00 SENATE CS FOR CS FOR HOUSE BILL NO. 335(FIN) 01 "An Act relating to information contained in retirement system records; relating 02 to retirement boards; relating to procedures and hearings under state retirement 03 systems; relating to benefits for reemployed retired members of retirement 04 systems; relating to eligibility for normal retirement for members of the 05 teachers' retirement system who have Alaska BIA credited service; relating to 06 disability benefits for members of state retirement systems; relating to deduction 07 of premiums from retirement benefits; relating to protection of, and assignment 08 and transfer of, amounts held in retirement systems; relating to retirement 09 benefits for certain employees earning high salaries; relating to qualified domestic 10 relations orders in state retirement systems; relating to the definition of 11 'retirement fund' in the teachers' retirement system; relating to membership of 12 state employees in the teachers' retirement system; relating to refund of 13 contributions made to the judicial retirement system or to the former elected 14 public officers retirement system and repayment of refunded contributions in 01 those systems; relating to self-insurance and excess loss insurance for persons 02 receiving benefits from a state retirement system; relating to participation of 03 elected officials in the public employees' retirement system; relating to the level 04 income option benefit under the public employees' retirement system; relating 05 to participation of employees of political subdivisions and public organizations 06 in the public employees' retirement system; relating to crimes for defrauding a 07 state retirement system; relating to the definition of 'pension fund' in the public 08 employees' retirement system; relating to calculation of years of service and of 09 benefits under the public employees' retirement system for noncertificated 10 employees of certain educational employers; and relating to individual accounts 11 maintained for members of the former elected public officers retirement system." 12 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 13 * Section 1. AS 09.25 is amended by adding a new section to read: 14 Sec. 09.25.151. Confidentiality of retirement records. (a) Except as 15 provided in (b) - (d) of this section, public records, including electronic services and 16 products involving public records, containing information about a person and 17 maintained under AS 14.25, AS 22.25, AS 26.05.222 - 26.05.229, AS 39.35, or former 18 AS 39.37 shall be kept confidential and are not subject to inspection or copying under 19 AS 09.25.110 - 09.25.120. 20 (b) Records described in (a) of this section concerning a person who is a 21 member or former member of a state retirement system who is still living may only 22 be released to 23 (1) the person or the person's guardian; 24 (2) the person's employer or former employer; 25 (3) a state agency authorized to obtain confidential information; 26 (4) another person if the person has 27 (A) written authorization for release from the affected member 28 or former member or the member's or former member's guardian; or 29 (B) a court order or subpoena to obtain the information. 30 (c) Records described in (a) of this section concerning a member or former 31 member of a state retirement system who is deceased or a deceased member's named 01 beneficiary may only be released to 02 (1) the member's named beneficiary or the beneficiary's guardian; 03 (2) the member's or former member's former employer; 04 (3) a state agency authorized to obtain confidential information; 05 (4) the personal representative of the member's or former member's 06 estate; 07 (5) another person if the person has 08 (A) written authorization for release from the member or former 09 member, the member's named beneficiary, or the personal representative of the 10 member's or former member's estate; or 11 (B) a court order or subpoena to secure the information. 12 (d) The name and address of a living person who is a member or former 13 member of a state retirement system may be released to a retirement organization 14 representing persons receiving benefits under a state retirement system if the retirement 15 organization is affiliated with an organization representing employees of the employer 16 under AS 23.40.070 - 23.40.260 (Public Employment Relations Act). 17 (e) In this section, "state retirement system" means the teachers' retirement 18 system under AS 14.25, the judicial retirement system under AS 22.25, the retirement 19 system for members of the national guard under AS 26.05.222 - 26.05.229, the public 20 employees' retirement system under AS 39.35, or the elected public officers retirement 21 system under former AS 39.37. 22 * Sec. 2. AS 14.25.035(a) is amended to read: 23 (a) There is established the Alaska Teachers' Retirement Board as follows: 24 (1) the governor shall appoint five members for overlapping three-year 25 terms; one member must be a resident who is receiving retirement benefits under this 26 chapter; statewide teacher organizations may submit to the governor a list of 27 recommended nominees to serve on the board; 28 (2) the governor shall appoint two physicians authorized to practice 29 medicine in the state to serve as members of the board and two physicians 30 authorized to practice medicine in the state to serve as alternate members to the 31 physician members of the board; the physicians are members of the board only 01 for the purpose of hearing appeals to determine medical eligibility for disability 02 benefits under AS 14.25.130; [THE GOVERNOR SHALL APPOINT TWO 03 PHYSICIANS EACH FROM AT LEAST TWO OF THE STATE'S FOUR JUDICIAL 04 DISTRICTS;] the Public Employees' Retirement Board and the Teachers' Retirement 05 Board may submit to the governor a list of recommended physicians to serve on the 06 board; if the administrator, after making a reasonable effort to secure the 07 participation of two physicians to serve on a disability appeal, is unable to do so, 08 the board may hear the appeal with the participation of only one physician or 09 alternate, in which case, for purposes of a quorum, the board shall be considered 10 to have only one physician as a member; [THE TWO PHYSICIAN MEMBERS 11 FROM THE JUDICIAL DISTRICT IN WHICH A DISABILITY APPEAL HEARING 12 IS CONDUCTED SHALL SERVE ON THE BOARD DURING THE HEARING; IF 13 ONE OR MORE OF THE PHYSICIANS IN THE JUDICIAL DISTRICT IN WHICH 14 A DISABILITY HEARING IS CONDUCTED IS UNABLE TO SERVE AT THE 15 HEARING, OR IF THERE IS NO PHYSICIAN MEMBER FROM THAT JUDICIAL 16 DISTRICT, OTHER PHYSICIAN MEMBERS SHALL SERVE AT THE HEARING, 17 SELECTED FOR SUCH HEARINGS ON A ROTATING BASIS, IN ACCORDANCE 18 WITH REGULATIONS ADOPTED BY THE BOARD;] physician members and 19 alternates serve at the pleasure of the governor. 20 * Sec. 3. AS 14.25.035(b) is amended to read: 21 (b) Members of the board appointed under (a)(1) of this section are entitled 22 to receive [DO NOT RECEIVE COMPENSATION] for their services on the 23 retirement board an honorarium equal to the honorarium provided to trustees of 24 the Alaska State Pension Investment Board under AS 37.10.250 . Physician 25 members of the board are entitled to hourly compensation for their services at a rate 26 to be determined by the commissioner of administration. The rate of compensation 27 shall be consistent with the physicians' normal hourly earnings. All members of the 28 board are entitled to travel expenses and per diem authorized for boards and 29 commissions under AS 39.20.180 [WHEN IT IS NECESSARY TO TRAVEL]. 30 * Sec. 4. AS 14.25.035(f) is amended to read: 31 (f) The board shall meet at the call of the chair [CHAIRMAN], any three 01 members, or at the request of the commissioner of administration. The board may 02 adopt regulations defining a quorum for the conduct of its business, including 03 appeals and disability appeals. 04 * Sec. 5. AS 14.25 is amended by adding a new section to read: 05 Sec. 14.25.037. Hearings. (a) The board shall adopt regulations establishing 06 procedures for the conduct of hearings and appeals under this chapter. 07 (b) In the conduct of a hearing under this chapter, the board may issue 08 subpoenas, administer oaths, compel the attendance and testimony of witnesses, compel 09 the taking of depositions and the submission of affidavits, and compel the production 10 of documents and records. The board's powers under this subsection do not extend 11 to prehearing discovery. However, upon good cause shown, the board may permit the 12 preservation of witness testimony if the board cannot successfully compel the witness 13 to attend a hearing. The board may authorize hearing officers to conduct hearings 14 under this chapter and issue decisions; the decision of a hearing officer may be 15 appealed to the board. The board shall adopt procedures for appeals from a hearing 16 officer's decision. 17 (c) A majority of a quorum of the board may issue a ruling or modification 18 of a ruling. If the board's vote on an appeal under this chapter is a tie vote of those 19 members present and voting, the decision being appealed is affirmed. The board, by 20 regulation, shall establish procedures for the reconsideration of a ruling issued under 21 this chapter. A request for reconsideration is timely if it is received within 30 days 22 after the initial ruling was issued. 23 (d) An aggrieved party may appeal a final decision to the superior court. 24 * Sec. 6. AS 14.25.043 is amended to read: 25 Sec. 14.25.043. Reemployment of retired members. If a retired member 26 again becomes an active member, benefit payments may not be made during the period 27 of reemployment. The retirement benefit must be suspended for the entire school year 28 if the teacher is reemployed as an active teacher for a period equivalent to a year of 29 service. During the period of reemployment, deductions from the member's salary will 30 be made in accordance with AS 14.25.050. Upon subsequent retirement, the retired 31 member is entitled to receive an additional benefit based on the credited service and 01 the average base salary during the period of reemployment in accordance with 02 AS 14.25.110. If the initial benefit payments to which the retired member is 03 eligible have been actuarially reduced because the member retired early under 04 AS 14.25.110(b), the member shall also receive an incremental benefit based on 05 the amount of the actuarial reduction imposed by AS 14.25.110(j) on the first 06 benefit and the length of time that the employee was reemployed and not 07 receiving retirement benefits. The amount of the incremental benefit is equal to 08 the difference between the normal retirement benefit to which the member would 09 have been entitled had the member taken a normal retirement and the early 10 retirement benefit that the member has been receiving based on the member's 11 initial period of employment multiplied by the total number of months that the 12 member did not receive retirement benefits because of reemployment and that 13 amount actuarially adjusted to be paid over the expected lifetime of the member. 14 * Sec. 7. AS 14.25.110(a) is amended to read: 15 (a) Subject to AS 14.25.167, a member is eligible for a normal retirement 16 benefit if the member 17 (1) was first hired before July 1, 1975, has attained the age of 55 years, 18 and has at least 15 years of credited service, the last five of which have been 19 membership service or is otherwise vested in the system; 20 (2) has attained the age of 60 years and has at least eight years of 21 membership service; 22 (3) has attained the age of 60 years, has at least five years of 23 membership service, and has [AT LEAST THREE YEARS OF] Alaska BIA service 24 which, when added to the membership service, will equal at least eight years ; 25 (4) has at least 25 years of credited service, the last five of which have 26 been membership service; 27 (5) has at least 20 years of membership service; 28 (6) has at least 20 years of combined membership service and Alaska 29 BIA service, the last five of which have been membership service; or 30 (7) has, for each of 20 school years, 31 (A) at least one-half year of membership service as a part-time 01 teacher; 02 (B) one full year of membership service as a full-time teacher; 03 or 04 (C) any combination of service qualified under this paragraph. 05 * Sec. 8. AS 14.25.130(d) is amended to read: 06 (d) The amount of the disability benefit is equal to 50 percent of the member's 07 base salary immediately before becoming disabled. The disability benefit is increased 08 by 10 percent of the member's base salary immediately before becoming disabled 09 for each dependent child, up to a maximum of four dependent children. 10 * Sec. 9. AS 14.25.130 is amended by adding a new subsection to read: 11 (f) A member is not entitled to a disability benefit under this section unless 12 the member files a timely application for the benefit with the administrator. The 13 application is timely if it is filed by the later of six months after the date that the 14 member's disability began or 90 days after the termination of the member's 15 employment. The board may waive a filing deadline under this subsection if there are 16 extraordinary circumstances that resulted in the inability to meet the filing deadline. 17 The board may delegate the authority to waive a filing deadline under this subsection 18 to the administrator. 19 * Sec. 10. AS 14.25.168(b) is amended to read: 20 (b) After an election of coverage under this section, major medical insurance 21 coverage takes effect on the same date as retirement benefits begin and stops when the 22 member or survivor is no longer eligible to receive a monthly benefit. The coverage 23 for persons age 65 or older is the same as that available for persons under age 65. 24 The benefits payable to those persons age 65 or older supplement any benefits 25 provided under the federal old age, survivors and disability insurance program. The 26 medical premium and optional insurance premiums owed by a member or 27 survivor shall be deducted from the benefit owed to the member or survivor 28 before payment of the benefit. 29 * Sec. 11. AS 14.25.175(b) is amended to read: 30 (b) In order to obtain consideration of a waiver under this section, the affected 31 member or beneficiary must appeal to the board in writing within 30 days after receipt 01 of notice that the records have been adjusted. [THE BOARD SHALL RULE ON AN 02 APPEAL WITHIN 120 DAYS AFTER ITS RECEIPT.] The ruling of the board shall 03 be in writing. 04 * Sec. 12. AS 14.25.175(c) is amended to read: 05 (c) The board may [, AT ITS DISCRETION,] conduct a hearing on an appeal 06 under this section. [IN REACHING A DECISION ON AN APPEAL, THE BOARD 07 MAY ISSUE SUBPOENAS, ADMINISTER OATHS, AND COMPEL THE 08 ATTENDANCE AND TESTIMONY OF WITNESSES, THE TAKING OF 09 DEPOSITIONS, THE SUBMISSION OF AFFIDAVITS, AND THE PRODUCTION 10 OF DOCUMENTS AND RECORDS.] 11 * Sec. 13. AS 14.25.200(a) is amended to read: 12 (a) Except as provided in AS 29.45.030(a)(1) or in (c) of this section , member 13 contributions and other amounts held in the system on behalf of a member or other 14 person who is or may become eligible for benefits under the system are exempt from 15 Alaska state and municipal taxes and are not subject to anticipation, alienation, sale, 16 transfer, assignment, pledge, encumbrance, or charge of any kind, either voluntary or 17 involuntary, before they are received by the person entitled to the amount under the 18 terms of the system . Any [, AND ANY] attempt to anticipate, alienate, sell, transfer, 19 assign, pledge, encumber, charge, or otherwise dispose of any right to amounts accrued 20 in the system is void. However, a member's right to receive benefits or the member 21 contribution account may be assigned 22 (1) under a qualified domestic relations order; [OR] 23 (2) to a trust or similar legal device that meets the requirements for a 24 Medicaid-qualifying trust under AS 47.07.020(f) and 42 U.S.C. 1396p(d)(4) ; or 25 (3) as provided in (c) of this section . 26 * Sec. 14. AS 14.25.200 is amended by adding a new subsection to read: 27 (c) An inactive member may elect to have the taxable portion of the member 28 contribution account transferred directly to another plan or an individual retirement 29 arrangement that is qualified under the federal Internal Revenue Code and that accepts 30 the transfer. 31 * Sec. 15. AS 14.25.210 is amended to read: 01 Sec. 14.25.210. Penalty for false statements. A person who [WILFULLY 02 OR] knowingly makes a false statement, or falsifies or permits to be falsified any 03 record of this [THE RETIREMENT] system , in an attempt to defraud this system , 04 is guilty of a class A misdemeanor and [, UPON CONVICTION, IS PUNISHABLE 05 BY A FINE OF NOT MORE THAN $500 OR BY IMPRISONMENT FOR NOT 06 MORE THAN SIX MONTHS, OR BY BOTH, AND] forfeits all rights under this 07 chapter. 08 * Sec. 16. AS 14.25.210 is amended by adding a new subsection to read: 09 (b) In this section, "knowingly" has the meaning given in AS 11.81.900(a). 10 * Sec. 17. AS 14.25.220(6) is amended to read: 11 (6) "base salary" 12 (A) means the total remuneration payable under contract for a 13 full year of membership service, including addenda to the contract but, for a 14 member first hired on or after July 1, 1996, does not include remuneration 15 in excess of the limitations set out in 26 U.S.C. 401(a)(17) ; 16 (B) has the same meaning as "compensation" under 17 AS 39.35.680(8) when applied to a state legislator who elects membership 18 under AS 14.25.040(b); 19 * Sec. 18. AS 14.25.220(31) is amended to read: 20 (31) "qualified domestic relations order" means a divorce or dissolution 21 judgment under AS 25.24, including an order approving a property settlement, that 22 (A) creates or recognizes the existence of an alternate payee's 23 right to, or assigns to an alternate payee the right to, receive all or a portion of 24 the member contribution account or benefits payable with respect to a 25 member; 26 (B) sets out the name and last known mailing address, if any, 27 of the member and of each alternate payee covered by the order; 28 (C) sets out the amount or percentage of the member's benefit, 29 or of any survivor's benefit, to be paid to the alternate payee, or sets out the 30 manner in which that amount or percentage is to be determined; 31 (D) sets out the number of payments or period to which the 01 order applies; 02 (E) does not require any type or form of benefit or any option 03 not otherwise provided by this chapter; 04 (F) does not require an increase of benefits in excess of the 05 amount provided by this chapter, determined on the basis of actuarial value; 06 and 07 (G) does not require the payment, to an alternate payee, of 08 benefits that are required to be paid to another alternate payee under another 09 order previously determined to be a qualified domestic relations order; 10 * Sec. 19. AS 14.25.220(35) is amended to read: 11 (35) "retirement fund" or "fund" means the fund in which the assets of 12 the system , including income and interest derived from the investment of money, 13 are deposited and held; 14 * Sec. 20. AS 14.25.220(40) is amended to read: 15 (40) "teacher" or "member" means a person eligible to participate in 16 the system and who is covered by the system, limited to 17 (A) a certificated full-time or part-time elementary or secondary 18 teacher, a certificated school nurse, or a certificated person in a position 19 requiring a teaching certificate as a condition of employment in a public school 20 of the state or in the Department of Education and Early Development ; 21 (B) [THE COMMISSIONER OF EDUCATION AND EARLY 22 DEVELOPMENT AND ALL SUPERVISORY POSITIONS IN THE 23 DEPARTMENT OF EDUCATION AND EARLY DEVELOPMENT; 24 (C)] a full-time or part-time teacher of the University of Alaska 25 or a person occupying a full-time administrative position at the University of 26 Alaska that requires academic standing; the approval of the administrator must 27 be obtained before an administrative position qualifies for membership in the 28 system; however, a teacher or administrative person at the university who is 29 participating in the optional university retirement program under AS 14.40.661 30 - 14.40.799 is not a member under this system; 31 (C) [(D)] a state legislator who elects membership under 01 AS 14.25.040(b); 02 * Sec. 21. AS 22.25.020 is amended to read: 03 Sec. 22.25.020. Retirement pay. A retired justice or judge eligible for 04 retirement pay shall receive from the date of eligibility until death monthly 05 compensation equal to five percent per year of service, to a maximum of 75 percent, 06 of the monthly salary authorized for justices and judges, respectively, at the time each 07 retirement payment is made. For a justice or judge who was first employed in this 08 retirement system on or after July 1, 1996, base annual salary does not include 09 remuneration in excess of the limitations set out in 26 U.S.C. 401(a)(17) (Internal 10 Revenue Code). 11 * Sec. 22. AS 22.25.041 is amended to read: 12 Sec. 22.25.041. Refund of contributions. (a) Except as provided in (c) of 13 this section, a [A] justice or judge who vacates office for any reason and who has not 14 then accrued five years of creditable service under this chapter is entitled to receive 15 a refund of the total amount of contributions, including principal and interest 16 payments on indebtedness, together with interest credited on the amount. To receive 17 credit for an earlier period of service under AS 22.25.010(f), [IF] a justice or judge 18 who has received a refund of contributions and who returns to active service [, THE 19 JUSTICE OR JUDGE] shall repay in full, before appointment to retirement, 20 [WITHIN ONE YEAR] the refunded contributions with interest at the prevailing rate 21 [TO RECEIVE CREDIT FOR THE EARLIER PERIOD OF SERVICE UNDER 22 AS 22.25.010(f)]. 23 (b) A justice or judge whose contributions have been involuntarily refunded 24 because of a levy under AS 09.38.065 or because of a federal tax levy may repay 25 the amount levied together with accrued interest whether or not the justice or judge is 26 on active service. Repayments shall be made under (a) of this section. 27 * Sec. 23. AS 22.25.041 is amended by adding new subsections to read: 28 (c) A justice or judge whose rights to a refund are subject to a qualified 29 domestic relations order is entitled to receive a refund of the total amount of 30 contributions, together with interest credited on the amount, only if the present spouse 31 of the justice or judge, if any, and each person entitled under the order consent to the 01 refund in writing on a form provided by the administrator. The administrator may 02 waive written consent from the person entitled to benefits under the order if the 03 administrator determines that the person cannot be located or for other reasons 04 established by regulation. The administrator may waive written consent from the 05 spouse if the administrator determines that 06 (1) the justice or judge was not married to the spouse during any period 07 of the justice's or judge's employment under this chapter; 08 (2) the spouse has no right to benefits under this chapter because of the 09 terms of a qualified domestic relations order; 10 (3) the spouse cannot be located; 11 (4) the justice or judge and spouse have been married for less than two 12 years and the justice or judge establishes that they are not cohabiting; or 13 (5) another reason established by regulation exists. 14 (d) Except as provided in this subsection and in AS 29.45.030(a)(1), amounts 15 held in the system on behalf of a justice or judge or other person who is or may 16 become eligible for benefits under the system are exempt from Alaska state and 17 municipal taxes and are not subject to anticipation, alienation, sale, transfer, 18 assignment, pledge, encumbrance, or charge of any kind, either voluntary or 19 involuntary, before they are received by the person entitled to the amount under the 20 terms of the system, and any attempt to anticipate, alienate, sell, transfer, assign, 21 pledge, encumber, charge, or otherwise dispose of any right to amounts accrued in the 22 system is void. However, 23 (1) the right of a justice or judge to receive benefits or the contributions 24 and interest may be assigned 25 (A) under a qualified domestic relations order; or 26 (B) to a trust or similar legal device that meets the requirements 27 for a Medicaid-qualifying trust under AS 47.07.020(f) and 42 U.S.C. 1396p(d)(4); 28 (2) a justice or judge may elect to have the taxable portion of the 29 qualifying distributions transferred directly to another qualified plan or an individual 30 retirement account that accepts the transfer. 31 * Sec. 24. AS 22.25.090(b) is amended to read: 01 (b) Except as provided in (d) of this section, major medical insurance coverage 02 takes effect on the same date as retirement benefits begin [,] and stops when the retired 03 person or survivor is no longer eligible to receive a monthly benefit. The coverage for 04 persons age 65 or older is the same as that available for persons under 65 years of 05 age . The benefits payable to those persons age 65 or older supplement any benefits 06 provided under the federal old age, survivors, and disability insurance program. The 07 medical premium and optional insurance premiums owed by a retired person or 08 survivor shall be deducted from the benefit payable to the retired person or 09 survivor before payment of the benefit. 10 * Sec. 25. AS 22.25.900 is amended to read: 11 Sec. 22.25.900. Definition. In this chapter, "qualified domestic relations 12 order" means a divorce or dissolution judgment under AS 25.24, including an order 13 approving a property settlement, that 14 (1) creates or recognizes the existence of an alternate payee's right to, 15 or assigns to an alternate payee the right to, receive all or a portion of the member 16 contributions and interest or benefits payable with respect to a justice or judge; 17 (2) sets out the name and last known mailing address, if any, of the 18 justice or judge and of each alternate payee covered by the order; 19 (3) sets out the amount or percentage of the justice's or judge's benefit, 20 or of any survivor's benefit, to be paid to the alternate payee, or sets out the manner 21 in which that amount or percentage is to be determined; 22 (4) sets out the number of payments or period to which the order 23 applies; 24 (5) does not require any type or form of benefit or any option not 25 otherwise provided by this chapter; 26 (6) does not require an increase of benefits in excess of the amount 27 provided by this chapter, determined on the basis of actuarial value; 28 (7) does not require the payment, to an alternate payee, of benefits that 29 are required to be paid to another alternate payee under another order previously 30 determined to be a qualified domestic relations order. 31 * Sec. 26. AS 26.05.224 is amended by adding new subsections to read: 01 (g) Except as provided in this subsection or AS 29.45.030(a)(1), amounts held 02 in the system on behalf of a member or other person who is or may become eligible 03 for benefits under the system are exempt from Alaska state and municipal taxes and 04 are not subject to anticipation, alienation, sale, transfer, assignment, pledge, 05 encumbrance, or charge of any kind, either voluntary or involuntary, before they are 06 received by the person entitled to the amount under the terms of the system, and any 07 attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, charge, or 08 otherwise dispose of any right to amounts accrued in the system is void. However, 09 (1) a member's right to receive benefits or the member contribution 10 account may be assigned 11 (A) under a qualified domestic relations order; or 12 (B) to a trust or similar legal device that meets the requirements 13 for a Medicaid-qualifying trust under AS 47.07.020(f) and 42 U.S.C. 14 1396p(d)(4); 15 (2) a member may elect to have the taxable portion of the qualifying 16 distributions transferred directly to another plan or individual retirement arrangement 17 qualified under the federal Internal Revenue Code. 18 (h) Amounts held in the system and benefits payable under this section are 19 exempt from garnishment, execution, or levy as provided in AS 09.38 (Alaska 20 Exemptions Act). 21 * Sec. 27. AS 39.30.091 is amended to read: 22 Sec. 39.30.091. Authorization for self-insurance and excess loss insurance. 23 Notwithstanding AS 21.86.310 or AS 39.30.090, the Department of Administration 24 may provide, by means of self-insurance, one or more of the benefits listed in 25 AS 39.30.090(a)(1) for state employees eligible for the benefits by law or under a 26 collective bargaining agreement and for persons receiving benefits under AS 14.25, 27 AS 22.25, AS 39.35, or former AS 39.37, and their dependents . The department 28 shall procure any necessary excess loss insurance under AS 39.30.090. 29 * Sec. 28. AS 39.35.030(b) is repealed and reenacted to read: 30 (b) Three public members are appointed by the governor to serve at the 31 pleasure of the governor for six-year staggered terms. One of the public members 01 must be or have been employed by an employer other than the State of Alaska. The 02 governor shall fill a vacancy in an unexpired appointive term by appointment for the 03 remainder of the term. 04 * Sec. 29. AS 39.35.030(c) is amended to read: 05 (c) Two members of the board must be members of the system elected by [A 06 MAJORITY OF THE VOTES CAST BY] members of the system. Elections shall be 07 conducted by the board. The candidate who receives the most votes cast in the 08 election is elected to the seat. If two seats are to be filled at the election, the 09 candidate who receives the most votes cast and the candidate who receives the 10 next most votes cast are elected to the seats. The term of office of an elected 11 member is six years. The governor shall fill a [A] vacancy in an unexpired elective 12 term by appointment for the period remaining before the next regularly scheduled 13 election held under this subsection [SHALL BE FILLED BY ELECTION FOR A 14 NEW SIX-YEAR TERM]. 15 * Sec. 30. AS 39.35.030(d) is amended to read: 16 (d) The governor shall appoint two physicians authorized to practice medicine 17 in the state to serve as members of the board and two physicians authorized to 18 practice medicine in the state to serve as alternate members to the physician 19 members of the board. The physicians are members of the board only for the 20 purpose of hearing appeals to determine medical eligibility for disability benefits under 21 AS 39.35.400 and 39.35.410. If the administrator, after making a reasonable effort 22 to secure the participation of two physician members or alternates to serve on a 23 disability appeal, is unable to do so, the board may hear the appeal with the 24 participation of only one physician member or alternate, in which case, for 25 purposes of a quorum, the board shall be considered to have only one physician 26 as a member [THE GOVERNOR SHALL APPOINT TWO PHYSICIANS EACH 27 FROM AT LEAST TWO OF THE STATE'S FOUR JUDICIAL DISTRICTS]. The 28 Public Employees' Retirement Board and the Teachers' Retirement Board may submit 29 to the governor a list of recommended physicians to serve on the board. [THE TWO 30 PHYSICIAN MEMBERS FROM THE JUDICIAL DISTRICT IN WHICH A 31 DISABILITY APPEAL HEARING IS CONDUCTED SHALL SERVE ON THE 01 BOARD DURING THE HEARING. IF ONE OR MORE OF THE PHYSICIANS IN 02 THE JUDICIAL DISTRICT IN WHICH A DISABILITY HEARING IS 03 CONDUCTED IS UNABLE TO SERVE AT THE HEARING, OR IF THERE IS NO 04 PHYSICIAN MEMBER FROM THAT JUDICIAL DISTRICT, OTHER PHYSICIAN 05 MEMBERS SHALL SERVE AT THE HEARING, SELECTED FOR SUCH 06 HEARINGS ON A ROTATING BASIS, IN ACCORDANCE WITH REGULATIONS 07 ADOPTED BY THE BOARD.] Physician members serve at the pleasure of the 08 governor. 09 * Sec. 31. AS 39.35.030(e) is amended to read: 10 (e) Members of the board appointed under [IDENTIFIED IN] (b) of this 11 section or elected under (c) of this section are entitled to [DO NOT] receive 12 [COMPENSATION] for their services on the retirement board an honorarium equal 13 to the honorarium provided to trustees of the Alaska State Pension Investment 14 Board under AS 37.10.250 . Physician members of the board are entitled to hourly 15 compensation for their services at a rate to be determined by the commissioner of 16 administration. The rate of compensation shall be consistent with the physicians' 17 normal hourly earnings. All members of the board are entitled to travel expenses and 18 per diem when it is necessary to travel. 19 * Sec. 32. AS 39.35.040 is amended to read: 20 Sec. 39.35.040. Powers and duties of board. The Public Employees 21 Retirement Board has the following powers and duties: 22 (1) to hold regular meetings and special meetings considered necessary; 23 all meetings are open to the public , and the board keeps a full record of all its 24 proceedings; the board may, by regulation, define a quorum for the conduct of its 25 business, including appeals and disability appeals; 26 (2) to adopt, with modifications it considers proper, regulations 27 recommended by the administrator for carrying out this chapter; 28 (3) to consider and adopt resolutions on matters referred to it by the 29 administrator in connection with changes in policy and revisions of this chapter; 30 (4) to act as an appeals board, hold hearings at the request of an 31 employer, employee, surviving spouse , or a beneficiary on decisions made by the 01 administrator, and submit its findings to the administrator; 02 (5) to have prepared, at least biennially, an actuarial valuation of the 03 total obligations under the system of each employer and, on the basis of the valuation 04 and in time for incorporation of the results in the state budget, to certify to the 05 appropriate budgetary authorities of each employer: 06 (A) an appropriate contribution rate for all employers; and 07 (B) an amount appropriate for each employer to liquidate the 08 employee's past service liability; the board shall have an actuarial and financial 09 experience analysis of the system conducted at appropriate intervals, but no less 10 frequently than once every six years; the actuarial valuations and the actuarial 11 and financial experience analysis shall be prepared and certified by a member 12 of the American Academy of Actuaries; 13 (6) to prescribe the policies for the proper operation of the system and 14 carry on other activities that are considered necessary to carry out the intent and 15 purpose of the system in accordance with this chapter; 16 (7) to prescribe the rate of interest that shall be credited to the 17 employee accounts each year; 18 (8) to waive the requirements of AS 39.35.520 in accordance with 19 AS 39.35.522; 20 (9) to exercise the duties set out in AS 39.30.155 with respect to the 21 supplemental employee benefit program under AS 39.30.150 - 39.30.180; 22 (10) to exercise the duties set out in AS 39.45.025 with respect to the 23 deferred compensation program for state employees; 24 (11) to adopt regulations for the election of trustees to the Alaska State 25 Pension Investment Board and for removal from the investment board of trustees 26 elected from the system ; 27 (12) to adopt a contribution surcharge under AS 39.35.160(c) . 28 * Sec. 33. AS 39.35 is amended by adding a new section to read: 29 Sec. 39.35.077. Hearings. (a) The board shall adopt regulations establishing 30 procedures for the conduct of hearings and appeals under this chapter. 31 (b) In the conduct of a hearing under this chapter, the board may issue 01 subpoenas, administer oaths, compel the attendance and testimony of witnesses, compel 02 the taking of depositions and the submission of affidavits, and compel the production 03 of documents and records. The board's powers under this subsection do not extend 04 to prehearing discovery. However, upon good cause shown, the board may permit the 05 preservation of witness testimony if the board cannot successfully compel the witness 06 to attend a hearing. The board may authorize hearing officers to conduct hearings 07 under this chapter and issue decisions; the decision of a hearing officer may be 08 appealed to the board. The board shall adopt procedures for appeals from a hearing 09 officer's decision. 10 (c) A majority of a quorum of the board may issue a ruling or modification 11 of a ruling. If the board's vote on an appeal under this chapter is a tie vote of those 12 members present and voting, the decision being appealed is affirmed. The board, by 13 regulation, shall establish procedures for the reconsideration of a ruling issued under 14 this chapter. A request for reconsideration is timely if it is received within 30 days 15 after the initial ruling was issued. 16 (d) An aggrieved party may appeal a final decision to the superior court. 17 * Sec. 34. AS 39.35.125(a) is amended to read: 18 (a) An elected official of the state or of a political subdivision of the state 19 if the political subdivision has elected under AS 39.35.550 - 39.35.650 to designate 20 elected officials in the classifications of employees entitled to participate in the 21 system is included in the system unless the official files a written waiver of coverage 22 with the administrator. A waiver under this subsection waives coverage of future 23 employment as an elected official, regardless of any change of employer. An elected 24 official may file a waiver under this subsection at any time after election to office, 25 including the period before taking the oath of office. An elected official may revoke 26 a waiver under this subsection by filing a written revocation with the administrator. 27 A revocation under this subsection operates prospectively only, and the elected official 28 may not receive credited service for service as an elected official while the waiver was 29 in effect. There is no limit on the number of times an elected official may file a 30 waiver or revocation under this subsection. 31 * Sec. 35. AS 39.35.150 is amended to read: 01 Sec. 39.35.150. Re-employment of retired employees. If a retired employee 02 subsequently becomes an active member, benefit payments may not be made during 03 the period of re-employment. During the period of re-employment, deductions from 04 the employee's salary shall be made in accordance with AS 39.35.160. Upon 05 subsequent retirement, the retired employee is entitled to receive an additional pension 06 based on the credited service and the average monthly compensation earned during the 07 period of re-employment in accordance with AS 39.35.370. If the initial benefit 08 payments to which the retired member is eligible have been reduced because the 09 member retired early under AS 39.35.370(b) or increased because the member 10 elected to receive a level income option benefit under former AS 39.35.460, the 11 member shall also receive an incremental benefit based on the amount of the 12 reduction imposed by AS 39.35.370(b) or the increase under former AS 39.35.460 13 on the first benefit and the length of time that the employee was reemployed and 14 not receiving retirement benefits. The amount of the incremental benefit is equal 15 to the difference between the normal retirement benefit to which the member 16 would have been entitled had the member taken a normal retirement and the 17 early retirement benefit or benefit under the level income option that the member 18 has been receiving based on the member's initial period of employment multiplied 19 by the total number of months that the member did not receive retirement 20 benefits because of reemployment and that amount actuarially adjusted to be paid 21 over the expected lifetime of the member. In the case of a member who selected 22 benefits under the level income option, the total number of months may not 23 include any month in which the member was 65 years of age or older. 24 * Sec. 36. AS 39.35.160(c) is amended to read: 25 (c) An employee who has made an [IRREVOCABLE] election under 26 AS 39.35.300(c) or 39.35.310(c) to have the employee's years of service as a 27 noncertificated employee of a state boarding school, of a school district or regional 28 educational attendance area, of the special education service agency, or of the Alaska 29 Vocational Technical Center determined by reference to AS 14.25.220 shall pay a 30 contribution surcharge for that service. The amount of the surcharge is the difference 31 between the amount the employer would have had to contribute under AS 39.35.250 - 01 39.35.290 for the employee when treating the employee's credited service as service 02 earned under AS 39.35.300(c) or 39.35.310(c) less the amount the employer would 03 have had to contribute under AS 39.35.250 - 39.35.290 without treating the employee's 04 credited service as service earned under AS 39.35.300(c) or 39.35.310(c). 05 * Sec. 37. AS 39.35.300(c) is amended to read: 06 (c) A noncertificated employee of the Alaska Vocational Technical Center or 07 a state boarding school who first becomes a member of the system on or after July 1, 08 1999, may, within 90 days after the employee first joins the system, make an 09 [IRREVOCABLE] election under this subsection to have the years of service that the 10 employee earns as a noncertificated employee determined using the table for service 11 on or after July 1, 1969, that is set out in the definition of "year of service" in 12 AS 14.25.220. A noncertificated employee of the Alaska Vocational Technical Center 13 or a state boarding school who is an active member of the system on July 1, 1999, 14 may, within 180 days after July 1, 1999, make the [IRREVOCABLE] election. A 15 member of the system who is an inactive member on July 1, 1999, and who is later 16 employed as a noncertificated employee of the Alaska Vocational Technical Center or 17 a state boarding school may, within 90 days after beginning the subsequent 18 employment, make the [IRREVOCABLE] election. An election under this subsection 19 is irrevocable except as provided in (d) of this section and shall be made in writing 20 on a form provided by the administrator. The election applies to the employee's 21 service earned for the school year in which the election is accepted by the 22 administrator and applies to all subsequent employment as a noncertificated employee 23 of a state boarding school, a school district or regional educational attendance area, the 24 special education service agency, or the Alaska Vocational Technical Center. An 25 employee who makes an election under this subsection shall pay the contribution 26 surcharge as set out in AS 39.35.160(c). 27 * Sec. 38. AS 39.35.300 is amended by adding new subsections to read: 28 (d) A noncertificated employee who has made an election under (c) of this 29 section and who thereafter changes employment status from working for less than a 30 full year, whether part-time or full time, to working for a full year, whether part-time 31 or full-time, may, between July 1 and September 30, revoke the election and cease 01 payment of the contribution surcharge. A revocation under this subsection is 02 retroactive to July 1 of the school year, as defined in AS 14.25.220, in which the 03 revocation is made. 04 (e) A noncertificated employee who has not made an election under (c) of this 05 section who changes employment status from working for a full year, whether part- 06 time or full-time, to working for less than a full year, whether part-time or full-time, may, 07 between July 1 and September 30, make the election and begin paying the contribution 08 surcharge. The election is retroactive to July 1 of the school year, as defined in AS 14.25.220, 09 in which the election is made. 10 * Sec. 39. AS 39.35.310(c) is amended to read: 11 (c) A noncertificated employee of a school district, a regional educational 12 attendance area, or the special education service agency who first becomes a member 13 of the system on or after July 1, 1999, may, within 90 days after the employee first 14 joins the system, make an [IRREVOCABLE] election under this subsection to have 15 the years of service that the employee earns as a noncertificated employee determined 16 using the table for service on or after July 1, 1969, that is set out in the definition of 17 "year of service" in AS 14.25.220. A noncertificated employee of a school district, a 18 regional educational attendance area, or the special education service agency who is 19 an active member of the system on July 1, 1999, may, within 180 days after July 1, 20 1999, make the [IRREVOCABLE] election. A member of the system who is an 21 inactive member on July 1, 1999, and who later is employed as a noncertificated 22 employee of a school district, a regional educational attendance area, or the special 23 education service agency may, within 90 days after beginning the subsequent 24 employment, make the [IRREVOCABLE] election. An election under this subsection 25 is irrevocable except as provided in (d) of this section and shall be made in writing 26 on a form provided by the administrator. The election applies to the employee's 27 service earned for the school year in which the election is accepted by the 28 administrator and applies to all subsequent employment as a noncertificated employee 29 of a state boarding school, a school district or regional educational attendance area, the 30 special education service agency, or the Alaska Vocational Technical Center. An 31 employee who makes an election under this subsection shall pay the contribution 01 surcharge as set out in AS 39.35.160(c). 02 * Sec. 40. AS 39.35.310 is amended by adding new subsections to read: 03 (d) A noncertificated employee who has made an election under (c) of this 04 section and who thereafter changes employment status from working for less than a 05 full year, whether part-time or full-time, to working for a full year, whether part-time 06 or full-time, may, between July 1 and September 30, revoke the election and cease 07 payment of the contribution surcharge. A revocation under this subsection is 08 retroactive to the beginning of the school year, as defined in AS 14.25.220, in which 09 the revocation was made. 10 (e) A noncertificated employee who has not made an election under (c) of this 11 section who changes employment status from working for a full year, whether part- 12 time or full-time, to working for less than a full year may, between July 1 and September 30, 13 make the election and begin paying the contribution surcharge. The election is retroactive to 14 July 1 of the school year, as defined in AS 14.25.220, in which the election was made. 15 * Sec. 41. AS 39.35.400(a) is amended to read: 16 (a) An employee is eligible for a nonoccupational disability benefit if the 17 employee's employment is terminated because of a total and apparently permanent 18 nonoccupational disability, as defined in AS 39.35.680, before the employee's normal 19 retirement date and after five or more years of credited service. A member is not 20 entitled to a nonoccupational disability benefit under this section unless the 21 member files an application for the benefit with the administrator within 90 days 22 after the member terminated employment. The board may waive a filing deadline 23 if there are extraordinary circumstances that resulted in the inability to meet the 24 deadline. The board may delegate the authority to waive a filing deadline under 25 this subsection to the administrator. 26 * Sec. 42. AS 39.35.410(f) is amended to read: 27 (f) An employee is not entitled to an occupational disability benefit unless the 28 employee files an application for it with the administrator [WITHIN SIX MONTHS 29 AFTER THE DATE OF THE ACCIDENT, IF DISABILITY IS ATTRIBUTABLE TO 30 AN ACCIDENT, WITHIN SIX MONTHS AFTER THE DATE THE DISABILITY 31 BEGINS IF THE DISABILITY IS CAUSED BY AN OCCUPATIONAL DISEASE, 01 OR] within 90 [30] days of the date of terminating employment [, WHICHEVER IS 02 LATER. IF THE DISABILITY IS ATTRIBUTABLE TO AN ACCIDENT, THE 03 EMPLOYEE SHALL FILE A NOTICE OF THE ACCIDENT WITH THE 04 ADMINISTRATOR WITHIN 30 DAYS FOLLOWING THE DATE IT OCCURRED. 05 THIS 30-DAY FILING PERIOD IS SUSPENDED FOR THE TIME THE 06 EMPLOYEE'S CONDITION PREVENTS FILING]. If the employee is unable to meet 07 a filing requirement of this subsection, it may be waived by the Public Employees' 08 Retirement Board if there are extraordinary circumstances that resulted in the 09 employee's inability to meet the filing requirement. The board may delegate the 10 authority to waive a filing deadline under this subsection to the administrator 11 [FOR CAUSE]. 12 * Sec. 43. AS 39.35.450(a) is amended to read: 13 (a) Benefits payable under this section are in place of benefits payable under 14 AS 39.35.370, 39.35.385, and former AS 39.35.460. Upon filing an application with 15 the administrator or when a disabled employee first attains eligibility for normal 16 retirement under AS 39.35.400(f) or 39.35.410(h), the employee shall designate the 17 person who is the employee's spouse at the time of appointment to retirement as the 18 contingent beneficiary. However, if the designation of the spouse is revoked under (c) 19 of this section, the employee may designate a dependent approved by the administrator 20 as the contingent beneficiary or may take normal or early retirement under 21 AS 39.35.370 or 39.35.385 or, if the employee was first hired before July 1, 1996, 22 benefit payments under the level income option under former AS 39.35.460 . The 23 administrator shall pay benefits under the option elected by the employee. The 24 employee may elect an option that provides that [(1)] the employee is entitled to 25 receive a reduced benefit payable for life, and, after the employee's death, the 26 contingent beneficiary is entitled to payments in the amount of 27 (1) 75 percent of the reduced benefit payable for life; or 28 (2) [THE EMPLOYEE IS ENTITLED TO RECEIVE A REDUCED 29 BENEFIT PAYABLE FOR LIFE, AND, AFTER THE EMPLOYEE'S DEATH, THE 30 CONTINGENT BENEFICIARY IS ENTITLED TO RECEIVE PAYMENTS IN THE 31 AMOUNT OF] 50 percent of the reduced benefit payable for life. 01 * Sec. 44. AS 39.35.500 is amended to read: 02 Sec. 39.35.500. Safeguard of employee funds held by the system. Except 03 as provided in AS 29.45.030(a)(1) or in (b) of this section , employee contributions 04 and other amounts held in the system are exempt from Alaska state and local taxes. 05 Except as provided in this subsection and in (b) of this section, amounts 06 [AMOUNTS] held on behalf of, or payable to, any employee or other person who is 07 or may become eligible for benefits under the system are not subject to anticipation, 08 alienation, sale, transfer, assignment, pledge, encumbrance, or charge of any kind, 09 either voluntary or involuntary, before being received by the person entitled to the 10 amount under the terms of the system. An attempt to anticipate, alienate, sell, transfer, 11 assign, pledge, encumber, charge, or otherwise dispose of a right to amounts held 12 under the system is void. However, an employee's right to receive benefits or the 13 member's employee contribution account may be assigned 14 (1) under a qualified domestic relations order; or 15 (2) to a trust or similar legal device that meets the requirements for a 16 Medicaid-qualifying trust under AS 47.07.020(f) and 42 U.S.C. 1396p(d)(4). 17 * Sec. 45. AS 39.35.500 is amended by adding a new subsection to read: 18 (b) An inactive member may elect to have the taxable portion of an inactive 19 employee contribution account transferred directly to another plan or an individual 20 retirement arrangement qualified under the federal Internal Revenue Code that accepts 21 the transfer. 22 * Sec. 46. AS 39.35.522(b) is amended to read: 23 (b) In order to obtain consideration of a waiver under this section, the affected 24 member or beneficiary must appeal to the board in writing within 30 days after receipt 25 of notice that the records have been adjusted. [THE BOARD SHALL RULE ON THE 26 APPEAL IN WRITING WITHIN 120 DAYS AFTER ITS RECEIPT.] 27 * Sec. 47. AS 39.35.522(c) is amended to read: 28 (c) The board may [, AT ITS DISCRETION,] conduct a hearing on an appeal 29 under this section. [IN REACHING A DECISION ON AN APPEAL, THE BOARD 30 MAY ISSUE SUBPOENAS, ADMINISTER OATHS, COMPEL THE ATTENDANCE 31 AND TESTIMONY OF WITNESSES, COMPEL THE TAKING OF DEPOSITIONS 01 AND THE SUBMISSION OF AFFIDAVITS, AND COMPEL THE PRODUCTION 02 OF DOCUMENTS AND RECORDS.] 03 * Sec. 48. AS 39.35.522(e) is amended to read: 04 (e) The board may reconsider a ruling under this section under 05 AS 39.35.077(c) [UPON REQUEST OF THE MEMBER OR BENEFICIARY OR THE 06 ADMINISTRATOR IF THE REQUEST IS RECEIVED WITHIN 30 DAYS AFTER 07 THE INITIAL RULING.] Any modification of the initial ruling must be made within 08 30 days after receipt of a request for reconsideration. 09 * Sec. 49. AS 39.35.535(b) is amended to read: 10 (b) Except as provided in (d) of this section, after an election of coverage 11 under this section, major medical insurance coverage takes effect on the same date that 12 benefits begin, and stops when the member or survivor is no longer eligible to receive 13 a monthly benefit. The coverage for persons age 65 or older is the same coverage 14 available for a person under 65 years of age . The benefits payable to persons age 65 15 or older supplement any benefits provided under the federal old age, survivors and 16 disability insurance program. The medical premium and optional insurance 17 premiums owed by a member or survivor shall be deducted from the benefit owed 18 to the member or survivor before payment of the benefit. 19 * Sec. 50. AS 39.35.615(a) is amended to read: 20 (a) A political subdivision or public organization may request that its 21 participation agreement be amended. The request may be made only after adoption 22 of a resolution by the legislative body of the political subdivision and approval of the 23 resolution by the person required by law to approve the resolution, or, in the case of 24 a public organization, after adoption of a resolution by the governing body of that 25 public organization. A certified copy of the resolution shall be filed with the 26 administrator. If a political subdivision or public organization amends its participation 27 agreement so as to terminate coverage of a department, group, or other classification 28 of employees, each employee whose coverage is so terminated, regardless of the 29 employee's employment status at the date of termination, shall be considered fully 30 vested in actuarially adjusted accrued retirement benefits as of the date of termination, 31 unless 01 (1) the employee's contributions have been refunded ; or 02 (2) the political subdivision or public organization amended its 03 participation agreement to exclude coverage for the affected department, group, 04 or other classification of employees at the written request of a majority of the 05 employees employed in that department, group, or other classification at the time 06 the request was made . 07 * Sec. 51. AS 39.35.670 is amended to read: 08 Sec. 39.35.670. Fraud. A person who knowingly makes a false statement, or 09 falsifies or permits to be falsified a record of this system, in an attempt to defraud the 10 system [,] is guilty of a class A misdemeanor [, AND UPON CONVICTION IS 11 PUNISHABLE BY A FINE OF NOT MORE THAN $500, OR BY IMPRISONMENT 12 FOR NOT MORE THAN TWELVE MONTHS, OR BY BOTH]. 13 * Sec. 52. AS 39.35.680(4) is amended to read: 14 (4) "average monthly compensation" means the result obtained by 15 dividing the compensation earned by an employee during a considered period by the 16 number of months, including fractional months, for which compensation was earned; 17 an employee must have at least 115 days of credited service in the last payroll 18 year in order for that year to be used as part of the consecutive payroll years; the 19 considered period consists of 20 (A) for employees first hired before July 1, 1996, the three 21 consecutive payroll years during the period of credited service that yield 22 [YIELDS] the highest average ; [,] and 23 (B) for employees first hired on or after July 1, 1996, the five 24 consecutive payroll years during the period of credited service that yield the 25 highest average ; 26 (C) [, OR] if the employee does not have the [REQUIRED] 27 number of consecutive payroll years required by (A) or (B) of this 28 paragraph , the actual number of months, including fractional months, that 29 the employee worked [EMPLOYEE'S PERIOD OF CREDITED SERVICE]; 30 (D) for an employee who has made an election under 31 AS 39.35.300(c) or 39.35.310(c), the actual number of months, including 01 fractional months, that the employee worked [AN EMPLOYEE MUST 02 HAVE AT LEAST 115 DAYS OF CREDITED SERVICE IN THE LAST 03 PAYROLL YEAR IN ORDER FOR THAT YEAR TO BE USED AS PART 04 OF THE CONSECUTIVE PAYROLL YEARS]; 05 * Sec. 53. AS 39.35.680(8) is amended to read: 06 (8) "compensation" means the [TOTAL] remuneration earned by an 07 employee for personal services rendered to an employer, including employee 08 contributions under AS 39.35.160, cost-of-living differentials only as provided in 09 AS 39.35.675, payments for leave that is actually used by the employee, the amount 10 by which the employee's wages are reduced under AS 39.30.150(c), and any amount 11 deferred under an employer-sponsored deferred compensation plan, but does not 12 include retirement benefits, severance pay or other separation bonuses, welfare 13 benefits, per diem, expense allowances, workers' compensation payments, or payments 14 for leave not used by the employee whether those leave payments are scheduled 15 payments, lump-sum payments, donations, or cash-ins; for a member first hired on 16 or after July 1, 1996, compensation does not include remuneration in excess of the 17 limitations set out in 26 U.S.C. 401(a)(17) (Internal Revenue Code); 18 * Sec. 54. AS 39.35.680(29) is amended to read: 19 (29) "pension fund" or "fund" means the fund in which the assets of 20 the system , including income and interest derived from the investment of money, 21 are deposited and held; 22 * Sec. 55. AS 39.35.680(34) is amended to read: 23 (34) "qualified domestic relations order" means a divorce or dissolution 24 judgment under AS 25.24, including an order approving a property settlement, that 25 (A) creates or recognizes the existence of an alternate payee's 26 right to, or assigns to an alternate payee the right to, receive all or a portion of 27 employee contribution account or the benefits payable with respect to an 28 employee; 29 (B) sets out the name and last known mailing address, if any, 30 of the employee and of each alternate payee covered by the order; 31 (C) sets out the amount or percentage of the employee's benefit, 01 or of any survivor's benefit, to be paid to the alternate payee, or sets out the 02 manner in which that amount or percentage is to be determined; 03 (D) sets out the number of payments or period to which the 04 order applies; 05 (E) does not require any type or form of benefit or any option 06 not otherwise provided by this chapter; 07 (F) does not require an increase of benefits in excess of the 08 amount provided by this chapter, determined on the basis of actuarial value; 09 and 10 (G) does not require the payment to an alternate payee of 11 benefits that are required to be paid to another alternate payee under another 12 order previously determined to be a qualified domestic relations order ; [.] 13 * Sec. 56. AS 39.50.200(a)(8) is amended to read: 14 (8) "public official" means 15 (A) a judicial officer; 16 (B) the governor or the lieutenant governor; 17 (C) a person hired or appointed in a department in the executive 18 branch as 19 (i) the head or deputy head of the department; 20 (ii) the director or deputy director of a division; 21 (iii) a special assistant to the head of the department; 22 (iv) a person serving as the legislative liaison for the 23 department; 24 (D) an assistant to the governor or the lieutenant governor; 25 (E) the chair or a member of a state commission or board other 26 than physician members or alternates of the Alaska Teachers' Retirement 27 Board appointed under AS 14.25.035(a)(2) or of the Public Employees' 28 Retirement Board appointed under AS 39.35.030(d) ; 29 (F) state investment officers and the state comptroller in the 30 Department of Revenue; 31 (G) the executive director of the Alaska Tourism Marketing 01 Council; 02 (H) the chief procurement officer appointed under 03 AS 36.30.010; 04 (I) the executive director of the Alaska Human Resource 05 Investment Council; and 06 (J) each appointed or elected municipal officer; 07 * Sec. 57. AS 14.25.175(f), 14.25.175(g); AS 39.35.522(f), and 39.35.522(g) are repealed. 08 * Sec. 58. The uncodified law of the State of Alaska is amended by adding a new section 09 to read: 10 ELECTED PUBLIC OFFICERS RETIREMENT SYSTEM QUALIFIED DOMESTIC 11 RELATIONS ORDER PROVISIONS. (a) Notwithstanding former AS 39.37.060, a former 12 spouse who was married for at least one year to an elected public officer who is a member 13 of the retirement system under former AS 39.37 shall be treated as a spouse or surviving 14 spouse to the extent required by a qualified domestic relations order. Rights under the order 15 do not take effect until the order is filed with the administrator. 16 (b) Notwithstanding former AS 39.37.130, an elected public officer who is a member 17 of the retirement system under former AS 39.37 and whose rights to a refund are subject to 18 a qualified domestic relations order is entitled to receive a refund of the total amount of 19 contributions together with interest credited on the amount only if the elected public officer's 20 present spouse, if any, and each person entitled under the order consent to the refund in 21 writing on a form provided by the administrator. The administrator may waive written 22 consent from the person entitled to benefits under the order if the administrator determines that 23 the person cannot be located or for other reasons established by regulation. The administrator 24 may waive written consent from the spouse if the administrator determines that 25 (1) the elected public officer was not married to the spouse during any period 26 of the public officer's membership in the system; 27 (2) the spouse has no right to benefits under former AS 39.37 because of the 28 terms of a qualified domestic relations order; 29 (3) the spouse cannot be located; 30 (4) the elected public officer and spouse have been married for less than two 31 years and the elected public officer establishes that they are not cohabiting; or 01 (5) another reason established by regulation exists. 02 (c) Except as provided in this subsection, amounts held in the retirement system under 03 former AS 39.37 on behalf of an elected public officer or other person who is or may become 04 eligible for benefits under the system are exempt from Alaska state and municipal taxes and 05 are not subject to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, or 06 charge of any kind, either voluntary or involuntary, before they are received by the person 07 entitled to the amount under the terms of the system, and any attempt to anticipate, alienate, 08 sell, transfer, assign, pledge, encumber, charge, or otherwise dispose of any right to amounts 09 accrued in the system is void. Amounts held in the system and benefits payable under former 10 AS 39.37 are exempt from garnishment, execution, or levy as provided in AS 09.38 (Alaska 11 Exemptions Act). However, 12 (1) the right of an elected public officer who is a member of the retirement 13 system under former AS 39.37 to receive benefits or the contributions and interest may be 14 assigned 15 (A) under a qualified domestic relations order; or 16 (B) to a trust or similar legal device that meets the requirements for a 17 Medicaid-qualifying trust under AS 47.07.020(f) and 42 U.S.C. 1396p(d)(4) (Title 18 XIX, Social Security Act); 19 (2) an elected public officer who is a member of the retirement system under 20 former AS 39.37 may elect to have the taxable portion of the qualifying distributions 21 transferred directly to another qualified plan or an individual retirement account that accepts 22 the transfer. 23 (d) Notwithstanding former AS 39.37.145, receipt under a qualified domestic relations 24 order of a monthly benefit under former AS 39.37 (elected public officer retirement system) 25 does not entitle a person or the person's spouse or child to insurance coverage. However, an 26 elected public officer's former spouse who receives a monthly benefit from the former elected 27 public officer retirement system under a qualified domestic relations order is entitled to 28 receive major medical insurance coverage if the former spouse 29 (1) elects the coverage within 60 days after the first monthly benefit paid under 30 the order is mailed first class or otherwise delivered; and 31 (2) pays the premium established by the administrator for the coverage. 01 (e) In this section, "qualified domestic relations order" has the same meaning given 02 in AS 39.35.680. 03 * Sec. 59. The uncodified law of the State of Alaska is amended by adding a new section 04 to read: 05 INITIAL APPOINTMENT OF PUBLIC MEMBERS OF THE PUBLIC EMPLOYEES' 06 RETIREMENT BOARD. Notwithstanding AS 39.35.030(b), as repealed and reenacted by 07 sec. 28 of this Act, persons serving on the Public Employees' Retirement Board under 08 AS 39.35.030(b) on the day before the effective date of this Act shall continue to serve on the 09 board until the expiration of their current terms on the board. When a vacancy on the board 10 occurs, it shall be filled as provided in AS 39.35.030(b), as repealed and reenacted by sec. 28 11 of this Act.