
01       the Protective Occupation Retirement Council may terminate a reduction made under                                 
02       this subsection.                                                                                                  
03    * Sec. 23. AS 39.35.480(a) is amended to read:                                                                     
04            (a)  While residing in the state, a person receiving a benefit under                                         
05       AS 39.35.095 - 39.35.680 who is 65 years of age or older or who is receiving a                                    
06       disability benefit, other than a protective occupation employee who first                                     
07       participates in the plan after June 30, 2006, is entitled to receive a monthly cost-of-                       
08       living allowance in addition to the basic benefit. The amount of this allowance shall be                          
09       $50 or 10 percent of the basic benefit, whichever is greater. A protective occupation                         
10       employee who first participates in the plan after June 30, 2006, is entitled to                               
11       receive a monthly cost-of-living allowance if authorized by the board under                                   
12       AS 37.10.222, in an amount determined by the board.                                                           
13    * Sec. 24. AS 39.35.485(a) is amended to read:                                                                     
14            (a)  An employee who is eligible for a benefit calculated in accordance with                                 
15       AS 39.35.370(c) or (m) is entitled to a benefit of at least $25 a month for each year of                      
16       credited service, not including adjustments made under AS 39.35.340 for military                                  
17       service, AS 39.35.360 for credit for earlier service, AS 39.35.370(c) or (m) for early                        
18       retirement, AS 39.35.420 for nonoccupational death benefits, AS 39.35.450 for the                                 
19       survivor's option, former AS 39.35.460 for the level income option, AS 39.35.475 for                              
20       the post-retirement pension adjustment, and AS 39.35.480 for the cost of living.                                  
21    * Sec. 25. AS 39.35.535(c) is amended to read:                                                                     
22            (c)  A benefit recipient may elect major medical insurance coverage in                                       
23       accordance with regulations and under the following conditions:                                                   
24                 (1)  a person who became a member before July 1, 2006, or the                                       
25       surviving spouse of the person, other than a disabled member or a disabled member                             
26       who is appointed to normal retirement, shall [MUST] pay an amount equal to the full                           
27       monthly group premium for retiree major medical insurance coverage if the person is                               
28                      (A)  younger than 60 years of age and has less than                                                
29                           (i)  25 years of credited service as a peace officer under                                    
30                 AS 39.35.360 and 39.35.370; or                                                                          
31                           (ii)  30 years of credited service under AS 39.35.360 and                                     
01                 39.35.370 that is not service as a peace officer; or                                                    
02                      (B)  of any age and has less than 10 years of credited service;                                    
03                 (2)  a person who became a member before July 1, 2006, or the                                       
04       surviving spouse of the person, is not required to make premium payments for retiree                          
05       major medical coverage if the person                                                                              
06                      (A)  is a disabled member;                                                                         
07                      (B)  is a disabled member who is appointed to normal                                               
08            retirement;                                                                                                  
09                      (C)  is 60 years of age or older and has at least 10 years of                                      
10            credited service; or                                                                                         
11                      (D)  has at least                                                                                  
12                           (i)  25 years of credited service as a peace officer under                                    
13                 AS 39.35.360 and 39.35.370; or                                                                          
14                           (ii)  30 years of credited service under AS 39.35.360 and                                     
15                 39.35.370 not as a peace officer;                                                                   
16                 (3)  a benefit recipient who is a protective occupation employee and                                
17       who first becomes a member after June 30, 2006, or a benefit recipient who is the                             
18       surviving spouse of a person who is a protective occupation employee and who                                  
19       first becomes a member after June 30, 2006, shall receive as an annual stipend                                
20       for the purpose of purchasing major medical insurance coverage, an amount                                     
21       subject to (h) of this section, and not to exceed 100 percent of the full annual                              
22       premium, that                                                                                                 
23                      (A)  if the employee has 10 years or more of service as a                                      
24            peace officer or firefighter, is equal to four percent of the full annual                                
25            premium in 2013 for retiree major medical insurance, multiplied by the                                   
26            employee's years of service as a peace officer or firefighter;                                           
27                      (B)  if the employee is not a peace officer or firefighter, is                                 
28            equal to three and three-tenths percent of the full annual premium in 2013                               
29            for retiree major medical insurance, multiplied by the employee's years of                               
30            service;                                                                                                 
31                 (4)  a benefit recipient who is a protective occupation employee and                                
01       who first becomes a member after June 30, 2006, shall receive an annual stipend                               
02       for an amount equal to the full annual group premium for retiree major medical                                
03       coverage, subject to (h) of this section, if the recipient                                                    
04                      (A)  is a disabled member; or                                                                  
05                      (B)  is a disabled member who is appointed to normal                                           
06            retirement.                                                                                              
07    * Sec. 26. AS 39.35.535 is amended by adding new subsections to read:                                              
08            (g)  If a benefit recipient is 65 years of age or older, the Protective Occupation                           
09       Retirement Council established under AS 37.10.450 shall reduce the stipend payable                                
10       to a benefit recipient under (c)(3) of this section by a percentage determined by the                             
11       council under AS 37.10.460(a)(4).                                                                                 
12            (h)  The Protective Occupation Retirement Council may adjust the annual                                      
13       stipend payable under (c)(3) of this section based on the percentage increase in the                              
14       Consumer Price Index for urban wage earners and clerical workers for Anchorage,                                   
15       Alaska, during the previous calendar year, as determined by the United States                                     
16       Department of Labor, Bureau of Labor Statistics.                                                                  
17    * Sec. 27. AS 39.35.620 is amended by adding a new subsection to read:                                           
18            (l)  Notwithstanding the provision under (k) of this section that limits employer                          
19       participation of a previously terminated employer that returns to the system, an                                
20       employer who terminates participation for one or more protective occupation                                     
21       employees and later returns to the system may participate in the defined benefit                                
22       retirement plan under AS 39.35.095 - 39.35.680 and defined contribution retirement                              
23       plan under AS 39.35.700 - 39.35.990.                                                                              
24    * Sec. 28. AS 39.35.680(18) is amended to read:                                                                    
25                 (18)  "employer" means                                                                                  
26                      (A)  the State of Alaska;                                                                          
27                      (B)  a political subdivision or public organization of the state                                   
28            that participates in the plan based on a resolution to participate in the plan that                          
29            was approved by the administrator                                                                            
30                           (i)  on or before July 1, 2006; or                                                        
31                           (ii)  for protective occupation employees; or                                             
01                      (C)  a political subdivision or public organization of the state                                   
02            that assumes liability for participation in the plan by another political                                
03            subdivision or public organization of the state [,] as a result of consolidation                         
04            or reorganization that occurs                                                                                
05                           (i)  at any time, with respect to protective occupation                                   
06                 employees;                                                                                          
07                           (ii)  on or after July 1, 2006, with respect to employees                             
08                 who are not protective occupation employees [ASSUMES                                                
09                 LIABILITY UNDER THE PLAN OF A POLITICAL SUBDIVISION                                                     
10                 OR PUBLIC ORGANIZATION DESCRIBED IN (B) OF THIS                                                         
11                 PARAGRAPH];                                                                                             
12    * Sec. 29. AS 39.35.680(26) is amended to read:                                                                    
13                 (26)  "normal retirement" means retirement for a member who is                                          
14       eligible to receive benefits under AS 39.35.370(a) or (l) or under 39.35.385(a) or (f);                       
15    * Sec. 30. AS 39.35.680 is amended by adding a new paragraph to read:                                              
16                 (44)  "protective occupation employee" has the meaning given in                                         
17       AS 37.10.490.                                                                                                     
18    * Sec. 31. 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 members first hired on or after July 1, 2006,                              
21       to members who are employed by employers that do not participate in the defined                                   
22       benefit retirement plan established under AS 39.35.095 - 39.35.680, to former                                     
23       members as defined in AS 39.35.680, [OR] to members who transfer into the defined                                 
24       contribution retirement plan under AS 39.35.940, or, subject to the limitations and                           
25       requirements of AS 39.35.705, to members of the defined benefit retirement plan                               
26       established under AS 39.35.095 - 39.35.680 who earn overtime compensation as                                  
27       protective occupation employees.                                                                              
28    * Sec. 32. AS 39.35 is amended by adding a new section to read:                                                    
29            Sec. 39.35.705. Limitation on applicability of AS 39.35.700 - 39.35.990.                                   
30       Notwithstanding AS 39.35.700, the benefits and requirements under AS 39.35.890 -                                  
31       39.35.894 and 39.35.960 - 39.35.970 do not apply to an employee who contributes to                                
01       an individual account under AS 39.35.700 - 39.35.990 solely as required by                                        
02       AS 39.35.160(h).                                                                                                  
03    * Sec. 33. AS 39.35.720 is amended to read:                                                                        
04            Sec. 39.35.720. Membership. Except as provided in AS 39.35.095 and                                       
05       39.35.705, an [AN] employee who becomes a member on or after July 1, 2006, shall                              
06       participate in the plan set out in AS 39.35.700 - 39.35.990.                                                      
07    * Sec. 34. AS 39.35.730(a) is amended to read:                                                                     
08            (a)  Each member shall contribute to the member's individual account                                         
09                 (1)  an amount equal to eight percent of the member's compensation                                  
10       from July 1 to the following June 30; or                                                                      
11                 (2)  the amount required under AS 39.35.160(h) if the member is a                                   
12       protective occupation employee and a member of the defined benefit retirement                                 
13       plan established under AS 39.35.095 - 39.35.680.                                                              
14    * Sec. 35. AS 39.35.750 is amended by adding a new subsection to read:                                             
15            (f)  This section does not apply to contributions made under AS 39.35.257(c)                                 
16       and does not require an employer who makes a contribution for an employee under                                   
17       AS 39.35.257(c) to make another contribution for that employee.                                                   
18    * Sec. 36. AS 39.35.870 is amended by adding a new subsection to read:                                             
19            (h)  Except as provided in (c) of this section, a protective occupation employee                             
20       who makes contributions under AS 39.35.160(h) is not eligible for benefits under this                             
21       section.                                                                                                          
22    * Sec. 37. AS 39.35.880 is amended by adding a new subsection to read:                                             
23            (l)  Except as provided in AS 39.35.870(c), a protective occupation employee                                 
24       who makes contributions under AS 39.35.160(h) is not eligible for benefits under this                             
25       section.                                                                                                          
26    * Sec. 38. AS 39.35.990 is amended by adding a new paragraph to read:                                              
27                 (28)  "protective occupation employee" has the meaning given in                                         
28       AS 37.10.490.                                                                                                     
29    * Sec. 39. The uncodified law of the State of Alaska is amended by adding a new section to                         
30 read:                                                                                                                   
31       TRANSITION: APPOINTMENTS TO PROTECTIVE OCCUPATION                                                                 
01 RETIREMENT COUNCIL. (a) The governor shall appoint as members of the first Protective                                   
02 Occupation Retirement Council established under AS 37.10.450, enacted by sec. 3 of this Act,                            
03 the following:                                                                                                          
04            (1)  six protective occupation employees who are members of either the                                       
05 defined benefit retirement plan under AS 39.35.095 - 39.35.680 or the defined contribution                              
06 retirement plan under AS 39.35.700 - 39.35.990, including                                                               
07                 (A)  one member of the Public Safety Employees Association;                                             
08                 (B)  one member of the Alaska Correctional Officers Association;                                        
09                 (C)  one member of the Alaska Professional Fire Fighters Association;                                   
10                 (D)  one member of the Anchorage Police Department Employees                                            
11       Association;                                                                                                      
12                 (E)  one employee who is employed as a firefighter by a municipal fire                                  
13       department;                                                                                                       
14                 (F)  one employee who is employed in a position other than a peace                                      
15       officer or firefighter;                                                                                           
16            (2)  one member of the public at large; and                                                                  
17            (3)  two retirees who participate in the defined benefit retirement plan under                               
18 AS 39.35.095 - 39.35.680.                                                                                               
19       (b)  In this section,                                                                                             
20            (1)  "peace officer" or "firefighter" has the meaning given in AS 39.35.680;                                 
21            (2)  "protective occupation employee" has the meaning given in AS 37.10.490,                                 
22 enacted by sec. 3 of this Act.                                                                                          
23    * Sec. 40. The uncodified law of the State of Alaska is amended by adding a new section to                         
24 read:                                                                                                                   
25       RETIREMENT PLAN ELECTION. (a) A protective occupation employee who was                                            
26 first hired after June 30, 2006, and before the effective date of this section and who is a                             
27 member of the defined contribution retirement plan of the public employees' retirement                                  
28 system under AS 39.35.700 - 39.35.990 may, within 90 days after the effective date of this                              
29 section, make a one-time election to participate in the defined benefit retirement plan under                           
30 AS 39.35.095 - 39.35.680 and to transfer all contributions that have been made or should be                             
31 made to the defined contribution retirement plan for service the member completes before the                            
01 effective date of the member's participation in the defined benefit retirement plan. The                                
02 transferred contributions shall be used to purchase credited service in the defined benefit                             
03 retirement plan on an actuarial equivalent basis determined by the Protective Occupation                                
04 Retirement Council established under AS 37.10.450, enacted by sec. 3 of this Act.                                       
05       (b)  In this section,                                                                                             
06            (1)  "peace officer" or "firefighter" has the meaning given in AS 39.35.680;                                 
07            (2)  "protective occupation employee" has the meaning given in AS 37.10.490,                                 
08 enacted by sec. 3 of this Act.                                                                                          
09    * Sec. 41. The uncodified law of the State of Alaska is amended by adding a new section to                         
10 read:                                                                                                                   
11       RETIREMENT PLAN ELECTION PROCEDURE; REGULATIONS REQUIRED.                                                         
12 (a) An election made under sec. 40 of this Act to participate in the defined benefit retirement                         
13 plan under AS 39.35.095 - 39.35.680 must be made in writing on one or more forms and in                                 
14 the manner prescribed by the administrator. Before accepting an election to participate in the                          
15 defined benefit retirement plan, the administrator shall provide the employee who plans on                              
16 making an election to participate in the defined benefit retirement plan with information,                              
17 including calculations to illustrate the effect of moving the employee's retirement plan from                           
18 the defined contribution retirement plan to the defined benefit retirement plan as well as other                        
19 information that informs the employee of potential consequences of the employee's election.                             
20       (b)  An election made under sec. 40 of this Act to participate in the defined benefit                             
21 retirement plan is irrevocable. On the effective date of the election, an eligible employee who                         
22 makes the election shall be enrolled as a member of the defined benefit retirement plan, and                            
23 the employee's participation in the plan shall be governed by the applicable provisions of the                          
24 defined benefit retirement plan. The employee's enrollment in the defined benefit retirement                            
25 plan is retroactive to the date of hire. An election made by an eligible employee who is                                
26 married is not effective unless the election is signed by the employee's spouse.                                        
27       (c)  When an eligible employee makes a one-time election under sec. 40 of this Act,                               
28 the administrator shall cause the total amount of the employee's employee and employer                                  
29 contributions, with investment earnings and losses through the day of the employee's election                           
30 to participate as a member in the defined benefit retirement plan, to be actuarially calculated                         
31 and, subject to (d) of this section, transferred to the pension fund in the defined benefit                             
01 retirement plan. On the effective date of the employee's participation in the defined benefit                           
02 retirement plan, the employee shall be credited with service in the defined benefit retirement                          
03 plan that may be purchased under an actuarial equivalent purchase formula as determined by                              
04 the board. The board shall establish transfer procedures by regulation, but the actual transfer                         
05 may not occur later than 30 days after the date the administrator receives the employee's                               
06 completed forms under (a) of this section, unless the major financial markets for securities                            
07 available for a transfer are seriously disrupted by an unforeseen event that also causes the                            
08 suspension of trading on any national securities exchange in the country where the securities                           
09 were issued. In that event, the 30-day period may be extended by a resolution of the board. A                           
10 transfer is not commissionable or subject to other fees and may be in the form of cash or a                             
11 security as determined by the board. A security shall be valued on the date of receipt in the                           
12 employee's account.                                                                                                     
13       (d)  If the value actuarially calculated under (c) of this section is insufficient to pay for                     
14 service credit equal to the employee's actual service, the administrator shall allow the                                
15 employee the option of creating an indebtedness up to the amount needed to eliminate the                                
16 insufficiency; however, if that value exceeds the amount needed to pay for a service credit                             
17 equal to the employee's actual service, the administrator shall cause the excess to remain in                           
18 the employee's retirement plan established under AS 39.35.700 - 39.35.990. An excess under                              
19 this subsection may not be used to purchase service credit in a retirement plan administered                            
20 under AS 39.35.                                                                                                         
21       (e)  The provisions of this section are subject to the requirements of the Internal                               
22 Revenue Code and the limitations under AS 39.35.115, 39.35.678, 39.35.710(c) and (d), and                               
23 39.35.895.                                                                                                              
24       (f)  In this section,                                                                                             
25            (1)  "administrator" means the commissioner of administration or the person                                  
26 designated by the commissioner of administration under AS 39.35.003 for a public                                        
27 employees' retirement plan;                                                                                             
28            (2)  "board" means the Alaska Retirement Management Board established                                        
29 under AS 37.10.210;                                                                                                     
30            (3)  "defined benefit retirement plan" means the retirement plan established                                 
31 under AS 39.35.095 - 39.35.680 for a public employee;                                                                   
01            (4)  "defined contribution retirement plan" means the retirement plan                                        
02 established under AS 39.35.700 - 39.35.990 for a public employee;                                                       
03            (5)  "Internal Revenue Code" has the meaning given in AS 39.35.990.                                          
04    * Sec. 42. The uncodified law of the State of Alaska is amended by adding a new section to                         
05 read:                                                                                                                   
06       ADOPTION OF REGULATIONS. The commissioner of administration shall adopt                                           
07 regulations necessary to implement the changes made by this Act. The regulations take effect                            
08 under AS 44.62 (Administrative Procedure Act), but not before the effective date of the law                             
09 implemented by the regulation.                                                                                          
10    * Sec. 43. Sections 41 and 42 of this Act take effect immediately under AS 01.10.070(c).                           
11    * Sec. 44. Except as provided in sec. 43 of this Act, this Act takes effect July 1, 2015.