00                      CS FOR HOUSE BILL NO. 238(STA)                                                                    
01 "An Act relating to establishing a past service cost offset account for required past                                   
02 service cost offset payments owed by employers other than the state to the public                                       
03 employees' pension fund; and providing for an effective date."                                                          
04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
05    * Section 1. AS 39.35 is amended by adding a new section to read:                                                  
06            Sec. 39.35.287. Past service cost offset account. (a) The public employees'                                
07       pension fund past service cost offset account is established in the state treasury and                            
08       shall be administered by the Department of Administration. The legislature may                                    
09       appropriate money to the account.                                                                                 
10            (b)  The administrator shall pay from the account into the public employees'                                 
11       pension fund, on behalf of each employer, other than the state, under the defined                                 
12       contribution plan in AS 39.35.700 - 39.35.990, the employer past service cost offset                              
13       contributions for that year, not to exceed the blended employer past service cost rate.                           
14       The amount shall be determined by actuarial method.                                                               

01            (c)  Contributions for each employer under (b) of this section shall be                                      
02       determined by applying the employer's past service cost rate, up to an amount equal to                            
03       the blended employer past service cost rate, as calculated on the employer's entire                               
04       wage base, to the average salary of all employees of the employer multiplied by the                               
05       number of employees of that employer who are members of the public employees'                                     
06       defined contribution plan in AS 39.35.700 - 39.35.990.                                                            
07            (d)  Unless the context requires otherwise, in this section,                                                 
08                 (1)  "account" means the public employees' pension fund past service                                  
09       cost offset account;                                                                                              
10                 (2)  "blended employer past service cost rate" means the average past                                   
11       service cost rate of all employers, other than the state, in the public employees' defined                        
12       contribution plan established in AS 39.35.700 - 39.35.990 and the defined benefit plan                            
13       established in AS 39.35.095 - 39.35.680;                                                                          
14                 (3)  "past service cost" means the amount of an annual payment made                                     
15       over a stipulated number of years to amortize the unfunded liability of the public                                
16       employees' pension fund under AS 39.35.095 - 39.35.680;                                                           
17                 (4)  "past service cost rate" means the annual payment as a percentage                                  
18       of total wage base of employee salary required to pay the past service cost as an                                 
19       amortized contribution in percentage over a stipulated number of years;                                           
20                 (5)  "unfunded liability" means the excess of the accrued liability over                                
21       the assets of the public employees' pension fund under AS 39.35.095 - 39.35.680.                                  
22    * Sec. 2. This Act takes effect July 1, 2006.