txt

CSHB 83(L&C): "An Act relating to new defined benefit tiers in the public employees' retirement system and the teachers' retirement system; providing certain employees an opportunity to choose between the defined benefit and defined contribution plans of the public employees' retirement system and the teachers' retirement system; and providing for an effective date."

00                       CS FOR HOUSE BILL NO. 83(L&C)                                                                     
01 "An Act relating to new defined benefit tiers in the public employees' retirement system                                
02 and the teachers' retirement system; providing certain employees an opportunity to                                      
03 choose between the defined benefit and defined contribution plans of the public                                         
04 employees' retirement system and the teachers' retirement system; and providing for an                                  
05 effective date."                                                                                                        
06 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
07    * Section 1. AS 14.25.009 is repealed and reenacted to read:                                                       
08            Sec. 14.25.009. Applicability of AS 14.25.009 - 14.25.220. (a) The provisions                            
09       of AS 14.25.009 - 14.25.220 apply to teachers who are eligible to be members of the                               
10       teachers' retirement system under AS 14.25.009 - 14.25.220 and are not members of                                 
11       the defined contribution retirement plan under AS 14.25.310 - 14.25.590.                                          
12            (b)  An employer that participates in the plan shall also participate in the                                 
13       defined contribution retirement plan under AS 14.25.310 - 14.25.590.                                              
01    * Sec. 2. AS 14.25.040(a) is amended to read:                                                                      
02 (a)  Unless a teacher or member participates in a university retirement program                                         
03 under AS 14.40.661 - 14.40.799 or has elected under AS 14.25.330 or former                                          
04 AS 14.25.540 to participate in the plan established in AS 14.25.310 - 14.25.590, a                                      
05 teacher or member contracting for service with a participating employer is subject to                                   
06       AS 14.25.009 - 14.25.220.                                                                                         
07    * Sec. 3. AS 14.25.050(a) is amended to read:                                                                      
08            (a)  Except as provided in (c) and (e) of this section, beginning January 1,                             
09       1991, each member shall contribute to the plan an amount equal to 8.65 percent of the                             
10 member's base salary accrued from July 1 to the following June 30. [THE                                                 
11 EMPLOYER SHALL DEDUCT THE CONTRIBUTION FROM THE MEMBER'S                                                                
12 SALARY AT THE END OF EACH PAYROLL PERIOD, AND THE                                                                       
13 CONTRIBUTION SHALL BE CREDITED BY THE PLAN TO THE MEMBER                                                                
14 CONTRIBUTION ACCOUNT. THE CONTRIBUTIONS SHALL BE DEDUCTED                                                               
15 FROM EMPLOYEE COMPENSATION BEFORE THE COMPUTATION OF                                                                    
16 APPLICABLE FEDERAL TAXES AND SHALL BE TREATED AS EMPLOYER                                                               
17 CONTRIBUTIONS UNDER 26 U.S.C. 414(h)(2). A MEMBER MAY NOT HAVE                                                          
18 THE OPTION OF MAKING THE PAYROLL DEDUCTION DIRECTLY IN CASH                                                             
19 INSTEAD OF HAVING THE CONTRIBUTION PICKED UP BY THE                                                                     
20       EMPLOYER.]                                                                                                        
21    * Sec. 4. AS 14.25.050 is amended by adding new subsections to read:                                               
22 (e)  Except as provided in (a) and (c) of this section, a member who first                                              
23 participates in the plan after June 30, 2006, shall contribute to the plan an amount                                    
24 equal to eight percent of the employee's base salary accrued from July 1 to the                                         
25       following June 30.                                                                                                
26 (f)  The employer shall deduct the contributions under (a) and (e) of this                                              
27 section from the member's salary at the end of each payroll period, and the                                             
28 contributions shall be credited by the plan to the member contribution account. The                                     
29 contributions shall be deducted from employee compensation before the computation                                       
30 of applicable federal taxes and shall be treated as employer contributions under 26                                     
31 U.S.C. 414(h)(2). A member may not have the option of making the payroll deduction                                      
01       directly in cash instead of having the contribution picked up by the employer.                                    
02    * Sec. 5. AS 14.25.130(c) is amended to read:                                                                      
03 (c)  Once each year during the first five years following appointment to                                                
04 disability under this section, and once every three-year period thereafter, the                                         
05 administrator may require a disabled member who first became a member before                                        
06 July 1, 2006, and who has not attained eligibility for normal retirement to undergo a                               
07 medical or mental examination by a competent physician. The administrator shall                                         
08 suspend any disability benefit for a disabled member who refuses to undergo a                                           
09       physical or mental examination when requested under this section.                                                 
10    * Sec. 6. AS 14.25.130 is amended by adding new subsections to read:                                               
11 (g)  A person who first becomes a member after June 30, 2006, and who is                                                
12 receiving a benefit under this section shall undergo a medical examination as often as                                  
13 the administrator considers advisable, but not more frequently than once each year.                                     
14 The administrator shall determine the place of the examination and engage the                                           
15 physician or physicians. If the administrator determines that the examination indicates                                 
16 that the disabled member is no longer incapacitated because of a total and apparently                                   
17 permanent occupational disability, the administrator may not issue further disability                                   
18       benefits to the member.                                                                                           
19 (h)  A person who first becomes a member after June 30, 2006, and who is                                                
20 appointed to disability benefits shall apply to the division of vocational rehabilitation                               
21 in the Department of Labor and Workforce Development within 30 days after the date                                      
22 disability benefits commence. The member shall be enrolled in a rehabilitation                                          
23 program if the member meets the eligibility requirements of the division of vocational                                  
24 rehabilitation. Unless the member demonstrates cause, benefits shall terminate at the                                   
25       end of the first month in which a disabled member                                                                 
26                 (1)  fails to report to the division of vocational rehabilitation;                                      
27 (2)  is certified by the division of vocational rehabilitation as failing to                                            
28       cooperate in a vocational rehabilitation program;                                                                 
29                 (3)  fails to interview for a job; or                                                                   
30                 (4)  fails to accept a position offered.                                                              
31    * Sec. 7. AS 14.25.168(d) is amended to read:                                                                      
01            (d)  A benefit recipient who first became a member before July 1, 2006, or                               
02       the benefit recipient's surviving spouse may elect major medical insurance coverage                           
03       in accordance with regulations and under the following conditions:                                                
04 (1)  a benefit recipient [PERSON] who has less than 25 years of                                                     
05 membership service and who is younger than 60 years of age must pay an amount                                           
06 equal to the full monthly group premium for retiree major medical insurance coverage;                                   
07 (2)  a disabled member, a disabled member who is appointed to normal                                                    
08 retirement, a person 60 years of age or older, or a person who has at least 25 years of                                 
09       membership service is not required to make premium payments.                                                      
10    * Sec. 8. AS 14.25.168 is amended by adding new subsections to read:                                               
11 (g)  A benefit recipient, or the surviving spouse of a benefit recipient, who first                                     
12 becomes a member after June 30, 2006, may elect major medical insurance coverage                                        
13       in accordance with regulations and under the following conditions:                                                
14 (1)  if the participating member or surviving spouse is not eligible for                                                
15 Medicare, the cost of a monthly premium for retiree major medical insurance coverage                                    
16 elected under this section is equal to the full monthly group premium for retiree major                                 
17       medical insurance coverage;                                                                                       
18 (2)  if the participating member or surviving spouse is eligible for                                                    
19 Medicare, the cost of a monthly premium for retiree major medical insurance coverage                                    
20       is a percentage of the full monthly group premium, as follows:                                                    
21 (A)  30 percent if the member had 10 or more, but less than 15,                                                         
22            years of service;                                                                                            
23 (B)  25 percent if the member had 15 or more, but less than 20,                                                         
24            years of service;                                                                                            
25 (C)  20 percent if the member had 20 or more, but less than 25,                                                         
26            years of service;                                                                                            
27 (3)  the cost of a monthly premium paid by the member or the                                                            
28       member's surviving spouse for retiree major medical insurance coverage is                                         
29 (A)  15 percent of the full monthly group premium if the                                                                
30            participating member has 25 or more, but less than 30, years of service;                                     
31 (B)  10 percent of the full monthly group premium if the                                                                
01            participating member has 30 or more years of service;                                                        
02 (4)  a disabled member or a disabled member who is appointed to                                                         
03       normal retirement is not required to make premium payments.                                                       
04 (h)  On or after July 1, 2021, and every five years thereafter, the administrator                                       
05 shall adjust the percentages under (g)(2) and (3) of this section as needed to maintain,                                
06 but not to exceed, over the succeeding five years, an employer normal cost rate for the                                 
07 members and survivors who first become members after June 30, 2006, that does not                                       
08 exceed the combined total of the rates under AS 14.25.350(a), (b), (d), and (e) minus                                   
09 the employer normal cost rate attributable to the members who first become members                                      
10 after June 30, 2006, for benefits under AS 14.25.009 - 14.25.167. An adjustment made                                    
11 under this subsection shall remain in effect for five years. In making an adjustment                                    
12 under this subsection, the administrator shall maintain the five percent differences                                    
13 between the percentages in (g)(2)(A), (B), and (C) of this section and the five percent                                 
14       differences between the percentages in (g)(3)(A) and (B) of this section.                                         
15 (i)  When a member is appointed to retirement, the member obtains a vested                                              
16 right to the applicable percentage under (g)(2) or (3) of this section, as adjusted under                               
17 (h) of this section, that is in effect when the member is appointed to retirement. A                                    
18 member does not obtain a vested right to a percentage under (g)(2) or (3) of this                                       
19 section, as adjusted under (h) of this section, before the member is appointed to                                       
20       retirement.                                                                                                       
21    * Sec. 9. AS 14.25.310 is amended to read:                                                                         
22 Sec. 14.25.310. Applicability of AS 14.25.310 - 14.25.590. The provisions of                                          
23       AS 14.25.310 - 14.25.590 apply only to                                                                            
24 (1)  teachers who first become members on or after July 1, 2006, and                                            
25 before the effective date of this section who do not transfer to a defined benefit                                  
26       retirement plan under AS 14.25.009 - 14.25.220 or AS 39.35.095 - 39.35.680;                                   
27 (2)  teachers described in AS 14.25.330 who elect under that section                                                
28 to become [TO MEMBERS WHO ARE EMPLOYED BY EMPLOYERS THAT DO                                                         
29 NOT PARTICIPATE IN THE DEFINED BENEFIT RETIREMENT PLAN                                                                  
30 ESTABLISHED UNDER AS 14.25.009 - 14.25.220, TO FORMER MEMBERS                                                           
31       UNDER AS 14.25.220, OR TO] members; and                                                                       
01                 (3)  teachers who transferred [TRANSFER] into the defined                                       
02       contribution retirement plan under former AS 14.25.540.                                                       
03    * Sec. 10. AS 14.25.310 is amended by adding a new subsection to read:                                             
04            (b)  An employer that participates in the plan shall also participate in the                                 
05       defined benefit retirement plan under AS 14.25.009 - 14.25.220.                                                   
06    * Sec. 11. AS 14.25.330 is repealed and reenacted to read:                                                         
07 Sec. 14.25.330. Retirement plan election option. (a) A teacher who is first                                           
08 hired on or after the effective date of this section may make a one-time election to                                    
09 participate in the defined contribution retirement plan under AS 14.25.310 - 14.25.590                                  
10 retroactive to the date of hire and may transfer to that plan employee contributions, if                                
11 any, and employer contributions, if any, that have been made to the defined benefit                                     
12 retirement plan under AS 14.25.009 - 14.25.220. Before employer contributions are                                       
13 transferred under this subsection, the administrator shall recalculate them under                                       
14       AS 14.25.070.                                                                                                     
15 (b)  The election to participate in the defined contribution retirement plan                                            
16 under (a) of this section must be made within 90 days after the date of hire and be                                     
17 made in writing on a form and in the manner prescribed by the administrator. Before                                     
18 accepting an election to participate in the defined contribution retirement plan, the                                   
19 administrator shall, within 20 days after the administrator receives notification of the                                
20 teacher's date of hire, provide the teacher eligible to make an election to participate in                              
21       the defined contribution retirement plan under AS 14.25.310 - 14.25.590 with                                      
22 (1)  information, including calculations to illustrate the effect of                                                    
23 moving the teacher's retirement plan from the defined benefit retirement plan to the                                    
24       defined contribution retirement plan; and                                                                         
25 (2)  other information clearly to inform the teacher of the potential                                                   
26       consequences of the teacher's election.                                                                           
27 (c)  An election made under (a) of this section to participate in the defined                                           
28 contribution retirement plan is irrevocable. Retroactive to the date of hire, the teacher                               
29 shall be enrolled in the defined contribution retirement plan under AS 14.25.310 -                                      
30 14.25.590, the teacher's participation in the plan shall be governed by the provisions                                  
31 for the defined contribution retirement plan, and the teacher's participation in the                                    
01 defined benefit retirement plan under AS 14.25.009 - 14.25.220 shall terminate. An                                      
02 election made by an eligible teacher who is married is not effective unless the election                                
03       is signed by the teacher's spouse.                                                                                
04 (d)  When an eligible teacher makes an election under (a) of this section, the                                          
05 administrator shall cause the total amount of the teacher's employee and employer                                       
06 contributions, with investment earnings and losses through the final day of the                                         
07 teacher's participation in the defined benefit retirement plan, to be actuarially                                       
08 calculated and transferred to the teacher's designated account in the defined                                           
09 contribution retirement plan. The administrator shall establish transfer procedures by                                  
10 regulation, but the actual transfer may not be later than 30 days after the date the                                    
11 administrator receives the teacher's completed election form under (b) of this section,                                 
12 unless the major financial markets for securities available for a transfer are seriously                                
13 disrupted by an unforeseen event that also causes the suspension of trading on any                                      
14 national securities exchange in the country where the securities were issued. In that                                   
15 event, the 30-day period may be extended by a resolution of the board. Transfers are                                    
16 not commissionable or subject to other fees and may be in the form of securities or                                     
17 cash as determined by the board. Securities shall be valued on the date of receipt in the                               
18       teacher's account.                                                                                                
19 (e)  An election under (a) of this section made by an eligible teacher who is                                           
20 married is not effective unless the election is signed by the teacher's spouse. An                                      
21 eligible teacher whose accounts are subject to a qualified domestic relations order may                                 
22 not make an election to participate in the defined contribution retirement plan under                                   
23 this section unless the qualified domestic relations order is amended or vacated and                                    
24       court-certified copies of the order are received by the administrator.                                            
25    * Sec. 12. AS 39.35.095 is repealed and reenacted to read:                                                     
26 Sec. 39.35.095. Applicability of AS 39.35.095 - 39.35.680. (a) The provisions                                       
27 of AS 39.35.095 - 39.35.680 apply to public employees who are eligible to be                                            
28 members of the public employees' retirement system under AS 39.35.095 - 39.35.680                                       
29 and are not members of the defined contribution retirement plan under AS 39.35.700 -                                    
30       39.35.990.                                                                                                        
31 (b)  A public organization or a municipality or other political subdivision of the                                      
01       state that participates in the plan shall also participate in the defined contribution                            
02       retirement plan under AS 39.35.700 - 39.35.990.                                                                   
03    * Sec. 13. AS 39.35 is amended by adding a new section to read:                                                    
04 Sec. 39.35.128. Participation of elected officials of political subdivisions. (a)                                     
05 A person who is an elected official of a political subdivision of the state and who has                                 
06 not participated in the plan or waived participation in the plan before July 1, 2016, is a                              
07       member of the plan if                                                                                             
08                 (1)  the political subdivision has elected under AS 39.35.600 -                                         
09       39.35.650 to designate elected officials in the classifications of employees entitled to                          
10       participate in the plan; and                                                                                      
11 (2)  the elected official receives compensation from the political                                                      
12 subdivision for services as an elected official in the amount of at least $2,001 a month.                               
13 (b)  An elected official entitled to participate under this section, and who either                                     
14 has no previous service under the system with the political subdivision or is retired                                   
15 under the system, may file a waiver of participation in the plan with the administrator                                 
16 within 30 days after the later of July 1, 2016, or the date that the elected official's term                            
17 of office begins. A waiver is irrevocable for the remainder of the elected official's                                   
18       service as an elected official or employee of the political subdivision.                                          
19    * Sec. 14. AS 39.35.160(a) is amended to read:                                                                     
20 (a)  Subject to (e) of this section, beginning [BEGINNING] January 1, 1987,                                         
21 each peace officer or firefighter shall contribute to the plan an amount equal to seven                                 
22 and one-half percent of the peace officer's or firefighter's compensation. Except as                                    
23 provided in (d) and (e) of this section, beginning January 1, 1987, each other                                      
24 employee shall contribute to the plan an amount equal to six and three-quarters percent                                 
25 of the employee's compensation. [THE CONTRIBUTIONS SHALL BE DEDUCTED                                                    
26 BY THE EMPLOYER AT THE END OF EACH PAYROLL PERIOD. THE                                                                  
27 CONTRIBUTIONS SHALL BE DEDUCTED FROM EMPLOYEE                                                                           
28 COMPENSATION BEFORE COMPUTATION OF APPLICABLE FEDERAL                                                                   
29 TAXES, AND THE CONTRIBUTIONS SHALL BE TREATED AS EMPLOYER                                                               
30 CONTRIBUTIONS UNDER 26 U.S.C. 414(h)(2). A MEMBER MAY NOT HAVE                                                          
31 THE OPTION OF MAKING THE PAYROLL DEDUCTION DIRECTLY INSTEAD                                                             
01       OF HAVING THE CONTRIBUTION PICKED UP BY THE EMPLOYER.]                                                            
02    * Sec. 15. AS 39.35.160 is amended by adding new subsections to read:                                              
03 (e)  Except as provided in (a) and (d) of this section, an employee, including a                                        
04 peace officer or firefighter, who first participates in the plan after June 30, 2006, shall                             
05 contribute to the plan an amount equal to eight percent of the employee's                                               
06       compensation.                                                                                                     
07 (f)  Contributions under (a) and (e) of this section shall be deducted by the                                           
08 employer at the end of each payroll period. The contributions shall be deducted from                                    
09 employee compensation before computation of applicable federal taxes, and the                                           
10 contributions shall be treated as employer contributions under 26 U.S.C. 414(h)(2). A                                   
11 member may not have the option of making the payroll deduction directly instead of                                      
12       having the contribution picked up by the employer.                                                                
13    * Sec. 16. AS 39.35.410(g) is amended to read:                                                                     
14 (g)  A disabled employee who first became a member before July 1, 2006,                                             
15 and who is receiving an occupational disability benefit shall undergo a medical                                     
16 examination as often as the administrator considers advisable but not more frequently                                   
17 than once each year. The administrator shall determine the place of the examination                                     
18 and engage the physician or physicians. If, in the judgment of the administrator, the                                   
19 examination indicates that the retired employee is no longer incapacitated because of a                                 
20 total and apparently permanent occupational disability, the administrator may not issue                                 
21       further disability benefits to the employee.                                                                      
22    * Sec. 17. AS 39.35.410 is amended by adding a new subsection to read:                                             
23 (k)  A person who first becomes a member after June 30, 2006, and who is                                                
24 appointed to disability benefits shall apply to the division of vocational rehabilitation                               
25 within 30 days after the date disability benefits commence. The employee shall be                                       
26 enrolled in a rehabilitation program if the employee meets the eligibility requirements                                 
27 of the division of vocational rehabilitation. Unless the employee demonstrates cause,                                   
28       benefits shall terminate at the end of the first month in which a disabled employee                               
29                 (1)  fails to report to the division of vocational rehabilitation;                                      
30 (2)  is certified by the division of vocational rehabilitation as failing to                                            
31       cooperate in a vocational rehabilitation program;                                                                 
01                 (3)  fails to interview for a job; or                                                                   
02                 (4)  fails to accept a position offered.                                                                
03    * Sec. 18. AS 39.35.535(c) is amended to read:                                                                     
04            (c)  A benefit recipient may elect major medical insurance coverage in                                       
05       accordance with regulations and under the following conditions:                                                   
06 (1)  a person who first became a member before July 1, 2006, or the                                                 
07 surviving spouse of the person, other than a disabled member or a disabled member                                   
08 who is appointed to normal retirement, must pay an amount equal to the full monthly                                     
09       group premium for retiree major medical insurance coverage if the person is                                       
10                      (A)  younger than 60 years of age and has less than                                                
11 (i)  25 years of credited service as a peace officer under                                                              
12                 AS 39.35.360 and 39.35.370; or                                                                          
13 (ii)  30 years of credited service under AS 39.35.360 and                                                               
14                 39.35.370 that is not service as a peace officer; or                                                    
15                      (B)  of any age and has less than 10 years of credited service;                                    
16 (2)  a person who first became a member before July 1, 2006, or the                                                 
17 surviving spouse of the person is not required to make premium payments for retiree                                 
18       major medical coverage if the person                                                                              
19                      (A)  is a disabled member;                                                                         
20 (B)  is a disabled member who is appointed to normal                                                                    
21            retirement;                                                                                                  
22 (C)  is 60 years of age or older and has at least 10 years of                                                           
23            credited service; or                                                                                         
24                      (D)  has at least                                                                                  
25 (i)  25 years of credited service as a peace officer under                                                              
26                 AS 39.35.360 and 39.35.370; or                                                                          
27 (ii)  30 years of credited service under AS 39.35.360 and                                                               
28                 39.35.370 not as a peace officer;                                                                   
29 (3)  a benefit recipient who first becomes a member after June 30,                                                  
30 2006, or a benefit recipient who is the surviving spouse of a person who first                                      
31 becomes a member after June 30, 2006, except as provided in (4) and (5) of this                                     
01 subsection, shall pay an amount equal to the full monthly group premium for                                         
02 retiree major medical insurance coverage; however, except as provided in (4) and                                    
03 (5) of this subsection, if the benefit recipient is eligible for Medicare, the cost of a                            
04 monthly premium is a percentage of the full monthly group premium, as follows:                                      
05 (A)  30 percent if the member has 10 or more, but less than                                                         
06            15, years of service;                                                                                    
07                      (B)  25 percent if the member has 15 or more, but less than                                    
08            20, years of service;                                                                                    
09                      (C)  20 percent if the member has 20 or more, but less than                                    
10            25, years of service;                                                                                    
11 (D)  15 percent if the member has 25 or more, but less than                                                         
12            30, years of service not as a peace officer;                                                             
13 (4)  except as provided in (5) of this subsection, a benefit recipient                                              
14 who first becomes a member after June 30, 2006, or a benefit recipient who is the                                   
15 surviving spouse of a person who first becomes a member after June 30, 2006,                                        
16       shall pay a monthly premium that is                                                                           
17 (A)  15 percent of the cost of a full monthly group premium                                                         
18 if the member has 25 or more, but less than 30, years of service as a peace                                         
19            officer; or                                                                                              
20 (B)  10 percent of the cost of a full monthly group premium                                                         
21            if the member has 30 or more years of service;                                                           
22 (5)  a benefit recipient who first becomes a member after June 30,                                                  
23 2006, is not required to make premium payments for retiree major medical                                            
24       coverage if the recipient                                                                                     
25                      (A)  is a disabled member; or                                                                  
26 (B)  is a disabled member who is appointed to normal                                                                
27            retirement;                                                                                              
28 (6)  on or after July 1, 2021, and every five years thereafter, the                                                 
29 administrator shall adjust the percentages under (3) and (4) of this subsection as                                  
30 needed to maintain, but not to exceed, over the succeeding five years, an                                           
31 employer normal cost rate for the members and survivors who first became                                            
01 members after June 30, 2006, that does not exceed the combined total of the rates                                   
02 under AS 39.35.750(a), (b), (d), and (e) minus the employer normal cost rate                                        
03 attributable to the members who first become members after June 30, 2006, for                                       
04 benefits under AS 39.35.095 - 39.35.530; an adjustment made under this                                              
05 paragraph shall remain in effect for five years; in making an adjustment under                                      
06 this paragraph, the administrator shall maintain the five percent differences                                       
07 between the percentages in (3)(A), (B), (C), and (D) of this subsection and the five                                
08       percent differences between the percentages in (4)(A) and (B) of this subsection;                             
09 (7)  when a member is appointed to retirement, the member                                                           
10 obtains a vested right to the applicable percentage under (3) or (4) of this                                        
11 subsection, as adjusted under (6) of this subsection, that is in effect when the                                    
12 member is appointed to retirement; a member does not obtain a vested right to a                                     
13 percentage under (3) or (4) of this subsection, as adjusted under (6) of this                                       
14       subsection, before appointment to retirement.                                                                 
15    * Sec. 19. AS 39.35.620(k) is amended to read:                                                                     
16 (k)  Termination of an employer's participation in the plan does not bar future                                         
17 participation in the system by that employer if the employer is current with payments                                   
18 on amounts due under AS 39.35.625. [IF A PREVIOUSLY TERMINATED                                                          
19 EMPLOYER RETURNS TO THE SYSTEM, THE EMPLOYER MAY ONLY                                                                   
20 PARTICIPATE IN THE PLAN ESTABLISHED UNDER AS 39.35.700 - 39.35.990.                                                     
21 EMPLOYEES MAY BE CREDITED UNDER AS 39.35.700 - 39.35.990 ONLY                                                           
22       WITH SERVICE SUBSEQUENT TO THE DATE OF RETURN.]                                                                   
23    * Sec. 20. AS 39.35.680(18) is amended to read:                                                                    
24                 (18)  "employer" means                                                                                  
25                      (A)  the State of Alaska;                                                                          
26 (B)  a political subdivision or public organization of the state                                                        
27 that participates in the plan based on a resolution to participate in the plan that                                     
28            was approved by the administrator [ON OR BEFORE JULY 1, 2006]; or                                            
29 (C)  a political subdivision or public organization of the state                                                        
30 that, as a result of consolidation or reorganization [THAT OCCURS ON OR                                                 
31 AFTER JULY 1, 2006], assumes liability under the plan of a political                                                    
01            subdivision or public organization described in (B) of this paragraph;                                       
02    * Sec. 21. AS 39.35.700 is amended to read:                                                                        
03            Sec. 39.35.700. Applicability of AS 39.35.700 - 39.35.990. The provisions of                               
04       AS 39.35.700 - 39.35.990 apply only to                                                                            
05                 (1)  members first hired on or after July 1, 2006, and before the                               
06       effective date of this section who do not transfer to a defined benefit retirement                            
07       plan under AS 14.25.009 - 14.25.220 or AS 39.35.095 - 39.35.680;                                              
08                 (2)  public employees described in AS 39.35.720 who elect under                                     
09       that section to become [TO MEMBERS WHO ARE EMPLOYED BY                                                        
10 EMPLOYERS THAT DO NOT PARTICIPATE IN THE DEFINED BENEFIT                                                                
11 RETIREMENT PLAN ESTABLISHED UNDER AS 39.35.095 - 39.35.680, TO                                                          
12       FORMER MEMBERS AS DEFINED IN AS 39.35.680, OR TO] members; and                                                
13 (3)  members who transferred [TRANSFER] into the defined                                                        
14       contribution retirement plan under former AS 39.35.940.                                                       
15    * Sec. 22. AS 39.35.700 is amended by adding a new subsection to read:                                             
16 (b)  A public organization as defined in AS 39.35.680 or a municipality or                                              
17 other political subdivision of the state that participates in the plan shall also participate                           
18       in the defined benefit retirement plan under AS 39.35.095 - 39.35.680.                                            
19    * Sec. 23. AS 39.35.720 is repealed and reenacted to read:                                                         
20 Sec. 39.35.720. Retirement plan election option. (a) A public employee who                                            
21 is first hired on or after the effective date of this section may make a one-time election                              
22 to participate in the defined contribution retirement plan under AS 39.35.700 -                                         
23 39.35.990 retroactive to the date of hire and may transfer to that plan employee                                        
24 contributions, if any, and employer contributions, if any, that have been made to the                                   
25 defined benefit retirement plan under AS 39.35.095 - 39.35.680. Before employer                                         
26 contributions are transferred under this subsection, the administrator shall recalculate                                
27       them under AS 39.35.255.                                                                                          
28 (b)  The election to participate in the defined contribution retirement plan                                            
29 under (a) of this section must be made within 90 days after the date of hire and be                                     
30 made in writing on a form and in the manner prescribed by the administrator. Before                                     
31 accepting an election to participate in the defined contribution retirement plan under                                  
01 AS 39.35.700 - 39.35.990, the administrator shall, within 20 days after the                                             
02 administrator receives notice of the public employee's date of hire, provide the                                        
03 employee eligible to make an election to participate in the defined contribution                                        
04       retirement plan with                                                                                              
05                 (1)  information, including calculations to illustrate the effect of                                    
06       moving the employee's retirement plan from the defined benefit retirement plan to the                             
07       defined contribution retirement plan; and                                                                         
08                 (2)  other information clearly to inform the employee of the potential                                  
09       consequences of the employee's election.                                                                          
10 (c)  An election made under (a) of this section to participate in the defined                                           
11 contribution retirement plan is irrevocable. Retroactive to the date of hire, the                                       
12 employee shall be enrolled in the defined contribution retirement plan under                                            
13 AS 39.35.700 - 39.35.990, the employee's participation in the plan shall be governed                                    
14 by the provisions for the defined contribution retirement plan, and the employee's                                      
15 participation in the defined benefit retirement plan under AS 39.35.095 - 39.35.680                                     
16 shall terminate. An election made by an eligible employee who is married is not                                         
17       effective unless the election is signed by the employee's spouse.                                                 
18 (d)  When an employee makes an election under (a) of this section, the                                                  
19 administrator shall cause the total amount of the employee's employee and employer                                      
20 contributions, with investment earnings and losses through the final day of the                                         
21 employee's participation in the defined benefit retirement plan, to be actuarially                                      
22 calculated and transferred to the employee's designated account in the defined                                          
23 contribution retirement plan. The administrator shall establish transfer procedures by                                  
24 regulation, but the actual transfer may not be later than 30 days after the date the                                    
25 administrator receives the employee's completed election form under (b) of this                                         
26 section, unless the major financial markets for securities available for a transfer are                                 
27 seriously disrupted by an unforeseen event that also causes the suspension of trading                                   
28 on any national securities exchange in the country where the securities were issued. In                                 
29 that event, the 30-day period may be extended by a resolution of the board. Transfers                                   
30 are not commissionable or subject to other fees and may be in the form of securities or                                 
31 cash as determined by the board. Securities shall be valued on the date of receipt in the                               
01       employee's account.                                                                                               
02 (e)  An election made by an eligible employee who is married is not effective                                           
03 unless the election is signed by the employee's spouse. An eligible employee whose                                      
04 accounts are subject to a qualified domestic relations order may not make an election                                   
05 to participate in the defined contribution retirement plan under this section unless the                                
06 qualified domestic relations order is amended or vacated and court-certified copies of                                  
07       the order are received by the administrator.                                                                      
08    * Sec. 24. AS 14.25.012(c), 14.25.540; AS 39.35.940, and 39.35.957(b) are repealed.                                
09    * Sec. 25. The uncodified law of the State of Alaska is amended by adding a new section to                         
10 read:                                                                                                                   
11 RETIREMENT PLAN ELECTION CHOICE. (a) A teacher who was first hired after                                                
12 June 30, 2006, and before the effective date of this section and who is a member of the                                 
13 defined contribution plan of the teachers' retirement system under AS 14.25.310 - 14.25.590                             
14 may make a one-time election, within 90 days after the effective date of this section, to                               
15 participate in the defined benefit retirement plan under AS 14.25.009 - 14.25.220 and to                                
16 transfer all contributions, including employer contributions, that have been made or should be                          
17 made to the defined contribution retirement plan for service the member completes before the                            
18 effective date of the member's participation in the defined benefit retirement plan.                                    
19 (b)  A public employee who was first hired after June 30, 2006, and before the                                          
20 effective date of this section and who is a member of the defined contribution plan of the                              
21 public employees' retirement system under AS 39.35.700 - 39.35.990 may make a one-time                                  
22 election, within 90 days after the effective date of this section, to participate in the defined                        
23 benefit retirement plan under AS 39.35.095 - 39.35.680 and to transfer all contributions,                               
24 including employer contributions, that have been made or should be made to the defined                                  
25 contribution retirement plan for any service the member completes before the effective date of                          
26 the member's participation in the defined benefit retirement plan.                                                      
27    * Sec. 26. The uncodified law of the State of Alaska is amended by adding a new section to                         
28 read:                                                                                                                   
29 RETIREMENT PLAN ELECTION PROCEDURE; REGULATIONS REQUIRED.                                                               
30 (a) The election to participate in the defined benefit retirement plan under sec. 25 of this Act                        
31 must be made in writing on forms and in the manner prescribed by the administrator. Before                              
01 accepting an election to participate in the defined benefit retirement plan, the administrator                          
02 shall provide the employee planning on making an election to participate in the defined                                 
03 benefit retirement plan with information, including calculations to illustrate the effect of                            
04 moving the employee's retirement plan from the defined contribution retirement plan to the                              
05 defined benefit retirement plan as well as other information clearly to inform the employee of                          
06 the potential consequences of the employee's election.                                                                  
07 (b)  An election made under sec. 25 of this Act to participate in the defined benefit                                   
08 retirement plan is irrevocable. On the effective date of the election, an eligible employee who                         
09 makes the election shall be enrolled as a member of the defined benefit retirement plan, the                            
10 employee's participation in the plan shall be governed by the provisions for the defined                                
11 benefit retirement plan, and the employee's participation in the defined contribution retirement                        
12 plan shall terminate. The employee's enrollment in the defined benefit retirement plan shall be                         
13 effective retroactive to the date of hire. An election made by an eligible employee who is                              
14 married is not effective unless the election is signed by the employee's spouse.                                        
15 (c)  When an eligible employee makes a one-time election under sec. 25 of this Act,                                     
16 the administrator shall cause the total amount of the employee's employee and employer                                  
17 contributions, with investment earnings and losses through the final day of the employee's                              
18 participation as a member in the defined contribution retirement plan, to be actuarially                                
19 calculated and, subject to (d) of this section, transferred to the pension fund in the defined                          
20 benefit retirement plan. On the effective date of the employee's participation in the defined                           
21 benefit retirement plan, the employee shall be credited with service in the defined benefit                             
22 retirement plan that is equal to the employee's service in years, including fractional years,                           
23 recognized for computing benefits that may be due from the defined contribution retirement                              
24 plan. The board shall establish transfer procedures by regulation, but the actual transfer may                          
25 not be later than 30 days after the date the administrator receives the employee's completed                            
26 election forms under (a) of this section, unless the major financial markets for securities                             
27 available for a transfer are seriously disrupted by an unforeseen event that also causes the                            
28 suspension of trading on any national securities exchange in the country where the securities                           
29 were issued. In that event, the 30-day period may be extended by a resolution of the board.                             
30 Transfers are not commissionable or subject to other fees and may be in the form of securities                          
31 or cash as determined by the board. Securities shall be valued on the date of receipt in the                            
01 employee's account.                                                                                                     
02 (d)  If the value actuarially calculated under (c) of this section is insufficient to pay for                           
03 a service credit equal to the employee's actual service, the administrator shall allow the                              
04 employee to create an indebtedness up to the amount needed to eliminate the insufficiency;                              
05 however, if that value exceeds the amount needed to pay for a service credit equal to the                               
06 employee's actual service, the administrator shall cause the excess to be paid to the employee                          
07 as a rollover transfer to either an individual employee annuity account in the Department of                            
08 Administration under the terms of AS 39.30.150 - 39.30.180 (State of Alaska Supplemental                                
09 Annuity Plan) or, if the employee's employer does not participate in the State of Alaska                                
10 Supplemental Annuity Plan, to an eligible retirement plan as defined in AS 14.25.360(d) or                              
11 AS 39.35.760(d). An excess under this subsection may not be used to purchase service credit                             
12 in a retirement plan administered under AS 14.25 or AS 39.35.                                                           
13 (e)  The provisions of this section are subject to the requirements of the Internal                                     
14 Revenue Code and the limitations under AS 14.25.010, 14.25.320(c) and (d), 14.25.490,                                   
15 AS 39.35.115, 39.35.678, 39.35.710(c) and (d), and 39.35.895.                                                           
16       (f)  In this section,                                                                                             
17 (1)  "administrator" means the commissioner of administration or the person                                             
18 designated by the commissioner of administration under AS 39.35.003 for a public                                        
19 employees' retirement plan and under AS 14.25.003 for a teachers' retirement plan;                                      
20 (2)  "board" means the Alaska Retirement Management Board established                                                   
21 under AS 37.10.210;                                                                                                     
22 (3)  "defined benefit retirement plan" means the retirement plan established                                            
23 under                                                                                                                   
24                 (A)  AS 14.25.009 - 14.25.220 for a teacher; or                                                         
25                 (B)  AS 39.35.095 - 39.35.680 for a public employee;                                                    
26 (4)  "defined contribution retirement plan" means the retirement plan                                                   
27 established under                                                                                                       
28                 (A)  AS 14.25.310 - 14.25.590 for a teacher; or                                                         
29                 (B)  AS 39.35.700 - 39.35.990 for a public employee;                                                    
30            (5)  "Internal Revenue Code" has the meaning given in AS 39.35.990.                                          
31    * Sec. 27. The uncodified law of the State of Alaska is amended by adding a new section to                         
01 read:                                                                                                                   
02 ADOPTION OF REGULATIONS. The commissioner of administration shall adopt                                                 
03 regulations necessary to implement the changes made by this Act. The regulations take effect                            
04 under AS 44.62 (Administrative Procedure Act), but not before the effective date of the law                             
05 implemented by the regulation.                                                                                          
06    * Sec. 28. Sections 26 and 27 of this Act take effect immediately under AS 01.10.070(c).                           
07    * Sec. 29. Except as provided in sec. 28 of this Act, this Act takes effect January 1, 2019.