SB 37: "An Act relating to restoration of tenure for certain disabled individuals; 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 SENATE BILL NO. 37 01 "An Act relating to restoration of tenure for certain disabled individuals; relating to the 02 Public Employees' Retirement System of Alaska and the teachers' retirement system; 03 providing certain employees an opportunity to choose between the defined benefit and 04 defined contribution plans of the Public Employees' Retirement System of Alaska and 05 the teachers' retirement system; and providing for an 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 AS 14.25.009 is repealed and reenacted to read: 06 Sec. 14.25.009.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 (c) of this section, a member who first participates in 03 the plan after June 30, 2006, shall contribute to the plan an amount equal to eight 04 percent of the employee's base salary accrued from July 1 to the following June 30. 05 (f) The employer shall deduct the contributions under (a) and (e) of this 06 section from the member's salary at the end of each payroll period, and the 07 contributions shall be credited by the plan to the member contribution account. The 08 contributions shall be deducted from employee compensation before the computation 09 of applicable federal taxes and shall be treated as employer contributions under 26 10 U.S.C. 414(h)(2). A member may not have the option of making the payroll deduction 11 directly in cash instead of having the contribution picked up by the employer. 12 * Sec. 6. AS 14.25.130(c) is repealed and reenacted to read: 13 (c) A disabled member receiving a benefit under this section shall undergo a 14 medical examination as often as the administrator considers advisable, but not more 15 frequently than once each year. The administrator shall determine the place of the 16 examination and engage the physician or physicians. If the administrator determines 17 that the examination indicates that the disabled member is no longer incapacitated 18 because of a total and apparently permanent occupational disability, the administrator 19 may not issue further disability benefits to the disabled member. 20 * Sec. 7. AS 14.25.130 is amended by adding a new subsection to read: 21 (g) A person who first becomes a member after June 30, 2006, and who is 22 appointed to disability benefits shall, within 30 days after the date disability benefits 23 commence, provide the administrator with proof that the member has applied for 24 enrollment in a vocational rehabilitation program approved by the administrator. 25 Unless the member demonstrates cause, the benefits terminate at the end of the first 26 month in which the member 27 (1) fails to provide the administrator with the required proof of 28 application for enrollment; 29 (2) is certified by the administrator as failing to enroll in or cooperate 30 with a vocational rehabilitation program approved under this subsection; 31 (3) fails to interview for a job; or
01 (4) fails to accept a job offered. 02 * Sec. 8. AS 14.25.168(d) is amended to read: 03 (d) A benefit recipient who first became a member before July 1, 2006, or 04 the benefit recipient's surviving spouse may elect major medical insurance coverage 05 in accordance with regulations and under the following conditions: 06 (1) a benefit recipient [PERSON] who has less than 25 years of 07 membership service and who is younger than 60 years of age must pay an amount 08 equal to the full monthly group premium for retiree major medical insurance coverage; 09 (2) a disabled member, a disabled member who is appointed to normal 10 retirement, a person 60 years of age or older, or a person who has at least 25 years of 11 membership service is not required to make premium payments. 12 * Sec. 9. AS 14.25.168 is amended by adding new subsections to read: 13 (g) A benefit recipient, or the surviving spouse of a benefit recipient, who first 14 becomes a member after June 30, 2006, may elect major medical insurance coverage 15 that was in effect before July 1, 2006, in accordance with this section and applicable 16 regulations and under the following conditions: 17 (1) if the participating member or surviving spouse is not eligible for 18 Medicare, the cost of a monthly premium for retiree major medical insurance coverage 19 elected under this section is equal to the full monthly group premium for retiree major 20 medical insurance coverage; 21 (2) if the participating member or surviving spouse is eligible for 22 Medicare, the cost of a monthly premium for retiree major medical insurance coverage 23 is a percentage of the full monthly group premium, as follows: 24 (A) 30 percent if the member had 10 or more, but less than 15, 25 years of service; 26 (B) 25 percent if the member had 15 or more, but less than 20, 27 years of service; 28 (C) 20 percent if the member had 20 or more, but less than 25, 29 years of service; 30 (3) the cost of a monthly premium paid by the participating member or 31 the surviving spouse for retiree major medical insurance coverage is
01 (A) 15 percent of the full monthly group premium if the 02 participating member has 25 or more, but less than 30, years of service; 03 (B) 10 percent of the full monthly group premium if the 04 participating member has 30 or more years of service; 05 (4) a disabled member or a disabled member who is appointed to 06 normal retirement is not required to make premium payments. 07 (h) On or after July 1, 2026, and every five years thereafter, the administrator 08 shall adjust the percentages under (g)(2) and (3) of this section as needed to maintain, 09 but not to exceed, over the succeeding five years, an employer normal cost rate for 10 persons who first became participating members after June 30, 2006, and the surviving 11 spouses of those persons that does not exceed the combined total of the rates under 12 AS 14.25.350(a), (b), (d), and (e) minus the employer normal cost rate attributable to 13 persons who first became participating members after June 30, 2006, for benefits 14 under AS 14.25.009 - 14.25.167. An adjustment made under this subsection shall 15 remain in effect for five years. In making an adjustment under this subsection, the 16 administrator shall maintain the five percent differences between the percentages in 17 (g)(2)(A), (B), and (C) of this section and the five percent differences between the 18 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 election made under (a) of this section by an eligible teacher who is 22 married may not take effect unless the election is signed by the teacher's spouse. An 23 eligible teacher whose accounts are subject to a qualified domestic relations order may 24 not make an election to participate in the defined contribution retirement plan under 25 this section unless the qualified domestic relations order is amended or vacated and 26 court-certified copies of the order are received by the administrator. 27 * Sec. 13. AS 14.25.485(h) is repealed and reenacted to read: 28 (h) A member who is appointed to disability benefits shall, within 30 days 29 after the date disability benefits commence, provide the administrator with proof that 30 the member has applied for enrollment in a vocational rehabilitation program 31 approved by the administrator. Unless the member demonstrates cause, the benefits
01 terminate at the end of the first month in which the member 02 (1) fails to provide the administrator with the required proof of 03 application for enrollment; 04 (2) is certified by the administrator as failing to enroll in or cooperate 05 with a vocational rehabilitation program approved under this subsection; 06 (3) fails to interview for a job; or 07 (4) fails to accept a job offered. 08 * Sec. 14. AS 39.35.095 is repealed and reenacted to read: 09 Sec. 39.35.095. Applicability of AS 39.35.095 - 39.35.680. (a) The provisions 10 of AS 39.35.095 - 39.35.680 apply to public employees who are eligible to be 11 members of the public employees' retirement system under AS 39.35.095 - 39.35.680 12 and are not members of the defined contribution retirement plan under AS 39.35.700 - 13 39.35.990. 14 (b) A public organization or a municipality or other political subdivision of the 15 state that participates in the plan shall also participate in the defined contribution 16 retirement plan under AS 39.35.700 - 39.35.990. 17 * Sec. 15. AS 39.35 is amended by adding a new section to read: 18 Sec. 39.35.128. Participation of elected officials of political subdivisions. (a) 19 Except as provided in (b) of this section, a person who is an elected official of a 20 political subdivision of the state and who, before July 1, 2021, has neither participated 21 in the plan nor waived participation in the plan becomes a member of the plan if 22 (1) the political subdivision has elected under AS 39.35.600 - 23 39.35.650 to designate elected officials in the classifications of employees entitled to 24 participate in the plan; and 25 (2) the elected official receives compensation from the political 26 subdivision for services as an elected official in the amount of at least $2,001 a month. 27 (b) An elected official entitled to participate under this section, and who either 28 has no previous service under the system with the political subdivision or is retired 29 under the system, may file a waiver of participation in the plan with the administrator 30 within 30 days after the later of July 1, 2021, or the date that the elected official's term 31 of office begins. A waiver is irrevocable for the remainder of the elected official's
01 service as an elected official or employee of the political subdivision. 02 * Sec. 16. AS 39.35.160(a) is amended to read: 03 (a) Except as provided in (e) of this section, beginning [BEGINNING] 04 January 1, 1987, each peace officer or firefighter shall contribute to the plan an 05 amount equal to seven and one-half percent of the peace officer's or firefighter's 06 compensation. Except as provided in (d) and (e) of this section, beginning January 1, 07 1987, each other employee shall contribute to the plan an amount equal to six and 08 three-quarters percent of the employee's compensation. [THE CONTRIBUTIONS 09 SHALL BE DEDUCTED BY THE EMPLOYER AT THE END OF EACH 10 PAYROLL PERIOD. THE CONTRIBUTIONS SHALL BE DEDUCTED FROM 11 EMPLOYEE COMPENSATION BEFORE COMPUTATION OF APPLICABLE 12 FEDERAL TAXES, AND THE CONTRIBUTIONS SHALL BE TREATED AS 13 EMPLOYER CONTRIBUTIONS UNDER 26 U.S.C. 414(h)(2). A MEMBER MAY 14 NOT HAVE THE OPTION OF MAKING THE PAYROLL DEDUCTION 15 DIRECTLY INSTEAD OF HAVING THE CONTRIBUTION PICKED UP BY THE 16 EMPLOYER.] 17 * Sec. 17. AS 39.35.160 is amended by adding new subsections to read: 18 (e) Except as provided in (d) of this section, an employee, including a peace 19 officer or firefighter, who first participates in the plan after June 30, 2006, shall 20 contribute to the plan an amount equal to eight percent of the employee's 21 compensation. 22 (f) Contributions under (a) and (e) of this section shall be deducted by the 23 employer at the end of each payroll period. The contributions shall be deducted from 24 employee compensation before computation of applicable federal taxes, and the 25 contributions shall be treated as employer contributions under 26 U.S.C. 414(h)(2). A 26 member may not have the option of making the payroll deduction directly instead of 27 having the contribution picked up by the employer. 28 * Sec. 18. AS 39.35.400(e) is amended to read: 29 (e) A disabled employee receiving a nonoccupational disability benefit shall 30 provide the administrator, within one year after appointment to disability benefits and 31 once within each year thereafter until disability benefits are denied or cease, with
01 proof that the disabled employee has applied [OF CONTINUING ELIGIBILITY] to 02 receive disability payments under the Social Security Act. If the disabled employee is 03 otherwise ineligible for a social security payment, the employee shall provide the 04 administrator with sufficient medical evidence once each year to demonstrate that 05 disability payments under the Social Security Act would be payable had the employee 06 been otherwise eligible. If the disabled employee fails to provide the administrator 07 with evidence of continuing eligibility for disability payments under the Social 08 Security Act or other medical evidence required by the administrator within 30 days 09 following each anniversary date, the disability benefits from the plan shall cease. If 10 that information is subsequently provided to the administrator, benefit payments will 11 resume beginning for the month following that in which the information is provided. 12 When disability payments under the Social Security Act cease, it is the responsibility 13 of the disabled employee to notify the administrator immediately. 14 * Sec. 19. AS 39.35.410 is amended by adding a new subsection to read: 15 (k) A person who first becomes an employee after June 30, 2006, and who is 16 appointed to disability benefits shall, within 30 days after the date disability benefits 17 commence, provide the administrator with proof that the employee has applied for 18 enrollment in a vocational rehabilitation program approved by administrator. Unless 19 the employee demonstrates cause, the benefits terminate at the end of the first month 20 in which the employee 21 (1) fails to provide the administrator with the required proof of 22 application for enrollment; 23 (2) is certified by the administrator as failing to enroll in or cooperate 24 with a vocational rehabilitation program approved under this subsection; 25 (3) fails to interview for a job; or 26 (4) fails to accept a job offered. 27 * Sec. 20. AS 39.35.535(c) is amended to read: 28 (c) A benefit recipient may elect major medical insurance coverage in 29 accordance with regulations and under the following conditions: 30 (1) a person who first became a member before July 1, 2006, or the 31 surviving spouse of the person, other than a disabled member or a disabled member
01 who is appointed to normal retirement, must pay an amount equal to the full monthly 02 group premium for retiree major medical insurance coverage if the person is 03 (A) younger than 60 years of age and has less than 04 (i) 25 years of credited service as a peace officer under 05 AS 39.35.360 and 39.35.370; or 06 (ii) 30 years of credited service under AS 39.35.360 and 07 39.35.370 that is not service as a peace officer; or 08 (B) of any age and has less than 10 years of credited service; 09 (2) a person who first became a member before July 1, 2006, or the 10 surviving spouse of the person is not required to make premium payments for retiree 11 major medical insurance coverage if the person 12 (A) is a disabled member; 13 (B) is a disabled member who is appointed to normal 14 retirement; 15 (C) is 60 years of age or older and has at least 10 years of 16 credited service; or 17 (D) has at least 18 (i) 25 years of credited service as a peace officer under 19 AS 39.35.360 and 39.35.370; or 20 (ii) 30 years of credited service under AS 39.35.360 and 21 39.35.370 not as a peace officer; 22 (3) a person who first becomes a member after June 30, 2006, or 23 the surviving spouse of the person shall, except as provided in (4) and (5) of this 24 subsection, pay an amount equal to the full monthly group premium for retiree 25 major medical insurance coverage; however, except as provided in (4) and (5) of 26 this subsection, if the member or surviving spouse is eligible for Medicare, the 27 cost of a monthly premium is a percentage of the full monthly group premium, as 28 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 person who first 07 becomes a member after June 30, 2006, or the surviving spouse of the person 08 shall pay a monthly premium that is 09 (A) 15 percent of the cost of a full monthly group premium 10 if the member has 25 or more, but less than 30, years of service as a peace 11 officer; or 12 (B) 10 percent of the cost of a full monthly group premium 13 if the member has 30 or more years of service; 14 (5) a person who first becomes a member after June 30, 2006, is 15 not required to make premium payments for retiree major medical coverage if 16 the person 17 (A) is a disabled member; or 18 (B) is a disabled member who is appointed to normal 19 retirement; 20 (6) on or after July 1, 2026, and every five years thereafter, the 21 administrator shall adjust the percentages under (3) and (4) of this subsection as 22 needed to maintain, but not to exceed, over the succeeding five years, an 23 employer normal cost rate for persons who first became members after June 30, 24 2006, and the surviving spouses of those persons that does not exceed the 25 combined total of the rates under AS 39.35.750(a), (b), (d), and (e) minus the 26 employer normal cost rate attributable to the persons who first became members 27 after June 30, 2006, for benefits under AS 39.35.095 - 39.35.530; an adjustment 28 made under this paragraph shall remain in effect for five years; in making an 29 adjustment under this paragraph, the administrator shall maintain the five 30 percent differences between the percentages in (3)(A), (B), (C), and (D) of this 31 subsection and the five percent differences between the percentages in (4)(A) and
01 (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 election made under (a) of this section by an eligible employee who is 26 married may not take effect unless the election is signed by the employee's spouse. An 27 eligible employee whose accounts are subject to a qualified domestic relations order 28 may not make an election to participate in the defined contribution retirement plan 29 under this section unless the qualified domestic relations order is amended or vacated 30 and court-certified copies of the order are received by the administrator. 31 * Sec. 26. AS 39.35.890(j) is repealed and reenacted to read:
01 (j) A member who is appointed to disability benefits shall, within 30 days after 02 the date disability benefits commence, provide the administrator with proof that the 03 member has applied for enrollment in a vocational rehabilitation program approved by 04 the administrator. Unless the member demonstrates cause, the benefits terminate at the 05 end of the first month in which the member 06 (1) fails to provide the administrator with the required proof of 07 application for enrollment; 08 (2) is certified by the administrator as failing to enroll in or cooperate 09 with a vocational rehabilitation program approved under this subsection; 10 (3) fails to interview for a job; or 11 (4) fails to accept a job offered. 12 * Sec. 27. AS 14.25.012(c), 14.25.540; AS 39.35.940, and 39.35.957(b) are repealed. 13 * Sec. 28. The uncodified law of the State of Alaska is amended by adding a new section to 14 read: 15 RETIREMENT PLAN ELECTION CHOICE. (a) A teacher who was first hired after 16 June 30, 2006, and before the effective date of this section and who is a member of the 17 defined contribution plan of the teachers' retirement system under AS 14.25.310 - 14.25.590 18 may make a one-time election, within 90 days after the effective date of this section, to 19 participate in the defined benefit retirement plan under AS 14.25.009 - 14.25.220 and to 20 transfer all contributions, including employer contributions, that have been made or should be 21 made to the defined contribution retirement plan for service the member completes before the 22 effective date of the member's participation in the defined benefit retirement plan. 23 (b) A public employee who was first hired after June 30, 2006, and before the 24 effective date of this section and who is a member of the defined contribution plan of the 25 public employees' retirement system under AS 39.35.700 - 39.35.990 may make a one-time 26 election, within 90 days after the effective date of this section, to participate in the defined 27 benefit retirement plan under AS 39.35.095 - 39.35.680 and to transfer all contributions, 28 including employer contributions, that have been made or should be made to the defined 29 contribution retirement plan for any service the member completes before the effective date of 30 the member's participation in the defined benefit retirement plan. 31 * Sec. 29. The uncodified law of the State of Alaska is amended by adding a new section to
01 read: 02 RETIREMENT PLAN ELECTION PROCEDURE. (a) An election made under sec. 03 28 of this Act to participate in the defined benefit retirement plan under AS 14.25.009 - 04 14.25.220 or AS 39.35.095 - 39.35.680 must be made in writing on one or more forms and in 05 the manner prescribed by the administrator. Before an eligible member makes an election 06 under sec. 28 of this Act, the administrator shall provide to the member 07 (1) written notice of the member's eligibility; and 08 (2) information about potential consequences of the member's election, 09 including calculations that illustrate the effect of changing the member's retirement plan from 10 the defined contribution retirement plan to the defined benefit retirement plan. 11 (b) An election made under sec. 28 of this Act to participate in the defined benefit 12 retirement plan is irrevocable. On the effective date of the election, an eligible member who 13 makes the election shall be enrolled as a member of the defined benefit retirement plan, the 14 member's participation in the plan shall be governed by the provisions for the defined benefit 15 retirement plan, and the member's participation in the defined contribution retirement plan 16 shall terminate. The member's enrollment in the defined benefit retirement plan shall be 17 effective retroactive to the date of hire. An election made by an eligible member who is 18 married is not effective unless the election is signed by the member's spouse. 19 (c) When an eligible member makes a one-time election under sec. 28 of this Act, the 20 administrator shall cause the total amount of the member's employee and employer 21 contributions, with investment earnings and losses through the final day of the member's 22 participation as a member in the defined contribution retirement plan, to be actuarially 23 calculated and, subject to (d) of this section, transferred to the pension fund in the defined 24 benefit retirement plan. On the effective date of the member's participation in the defined 25 benefit retirement plan, the member shall be credited with service in the defined benefit 26 retirement plan that is equal to the member's service in years, including fractional years, 27 recognized for computing benefits that may be due from the defined contribution retirement 28 plan. The board shall establish transfer procedures by regulation, but the actual transfer may 29 not be later than 30 days after the date the administrator receives the member's completed 30 election forms under (a) of this section, unless the major financial markets for securities 31 available for a transfer are seriously disrupted by an unforeseen event that also causes the
01 suspension of trading on any national securities exchange in the country where the securities 02 were issued. In that event, the 30-day period may be extended by a resolution of the board. 03 Transfers are not commissionable or subject to other fees and may be in the form of securities 04 or cash as determined by the board. Securities shall be valued on the date of receipt in the 05 member's account. 06 (d) If the value actuarially calculated under (c) of this section is insufficient to pay for 07 a service credit equal to the member's actual service, the administrator shall allow the member 08 to create an indebtedness up to the amount needed to eliminate the insufficiency; however, if 09 that value exceeds the amount needed to pay for a service credit equal to the member's actual 10 service, the administrator shall cause the excess to be paid to the employee as a rollover 11 transfer to either an individual employee annuity account in the Department of Administration 12 under the terms of AS 39.30.150 - 39.30.180 (State of Alaska Supplemental Annuity Plan) or, 13 if the member's employer does not participate in the State of Alaska Supplemental Annuity 14 Plan, to an eligible retirement plan as defined in AS 14.25.360(d) or AS 39.35.760(d). An 15 excess under this subsection may not be used to purchase service credit in a retirement plan 16 administered under AS 14.25 or AS 39.35. 17 (e) The provisions of this section are subject to the requirements of the Internal 18 Revenue Code and the limitations under AS 14.25.010, 14.25.320(c) and (d), 14.25.490, 19 AS 39.35.115, 39.35.678, 39.35.710(c) and (d), and 39.35.895. 20 (f) In this section, 21 (1) "administrator" means the commissioner of administration or the person 22 designated by the commissioner of administration under AS 39.35.003 for a public 23 employees' retirement plan and under AS 14.25.003 for a teachers' retirement plan; 24 (2) "board" means the Alaska Retirement Management Board established 25 under AS 37.10.210; 26 (3) "defined benefit retirement plan" means the retirement plan established 27 under 28 (A) AS 14.25.009 - 14.25.220 for a teacher; or 29 (B) AS 39.35.095 - 39.35.680 for a public employee; 30 (4) "defined contribution retirement plan" means the retirement plan 31 established under
01 (A) AS 14.25.310 - 14.25.590 for a teacher; or 02 (B) AS 39.35.700 - 39.35.990 for a public employee; 03 (5) "Internal Revenue Code" has the meaning given in AS 39.35.990. 04 * Sec. 30. The uncodified law of the State of Alaska is amended by adding a new section to 05 read: 06 ADOPTION OF REGULATIONS. The commissioner of administration shall adopt 07 regulations necessary to implement the changes made by this Act. The regulations take effect 08 under AS 44.62 (Administrative Procedure Act), but not before the effective date of the law 09 implemented by the regulation. 10 * Sec. 31. Sections 29 and 30 of this Act take effect immediately under AS 01.10.070(c). 11 * Sec. 32. Except as provided in sec. 31 of this Act, this Act takes effect July 1, 2021.