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CSHB 83(STA): "An Act relating to the Public Employees' Retirement System of Alaska 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 of Alaska and the teachers' retirement system; and providing for an effective date."

00                       CS FOR HOUSE BILL NO. 83(STA)                                                                     
01 "An Act relating to the Public Employees' Retirement System of Alaska and the                                           
02 teachers' retirement system; providing certain employees an opportunity to choose                                       
03 between the defined benefit and defined contribution plans of the Public Employees'                                     
04 Retirement System of Alaska 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 14.20.165 is amended to read:                                                                      
08            Sec. 14.20.165. Restoration of tenure rights. A teacher who held tenure                                    
09       rights and who was retired due to disability under AS 14.25.130, but whose disability                             
10 (1) has been removed, and the removal of that disability is certified by a competent                                    
11 physician following a physical or mental examination, or (2) has been compensated                                       
12 for by rehabilitation or other appropriate restorative education or training, and that                                  
13 rehabilitation or restoration to health has been certified by the commissioner of                                   
01 administration [DIVISION OF VOCATIONAL REHABILITATION OF THE                                                        
02 DEPARTMENT OF LABOR AND WORKFORCE DEVELOPMENT], shall be                                                                
03 restored to full tenure rights in the district from which the teacher was retired, at such                              
04       time as an opening for which the teacher is qualified becomes available.                                          
05    * Sec. 2. AS 14.25.009 is repealed and reenacted to read:                                                          
06 Sec. 14.25.009. Applicability of AS 14.25.009 - 14.25.220. (a) The provisions                                       
07 of AS 14.25.009 - 14.25.220 apply to teachers who are eligible to be members of the                                     
08 teachers' retirement system under AS 14.25.009 - 14.25.220 and are not members of                                       
09       the defined contribution retirement plan under AS 14.25.310 - 14.25.590.                                          
10 (b)  An employer that participates in the plan shall also participate in the                                            
11       defined contribution retirement plan under AS 14.25.310 - 14.25.590.                                              
12    * Sec. 3. AS 14.25.040(a) is amended to read:                                                                      
13 (a)  Unless a teacher or member participates in a university retirement program                                         
14 under AS 14.40.661 - 14.40.799 or has elected under AS 14.25.330 or former                                          
15 AS 14.25.540 to participate in the plan established in AS 14.25.310 - 14.25.590, a                                      
16 teacher or member contracting for service with a participating employer is subject to                                   
17       AS 14.25.009 - 14.25.220.                                                                                         
18    * Sec. 4. AS 14.25.050(a) is amended to read:                                                                      
19 (a)  Except as provided in (c) and (e) of this section, beginning January 1,                                        
20 1991, each member shall contribute to the plan an amount equal to 8.65 percent of the                                   
21 member's base salary accrued from July 1 to the following June 30. [THE                                                 
22 EMPLOYER SHALL DEDUCT THE CONTRIBUTION FROM THE MEMBER'S                                                                
23 SALARY AT THE END OF EACH PAYROLL PERIOD, AND THE                                                                       
24 CONTRIBUTION SHALL BE CREDITED BY THE PLAN TO THE MEMBER                                                                
25 CONTRIBUTION ACCOUNT. THE CONTRIBUTIONS SHALL BE DEDUCTED                                                               
26 FROM EMPLOYEE COMPENSATION BEFORE THE COMPUTATION OF                                                                    
27 APPLICABLE FEDERAL TAXES AND SHALL BE TREATED AS EMPLOYER                                                               
28 CONTRIBUTIONS UNDER 26 U.S.C. 414(h)(2). A MEMBER MAY NOT HAVE                                                          
29 THE OPTION OF MAKING THE PAYROLL DEDUCTION DIRECTLY IN CASH                                                             
30 INSTEAD OF HAVING THE CONTRIBUTION PICKED UP BY THE                                                                     
31       EMPLOYER.]                                                                                                        
01    * Sec. 5. AS 14.25.050 is amended by adding new subsections to read:                                               
02 (e)  Except as provided in (a) and (c) of this section, a member who first                                              
03 participates in the plan after June 30, 2006, shall contribute to the plan an amount                                    
04 equal to eight percent of the employee's base salary accrued from July 1 to the                                         
05       following June 30.                                                                                                
06 (f)  The employer shall deduct the contributions under (a) and (e) of this                                              
07 section from the member's salary at the end of each payroll period, and the                                             
08 contributions shall be credited by the plan to the member contribution account. The                                     
09 contributions shall be deducted from employee compensation before the computation                                       
10 of applicable federal taxes and shall be treated as employer contributions under 26                                     
11 U.S.C. 414(h)(2). A member may not have the option of making the payroll deduction                                      
12       directly in cash instead of having the contribution picked up by the employer.                                    
13    * Sec. 6. AS 14.25.130(c) is repealed and reenacted to read:                                                       
14 (c)  A disabled member receiving a benefit under this section shall undergo a                                           
15 medical examination as often as the administrator considers advisable, but not more                                     
16 frequently than once each year. The administrator shall determine the place of the                                      
17 examination and engage the physician or physicians. If the administrator determines                                     
18 that the examination indicates that the disabled member is no longer incapacitated                                      
19 because of a total and apparently permanent occupational disability, the administrator                                  
20       may not issue further disability benefits to the disabled member.                                                 
21    * Sec. 7. AS 14.25.130 is amended by adding a new subsection to read:                                              
22 (g)  A person who first becomes a member after June 30, 2006, and who is                                                
23 appointed to disability benefits shall, within 30 days after the date disability benefits                               
24 commence, provide the administrator with proof that the member has applied for                                          
25 enrollment in a vocational rehabilitation program approved by the administrator.                                        
26 Unless the member demonstrates cause, the benefits terminate at the end of the first                                    
27       month in which the member                                                                                         
28 (1)  fails to provide the administrator with the required proof of                                                      
29       application for enrollment;                                                                                       
30 (2)  is certified by the administrator as failing to enroll in or cooperate                                             
31       with a vocational rehabilitation program approved under this subsection;                                          
01                 (3)  fails to interview for a job; or                                                                   
02                 (4)  fails to accept a job offered.                                                                     
03    * Sec. 8. AS 14.25.168(d) is amended to read:                                                                      
04            (d)  A benefit recipient who first became a member before July 1, 2006, or                               
05       the benefit recipient's surviving spouse may elect major medical insurance coverage                           
06       in accordance with regulations and under the following conditions:                                                
07 (1)  a benefit recipient [PERSON] who has less than 25 years of                                                     
08 membership service and who is younger than 60 years of age must pay an amount                                           
09 equal to the full monthly group premium for retiree major medical insurance coverage;                                   
10 (2)  a disabled member, a disabled member who is appointed to normal                                                    
11 retirement, a person 60 years of age or older, or a person who has at least 25 years of                                 
12       membership service is not required to make premium payments.                                                      
13    * Sec. 9. AS 14.25.168 is amended by adding new subsections to read:                                               
14 (g)  A benefit recipient, or the surviving spouse of a benefit recipient, who first                                     
15 becomes a member after June 30, 2006, may elect major medical insurance coverage                                        
16 that was in effect before July 1, 2006, in accordance with regulations and under the                                    
17       following conditions:                                                                                             
18 (1)  if the participating member or surviving spouse is not eligible for                                                
19 Medicare, the cost of a monthly premium for retiree major medical insurance coverage                                    
20 elected under this section is equal to the full monthly group premium for retiree major                                 
21       medical insurance coverage;                                                                                       
22 (2)  if the participating member or surviving spouse is eligible for                                                    
23 Medicare, the cost of a monthly premium for retiree major medical insurance coverage                                    
24       is a percentage of the full monthly group premium, as follows:                                                    
25 (A)  30 percent if the member had 10 or more, but less than 15,                                                         
26            years of service;                                                                                            
27 (B)  25 percent if the member had 15 or more, but less than 20,                                                         
28            years of service;                                                                                            
29 (C)  20 percent if the member had 20 or more, but less than 25,                                                         
30            years of service;                                                                                            
31 (3)  the cost of a monthly premium paid by the member or the                                                            
01       member's surviving spouse for retiree major medical insurance coverage is                                         
02                      (A)  15 percent of the full monthly group premium if the                                           
03            participating member has 25 or more, but less than 30, years of service;                                     
04                      (B)  10 percent of the full monthly group premium if the                                           
05            participating member has 30 or more years of service;                                                        
06                 (4)  a disabled member or a disabled member who is appointed to                                         
07       normal retirement is not required to make premium payments.                                                       
08            (h)  On or after July 1, 2024, and every five years thereafter, the administrator                            
09       shall adjust the percentages under (g)(2) and (3) of this section as needed to maintain,                          
10 but not to exceed, over the succeeding five years, an employer normal cost rate for the                                 
11 members and survivors who first become members after June 30, 2006, that does not                                       
12 exceed the combined total of the rates under AS 14.25.350(a), (b), (d), and (e) minus                                   
13 the employer normal cost rate attributable to the members who first become members                                      
14 after June 30, 2006, for benefits under AS 14.25.009 - 14.25.167. An adjustment made                                    
15 under this subsection shall remain in effect for five years. In making an adjustment                                    
16 under this subsection, the administrator shall maintain the five percent differences                                    
17 between the percentages in (g)(2)(A), (B), and (C) of this section and the five percent                                 
18       differences between the percentages in (g)(3)(A) and (B) of this section.                                         
19 (i)  When a member is appointed to retirement, the member obtains a vested                                              
20 right to the applicable percentage under (g)(2) or (3) of this section, as adjusted under                               
21 (h) of this section, that is in effect when the member is appointed to retirement. A                                    
22 member does not obtain a vested right to a percentage under (g)(2) or (3) of this                                       
23 section, as adjusted under (h) of this section, before the member is appointed to                                       
24       retirement.                                                                                                       
25    * Sec. 10. AS 14.25.310 is amended to read:                                                                        
26 Sec. 14.25.310. Applicability of AS 14.25.310 - 14.25.590. The provisions of                                          
27       AS 14.25.310 - 14.25.590 apply only to                                                                            
28 (1)  teachers who first become members on or after July 1, 2006, and                                            
29 before the effective date of this section who do not transfer to a defined benefit                                  
30       retirement plan under AS 14.25.009 - 14.25.220 or AS 39.35.095 - 39.35.680;                                   
31 (2)  teachers described in AS 14.25.330 who elect under that section                                                
01 to become [TO MEMBERS WHO ARE EMPLOYED BY EMPLOYERS THAT DO                                                         
02 NOT PARTICIPATE IN THE DEFINED BENEFIT RETIREMENT PLAN                                                                  
03 ESTABLISHED UNDER AS 14.25.009 - 14.25.220, TO FORMER MEMBERS                                                           
04       UNDER AS 14.25.220, OR TO] members; and                                                                       
05                 (3)  teachers who transferred [TRANSFER] into the defined                                       
06       contribution retirement plan under former AS 14.25.540.                                                       
07    * Sec. 11. AS 14.25.310 is amended by adding a new subsection to read:                                             
08            (b)  An employer that participates in the plan shall also participate in the                                 
09       defined benefit retirement plan under AS 14.25.009 - 14.25.220.                                                   
10    * Sec. 12. AS 14.25.330 is repealed and reenacted to read:                                                         
11 Sec. 14.25.330. Retirement plan election option. (a) A teacher who is first                                           
12 hired on or after the effective date of this section may make a one-time election to                                    
13 participate in the defined contribution retirement plan under AS 14.25.310 - 14.25.590                                  
14 retroactive to the date of hire and may transfer to that plan employee contributions, if                                
15 any, and employer contributions, if any, that have been made to the defined benefit                                     
16 retirement plan under AS 14.25.009 - 14.25.220. Before employer contributions are                                       
17 transferred under this subsection, the administrator shall recalculate them under                                       
18       AS 14.25.070.                                                                                                     
19 (b)  The election to participate in the defined contribution retirement plan                                            
20 under (a) of this section must be made within 90 days after the date of hire and be                                     
21 made in writing on a form and in the manner prescribed by the administrator. Before                                     
22 accepting an election to participate in the defined contribution retirement plan, the                                   
23 administrator shall, within 20 days after the administrator receives notification of the                                
24 teacher's date of hire, provide the teacher eligible to make an election to participate in                              
25       the defined contribution retirement plan under AS 14.25.310 - 14.25.590 with                                      
26 (1)  information, including calculations to illustrate the effect of                                                    
27 moving the teacher's retirement plan from the defined benefit retirement plan to the                                    
28       defined contribution retirement plan; and                                                                         
29 (2)  other information clearly to inform the teacher of the potential                                                   
30       consequences of the teacher's election.                                                                           
31 (c)  An election made under (a) of this section to participate in the defined                                           
01 contribution retirement plan is irrevocable. Retroactive to the date of hire, the teacher                               
02 shall be enrolled in the defined contribution retirement plan under AS 14.25.310 -                                      
03 14.25.590, the teacher's participation in the plan shall be governed by the provisions                                  
04 for the defined contribution retirement plan, and the teacher's participation in the                                    
05       defined benefit retirement plan under AS 14.25.009 - 14.25.220 shall terminate.                                   
06 (d)  When an eligible teacher makes an election under (a) of this section, the                                          
07 administrator shall cause the total amount of the teacher's employee and employer                                       
08 contributions, with investment earnings and losses through the final day of the                                         
09 teacher's participation in the defined benefit retirement plan, to be actuarially                                       
10 calculated and transferred to the teacher's designated account in the defined                                           
11 contribution retirement plan. The administrator shall establish transfer procedures by                                  
12 regulation, but the actual transfer may not be later than 30 days after the date the                                    
13 administrator receives the teacher's completed election form under (b) of this section,                                 
14 unless the major financial markets for securities available for a transfer are seriously                                
15 disrupted by an unforeseen event that also causes the suspension of trading on any                                      
16 national securities exchange in the country where the securities were issued. In that                                   
17 event, the 30-day period may be extended by a resolution of the board. Transfers are                                    
18 not commissionable or subject to other fees and may be in the form of securities or                                     
19 cash as determined by the board. Securities shall be valued on the date of receipt in the                               
20       teacher's account.                                                                                                
21 (e)  An eligible teacher whose accounts are subject to a qualified domestic                                             
22 relations order may not make an election to participate in the defined contribution                                     
23 retirement plan under this section unless the qualified domestic relations order is                                     
24 amended or vacated and court-certified copies of the order are received by the                                          
25       administrator.                                                                                                    
26    * Sec. 13. AS 14.25.485(h) is repealed and reenacted to read:                                                      
27 (h)  A member who is appointed to disability benefits shall, within 30 days                                             
28 after the date disability benefits commence, provide the administrator with proof that                                  
29 the member has applied for enrollment in a vocational rehabilitation program                                            
30 approved by the administrator. Unless the member demonstrates cause, the benefits                                       
31       terminate at the end of the first month in which the member                                                       
01                 (1)  fails to provide the administrator with the required proof of                                      
02       application for enrollment;                                                                                       
03                 (2)  is certified by the administrator as failing to enroll in or cooperate                             
04       with a vocational rehabilitation program approved under this subsection;                                          
05                 (3)  fails to interview for a job; or                                                                   
06                 (4)  fails to accept a job offered.                                                                     
07    * Sec. 14. AS 39.35.095 is repealed and reenacted to read:                                                     
08            Sec. 39.35.095. Applicability of AS 39.35.095 - 39.35.680. (a) The provisions                            
09       of AS 39.35.095 - 39.35.680 apply to public employees who are eligible to be                                      
10 members of the public employees' retirement system under AS 39.35.095 - 39.35.680                                       
11 and are not members of the defined contribution retirement plan under AS 39.35.700 -                                    
12       39.35.990.                                                                                                        
13 (b)  A public organization or a municipality or other political subdivision of the                                      
14 state that participates in the plan shall also participate in the defined contribution                                  
15       retirement plan under AS 39.35.700 - 39.35.990.                                                                   
16    * Sec. 15. AS 39.35 is amended by adding a new section to read:                                                    
17 Sec. 39.35.128. Participation of elected officials of political subdivisions. (a)                                     
18 Except as provided in (b) of this section, a person who is an elected official of a                                     
19 political subdivision of the state and who has not participated in the plan or waived                                   
20       participation in the plan before July 1, 2019, is a member of the plan if                                         
21 (1)  the political subdivision has elected under AS 39.35.600 -                                                         
22 39.35.650 to designate elected officials in the classifications of employees entitled to                                
23       participate in the plan; and                                                                                      
24 (2)  the elected official receives compensation from the political                                                      
25 subdivision for services as an elected official in the amount of at least $2,001 a month.                               
26 (b)  An elected official entitled to participate under this section, and who either                                     
27 has no previous service under the system with the political subdivision or is retired                                   
28 under the system, may file a waiver of participation in the plan with the administrator                                 
29 within 30 days after the later of July 1, 2019, or the date that the elected official's term                            
30 of office begins. A waiver is irrevocable for the remainder of the elected official's                                   
31       service as an elected official or employee of the political subdivision.                                          
01    * Sec. 16. AS 39.35.160(a) is amended to read:                                                                     
02 (a)  Subject to (e) of this section, beginning [BEGINNING] January 1, 1987,                                         
03 each peace officer or firefighter shall contribute to the plan an amount equal to seven                                 
04 and one-half percent of the peace officer's or firefighter's compensation. Except as                                    
05 provided in (d) and (e) of this section, beginning January 1, 1987, each other                                      
06 employee shall contribute to the plan an amount equal to six and three-quarters percent                                 
07 of the employee's compensation. [THE CONTRIBUTIONS SHALL BE DEDUCTED                                                    
08 BY THE EMPLOYER AT THE END OF EACH PAYROLL PERIOD. THE                                                                  
09 CONTRIBUTIONS SHALL BE DEDUCTED FROM EMPLOYEE                                                                           
10 COMPENSATION BEFORE COMPUTATION OF APPLICABLE FEDERAL                                                                   
11 TAXES, AND THE CONTRIBUTIONS SHALL BE TREATED AS EMPLOYER                                                               
12 CONTRIBUTIONS UNDER 26 U.S.C. 414(h)(2). A MEMBER MAY NOT HAVE                                                          
13 THE OPTION OF MAKING THE PAYROLL DEDUCTION DIRECTLY INSTEAD                                                             
14       OF HAVING THE CONTRIBUTION PICKED UP BY THE EMPLOYER.]                                                            
15    * Sec. 17. AS 39.35.160 is amended by adding new subsections to read:                                              
16 (e)  Except as provided in (a) and (d) of this section, an employee, including a                                        
17 peace officer or firefighter, who first participates in the plan after June 30, 2006, shall                             
18 contribute to the plan an amount equal to eight percent of the employee's                                               
19       compensation.                                                                                                     
20 (f)  Contributions under (a) and (e) of this section shall be deducted by the                                           
21 employer at the end of each payroll period. The contributions shall be deducted from                                    
22 employee compensation before computation of applicable federal taxes, and the                                           
23 contributions shall be treated as employer contributions under 26 U.S.C. 414(h)(2). A                                   
24 member may not have the option of making the payroll deduction directly instead of                                      
25       having the contribution picked up by the employer.                                                                
26    * Sec. 18. AS 39.35.400(e) is amended to read:                                                                     
27 (e)  A disabled employee receiving a nonoccupational disability benefit shall                                           
28 provide the administrator, within one year after appointment to disability benefits and                             
29 once within each year thereafter until disability benefits are denied or cease, with                        
30 proof that the disabled employee has applied [OF CONTINUING ELIGIBILITY] to                                         
31 receive disability payments under the Social Security Act. If the disabled employee is                                  
01 otherwise ineligible for a social security payment, the employee shall provide the                                      
02 administrator with sufficient medical evidence once each year to demonstrate that                                       
03 disability payments under the Social Security Act would be payable had the employee                                     
04 been otherwise eligible. If the disabled employee fails to provide the administrator                                    
05 with evidence of continuing eligibility for disability payments under the Social                                        
06 Security Act or other medical evidence required by the administrator within 30 days                                     
07 following each anniversary date, the disability benefits from the plan shall cease. If                                  
08 that information is subsequently provided to the administrator, benefit payments will                                   
09 resume beginning for the month following that in which the information is provided.                                     
10 When disability payments under the Social Security Act cease, it is the responsibility                                  
11       of the disabled employee to notify the administrator immediately.                                                 
12    * Sec. 19. AS 39.35.410 is amended by adding a new subsection to read:                                             
13 (k)  A person who first becomes an employee after June 30, 2006, and who is                                             
14 appointed to disability benefits shall, within 30 days after the date disability benefits                               
15 commence, provide the administrator with proof that the employee has applied for                                        
16 enrollment in a vocational rehabilitation program approved by administrator. Unless                                     
17 the employee demonstrates cause, the benefits terminate at the end of the first month                                   
18       in which the employee                                                                                             
19 (1)  fails to provide the administrator with the required proof of                                                      
20       application for enrollment;                                                                                       
21 (2)  is certified by the administrator as failing to enroll in or cooperate                                             
22       with a vocational rehabilitation program approved under this subsection;                                          
23                 (3)  fails to interview for a job; or                                                                   
24                 (4)  fails to accept a job offered.                                                                     
25    * Sec. 20. AS 39.35.535(c) is amended to read:                                                                     
26 (c)  A benefit recipient may elect major medical insurance coverage in                                                  
27       accordance with regulations and under the following conditions:                                                   
28 (1)  a person who first became a member before July 1, 2006, or the                                                 
29 surviving spouse of the person, other than a disabled member or a disabled member                                   
30 who is appointed to normal retirement, must pay an amount equal to the full monthly                                     
31       group premium for retiree major medical insurance coverage if the person is                                       
01                      (A)  younger than 60 years of age and has less than                                                
02                           (i)  25 years of credited service as a peace officer under                                    
03                 AS 39.35.360 and 39.35.370; or                                                                          
04                           (ii)  30 years of credited service under AS 39.35.360 and                                     
05                 39.35.370 that is not service as a peace officer; or                                                    
06                      (B)  of any age and has less than 10 years of credited service;                                    
07                 (2)  a person who first became a member before July 1, 2006, or the                                 
08       surviving spouse of the person is not required to make premium payments for retiree                           
09       major medical insurance coverage if the person                                                                
10                      (A)  is a disabled member;                                                                         
11 (B)  is a disabled member who is appointed to normal                                                                    
12            retirement;                                                                                                  
13 (C)  is 60 years of age or older and has at least 10 years of                                                           
14            credited service; or                                                                                         
15                      (D)  has at least                                                                                  
16 (i)  25 years of credited service as a peace officer under                                                              
17                 AS 39.35.360 and 39.35.370; or                                                                          
18 (ii)  30 years of credited service under AS 39.35.360 and                                                               
19                 39.35.370 not as a peace officer;                                                                   
20 (3)  except as provided in (4) and (5) of this subsection, a benefit                                                
21 recipient who first becomes a member after June 30, 2006, or a benefit recipient                                    
22 who is the surviving spouse of a person who first becomes a member after                                            
23 June 30, 2006, may, in accordance with regulations, elect retiree major medical                                     
24 coverage that was in effect before July 1, 2006, and pay an amount equal to the                                     
25 full monthly group premium for retiree major medical insurance coverage;                                            
26 however, except as provided in (4) and (5) of this subsection, if the benefit                                       
27 recipient is eligible for Medicare, the cost of a monthly premium is a percentage                                   
28       of the full monthly group premium, as follows:                                                                
29 (A)  30 percent if the member has 10 or more, but less than                                                         
30            15, years of service;                                                                                    
31 (B)  25 percent if the member has 15 or more, but less than                                                         
01            20, years of service;                                                                                    
02                      (C)  20 percent if the member has 20 or more, but less than                                    
03            25, years of service;                                                                                    
04                      (D)  15 percent if the member has 25 or more, but less than                                    
05            30, years of service not as a peace officer;                                                             
06 (4)  except as provided in (5) of this subsection, a benefit recipient                                              
07 who first becomes a member after June 30, 2006, or a benefit recipient who is the                                   
08 surviving spouse of a person who first becomes a member after June 30, 2006,                                        
09       shall pay a monthly premium that is                                                                           
10 (A)  15 percent of the cost of a full monthly group premium                                                         
11 if the member has 25 or more, but less than 30, years of service as a peace                                         
12            officer; or                                                                                              
13 (B)  10 percent of the cost of a full monthly group premium                                                         
14            if the member has 30 or more years of service;                                                           
15 (5)  a benefit recipient who first becomes a member after June 30,                                                  
16 2006, is not required to make premium payments for retiree major medical                                            
17       coverage if the recipient                                                                                     
18                      (A)  is a disabled member; or                                                                  
19 (B)  is a disabled member who is appointed to normal                                                                
20            retirement;                                                                                              
21 (6)  on or after July 1, 2024, and every five years thereafter, the                                                 
22 administrator shall adjust the percentages under (3) and (4) of this subsection as                                  
23 needed to maintain, but not to exceed, over the succeeding five years, an                                           
24 employer normal cost rate for the members and survivors who first became                                            
25 members after June 30, 2006, that does not exceed the combined total of the rates                                   
26 under AS 39.35.750(a), (b), (d), and (e) minus the employer normal cost rate                                        
27 attributable to the members who first become members after June 30, 2006, for                                       
28 benefits under AS 39.35.095 - 39.35.530; an adjustment made under this                                              
29 paragraph shall remain in effect for five years; in making an adjustment under                                      
30 this paragraph, the administrator shall maintain the five percent differences                                       
31 between the percentages in (3)(A), (B), (C), and (D) of this subsection and the five                                
01       percent differences between the percentages in (4)(A) and (B) of this subsection;                             
02 (7)  when a member is appointed to retirement, the member                                                           
03 obtains a vested right to the applicable percentage under (3) or (4) of this                                        
04 subsection, as adjusted under (6) of this subsection, that is in effect when the                                    
05 member is appointed to retirement; a member does not obtain a vested right to a                                     
06 percentage under (3) or (4) of this subsection, as adjusted under (6) of this                                       
07       subsection, before appointment to retirement.                                                                 
08    * Sec. 21. AS 39.35.620(k) is amended to read:                                                                     
09            (k)  Termination of an employer's participation in the plan does not bar future                              
10 participation in the system by that employer if the employer is current with payments                                   
11 on amounts due under AS 39.35.625. [IF A PREVIOUSLY TERMINATED                                                          
12 EMPLOYER RETURNS TO THE SYSTEM, THE EMPLOYER MAY ONLY                                                                   
13 PARTICIPATE IN THE PLAN ESTABLISHED UNDER AS 39.35.700 - 39.35.990.                                                     
14 EMPLOYEES MAY BE CREDITED UNDER AS 39.35.700 - 39.35.990 ONLY                                                           
15       WITH SERVICE SUBSEQUENT TO THE DATE OF RETURN.]                                                                   
16    * Sec. 22. AS 39.35.680(18) is amended to read:                                                                    
17                 (18)  "employer" means                                                                                  
18                      (A)  the State of Alaska;                                                                          
19 (B)  a political subdivision or public organization of the state                                                        
20 that participates in the plan based on a resolution to participate in the plan that                                     
21            was approved by the administrator [ON OR BEFORE JULY 1, 2006]; or                                            
22 (C)  a political subdivision or public organization of the state                                                        
23 that, as a result of consolidation or reorganization [THAT OCCURS ON OR                                                 
24 AFTER JULY 1, 2006], assumes liability under the plan of a political                                                    
25            subdivision or public organization described in (B) of this paragraph;                                       
26    * Sec. 23. AS 39.35.700 is amended to read:                                                                        
27 Sec. 39.35.700. Applicability of AS 39.35.700 - 39.35.990. The provisions of                                          
28       AS 39.35.700 - 39.35.990 apply only to                                                                            
29 (1)  members first hired on or after July 1, 2006, and before the                                               
30 effective date of this section who do not transfer to a defined benefit retirement                                  
31       plan under AS 14.25.009 - 14.25.220 or AS 39.35.095 - 39.35.680;                                              
01 (2)  public employees described in AS 39.35.720 who elect under                                                     
02 that section to become [TO MEMBERS WHO ARE EMPLOYED BY                                                              
03 EMPLOYERS THAT DO NOT PARTICIPATE IN THE DEFINED BENEFIT                                                                
04 RETIREMENT PLAN ESTABLISHED UNDER AS 39.35.095 - 39.35.680, TO                                                          
05       FORMER MEMBERS AS DEFINED IN AS 39.35.680, OR TO] members; and                                                
06                 (3)  members who transferred [TRANSFER] into the defined                                        
07       contribution retirement plan under former AS 39.35.940.                                                       
08    * Sec. 24. AS 39.35.700 is amended by adding a new subsection to read:                                             
09            (b)  A public organization as defined in AS 39.35.680 or a municipality or                                   
10 other political subdivision of the state that participates in the plan shall also participate                           
11       in the defined benefit retirement plan under AS 39.35.095 - 39.35.680.                                            
12    * Sec. 25. AS 39.35.720 is repealed and reenacted to read:                                                         
13 Sec. 39.35.720. Retirement plan election option. (a) A public employee who                                            
14 is first hired on or after the effective date of this section may make a one-time election                              
15 to participate in the defined contribution retirement plan under AS 39.35.700 -                                         
16 39.35.990 retroactive to the date of hire and may transfer to that plan employee                                        
17 contributions, if any, and employer contributions, if any, that have been made to the                                   
18 defined benefit retirement plan under AS 39.35.095 - 39.35.680. Before employer                                         
19 contributions are transferred under this subsection, the administrator shall recalculate                                
20       them under AS 39.35.255.                                                                                          
21 (b)  The election to participate in the defined contribution retirement plan                                            
22 under (a) of this section must be made within 90 days after the date of hire and be                                     
23 made in writing on a form and in the manner prescribed by the administrator. Before                                     
24 accepting an election to participate in the defined contribution retirement plan under                                  
25 AS 39.35.700 - 39.35.990, the administrator shall, within 20 days after the                                             
26 administrator receives notice of the public employee's date of hire, provide the                                        
27 employee eligible to make an election to participate in the defined contribution                                        
28       retirement plan with                                                                                              
29 (1)  information, including calculations to illustrate the effect of                                                    
30 moving the employee's retirement plan from the defined benefit retirement plan to the                                   
31       defined contribution retirement plan; and                                                                         
01 (2)  other information clearly to inform the employee of the potential                                                  
02       consequences of the employee's election.                                                                          
03 (c)  An election made under (a) of this section to participate in the defined                                           
04 contribution retirement plan is irrevocable. Retroactive to the date of hire, the                                       
05 employee shall be enrolled in the defined contribution retirement plan under                                            
06 AS 39.35.700 - 39.35.990, the employee's participation in the plan shall be governed                                    
07 by the provisions for the defined contribution retirement plan, and the employee's                                      
08 participation in the defined benefit retirement plan under AS 39.35.095 - 39.35.680                                     
09       shall terminate.                                                                                                  
10 (d)  When an employee makes an election under (a) of this section, the                                                  
11 administrator shall cause the total amount of the employee's employee and employer                                      
12 contributions, with investment earnings and losses through the final day of the                                         
13 employee's participation in the defined benefit retirement plan, to be actuarially                                      
14 calculated and transferred to the employee's designated account in the defined                                          
15 contribution retirement plan. The administrator shall establish transfer procedures by                                  
16 regulation, but the actual transfer may not be later than 30 days after the date the                                    
17 administrator receives the employee's completed election form under (b) of this                                         
18 section, unless the major financial markets for securities available for a transfer are                                 
19 seriously disrupted by an unforeseen event that also causes the suspension of trading                                   
20 on any national securities exchange in the country where the securities were issued. In                                 
21 that event, the 30-day period may be extended by a resolution of the board. Transfers                                   
22 are not commissionable or subject to other fees and may be in the form of securities or                                 
23 cash as determined by the board. Securities shall be valued on the date of receipt in the                               
24       employee's account.                                                                                               
25 (e)  An eligible employee whose accounts are subject to a qualified domestic                                            
26 relations order may not make an election to participate in the defined contribution                                     
27 retirement plan under this section unless the qualified domestic relations order is                                     
28 amended or vacated and court-certified copies of the order are received by the                                          
29       administrator.                                                                                                    
30    * Sec. 26. AS 39.35.890(j) is repealed and reenacted to read:                                                      
31 (j)  A member who is appointed to disability benefits shall, within 30 days after                                       
01 the date disability benefits commence, provide the administrator with proof that the                                    
02 member has applied for enrollment in a vocational rehabilitation program approved by                                    
03 the administrator. Unless the member demonstrates cause, the benefits terminate at the                                  
04       end of the first month in which the member                                                                        
05                 (1)  fails to provide the administrator with the required proof of                                      
06       application for enrollment;                                                                                       
07                 (2)  is certified by the administrator as failing to enroll in or cooperate                             
08       with a vocational rehabilitation program approved under this subsection;                                          
09                 (3)  fails to interview for a job; or                                                                   
10                 (4)  fails to accept a job offered.                                                                     
11    * Sec. 27. AS 14.25.012(c), 14.25.540; AS 39.35.940, and 39.35.957(b) are repealed.                                
12    * Sec. 28. The uncodified law of the State of Alaska is amended by adding a new section to                         
13 read:                                                                                                                   
14 RETIREMENT PLAN ELECTION CHOICE. (a) A teacher who was first hired after                                                
15 June 30, 2006, and before the effective date of this section and who is a member of the                                 
16 defined contribution plan of the teachers' retirement system under AS 14.25.310 - 14.25.590                             
17 may make a one-time election, within 90 days after the effective date of this section, to                               
18 participate in the defined benefit retirement plan under AS 14.25.009 - 14.25.220 and to                                
19 transfer all contributions, including employer contributions, that have been made or should be                          
20 made to the defined contribution retirement plan for service the member completes before the                            
21 effective date of the member's participation in the defined benefit retirement plan.                                    
22 (b)  A public employee who was first hired after June 30, 2006, and before the                                          
23 effective date of this section and who is a member of the defined contribution plan of the                              
24 public employees' retirement system under AS 39.35.700 - 39.35.990 may make a one-time                                  
25 election, within 90 days after the effective date of this section, to participate in the defined                        
26 benefit retirement plan under AS 39.35.095 - 39.35.680 and to transfer all contributions,                               
27 including employer contributions, that have been made or should be made to the defined                                  
28 contribution retirement plan for any service the member completes before the effective date of                          
29 the member's participation in the defined benefit retirement plan.                                                      
30    * Sec. 29. The uncodified law of the State of Alaska is amended by adding a new section to                         
31 read:                                                                                                                   
01 RETIREMENT PLAN ELECTION PROCEDURE; REGULATIONS REQUIRED.                                                               
02 (a) The election to participate in the defined benefit retirement plan under sec. 28 of this Act                        
03 must be made in writing on forms and in the manner prescribed by the administrator. Before                              
04 accepting an election to participate in the defined benefit retirement plan, the administrator                          
05 shall provide the employee planning on making an election to participate in the defined                                 
06 benefit retirement plan with information, including calculations to illustrate the effect of                            
07 moving the employee's retirement plan from the defined contribution retirement plan to the                              
08 defined benefit retirement plan as well as other information clearly to inform the employee of                          
09 the potential consequences of the employee's election.                                                                  
10 (b)  An election made under sec. 28 of this Act to participate in the defined benefit                                   
11 retirement plan is irrevocable. On the effective date of the election, an eligible employee who                         
12 makes the election shall be enrolled as a member of the defined benefit retirement plan, the                            
13 employee's participation in the plan shall be governed by the provisions for the defined                                
14 benefit retirement plan, and the employee's participation in the defined contribution retirement                        
15 plan shall terminate. The employee's enrollment in the defined benefit retirement plan shall be                         
16 effective retroactive to the date of hire. An election made by an eligible employee who is                              
17 married is not effective unless the election is signed by the employee's spouse.                                        
18 (c)  When an eligible employee makes a one-time election under sec. 28 of this Act,                                     
19 the 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 employee's                              
21 participation as a member in the defined contribution retirement plan, to be actuarially                                
22 calculated and, subject to (d) of this section, transferred to the pension fund in the defined                          
23 benefit retirement plan. On the effective date of the employee's participation in the defined                           
24 benefit retirement plan, the employee shall be credited with service in the defined benefit                             
25 retirement plan that is equal to the employee's service in years, including fractional years,                           
26 recognized for computing benefits that may be due from the defined contribution retirement                              
27 plan. The board shall establish transfer procedures by regulation, but the actual transfer may                          
28 not be later than 30 days after the date the administrator receives the employee's completed                            
29 election forms under (a) of this section, unless the major financial markets for securities                             
30 available for a transfer are seriously disrupted by an unforeseen event that also causes the                            
31 suspension of trading on any national securities exchange in the country where the securities                           
01 were issued. In that event, the 30-day period may be extended by a resolution of the board.                             
02 Transfers are not commissionable or subject to other fees and may be in the form of securities                          
03 or cash as determined by the board. Securities shall be valued on the date of receipt in the                            
04 employee's account.                                                                                                     
05 (d)  If the value actuarially calculated under (c) of this section is insufficient to pay for                           
06 a service credit equal to the employee's actual service, the administrator shall allow the                              
07 employee to create an indebtedness up to the amount needed to eliminate the insufficiency;                              
08 however, if that value exceeds the amount needed to pay for a service credit equal to the                               
09 employee's actual service, the administrator shall cause the excess to be paid to the employee                          
10 as a rollover transfer to either an individual employee annuity account in the Department of                            
11 Administration under the terms of AS 39.30.150 - 39.30.180 (State of Alaska Supplemental                                
12 Annuity Plan) or, if the employee's employer does not participate in the State of Alaska                                
13 Supplemental Annuity Plan, to an eligible retirement plan as defined in AS 14.25.360(d) or                              
14 AS 39.35.760(d). An excess under this subsection may not be used to purchase service credit                             
15 in a retirement plan administered under AS 14.25 or AS 39.35.                                                           
16 (e)  The provisions of this section are subject to the requirements of the Internal                                     
17 Revenue Code and the limitations under AS 14.25.010, 14.25.320(c) and (d), 14.25.490,                                   
18 AS 39.35.115, 39.35.678, 39.35.710(c) and (d), and 39.35.895.                                                           
19       (f)  In this section,                                                                                             
20 (1)  "administrator" means the commissioner of administration or the person                                             
21 designated by the commissioner of administration under AS 39.35.003 for a public                                        
22 employees' retirement plan and under AS 14.25.003 for a teachers' retirement plan;                                      
23 (2)  "board" means the Alaska Retirement Management Board established                                                   
24 under AS 37.10.210;                                                                                                     
25 (3)  "defined benefit retirement plan" means the retirement plan established                                            
26 under                                                                                                                   
27                 (A)  AS 14.25.009 - 14.25.220 for a teacher; or                                                         
28                 (B)  AS 39.35.095 - 39.35.680 for a public employee;                                                    
29 (4)  "defined contribution retirement plan" means the retirement plan                                                   
30 established under                                                                                                       
31                 (A)  AS 14.25.310 - 14.25.590 for a teacher; or                                                         
01                 (B)  AS 39.35.700 - 39.35.990 for a public employee;                                                    
02            (5)  "Internal Revenue Code" has the meaning given in AS 39.35.990.                                          
03    * Sec. 30. The uncodified law of the State of Alaska is amended by adding a new section to                         
04 read:                                                                                                                   
05 ADOPTION OF REGULATIONS. The commissioner of administration shall adopt                                                 
06 regulations under AS 39.35.005 and AS 14.25.005 necessary to implement the changes made                                 
07 by this Act. A regulation adopted under this section may not take effect before the effective                           
08 date of the law being implemented by the regulation.                                                                    
09    * Sec. 31. Sections 29 and 30 of this Act take effect immediately under AS 01.10.070(c).                           
10    * Sec. 32. Except as provided in sec. 31 of this Act, this Act takes effect July 1, 2019.