Legislature(2007 - 2008)
2007-04-25 House Journal
Full Journal pdf2007-04-25 House Journal Page 0912 SB 123 The following was read the second time: CS FOR SENATE BILL NO. 123(FIN) "An Act relating to the public employees' and teachers' defined benefit retirement plans; relating to the public employees' and teachers' defined contribution retirement plans; relating to the judicial retirement system; relating to the health reimbursement arrangement plan for certain teachers and public employees; relating to the supplemental employee benefit program; relating to the public employees' deferred compensation program; relating to group insurance for public employees and retirees; making conforming amendments; and providing for an effective date." with the: Journal Page FIN RPT HCS(FIN) 5DP 4NR 849 FN2: ZERO(ADM) 849 FN3: (ADM) 849 Representative Samuels moved and asked unanimous consent that the following committee substitute be adopted in lieu of the original bill: HOUSE CS FOR CS FOR SENATE BILL NO. 123(FIN) (same title) There being no objection, it was so ordered. 2007-04-25 House Journal Page 0913 Amendment No. 1 was offered by Representative Doll: Page 8, line 30, through page 9, line 12: Delete all material and insert: "* Sec. 16. AS 14.25.310 is amended to read: Sec. 14.25.310. Applicability of AS 14.25.310 - 14.25.590. The provisions of AS 14.25.310 - 14.25.590 apply only to (1) teachers who first become members on or after July 1, 2006, and before the effective date of this bill section and who have not elected under sec. 123 of this Act to be members of the defined benefit retirement plan established in AS 14.25.009 - 14.25.220; (2) teachers who first become members on or after the effective date of this bill section and who have elected under AS 14.25.335 to be members of the defined contribution retirement plan established in AS 14.25.310 - 14.25.590 or are precluded by AS 14.25.335(e) from making an election under AS 14.25.335; (3) members who are employed by employers that do not participate in the defined benefit retirement plan established under AS 14.25.009 - 14.25.220; or (4) [TO] members who transfer into the defined contribution retirement plan under AS 14.25.540. * Sec. 17. AS 14.25.310, as amended by sec. 16 of this Act, is amended to read: Sec. 14.25.310. Applicability of AS 14.25.310 - 14.25.590. The provisions of AS 14.25.310 - 14.25.590 apply only to (1)teachers who first become members on or after July 1, 2006, and before the effective date of this bill section and who have not elected under sec. 123 of this Act to be members of the defined benefit retirement plan established in AS 14.25.009 - 14.25.220; (2) teachers who first become members on or after the effective date of this bill section and who have elected under AS 14.25.335 to be members of the defined contribution retirement plan established in AS 14.25.310 - 14.25.590 or are precluded by AS 14.25.335(e) from making an election under AS 14.25.335; (3) members who are employed by employers that do not participate in the defined benefit retirement plan established under 2007-04-25 House Journal Page 0914 AS 14.25.009 - 14.25.220; (4) former members under AS 14.25.220; or (5) [(4)] members who transfer into the defined contribution retirement plan under AS 14.25.540." Page 9, following line 19: Insert new bill sections to read: "* Sec. 19. AS 14.25.330(a) is amended to read: (a) Except as provided in AS 14.25.310, a [A] teacher who first becomes a member on or after July 1, 2006, shall participate in the system [PLAN] as a member of the defined benefit [CONTRIBUTION] retirement plan established in AS 14.25.009 - 14.25.220. * Sec. 20. AS 14.25 is amended by adding a new section to read: Sec. 14.25.335. Election to participate in defined benefit or defined contribution plan. (a) Except as provided in (e) of this section, a person who has not previously been eligible for benefits under the teachers' retirement system who becomes eligible on or after the effective date of this bill section may, within 30 days after becoming eligible to elect a benefit plan, elect to enroll in either the defined benefit retirement plan or the defined contribution retirement plan. An election made under this section is irrevocable. Except as provided in (e) of this section, a person who is eligible to make an election under this subsection and fails to make an election is considered to have elected to enroll in the defined benefit retirement plan. (b) The election allowed under this section must be made in writing on forms and in the manner prescribed by the administrator. Before accepting an election under this section, the administrator shall provide the employee with information to clearly inform the employee of the potential consequences of each of the employee's options. (c) Upon making an election under this section to enroll in the defined benefit retirement plan, or upon failure to make an election under this section within 30 days after becoming eligible to elect a benefit plan, the employee shall be enrolled as a member of the defined benefit retirement plan, and the employee's participation in the system shall be governed by the provisions of AS 14.25.009 - 14.25.220. (d) Upon making an election under this section to enroll in 2007-04-25 House Journal Page 0915 the defined contribution retirement plan, the employee shall be enrolled as a member of the defined contribution retirement plan, and the employee's participation in the plan shall be governed by the provisions of AS 14.25.310 - 14.25.590. (e) A member may be enrolled in the defined benefit retirement plan under (c) of this section only if the member's employer participates in both the defined benefit retirement plan and the defined contribution retirement plan. (f) In this section, (1) "defined benefit retirement plan" means the retirement plan established in AS 14.25.009 - 14.25.220; (2) "defined contribution retirement plan" means the retirement plan established in AS 14.25.310 - 14.25.590." Renumber the following bill sections accordingly. Page 35, line 28, through page 36, line 10: Delete all material and insert: "* Sec. 82. AS 39.35.700 is amended to read: Sec. 39.35.700. Applicability of AS 39.35.700 - 39.35.990. The provisions of AS 39.35.700 - 39.35.990 apply only to (1) members first hired on or after July 1, 2006, and before the effective date of this bill section and who have not elected under sec. 123 of this Act to be members of the defined benefit retirement plan established in AS 39.35.095 - 39.35.680; (2) persons who first became members on or after the effective date of this bill section and who have elected under AS 39.35.722 to be members of the defined contribution retirement plan established in AS 39.35.700 - 39.35.990 or are precluded by AS 39.35.722(e) from making an election under AS 39.35.722; (3) members who are employed by employers that do not participate in the defined benefit retirement plan established under AS 39.35.095 - 39.35.680; or (4) [TO] members who transfer into the defined contribution plan under AS 39.35.940. * Sec. 83. AS 39.35.700, as amended by sec. 82 of this Act, is amended to read: Sec. 39.35.700. Applicability of AS 39.35.700 - 39.35.990. 2007-04-25 House Journal Page 0916 The provisions of AS 39.35.700 - 39.35.990 apply only to (1)members first hired on or after July 1, 2006, and before the effective date of this bill section and who have not elected under sec. 123 of this Act to be members of the defined benefit retirement plan established in AS 39.35.095 - 39.35.680; (2) persons who first became members on or after the effective date of this bill section and who have elected under AS 39.35.722 to be members of the defined contribution retirement plan established in AS 39.35.700 - 39.35.990 or are precluded by AS 39.35.722(e) from making an election under AS 39.35.722; (3) members who are employed by employers that do not participate in the defined benefit retirement plan established under AS 39.35.095 - 39.35.680; (4) former members under AS 39.35.680; or (5) [(4)] members who transfer into the defined contribution plan under AS 39.35.940." Page 36, following line 19: Insert new bill sections to read: "* Sec. 85. AS 39.35.720 is amended to read: Sec. 39.35.720. Membership. Except as provided in AS 39.35.700, an [AN] employee who becomes a member on or after July 1, 2006, shall participate in the system as a member of the defined benefit plan set out in AS 39.35.095 - 39.35.680 [AS 39.35.700 - 39.35.990]. * Sec. 86. AS 39.35 is amended by adding a new section to read: Sec. 39.35.722. Election to participate in defined benefit or defined contribution plan. (a) Except as provided in (e) of this section, a person who has not previously been eligible for benefits under the public employees' retirement system who becomes eligible on or after the effective date of this bill section may, within 30 days after becoming eligible to elect a benefit plan, elect to enroll in either the defined benefit retirement plan or the defined contribution retirement plan. An election made under this section is irrevocable. A person who is eligible to make an election under this subsection and fails to make an election is considered to have elected to enroll in the defined benefit retirement plan. (b) The election allowed under this section must be made in 2007-04-25 House Journal Page 0917 writing on forms and in the manner prescribed by the administrator. Before accepting an election under this section, the administrator must provide the employee with information to clearly inform the employee of the potential consequences of each of the employee's options. (c) Upon making an election under this section to enroll in the defined benefit retirement plan, or upon failure to make an election under this section within 30 days after becoming eligible to elect a benefit plan, the employee shall be enrolled as a member of the defined benefit retirement plan, and the employee's participation in the system shall be governed by the provisions of AS 39.35.095 - 39.35.680. (d) Upon making an election under this section to enroll in the defined contribution retirement plan, the employee shall be enrolled as a member of the defined contribution retirement plan, and the employee's participation in the plan shall be governed by the provisions of AS 39.35.700 - 39.35.990. (e) A member may be enrolled in the defined benefit retirement plan under (c) of this section only if the member's employer participates in both the defined benefit retirement plan and the defined contribution retirement plan. (f) In this section, (1) "defined benefit retirement plan" means the retirement plan established in AS 39.35.095 - 39.35.680; (2) "defined contribution retirement plan" means the retirement plan established in AS 39.35.700 - 39.35.990." Renumber the following bill sections accordingly. Page 54, line 20: Delete "sec. 20" Insert "sec. 22" Page 54, line 29: Delete "sec. 50" Insert "sec. 52" Page 55, lines 5 - 7: Delete all material and insert: "* Sec. 123. The uncodified law of the State of Alaska is amended 2007-04-25 House Journal Page 0918 by adding a new section to read: RETIREMENT PLAN ELECTION OPTION. (a) A teacher who was hired on or after July 1, 2006, and before the effective date of this section and who is an active member of the defined contribution plan of the teachers' retirement system under AS 14.25.310 - 14.25.590 may make a one-time election before October 1, 2007, or within 90 days after the effective date of this section, whichever is later, to participate in the defined benefit retirement plan under AS 14.25.009 - 14.25.220 and to transfer any contributions, including employer contributions, made to the defined contribution plan before that date. (b) A public employee who was hired on or after July 1, 2006, and before the effective date of this section and who is an active member of the defined contribution plan of the public employees' retirement system under AS 39.35.700 - 39.35.990 may make a one time election before October 1, 2007, or within 90 days after the effective date of this section, whichever is later, to participate in the defined benefit retirement plan under AS 39.35.095 - 39.35.680 and to transfer any contributions, including employer contributions, made to the defined contribution plan before that date. (c) The election to participate in the defined benefit retirement plan under this section must be made in writing on forms and in the manner prescribed by the administrator. Before accepting an election to participate in the defined benefit retirement plan, the administrator shall provide the employee planning on making an election to participate in the defined benefit retirement plan with information, including calculations to illustrate the effect of moving the employee's retirement plan from the defined contribution retirement plan to the defined benefit retirement plan as well as other information to clearly inform the employee of the potential consequences of the employee's election. (d) An election made under this section to participate in the defined benefit retirement plan is irrevocable. On making the election, the participant shall be enrolled as a member of the defined benefit retirement plan, the member's participation in the plan shall be governed by the provisions for the defined benefit retirement plan, and the member's participation in the defined contribution retirement plan shall terminate. The participant's enrollment in the defined benefit retirement plan shall be effective the first day of the month after the administrator receives the completed enrollment forms. An election made by an eligible member who is married is not effective unless the 2007-04-25 House Journal Page 0919 election is signed by the individual's spouse. (e) As directed by the participant, the board shall transfer or cause to be transferred the appropriate amounts to the designated account. The administrator shall credit the participant with a service credit that is equal to the participant's actual service or the actuarially calculated value of the employer and employee contribution transferred, whichever is less. The board shall establish transfer procedures by regulation, but the actual transfer may not be later than 30 days after the effective date of the member's participation in the defined benefit retirement plan unless the major financial markets for securities available for a transfer are seriously disrupted by an unforeseen event that also causes the suspension of trading on any national securities exchange in the country where the securities were issued. In that event, the 30-day period of time may be extended by a resolution of the board. Transfers are not commissionable or subject to other fees and may be in the form of securities or cash as determined by the board. Securities shall be valued on the date of receipt in the participant's account. (f) A person may make an election under this section only if the person's employer participates in both the applicable defined benefit retirement plan and the applicable defined contribution retirement plan. (g) In this section, (1) "active member" means an employee who is employed by an employer, is receiving compensation for seasonal, permanent full- time, or permanent part-time services, and is, on the effective date of this section, making contributions to the defined contribution retirement plan under AS 14.25.310 - 14.25.590 or AS 39.35.700 - 39.35.990, as applicable; (2) "administrator" means the person serving as administrator under AS 14.25.003 for a teachers' retirement plan or the person appointed or designated by the commissioner of administration under AS 39.35.050 for a public employees' retirement plan; (3) "board" means the Alaska Retirement Management Board established under AS 37.10.210; (4) "defined benefit retirement plan" means the retirement plan established under AS 14.25.009 - 14.25.220 or AS 39.35.095 - 39.35.680, as applicable; (5) "defined contribution retirement plan" means the retirement plan established under AS 14.25.310 - 14.25.590 or 2007-04-25 House Journal Page 0920 AS 39.35.700 - 39.35.990, as applicable; (6) "employer," (A) as applied to an active member of the plan under AS 14.25.310 - 14.25.590, has the meaning given in AS 14.25.590; and (B) as applied to an active member of the plan under AS 39.35.700 - 39.35.990, has the meaning given in AS 39.35.990. * Sec. 124. Sections 5, 6, 17, 62, 70, 71, 83, and 120(b) of this Act take effect July 1, 2010. * Sec. 125. Except as provided in sec. 124 of this Act, this Act takes effect immediately under AS 01.10.070(c)." Representative Doll moved and asked unanimous consent that Amendment No. 1 be adopted. Representative Kelly objected. The question being: "Shall Amendment No. 1 be adopted?" The roll was taken with the following result: HCS CSSB 123(FIN) Second Reading Amendment No. 1 YEAS: 15 NAYS: 21 EXCUSED: 4 ABSENT: 0 Yeas: Buch, Cissna, Crawford, Doll, Doogan, Edgmon, Gara, Gardner, Gruenberg, Guttenberg, Holmes, Kawasaki, LeDoux, Lynn, Salmon Nays: Chenault, Coghill, Dahlstrom, Fairclough, Foster, Gatto, Harris, Hawker, Johansen, Johnson, Kelly, Meyer, Neuman, Olson, Ramras, Roses, Samuels, Seaton, Stoltze, Thomas, Wilson Excused: Joule, Kerttula, Kohring, Nelson And so, Amendment No. 1 was not adopted. Representative Samuels moved and asked unanimous consent that HCS CSSB 123(FIN) be considered engrossed, advanced to third reading, and placed on final passage. 2007-04-25 House Journal Page 0921 There was objection. HCS CSSB 123(FIN) will advance to third reading on tomorrow's calendar.