00CS FOR SENATE BILL NO. 85(FIN)                                                                                        
01 "An Act relating to credited service in the public employees' retirement system                                         
02 for temporary employment; and creating a public service benefit in the public                                           
03 employees' retirement system."                                                                                          
04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                               
05    * Section 1.  AS 39.35.345(d) is repealed and reenacted to read:                                                   
06  (d)  An employee may choose whether the credited service granted under this                                           
07 section is used to satisfy the credited service requirements for normal retirement under                                
08 AS 39.35.370(a)(2) or (3) or is only used for the calculation of benefits.  An election                                 
09 under this subsection is irrevocable and applies to all temporary credited service that                                 
10 the employee has accrued when the employee retires.  An election under this                                             
11 subsection does not change the date that an employee is considered to have                                              
12 commenced participation in the system under AS 39.35.120.                                                               
13    * Sec. 2.  AS 39.35 is amended by adding a new section to read:                                                    
14  Sec. 39.35.375.  Public service benefit.  (a)  An active or inactive member                                         

01 who has never been vested in this system or in the teachers' retirement system under                                    
02 AS 14.25, who has at least two years of credited service in this system, and who has                                    
03 membership service in the teachers' retirement system may claim credited service in                                     
04 this system in an amount equal to the membership service the member has in the                                          
05 teachers' retirement system.  The claimed credited service may be added to service                                      
06 earned under this chapter to enable the member to qualify for a public service benefit                                  
07 under this section.  The member may not claim credited service for membership                                           
08 service for which the member has received a refund under AS 14.25.150 unless the                                        
09 member fully pays the indebtedness as established under AS 14.25.063.  The member                                       
10 may not claim credited service in this system based on unused sick leave under                                          
11 AS 14.25.115.                                                                                                           
12  (b)  To claim credited service under this section, the member shall file a written                                    
13 request with the administrator when the member applies to retire.  The administrator                                    
14 shall determine the full actuarial cost of benefits based on the member's total credited                                
15 service and shall transfer from the teachers' retirement system to this system an                                       
16 amount equal to the sum of the member contributions and any indebtedness payments                                       
17 to the teachers' retirement system and the employer contributions to the teachers'                                      
18 retirement system made on behalf of the employee together with interest earned on                                       
19 those contributions and indebtedness payments.  If the amount to be transferred, when                                   
20 combined with the amount of employee contributions and indebtedness payments to                                         
21 this system and the amount of employer contributions on behalf of the employee in                                       
22 this system, and interest earned on contributions and indebtedness payments for the                                     
23 employee, is less than the full actuarial cost computed under this subsection, an                                       
24 indebtedness to the system equal to the amount of the difference is established.                                        
25 Interest as prescribed by regulation accrues on the indebtedness. The member must pay                                   
26 any outstanding indebtedness existing at the time the member applies for retirement                                     
27 in full before the member is appointed to retirement under this section.                                                
28  (c)  A member is entitled to receive a public service benefit under this section                                      
29 if the member has at least a total of five years credited service under this chapter and                                
30 credited service from the teachers' retirement system claimed under this section.  A                                    
31 public service benefit shall be calculated using the higher of the average monthly                                      

01 compensation for service in this system or the average base salary for service in the                                   
02 teachers' retirement system.  The amount of the benefit shall be calculated in                                          
03 accordance with AS 39.35.370(c).                                                                                        
04  (d)  Credited service earned under either this system or the teachers' retirement                                     
05 system that has been claimed for a public service benefit under this section may not                                    
06 be used for any other purpose. A member who claims credited service under this                                          
07 section loses all rights to benefits under AS 14.25 based on the claimed credited                                       
08 service.  A member may not claim credited service under this section unless the                                         
09 member claims all of the membership service the member has in the teachers'                                             
10 retirement system.  A public service benefit does not constitute a normal or early                                      
11 retirement benefit for purposes of qualifying for a conditional service retirement benefit                              
12 under AS 14.25.125 or AS 39.35.385.                                                                                     
13  (e)  A member whose rights to benefits under AS 14.25 are subject to a                                                
14 qualified domestic relations order may claim credited service under this section.                                       
15 However, the credited service claimed remains subject to the terms of the order.                                        
16  (f)  Notwithstanding AS 14.25.063 and AS 39.35.350, a former member of the                                            
17 teachers' retirement system who is an active member or inactive member of this                                          
18 system may reinstate, under this section, membership service earned under AS 14.25                                      
19 for which the member received a refund of contributions.                                                                
20  (g)  If a member retires under this section and subsequently returns to work for                                      
21 an employer under this system or the teachers' retirement system, benefits under this                                   
22 section shall cease during the period of reemployment and shall recommence when the                                     
23 reemployment is ended.  The credited service earned during the period of                                                
24 reemployment may not be added to the credited service claimed for a public service                                      
25 benefit under this section.  If a member vests and meets the other eligibility                                          
26 requirements under this system or the teachers' retirement system during the                                            
27 reemployment, the member is entitled to a benefit under AS 14.25 or AS 39.35, as                                        
28 appropriate.                                                                                                            
29    * Sec. 3.  A member of the public employees' retirement system who has claimed credited                            
30 service under AS 39.35.345 before the effective date of this Act may exercise the election                              
31 established under AS 39.35.345(d), as amended by sec. 1 of this Act, before the member is                               

01 appointed to retirement.