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CSSB 148(FIN): "An Act relating to contributions and benefits in the teachers' retirement system and in the public employees' retirement system; relating to the supplemental benefits system; relating to retirement incentive programs for the public employees' retirement system, the judicial retirement system, and the teachers' retirement system; relating to separation incentives for certain state employees; repealing a provision permitting the National Education Association to participate in the teachers' retirement system; and providing for an effective date."

00CS FOR SENATE BILL NO. 148(FIN) 01 "An Act relating to contributions and benefits in the teachers' retirement system 02 and in the public employees' retirement system; relating to the supplemental 03 benefits system; relating to retirement incentive programs for the public 04 employees' retirement system, the judicial retirement system, and the teachers' 05 retirement system; relating to separation incentives for certain state employees; 06 repealing a provision permitting the National Education Association to participate 07 in the teachers' retirement system; and providing for an effective date." 08 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 09 * Section 1. AS 14.25.040(a) is amended to read: 10 (a) Unless a teacher or member has elected to participate in the optional 11 university retirement program under AS 14.40.661 - 14.40.799, a teacher or member 12 contracting for service with a participating employer is subject to this chapter. A 13 school board shall, by resolution, elect whether to participate in the reduction in 14 contributions and benefits enacted by this Act and shall inform the administrator

01 of its decision. For school boards in existence on January 31, 1996, the board 02 shall inform the administrator no later than February 1, 1996. A school board 03 that comes into existence after January 31, 1996, shall inform the administrator 04 whether it elects to be a participating or nonparticipating employer. A school 05 board that elects to participate in the reductions may not later revoke its 06 participation. 07 * Sec. 2. AS 14.25.050(a) is amended to read: 08 (a) A [BEGINNING JANUARY 1, 1991, EACH] teacher who is first hired 09 on or after March 31, 1996, by the Department of Education, the University of 10 Alaska, or a participating school district shall contribute to the system an amount 11 equal to 5.5 percent of the teacher's base salary accrued from July 1 to the 12 following June 30. A teacher who is first hired before March 31, 1996, or who 13 was hired by a nonparticipating school district on or after March 31, 1996, shall 14 contribute to the system an amount equal to 8.65 percent of the teacher's base salary 15 accrued from July 1 to the following June 30. The employer shall deduct the 16 contribution from the teacher's salary at the end of each payroll period. The 17 contributions shall be deducted from employee compensation before the computation 18 of applicable federal taxes and shall be treated as employer contributions under 26 19 U.S.C. 414(h)(2). 20 * Sec. 3. AS 14.25.070 is amended to read: 21 Sec. 14.25.070. CONTRIBUTIONS BY EMPLOYER. For employees first 22 hired before March 31, 1996, and for employees hired after that date by a 23 nonparticipating school district, an [AN] employer shall contribute to the system an 24 amount equal to the percentage, as certified by the administrator, of the sum total of 25 the base salaries of all those teachers that is required in addition to teacher 26 contributions to provide the benefits of this chapter for those teachers times the sum 27 total of the base salaries paid to those teachers by the employer. For teachers first 28 hired on or after March 31, 1996, by the Department of Education, the University 29 of Alaska, or a participating school district, the percentage that the employer shall 30 contribute shall be computed under this section with the data that applies to those 31 teachers.

01 * Sec. 4. AS 14.25.110(a) is amended to read: 02 (a) Subject to AS 14.25.167, a member is eligible for a normal retirement 03 benefit if the member was first hired 04 (1) [WAS FIRST HIRED] before July 1, 1975, has attained the age of 05 55 years, and has at least 15 years of credited service, the last five of which have been 06 membership service or is otherwise vested in the system; 07 (2) on or after July 1, 1975, and before March 31, 1996, or after 08 March 31, 1996, by a nonparticipating school district, has attained the age of 60 09 years, and has at least eight years of membership service; 10 (3) before March 31, 1996, or on or after that date by a 11 nonparticipating school district, has attained the age of 60 years, has at least five 12 years of membership service, and has at least three years of Alaska BIA service; 13 (4) on or after March 31, 1996, by the Department of Education, 14 the University of Alaska, or participating school district and 15 (A) has attained the age of 60 years and has at least five 16 years of membership service; or 17 (B) the sum of the member's age plus the member's years 18 of membership service equals or exceeds 85; 19 (5) before March 31, 1996, or on or after that date by a 20 nonparticipating school district and [(4)] has at least 25 years of credited service, 21 the last five of which have been membership service; 22 (6) before March 31, 1996, or on or after that date by a 23 nonparticipating school district and [(5)] has at least 20 years of membership 24 service; 25 (7) before March 31, 1996, or on or after that date by a 26 nonparticipating school district and [(6)] has at least 20 years of combined 27 membership service and Alaska BIA service, the last five of which have been 28 membership service; or 29 (8) before March 31, 1996, or on or after that date by a 30 nonparticipating school district and [(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. 5. AS 14.25.110(d) is amended to read: 06 (d) The monthly amount of a retirement benefit for a member who has paid 07 the full amount of any indebtedness is one-twelfth of the member's average base salary 08 during any three school years of membership service multiplied for members first 09 hired 10 (1) before March 31, 1996, or on or after that date by a 11 nonparticipating school district by 12 (A) [(1)] two percent of the years of credited service earned 13 before June 30, 1990, including credited fractional years, and the years of 14 credited service through a total of 20 years; plus 15 (B) [(2)] two and one-half percent of the years of credited 16 service earned after June 30, 1990, that are more than 20 years of total credited 17 service; or 18 (2) on or after March 31, 1996, by the Department of Education, 19 the University of Alaska, or a participating school district by one and one-half 20 percent of the years of credited service. 21 * Sec. 6. AS 14.25.110(j) is amended to read: 22 (j) For teachers first hired before March 31, 1996, or on or after that date 23 by a nonparticipating school district, an [AN] actuarial adjustment must be made 24 to benefits payable under (d) of this section for early retirement. For teachers first 25 hired on or after March 31, 1996, by the Department of Education, the University 26 of Alaska, or a nonparticipating school district, the monthly amount of a 27 retirement benefit that would be due under (d) of this section shall be reduced by 28 multiplying one-half of one percent times the number of months, to the nearest 29 month, by which the retirement date of the teacher falls short of the date on 30 which the teacher reaches 60 years of age. 31 * Sec. 7. AS 14.25.143(a) is amended to read:

01 (a) Once each year, the administrator shall increase benefit payments to 02 (1) eligible disabled members; 03 (2) [, TO] persons age 60 or older receiving benefits under this system 04 in the preceding calendar year; 05 (3) members who were first hired before March 31, 1996, or on or 06 after that date by a nonparticipating school district [, AND TO PERSONS] who 07 have received benefits under this system for at least eight years and who are not 08 otherwise eligible for an increase under this section; and 09 (4) survivors of members described in (3) of this subsection when 10 the member and the survivor have together received benefits under this system 11 for at least eight years. 12 * Sec. 8. AS 14.25.143(b) is amended to read: 13 (b) The increase in benefit payments applies to total benefit payments except 14 for the cost-of-living allowance under AS 14.25.142. For members first hired on or 15 after March 31, 1996, by the Department of Education, the University of Alaska, 16 or a participating school district, the amount of the increase is the lesser of 50 17 percent of the increase in the cost-of-living in the preceding calendar year or six 18 percent. For members first hired before March 31, 1996, or on or after that date 19 by a nonparticipating school district, the [THE] amount of the increase is a 20 percentage of the current benefit equal to 21 (1) the lesser of 75 percent of the increase in the cost of living in the 22 preceding calendar year or nine percent, for recipients who on July 1 are at least 65 23 years old and for members receiving disability benefits; and 24 (2) the lesser of 50 percent of the increase in the cost of living in the 25 preceding calendar year or six percent, for recipients who on July 1 are at least 60 but 26 less than 65 years old or for recipients who on July 1 are less than 60 years old but 27 who have received benefits from the system for at least eight years. 28 * Sec. 9. AS 14.25.167(a) is amended to read: 29 (a) Benefits payable under this section are in place of benefits payable under 30 AS 14.25.110, 14.25.125, 14.25.155, 14.25.157, 14.25.160, 14.25.162, or 14.25.164. 31 Upon filing an application for retirement with the administrator, or when a disabled

01 member becomes eligible for normal retirement under AS 14.25.130(e), the member 02 shall designate the person who is the member's spouse at the time of appointment to 03 retirement as the contingent beneficiary. However, if the designation of the spouse is 04 revoked under (c) of this section, the member may designate a dependent approved by 05 the administrator as the contingent beneficiary or may take normal or early retirement 06 under AS 14.25.110 or 14.25.125. The administrator shall pay benefits under the 07 option elected by the member. The member may elect an option that provides that 08 (1) the member is entitled to receive a reduced benefit payable for life, 09 and, after the member's death, the contingent beneficiary is entitled to receive 10 payments in the amount of 75 percent of the reduced benefit for life; 11 (2) the member is entitled to receive a reduced benefit payable for life, 12 and, after the member's death, the contingent beneficiary is entitled to receive 13 payments in the amount of 50 percent of the reduced benefit for life; or 14 (3) for members first hired before March 31, 1996, or on or after 15 that date by a nonparticipating school district, the member is entitled to receive a 16 reduced benefit payable during the joint lifetime of the member and the contingent 17 beneficiary, and, after the death of either the member or the contingent beneficiary, the 18 survivor is entitled to receive payments in the amount of 66-2/3 percent of the reduced 19 benefit for life. 20 * Sec. 10. AS 14.25.168(d) is amended to read: 21 (d) A benefit recipient may elect major medical insurance coverage in 22 accordance with regulations and under the following conditions: 23 (1) a person who is younger than 60 years of age must pay an amount 24 equal to the full monthly group premium for retiree major medical insurance coverage; 25 (2) a person who is at least 60 years of age but is younger than 65 26 years of age must pay an amount equal to one-half of the full monthly group premium 27 for retiree major medical insurance coverage; 28 (3) a disabled member or a person 65 years of age or older is not 29 required to make premium payments; 30 (4) a benefit recipient who was first hired on or after March 31, 31 1996, by the Department of Education, University of Alaska, or a participating

01 school district who is electing major medical insurance coverage for dependents 02 eligible under (a)(2) or (3) of this section shall pay the full cost of that insurance. 03 * Sec. 11. AS 14.25.220(42) is amended to read: 04 (42) "vested member" or "vested teacher" means an active member who 05 has completed either 06 (A) 15 years of service, the last five of which have been 07 membership service, for a member first hired before July 1, 1975; 08 (B) eight years of membership service if the member was first 09 hired before March 31, 1996, or on or after that date by a 10 nonparticipating school district; 11 (C) five years of membership and three years of BIA service if 12 the member was first hired before March 31, 1996, or on or after that date 13 by a nonparticipating school district; [OR] 14 (D) 12 school years of part-time membership service or 12 15 school years in each of which the member earned either part-time or full-time 16 membership service; or 17 (E) five years of membership service if the member was first 18 hired on or after March 31, 1996, by the Department of Education, 19 University of Alaska, or a participating school district; 20 * Sec. 12. AS 14.25.220 is amended by adding new paragraphs to read: 21 (44) "nonparticipating school district" means a school district that has 22 chosen under AS 14.25.040(a) not to participate in the amendments to this chapter and 23 AS 39.35 that reduce retirement contribution rates and benefits; 24 (45) "participating school district" means a school district that has 25 chosen under AS 14.25.040(a) to participate in the amendments to this chapter and 26 AS 39.35 that reduce retirement contribution rates and benefits. 27 * Sec. 13. AS 39.30.150(a) is amended to read: 28 (a) In place of contributions to the federal social security system that would 29 have been required on behalf of an employee had the participating employer belonged 30 to the social security system, the participating employer shall pay [CONTRIBUTE] an 31 amount equal to 6.13 percent of the wages of the employee up to the taxable wage

01 base then in effect in the social security system as the employee contribution. This 02 contribution shall [MUST] be paid into an individual employee annuity account in the 03 Department of Administration under the terms of the State of Alaska Supplemental 04 Annuity Plan. For employees who first become members under AS 39.35 (public 05 employees' retirement system) before March 31, 1996, and for employees of 06 nonparticipating employers, the employer [THE DEPARTMENT] shall pay 6.13 07 percent of the wages of the employee up to the taxable wage base then in effect in the 08 social security system into the individual employee annuity account established under 09 this subsection as the employer contribution. For employees who first become 10 members under AS 39.35 on or after March 31, 1996, except for employees of 11 nonparticipating employers, the percentage that the employer contributes as the 12 employer contribution is the percentage that results from subtracting the 13 percentage of the employer contribution for the employee under AS 39.35.250 14 from 12.5 percent. This wage reduction shall [MUST] be treated as an employer 15 contribution under 26 U.S.C. 414(h)(2). All costs of establishing and administering 16 the programs established under AS 39.30.150 - 39.30.180 shall [MUST] be paid from 17 the amounts available in [CONTRIBUTIONS MADE TO] the individual employee 18 annuity accounts under this section. In this subsection, "nonparticipating 19 employer" has the meaning given in AS 39.35.680. 20 * Sec. 14. AS 39.35.160(a) is amended to read: 21 (a) A [BEGINNING JANUARY 1, 1987, EACH] peace officer or fire fighter 22 who is first hired on or after March 31, 1996, other than an employee of a 23 nonparticipating employer, shall contribute to the system an amount equal to six 24 percent of the peace officer's or fire fighter's compensation. A peace officer or 25 fire fighter who is first hired before March 31, 1996, or who is an employee of a 26 nonparticipating employer, shall contribute to the system an amount equal to seven 27 and one-half percent of the peace officer's or fire fighter's compensation. Except for 28 employees of nonparticipating employers, each [BEGINNING JANUARY 1, 1987, 29 EACH] other employee who is first hired on or after March 31, 1996, shall 30 contribute to the system an amount equal to five and one-half percent of the 31 employee's compensation. Each other employee who is first hired before

01 March 31, 1996, or on or after that date by a nonparticipating employer shall 02 contribute to the system an amount equal to six and three-quarters percent of the 03 employee's compensation. The contributions shall be deducted by the employer at the 04 end of each payroll period. The contributions shall be deducted from employee 05 compensation before computation of applicable federal taxes, and the contributions 06 shall be treated as employer contributions under 26 U.S.C. 414(h)(2). 07 * Sec. 15. AS 39.35.250 is amended to read: 08 Sec. 39.35.250. CALCULATION OF EMPLOYER'S CONTRIBUTION RATE. 09 (a) An employer shall make contributions to the system in amounts determined in 10 accordance with this section. For the purposes of this section, the past service date for 11 each employer for employees first hired before March 31, 1996, and for employees 12 hired on or after that date by nonparticipating employers is the entry date of the 13 employer or December 31, 1972, whichever is later. The past service date for 14 employees first hired on or after March 31, 1996, other than employees of 15 nonparticipating employers, is the entry date of the employer or March 31, 1996, 16 whichever is later. After December 31, 1972, if amendments to this chapter are 17 enacted that substantially affect benefits accrued before the effective date of the 18 amendment, the past service date will be changed to December 31 of the year 19 immediately preceding that in which the amendment is enacted. The contribution rate 20 for employees first hired before March 31, 1996, and for employees hired on or 21 after that date by nonparticipating employers, is the sum of the consolidated 22 employer rate for those employees and the past service rate that applies to those 23 employees. The contribution rate for employees first hired on or after March 31, 24 1996, other than employees of nonparticipating employers, is the sum of the 25 consolidated employer rate for those employees and the past service rate that 26 applies to those employees. 27 (b) In (a) of this section, "consolidated employer rate" for employees first 28 hired before March 31, 1996, and for employees hired on or after that date by 29 nonparticipating employers means the percentage of compensation of all those active 30 employees in the system which, if paid over the period of their credited service after 31 the [THEIR] past service date of those employees and when combined with all

01 employee contributions from those employees, is sufficient to provide the benefits 02 earned after such past service dates. This percentage is uniformly determined for all 03 employers for employees first hired before March 31, 1996, and for employees 04 hired on or after that date by nonparticipating employers and is applicable to each 05 employer. The consolidated employer rate for employees first hired on or after 06 March 31, 1996, other than employees of nonparticipating employers, shall be 07 separately determined under this subsection with the data that applies to those 08 employees. 09 (c) In (a) of this section, "past service rate" for employees first hired before 10 March 31, 1996, and for employees hired on or after that date by 11 nonparticipating employers means the percentage of compensation of all those active 12 employees in the system necessary to provide the annual amount required to amortize 13 the unfunded obligations of the employer for benefits earned by those employees 14 before the employer's past service date over a period not to exceed 40 years. The 15 period of amortization begins at the past service date of each employer. The 16 percentage is separately determined for each employer. The past service rate for 17 employees first hired on or after March 31, 1996, and employees hired on or after 18 that date by nonparticipating employers shall be separately determined under this 19 subsection with the data that applies to those employees. 20 * Sec. 16. AS 39.35.370(a) is amended to read: 21 (a) Subject to AS 39.35.450, a terminated employee is eligible for a normal 22 retirement benefit 23 (1) at age 60 with at least five years credited service; [,] or 24 (2) with at least 20 years of credited service as a peace officer or fire 25 fighter for peace officers or fire fighters first hired before March 31, 1996, or 26 hired on or after that date by a nonparticipating employer; [, OR] 27 (3) with at least 25 years of credited service as a peace officer or 28 fire fighter for peace officers and fire fighters first hired on or after March 31, 29 1996, other than employees of nonparticipating employers; 30 (4) with at least 30 years of credited service for all other employees if 31 the employee was first hired before March 31, 1996, or if the employee was hired

01 on or after that date by a nonparticipating employer; or 02 (5) with a combination of age and years of credited service equal 03 to or greater than 85. 04 * Sec. 17. AS 39.35.370(b) is amended to read: 05 (b) Subject to AS 39.35.450, a terminated employee is eligible for an early 06 retirement benefit at age 55 with at least five years credited service. For employees 07 first hired before March 31, 1996, and for employees hired on or after that date 08 by nonparticipating employers, an [AN] actuarial adjustment must be made to 09 retirement benefits paid under this section for an early retirement benefit. For 10 employees first hired on or after March 31, 1996, other than employees of 11 nonparticipating employers, the monthly amount of a retirement benefit that 12 would be due under (c) of this section shall be reduced by multiplying one-half 13 of one percent times the number of months, to the nearest month, by which the 14 retirement date of the employee falls short of the date that the employee reaches 15 age 60. 16 * Sec. 18. AS 39.35.370(c) is amended to read: 17 (c) For employees first hired on or after March 31, 1996, other than for 18 employees of nonparticipating employers, the monthly amount of a retirement 19 benefit is one and one-half percent of the average monthly compensation times the 20 years of credited service. The monthly amount of a retirement benefit for a peace 21 officer or fire fighter first hired before March 31, 1996, and for a peace officer or 22 fire fighter hired on or after that date by a nonparticipating employer, is two 23 percent of the average monthly compensation times the years of credited service 24 through 10 years, plus two and one-half percent of the average monthly compensation 25 times the years of service over 10 years. For all other employees first hired before 26 March 31, 1996, and for other employees of nonparticipating employers first hired 27 on or after that date, it is 28 (1) two percent of the average monthly compensation times all years 29 of service before July 1, 1986, and for years of service through a total of 10 years; 30 plus 31 (2) two and one-quarter percent of the average monthly compensation

01 times all years of service after June 30, 1986, over 10 years of total service through 02 20 years; plus 03 (3) two and one-half percent of the average monthly compensation 04 times all years of service after June 30, 1986, over 20 years of total service. 05 * Sec. 19. AS 39.35.450(a) is amended to read: 06 (a) Benefits payable under this section are in place of benefits payable under 07 AS 39.35.370, 39.35.385, and 39.35.460. Upon filing an application with the 08 administrator or when a disabled employee first attains eligibility for normal retirement 09 under AS 39.35.400(f) or 39.35.410(h), the employee shall designate the person who 10 is the employee's spouse at the time of appointment to retirement as the contingent 11 beneficiary. However, if the designation of the spouse is revoked under (c) of this 12 section, the employee may designate a dependent approved by the administrator as the 13 contingent beneficiary or may take normal or early retirement under AS 39.35.370 or 14 39.35.385 or a level income option under AS 39.35.460. The administrator shall pay 15 benefits under the option elected by the employee. The employee may elect an option 16 that provides that 17 (1) the employee is entitled to receive a reduced benefit payable for 18 life, and, after the employee's death, the contingent beneficiary is entitled to payments 19 in the amount of 75 percent of the reduced benefit payable for life; 20 (2) the employee is entitled to receive a reduced benefit payable for 21 life, and, after the employee's death, the contingent beneficiary is entitled to receive 22 payments in the amount of 50 percent of the reduced benefit payable for life; 23 (3) for employees first hired before March 31, 1996, or hired on or 24 after that date by a nonparticipating employer, the employee is entitled to receive 25 a reduced benefit payable during the joint lifetime of the employee and the contingent 26 beneficiary, and, after the death of either the employee or the contingent beneficiary, 27 the survivor is entitled to receive payments in the amount of 66 2/3 percent of the 28 reduced benefit payable for life. 29 * Sec. 20. AS 39.35.460 is amended to read: 30 Sec. 39.35.460. LEVEL INCOME OPTION. For an employee first hired 31 before March 31, 1996, or hired on or after that date by a nonparticipating

01 employer, if [IF] the payment of a retirement pension begins before age 65, the 02 amount of pension payable before and after that age may be adjusted so that an 03 increased amount will be paid before the time that full social security benefits become 04 available and a reduced amount after that time, so that the employee may receive a 05 more level income for life. The aggregate value of all adjusted payments may not 06 exceed the actuarial equivalent of the value of the pension otherwise payable to the 07 employee. 08 * Sec. 21. AS 39.35.475(a) is amended to read: 09 (a) Once each year the administrator shall increase benefit payments to 10 (1) eligible disabled members; 11 (2) [, TO] persons age 60 or older receiving benefits under this system 12 in the preceding calendar year; 13 (3) members who were first hired before March 31, 1996, or who 14 were hired on or after that date by a nonparticipating employer [, AND TO 15 PERSONS] who have received benefits under this system for at least five years and 16 who are not otherwise eligible for an increase under this section; and 17 (4) survivors of members described in (3) of this subsection when 18 the member and the survivor have together received benefits under this system 19 for at least five years. 20 * Sec. 22. AS 39.35.475(b) is amended to read: 21 (b) The increase in benefit payments applies to total benefit payments except 22 for the cost-of-living allowance under AS 39.35.480. For members first hired on or 23 after March 31, 1996, other than employees of a nonparticipating employer, the 24 amount of the increase is a percentage of the current benefit equal to the lesser 25 of 50 percent of the increase in the cost of living in the preceding calendar year 26 or six percent. For members first hired before March 31, 1996, or hired on or 27 after that date by a nonparticipating employer, the [THE] amount of the increase 28 is a percentage of the current benefit equal to 29 (1) the lesser of 75 percent of the increase in the cost of living in the 30 preceding calendar year or nine percent, for recipients who on July 1 are at least 65 31 years old and for members receiving disability benefits; and

01 (2) the lesser of 50 percent of the increase in the cost of living in the 02 preceding calendar year or six percent, for recipients who on July 1 are at least 60 but 03 less than 65 years old or for recipients who are less than 60 years old on July 1 but 04 who have received benefits from the system for at least five years. 05 * Sec. 23. AS 39.35.535(c) is amended to read: 06 (c) A benefit recipient may elect major medical insurance coverage in 07 accordance with regulations and under the following conditions: 08 (1) a person who is younger than 60 years of age must pay an amount 09 equal to the full monthly group premium for retiree major medical insurance coverage; 10 (2) a person who is at least 60 years of age but is younger than 65 11 years of age must pay an amount equal to one-half of the full monthly group premium 12 for retiree major medical insurance coverage; 13 (3) a disabled member or a person 65 years of age or older is not 14 required to make premium payments; 15 (4) a benefit recipient who is first hired on or after March 31, 1996, 16 other than a recipient receiving benefits through a nonparticipating employer, 17 who is electing major medical insurance coverage for dependents eligible under 18 (a)(2) and (3) of this section shall pay the full cost of that insurance. 19 * Sec. 24. AS 39.35 is amended by adding a new section to read: 20 Sec. 39.35.565. PARTICIPATION IN REDUCED CONTRIBUTIONS AND 21 BENEFITS. A political subdivision or public organization participating in the system 22 on January 31, 1996, shall, by resolution, elect whether to participate in the reduction 23 in contributions and benefits enacted by this Act and shall inform the administrator of 24 its decision no later than February 1, 1996. A political subdivision or public 25 organization that becomes an employer in the system on or after February 1, 1996, 26 shall inform the administrator whether it has elected to be a nonparticipating employer. 27 A political subdivision or public organization that is an employer in the system that 28 elects to participate in the reductions may not later decide to participate in the system 29 as it existed before amendment by this Act. 30 * Sec. 25. AS 39.35.680 is amended by adding a new paragraph to read: 31 (41) "nonparticipating employer" means a political subdivision or public

01 organization that is an employer under this system that has chosen under AS 39.35.565 02 not to participate in the amendments to this chapter enacted in this Act. 03 * Sec. 26. FINDINGS AND PURPOSE AS TO SECS. 26 - 40. The State of Alaska and 04 many local governments and school districts are facing the need to restructure their operations 05 and their work forces in order to reduce expenditures and balance budgets. Retirement and 06 separation incentives are management tools that have been used extensively by the private 07 sector, the federal government, and other state and local governments across the country. The 08 purpose of secs. 26 - 40 of this Act is to make these management tools temporarily available 09 to the state and to the municipalities and school districts of the state. Sections 26 - 40 of this 10 Act will enable these entities to be more efficient and cost-effective by eliminating certain 11 nonessential positions, and producing a net reduction in personnel costs. 12 * Sec. 27. RETIREMENT INCENTIVE PROGRAM. (a) An employer may adopt a 13 retirement incentive plan under secs. 28 - 31 of this Act, as appropriate, and designate 14 categories of employees eligible to participate in that plan. An employer need not extend the 15 incentive plan to all employees who would otherwise be eligible, but may choose to extend 16 the plan only to employees 17 (1) in specific budget or administrative components of the employer; 18 (2) in specific job classifications; 19 (3) in specific geographic locations; or 20 (4) on the basis of any combination of factors under (1) - (3) of this 21 subsection. 22 (b) An employee is eligible to participate in a retirement incentive plan under secs. 23 26 - 40 of this Act only if the 24 (1) employee is a vested member of the public employees' retirement system 25 or the teachers' retirement system; 26 (2) employee will be qualified to retire under AS 14.25.110 or AS 39.35.370 27 after receipt of the credit described in (f) of this section; 28 (3) savings to the employer in personal services costs for the employee's 29 position will exceed the costs to the employer for that position within three years after the 30 employee is appointed to retirement. 31 (c) An employer shall file its proposed retirement incentive plan with the

01 commissioner of administration. The commissioner shall approve the plan if the plan meets 02 the requirements of secs. 26 - 40 of this Act, except that the commissioner may approve a 03 state agency's retirement incentive plan only if the office of management and budget approves 04 the calculation of savings under (b)(3) of this section. A proposed plan filed under this 05 section must 06 (1) identify job classifications of employees, and specific budget or 07 administrative components, eligible to participate in the plan; 08 (2) include a reimbursement agreement that 09 (A) requires the employer, for each employee who retires under the 10 plan, to reimburse the appropriate retirement system, within three years after the end 11 of the fiscal year in which the employee is appointed to retirement, in an amount equal 12 to 13 (i) the actuarial equivalent of the difference between the benefits 14 the participant receives after the addition of the credit under (f) of this section 15 and the amount the participant would have received without the credit, less the 16 amount the participant has paid on the indebtedness determined under (d) or (e) 17 of this section; and 18 (ii) an appropriate share of the administrative costs of the 19 program; and 20 (B) provides that contributions from the employer under this section 21 take priority over other obligations of the employer to the maximum extent permitted 22 by law. 23 (d) A member of the teachers' retirement system who participates in an approved 24 retirement incentive plan under secs. 26 - 40 of this Act is indebted to that system for an 25 amount calculated under this subsection. The indebtedness is 25.95 percent of the member's 26 actual compensation for the school year in which the member terminates employment, or the 27 calculated school year compensation for a member who works less than the entire school year. 28 An outstanding indebtedness at the time a member is appointed to retirement under an 29 approved retirement incentive plan requires an actuarial adjustment to the benefits payable to 30 that member. 31 (e) A member of the public employees' retirement system who participates in an

01 approved retirement incentive plan under secs. 26 - 40 of this Act is indebted to that system 02 for an amount calculated under this subsection. The indebtedness is 22-1/2 percent for a 03 peace officer or fire fighter, and 20-1/4 percent for other members, of the member's actual 04 annual compensation for the year in which the member terminates employment, or the 05 calculated annual compensation for a member who works fewer than 12 months. An 06 outstanding indebtedness at the time a member is appointed to retirement under an approved 07 retirement incentive plan requires an actuarial adjustment to the benefits payable to that 08 member. 09 (f) An employee who participates in an approved retirement incentive plan under secs. 10 26 - 40 of this Act receives a credit of three years. The three years must be applied in the 11 following order until exhausted: 12 (1) to meet the age or service required for eligibility for normal retirement 13 under AS 14.25.110 or AS 39.35.370, as appropriate; 14 (2) to meet the age required for early retirement under AS 14.25.110 or 15 AS 39.35.370, as appropriate; 16 (3) to reduce the actuarial adjustment required for early retirement under 17 AS 14.25.110 or AS 39.35.370, as appropriate; 18 (4) as years of credited service for calculating retirement benefits. 19 (g) In this section, 20 (1) "department" means 21 (A) a principal department of the executive branch of state government; 22 an independent state entity that is attached to a principal department of the executive 23 branch for administrative purposes but that is not a public organization as defined in 24 AS 39.35.680 is part of that department for purposes of this paragraph; and 25 (B) the Office of the Governor; 26 (2) "employer" 27 (A) for purposes of a retirement incentive plan under AS 14.25, means 28 the Board of Regents of the University, the Department of Education, or the Regional 29 Resource Center; and 30 (B) for purposes of a retirement incentive plan under AS 39.35, has the 31 meaning given in AS 39.35.680 and includes a department.

01 * Sec. 28. AUTHORIZATION FOR STATE EMPLOYEE RETIREMENT INCENTIVE. 02 (a) A state agency may adopt, and file with the commissioner of administration for approval, 03 a proposed retirement incentive plan for its employees as part of a permanent reduction in the 04 personal services costs in that section. 05 (b) Upon the request of a state agency, the commissioner of administration shall 06 establish one or more periods during which the employees of that state agency who are 07 eligible under sec. 27(b) of this Act to participate in a retirement incentive plan may apply to 08 the commissioner of administration to participate in the state agency's approved plan. The 09 periods shall begin no earlier than June 30, 1995, and end no later than June 30, 1998. The 10 periods shall be no less than 30 days and no more than 60 days in duration, and may not 11 begin less than 30 days after their establishment. A state agency is not required to request an 12 application period, and may request more than one application period. 13 (c) A proposed retirement incentive plan adopted under this section may not permit 14 an employee who is the governor, the lieutenant governor, or a commissioner, deputy 15 commissioner, or assistant commissioner of a principal department of the executive branch to 16 participate in the plan. 17 (d) A proposed retirement incentive plan adopted under this section may permit 18 participation only by an employee who is eligible to participate under sec. 27(b) of this Act 19 and who 20 (1) has been continuously employed by the state for at least one year before 21 the employee applies to participate in the state agency's approved plan; 22 (2) is a permanent seasonal employee who has been continuously employed 23 by the state in a permanent seasonal position during all of the time in the one year before the 24 employee's application to participate in which the position normally is filled; 25 (3) has a job sharing agreement with a state agency in which two or more 26 employees share a single position identified by a single position control number and in which 27 the employee who applies to participate in the plan was continuously employed by the agency 28 during the portion of the one year before the employee's application in which the employee 29 normally worked under the job sharing agreement; or 30 (4) meets a combination of the requirements of this subsection. 31 (e) The commissioner of administration may not accept the application of an employee

01 to participate in an approved retirement incentive plan adopted under this section unless the 02 employee will be appointed to retirement not later than the first day of the month that is six 03 months after the last day of the application period established by the commissioner under (b) 04 of this section. A state agency, in a plan adopted under this section, may set an earlier date 05 by which an employee must be appointed to retirement in order to participate in the plan. 06 (f) A state agency that has adopted a retirement incentive plan for its employees may 07 not appoint a person to fill a vacant position in a category of position that was included in the 08 plan until after March 31, 1996, unless 09 (1) the governor submits a notice to the Legislative Budget and Audit 10 Committee of the intended appointment to the position for the committee's review; 11 (2) 45 days elapse before the appointment to the vacancy is made unless the 12 committee earlier recommends that the agency appoint a person to fill the position; and 13 (3) if, within the 45 days, the committee recommends that the vacancy not be 14 filled, the governor reviews the request to fill the position and determines to authorize the 15 hiring, in which case the governor shall provide the committee with a statement of the reasons 16 for the authorization before the appointment to the position is made. 17 (g) In this section, "committee" means the Legislative Budget and Audit Committee. 18 * Sec. 29. AUTHORIZATION FOR RETIREMENT INCENTIVE FOR EMPLOYEES OF 19 THE UNIVERSITY OF ALASKA. (a) The Board of Regents of the University of Alaska 20 may adopt, and file with the commissioner of administration for approval, a proposed 21 retirement incentive plan for university employees. 22 (b) Upon the request of the Board of Regents, the commissioner of administration 23 shall establish one or more periods during which the employees of the university who are 24 eligible under sec. 27(b) of this Act to participate in a retirement incentive plan may apply to 25 the commissioner of administration to participate in the university's approved plan. The 26 periods shall begin no earlier than June 30, 1995, and end no later than June 30, 1998. The 27 periods shall be no less than 30 days and no more than 60 days in duration, and may not 28 begin less than 30 days after their establishment. The Board of Regents is not required to 29 request an application period, and may request more than one application period. 30 (c) The commissioner of administration may not accept the application of an employee 31 to participate in an approved retirement incentive plan adopted under this section unless the

01 employee will be appointed to retirement not later than the first day of the month that is six 02 months after the last day of the application period established by the commissioner under (b) 03 of this section. The Board of Regents, in a plan adopted under this section, may set an earlier 04 date by which an employee of the University of Alaska must be appointed to retirement in 05 order to participate in the plan. 06 (d) A participant in the optional university retirement program under AS 14.40.661 - 07 14.40.799 who is vested in the public employees' retirement system or the teachers' retirement 08 system may participate in a retirement incentive plan for that system if the participant meets 09 the other qualifications of secs. 26 - 40 of this Act. If a provision of this subsection is 10 inconsistent with another provision of law, the provision of this subsection governs. 11 * Sec. 30. AUTHORIZATION FOR RETIREMENT INCENTIVE FOR OTHER 12 EMPLOYEES IN THE PUBLIC EMPLOYEES' RETIREMENT SYSTEM. (a) The 13 governing body of a political subdivision of the state or public organization that has elected 14 to participate in the public employees' retirement system under AS 39.35.550 - 39.35.650 may 15 adopt, and file with the commissioner of administration for approval, a proposed retirement 16 incentive plan for its employees. Upon the request of the governing body, the commissioner 17 of administration shall establish one or more periods during which the employees of a political 18 subdivision or public organization who are eligible to participate in a retirement incentive plan 19 may apply to the commissioner of administration to participate in the approved plan. The 20 periods shall begin no earlier than October 31, 1995, and end no later than October 31, 1998. 21 The periods shall be no less than 30 days and no more than 60 days in duration, and may not 22 begin less than 60 days after their establishment. The governing body is not required to 23 request an application period, and may request more than one application period. 24 (b) The commissioner of administration may not accept the application of an employee 25 to participate in an approved retirement incentive plan adopted under this section unless the 26 employee will be appointed to retirement not later than the first day of the month that is six 27 months after the last day of the application period established by the commissioner under (a) 28 of this section. The governing body of the political subdivision or public organization, in a 29 plan adopted under this section, may set an earlier date by which an employee must be 30 appointed to retirement in order to participate in the plan. 31 * Sec. 31. AUTHORIZATION FOR RETIREMENT INCENTIVE FOR EMPLOYEES OF

01 REGIONAL RESOURCE CENTERS IN THE TEACHERS' RETIREMENT SYSTEM. (a) 02 A regional resource center that has employees who are members of the teachers' retirement 03 system may adopt, and file with the commissioner of administration for approval, a proposed 04 retirement incentive plan for its employees. A plan adopted under this section must provide 05 that the application period for participation in the retirement incentive plan is June 30, 1995, 06 through December 31, 1995. 07 (b) The commissioner of administration may not accept the application of an employee 08 to participate in an approved retirement incentive plan adopted under this section unless the 09 employee will be appointed to retirement on or before August 1, 1996. The regional resource 10 center, in a plan adopted under this section, may set an earlier date by which an employee 11 must be appointed to retirement in order to participate in the plan. 12 * Sec. 32. POLITICAL SUBDIVISION OR PUBLIC ORGANIZATION EMPLOYMENT. 13 For purposes of determining the years of service requirements for retirement under 14 AS 14.25.110 or AS 39.35.370, as appropriate, a vested member who is a state employee and 15 who applies to participate in a retirement incentive plan approved under secs. 26 - 40 of this 16 Act may receive credit for employment with a political subdivision or public organization 17 before the political subdivision or organization became an employer under the public 18 employees' retirement system. The member may not receive credit for those years under this 19 subsection for purposes of determining benefits. If a provision of this section is inconsistent 20 with any other provision of law, the provision of this section governs. 21 * Sec. 33. RECOVERY OF EMPLOYER DELINQUENCIES. To recover a delinquency 22 owed by an employer other than the state under an agreement entered into under sec. 27(c)(2) 23 of this Act, the Department of Administration may 24 (1) direct that the amount of the delinquency or a lesser amount be withheld 25 from any money payable to the employer by a state department or agency and that the amount 26 withheld be credited to the delinquency; and 27 (2) bring an action against the employer. 28 * Sec. 34. PROVISION AND AUTHORIZATION FOR ADMINISTRATIVE DIRECTOR 29 OF COURT. (a) The chief justice of the state supreme court may adopt a retirement 30 incentive plan for an administrative director of the Alaska Court System who is a member of 31 the judicial retirement system under AS 22.25.012 if participation in the plan will result in

01 savings to the court system in personal services costs within three years after the 02 commencement of the plan. The administrative director may participate only if the 03 administrative director is vested in the judicial retirement system and will be qualified to retire 04 under AS 22.25.010 after receipt of the retirement incentive. To participate, the administrative 05 director shall apply to the commissioner of administration to participate in the approved court 06 system plan. 07 (b) The court system shall include in the retirement incentive plan a reimbursement 08 agreement that requires the court system, for each administrative director of the Alaska Court 09 System who is retired under the plan, to reimburse the judicial retirement system within three 10 years after the end of the fiscal year in which the administrative director is appointed to 11 retirement in an amount equal to 12 (1) the actuarial equivalent of the difference between the benefits the 13 administrative director receives after the addition of the credit under (e) of this section and 14 the amount the participant would have received without the credit, less the total of the amount 15 the participant has paid on the indebtedness determined under (d) of this section; and 16 (2) an appropriate share of the administrative costs of the program. 17 (c) A retirement incentive plan adopted under this section must provide that 18 contributions from the court system under (b) of this section take priority over other 19 obligations of the court system to the maximum extent permitted by law. 20 (d) An administrative director of the Alaska Court System who participates in an 21 approved retirement incentive plan is indebted to the system. The amount of indebtedness is 22 equal to 21 percent of the director's actual annual compensation for the year in which the 23 director terminates employment to participate in the program, or the calculated annual 24 compensation for an administrative director who works fewer than 12 months. An outstanding 25 indebtedness at the time the administrative director is appointed to retirement under an 26 approved retirement incentive plan will require an actuarial adjustment to the benefits payable 27 to the director. 28 (e) An administrative director of the Alaska Court System who participates in an 29 approved retirement incentive plan receives a credit of three years that may only be used to 30 meet the age requirements for normal or early retirement under AS 22.25.010(d). 31 (f) The chief justice of the Alaska Court System may adopt, and file with the

01 commissioner of administration for approval, a proposed retirement incentive plan for the 02 administrative director of the court system who is a member of the judicial retirement system. 03 Upon the request of the chief justice, the commissioner of administration shall establish a 04 period during which an administrative director eligible to participate in the retirement incentive 05 plan of the court system may apply to the commissioner of administration to participate in the 06 court system's approved plan. The period shall begin no earlier than June 30, 1995, and end 07 no later than June 30, 1998. The period shall be no less than 30 days and no more than 60 08 days in duration and may not begin less than 30 days after establishment. The chief justice 09 is not required to request an application period. 10 (g) The commissioner of administration may not accept the application of an 11 administrative director of the court system to participate in an approved retirement incentive 12 plan adopted under this section unless the administrative director will be appointed to 13 retirement not later than the first day of the month that is six months after the last day of the 14 application period established by the commissioner under (f) of this section. The chief justice, 15 in a plan adopted under this section, may set an earlier date by which an administrative 16 director must be appointed to retirement in order to participate in the plan. 17 * Sec. 35. REEMPLOYMENT INDEBTEDNESS; PROHIBITION ON REEMPLOYMENT. 18 (a) If an individual is reemployed as a member of the public employees' retirement system 19 under AS 39.35, the teachers' retirement system under AS 14.25, the judicial retirement system 20 under AS 22.25, or the optional university retirement program under AS 14.40.661 - 14.40.799 21 after appointment to retirement under secs. 26 - 40 of this Act, that individual forfeits the 22 incentive credit received under sec. 27(f) or 34(e) of this Act and is indebted to the system 23 under which the individual took retirement. The indebtedness is 110 percent of the amount 24 the individual received as a result of participation in a retirement incentive plan under secs. 25 26 - 40 of this Act and to which the individual would not otherwise have been entitled, 26 including the cost of health insurance. The amount that the individual has paid under sec. 27 27(d) or (e) or sec. 34(d) of this Act will be applied as a credit toward the reemployment 28 indebtedness. Interest on the reemployment indebtedness accrues from the date of 29 reemployment until the date that the individual either is appointed to retirement and accepts 30 an actuarial adjustment to the individual's future benefits or repays the indebtedness in full. 31 The rate of interest is that established by regulation for the public employees' retirement

01 system by the public employees' retirement board and for the teachers' retirement system by 02 the teachers' retirement board. 03 (b) An individual who was appointed to retirement under secs. 26 - 40 of this Act may 04 not be employed by, or enter into a contract for personal services with, a state agency or the 05 University of Alaska within the three years after the date of appointment to retirement, except 06 that 07 (1) the University of Alaska may enter into a personal services contract with 08 the individual for teaching or research that does not entitle the individual to receive retirement, 09 health, or leave benefits, except social security replacement if required by the Internal Revenue 10 Code; and 11 (2) the individual may accept employment with the legislature during a 12 legislative session if the employment is on an hourly basis and does not entitle the individual 13 to receive retirement, health, or leave benefits. 14 (c) Notwithstanding the prohibition in (b) of this section, a state agency or the 15 University of Alaska may enter into a personal services contract with an individual who was 16 appointed to retirement under secs. 26 - 40 of this Act if the Board of Regents, for the 17 University of Alaska, or the commissioner of administration, for a state agency, determines 18 that there is a compelling reason to do so because of the individual's specialized or extensive 19 experience that relates to a particular program or project of the state agency or university. 20 However, a state agency may not enter into a contract with an individual under this subsection 21 if the individual was employed by that state agency at the time of the individual's appointment 22 to retirement. 23 * Sec. 36. SEPARATION INCENTIVE PROGRAM. (a) A state agency may, with the 24 approval of the director of the office of management and budget, establish a separation 25 incentive program for its employees. The program may be offered in combination with an 26 approved retirement incentive plan adopted under sec. 28 of this Act, or may be offered 27 separately from such a plan. A state agency need not extend an incentive program under this 28 section to all employees who would otherwise be eligible to participate, but may choose to 29 extend the program only to employees 30 (1) in specific budget or administrative components of the state agency; 31 (2) in specific job classifications;

01 (3) on the basis of any combination of factors under (1) and (2) of this 02 subsection. 03 (b) A separation incentive payment under this section shall be paid in a lump sum 04 after the employee's separation from state service, and shall be equal to the lesser of an 05 amount equaling six months of the employee's base salary, or $25,000. However, a state 06 agency or the office of management and budget may set a lower separation incentive payment 07 in the state agency's separation incentive program. 08 (c) Upon the request of a state agency, the commissioner of administration shall 09 establish one or more periods during which the employees of that state agency may apply to 10 the commissioner of administration to participate in the state agency's approved separation 11 incentive program. The periods shall begin no earlier than June 30, 1995, and end no later 12 than June 30, 1998. The periods shall be no less than 30 days and no more than 60 days in 13 duration, and may not begin less than 30 days after their establishment. A state agency is not 14 required to request an application period, and may request more than one application period. 15 If the commissioner of administration has established one or more application periods for a 16 state agency under sec. 28(b) of this Act, the application period or periods established under 17 this subsection must coincide with the period or periods established under sec. 28(b) of this 18 Act. 19 (d) A separation incentive program established under this section must provide that 20 a separation incentive payment to an employee may be made only if 21 (1) the employee is a permanent full-time or permanent full-time seasonal 22 employee with at least five years of service with the state; and 23 (2) the savings to the state agency in personal services costs for the position 24 occupied by that employee would exceed, in the three years after the employee separates, the 25 amount of the separation incentive payment. 26 (e) If an individual who received a separation incentive payment under this section 27 subsequently is reemployed by a state agency or the University of Alaska within the three 28 years after the date that the individual received the separation incentive payment, the 29 individual is liable to the state in an amount equal to 110 percent of the amount of the 30 separation incentive payment, plus interest at the rate prescribed by AS 45.45.010, 31 commencing on the date that the individual received the separation incentive payment.

01 (f) If an employee is eligible to participate in an approved retirement incentive plan 02 adopted under sec. 28 of this Act, 03 (1) a separation incentive payment to that employee may not exceed the 04 amount that the state agency would be obligated to pay to the appropriate retirement system, 05 notwithstanding (b) of this section; and 06 (2) the employee may participate in either the separation incentive program 07 under this section or the retirement incentive plan adopted under sec. 28 of this Act, but not 08 both. 09 (g) In this section, "base salary" means the monthly salary paid to an employee under 10 the applicable collective bargaining agreement, AS 39.27.011, or another applicable pay 11 schedule, and includes geographic differential; if an employee is paid on an hourly basis, the 12 employee's base salary is the employee's hourly rate, including geographic differential, 13 multiplied by the number of hours in the employee's regular work week, multiplied by 4.35. 14 * Sec. 37. OFFICE OF MANAGEMENT AND BUDGET. (a) When designating an 15 employee category for participation in a retirement incentive plan or a separation incentive 16 program under secs. 26 - 40 of this Act, the executive head of the relevant state agency shall 17 describe in detail the expected effect of the plan or program on the agency's personal services 18 cost and operation. This financial report must be approved by the director of the office of 19 management and budget before the commissioner of administration may approve the proposed 20 plan or program. The state agency shall report each year to the office of management and 21 budget on the cost of each employee's participation and the effect on the agency's personal 22 services cost and operation. 23 (b) The office of management and budget shall submit to the legislature annual reports 24 on the retirement incentive and separation incentive programs under secs. 26 - 40 of this Act 25 beginning January 15, 1997, and continuing through January 15, 1999, and shall submit a final 26 report January 15, 2000. Each report must provide the information necessary for the 27 legislature to evaluate the effectiveness of the programs in achieving their objectives. The 28 report must include information on the designated employee categories under the incentive 29 programs, including the cost of each incentive program per participant, the cost to the state, 30 the cost to the employee, the annual budgeted amount, by state agency, for the incentives, the 31 number of positions deleted or left vacant, and the projected or actual net savings over the

01 three-year period. 02 * Sec. 38. PROGRAM CHANGES. (a) An individual employee does not have a vested 03 or contractual right to a benefit under secs. 26 - 40 of this Act until an agreement is executed 04 with the administrator that specifically authorizes that employee to participate in the retirement 05 incentive program under secs. 26 - 40 of this Act or until an agreement is executed with the 06 commissioner of administration to participate in the separation incentive program under secs. 07 26 - 40 of this Act. The legislature reserves the right to change any aspect of either incentive 08 program as it relates to employees for whom participation agreements have not yet been 09 executed with the administrator or with the commissioner of administration. 10 (b) In this section, "administrator" means the administrator of the public employees' 11 retirement system for employees who are members of that system, and the administrator of 12 the teachers' retirement system for employees who are members of that system. 13 * Sec. 39. REGULATIONS. The commissioner of the Department of Administration may 14 adopt regulations under AS 44.62 (Administrative Procedure Act) to implement and interpret 15 secs. 26 - 40 of this Act. 16 * Sec. 40. DEFINITIONS. (a) Unless provided otherwise in secs. 26 - 40 of this Act, the 17 definitions set out in AS 14.25.220 apply to provisions in secs. 27 - 35 of this Act that relate 18 to the teachers' retirement system and members of the teachers' retirement system except that 19 "employer" does not include a school district. 20 (b) Unless provided otherwise in secs. 26 - 40 of this Act, the definitions set out in 21 AS 39.35.680 apply to provisions in secs. 27 - 35 of this Act that relate to the public 22 employees' retirement system and members of the public employees' retirement system. 23 (c) Unless provided otherwise in this Act, the definition set out in AS 22.25.900 24 applies to provisions in secs. 34 and 35 that relate to the judicial retirement system and 25 members of the judicial retirement system. 26 (d) In secs. 26 - 40 of this Act, 27 (1) "judicial retirement system" means the retirement system established for 28 judges and justices in AS 22.25; 29 (2) "office of management and budget" means the office of management and 30 budget in the Office of the Governor; 31 (3) "public employees' retirement system" means the Public Employees'

01 Retirement System of Alaska (AS 39.35); 02 (4) "state agency" 03 (A) means 04 (i) the legislative branch of state government; 05 (ii) the judicial branch of state government; 06 (iii) a principal department of the executive branch of state 07 government; an independent state entity that is attached to a principal 08 department of the executive branch for administrative purposes but that is not 09 a public organization as defined in AS 39.35.680 is part of that department for 10 purposes of this clause; and 11 (iv) the Office of the Governor; 12 (B) does not include 13 (i) the University of Alaska; 14 (ii) a political subdivision of the state; or 15 (iii) a public organization as defined in AS 39.35.680; 16 (5) "teachers' retirement system" means the Teachers' Retirement System of 17 Alaska (AS 14.25). 18 * Sec. 41. AS 14.25.045 is repealed. 19 * Sec. 42. Sections 27, 28, and 36 of this Act are repealed July 1, 1999. 20 * Sec. 43. Sections 29 - 32 and 34 of this Act are repealed July 1, 1997. 21 * Sec. 44. Sections 26 - 40 of this Act take effect immediately under AS 01.10.070(c).