HB 90: "An Act relating to the Protective Occupation Retirement Council; relating to participation of certain employees in the defined benefit and defined contribution plans of the public employees' retirement system; and providing for an effective date."
00 HOUSE BILL NO. 90 01 "An Act relating to the Protective Occupation Retirement Council; relating to 02 participation of certain employees in the defined benefit and defined contribution plans 03 of the public employees' retirement system; and providing for an effective date." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05 * Section 1. AS 37.10 is amended by adding new sections to read: 06 Article 8. Protective Occupation Retirement Council. 07 Sec. 37.10.450. Protective Occupation Retirement Council. (a) The 08 Protective Occupation Retirement Council is established in the Department of 09 Administration. 10 (b) The council consists of nine members. The governor shall appoint 11 (1) six protective occupation employees who are members of the 12 defined benefit retirement plan under AS 39.35.095 - 39.35.680, including 13 (A) one member of the Public Safety Employees Association; 14 (B) one member of the Alaska Correctional Officers
01 Association; 02 (C) one member of the Alaska Professional Fire Fighters 03 Association; 04 (D) one member of the Anchorage Police Department 05 Employees Association; 06 (E) one employee who is employed as a firefighter by a 07 municipal fire department; 08 (F) one employee who is employed in a position other than a 09 peace officer or firefighter position; 10 (2) one member of the legislature for a term that ends after two years 11 or on the date the legislator is no longer a member of the legislature, whichever occurs 12 first; 13 (3) before July 1, 2033, two retirees who participate in the defined 14 benefit retirement plan under AS 39.35.095 - 39.35.680 for terms that end after three 15 years or on June 30, 2033, whichever occurs first; and 16 (4) after June 30, 2033, two retirees who were first hired after June 30, 17 2006, and who participate in the defined benefit retirement plan under AS 39.35.095 - 18 39.35.680. 19 (c) Subject to (b)(3) of this section, members of the Protective Occupation 20 Retirement Council shall serve for staggered terms of three years and may be 21 reappointed. 22 (d) The governor may remove a member for cause by providing written notice 23 to the member. After a member receives the notice, the member may not participate on 24 the Protective Occupation Retirement Council. 25 Sec. 37.10.455. Per diem and travel expenses. Members of the Protective 26 Occupation Retirement Council are entitled to per diem and travel expenses authorized 27 for boards and commissions under AS 39.20.180. 28 Sec. 37.10.460. Powers and duties. (a) The Protective Occupation Retirement 29 Council shall 30 (1) make recommendations to the Alaska Retirement Management 31 Board concerning the board's investment policies, strategies, and procedures that
01 affect the retirement benefits of protective occupation employees; 02 (2) determine an assumed variable benefit as required under 03 AS 39.35.370(m) and (n); 04 (3) reduce the amounts of annual stipends as required under 05 AS 39.35.535(g). 06 (b) The Protective Occupation Retirement Council may 07 (1) enter into contracts for actuarial services that are necessary to carry 08 out the powers and duties of the council under this section; 09 (2) establish employee contribution rates under AS 39.35.160(e) and 10 (f). 11 Sec. 37.10.490. Definitions. In AS 37.10.450 - 37.10.490, "protective 12 occupation employee" means 13 (1) a peace officer as defined in AS 39.35.680; 14 (2) a firefighter as defined in AS 39.35.680; or 15 (3) an administrative, professional, or clerical employee of 16 (A) a municipal police or fire department; 17 (B) a University of Alaska police or fire department; or 18 (C) the Department of Public Safety. 19 * Sec. 2. AS 39.35.095 is amended to read: 20 Sec. 39.35.095. Applicability of AS 39.35.095 - 39.35.680. The following 21 provisions of this chapter apply [ONLY] to members first hired before July 1, 2006, 22 and, regardless of the date of hire, members who are protective occupation 23 employees: AS 39.35.095 - 39.35.680. 24 * Sec. 3. AS 39.35.160(a) is amended to read: 25 (a) Subject to (e) of this section, beginning [BEGINNING] January 1, 1987, 26 each peace officer or firefighter shall contribute to the plan an amount equal to seven 27 and one-half percent of the peace officer's or firefighter's compensation. Except as 28 provided in (d) and (e) of this section, beginning January 1, 1987, each other 29 employee shall contribute to the plan an amount equal to six and three-quarters percent 30 of the employee's compensation. [THE CONTRIBUTIONS SHALL BE DEDUCTED 31 BY THE EMPLOYER AT THE END OF EACH PAYROLL PERIOD. THE
01 CONTRIBUTIONS SHALL BE DEDUCTED FROM EMPLOYEE 02 COMPENSATION BEFORE COMPUTATION OF APPLICABLE FEDERAL 03 TAXES, AND THE CONTRIBUTIONS SHALL BE TREATED AS EMPLOYER 04 CONTRIBUTIONS UNDER 26 U.S.C. 414(h)(2). A MEMBER MAY NOT HAVE 05 THE OPTION OF MAKING THE PAYROLL DEDUCTION DIRECTLY INSTEAD 06 OF HAVING THE CONTRIBUTION PICKED UP BY THE EMPLOYER.] 07 * Sec. 4. AS 39.35.160 is amended by adding new subsections to read: 08 (e) Except as provided in (a) of this section, a protective occupation employee 09 who is employed as a peace officer or firefighter and who first participates in the plan 10 after June 30, 2006, shall contribute to the plan an amount equal to nine percent of the 11 employee's compensation, excluding overtime compensation. The Protective 12 Occupation Retirement Council may, from time to time, adjust the employee 13 contribution under this subsection to an amount that is 14 (1) not less than eight percent of the employee's compensation, 15 excluding overtime compensation; and 16 (2) not more than 12 percent of the employee's compensation, 17 excluding overtime compensation. 18 (f) Except as provided in (a) of this section, a protective occupation employee 19 who is not employed as a peace officer or firefighter and who first participates in the 20 plan after June 30, 2006, shall contribute to the plan an amount equal to eight percent 21 of the employee's compensation, excluding overtime compensation. The council may, 22 from time to time, adjust the employee contribution under this subsection to an 23 amount that is 24 (1) not less than seven percent of the employee's compensation, 25 excluding overtime compensation; and 26 (2) not more than 11 percent of the employee's compensation, 27 excluding overtime compensation. 28 (g) Contributions under (a), (e), and (f) of this section shall be deducted by the 29 employer at the end of each payroll period. The contributions shall be deducted from 30 employee compensation before computation of applicable federal taxes, and the 31 contributions shall be treated as employer contributions under 26 U.S.C. 414(h)(2). A
01 member may not have the option of making the payroll deduction directly instead of 02 having the contribution picked up by the employer. 03 (h) In addition to other employee contributions required under this section, a 04 protective occupation employee who first participates in the plan after June 30, 2006, 05 and who earns overtime compensation shall contribute to the member's individual 06 account in the defined contribution retirement plan established under AS 39.35.700 - 07 39.35.990 an amount equal to nine percent of the employee's overtime compensation. 08 * Sec. 5. AS 39.35.255 is amended by adding a new subsection to read: 09 (i) The requirements of this section are in addition to the requirements under 10 AS 39.35.257. 11 * Sec. 6. AS 39.35 is amended by adding a new section to read: 12 Sec. 39.35.257. Employer contributions for protective occupation 13 employees. (a) An employer that employs a peace officer or firefighter who first 14 participates in the plan after June 30, 2006, shall contribute monthly to the plan a per 15 capita amount that is equal to 14 percent of the total monthly compensation, excluding 16 overtime compensation, that the employer pays to all protective occupation employees 17 combined. 18 (b) An employer who employs a protective occupation employee who is not 19 employed as a peace officer or firefighter and who first participates in the plan after 20 June 30, 2006, shall contribute monthly to the plan a per capita amount that is equal to 21 12 percent of the total monthly compensation, excluding overtime compensation, that 22 the employer pays to all protective occupation employees combined. 23 (c) In addition to other employer contributions required under this section, an 24 employer of a protective occupation employee who first participates in the plan after 25 June 30, 2006, shall contribute an amount equal to 14 percent of the employee's 26 overtime compensation to the employee's individual account in the defined 27 contribution retirement plan established under AS 39.35.700 - 39.35.990. 28 * Sec. 7. AS 39.35.370(a) is amended to read: 29 (a) Subject to AS 39.35.450, a terminated employee who first became a 30 member before July 1, 2006, is eligible for a normal retirement benefit 31 (1) at age 60 with at least five years of credited service;
01 (2) with at least 20 years of credited service as a peace officer or 02 firefighter; or 03 (3) with at least 30 years of credited service for all other employees. 04 * Sec. 8. AS 39.35.370(c) is amended to read: 05 (c) Except as provided in (m) and (n) of this section, the [THE] monthly 06 amount of a retirement benefit for a peace officer or firefighter is two percent of the 07 average monthly compensation times the years of credited service through 10 years, 08 plus two and one-half percent of the average monthly compensation times the years of 09 service over 10 years. For all other employees, it is 10 (1) two percent of the average monthly compensation times all years of 11 service before July 1, 1986, and for years of service through a total of 10 years; plus 12 (2) two and one-quarter percent of the average monthly compensation 13 times all years of service after June 30, 1986, over 10 years of total service through 20 14 years; plus 15 (3) two and one-half percent of the average monthly compensation 16 times all years of service after June 30, 1986, over 20 years of total service. 17 * Sec. 9. AS 39.35.370 is amended by adding new subsections to read: 18 (l) Subject to AS 39.35.450, a terminated employee who first became a 19 member after June 30, 2006, is eligible for a normal retirement benefit 20 (1) at age 55 with at least 20 years of credited service as a peace 21 officer or firefighter; or 22 (2) at age 60 with at least 30 years of credited service as a protective 23 occupation employee who is not employed as a peace officer or firefighter. 24 (m) The monthly amount of a retirement benefit for a protective occupation 25 employee who first participates in the plan after June 30, 2006, is two percent of the 26 employee's average monthly compensation, excluding overtime compensation, times 27 the employee's years of credited service plus an assumed variable benefit calculated 28 under (n) of this section by the Protective Occupation Retirement Council established 29 under AS 37.10.450. 30 (n) The Protective Occupation Retirement Council established under 31 AS 37.10.450 shall actuarially calculate the assumed variable benefit under (m) of this
01 section for each eligible employee individually based on a percentage of the 02 employee's annual compensation rate in the year the employee is appointed to 03 retirement, the employee's age, and the employee's credited service on the date the 04 employee is appointed to retirement. The employee shall have a vested right to the 05 assumed variable benefit that is calculated in the year in which the employee is 06 appointed to retirement and may not receive an assumed variable benefit that is 07 calculated before then. 08 * Sec. 10. AS 39.35.375(c) is amended to read: 09 (c) A member is entitled to receive a public service benefit under this section 10 if the member has at least a total of five years credited service under AS 39.35.095 - 11 39.35.680 and credited service from the teachers' retirement plan under AS 14.25.009 12 - 14.25.220 claimed under this section. A public service benefit shall be calculated 13 using the higher of the average monthly compensation for service in this plan or the 14 average base salary for service in the teachers' retirement plan under AS 14.25.009 - 15 14.25.220. The amount of the benefit shall be calculated in accordance with 16 AS 39.35.370(c) or (m). 17 * Sec. 11. AS 39.35.385(d) is amended to read: 18 (d) The monthly amount of a conditional service retirement benefit shall be 19 calculated on the years of fully paid credited service in accordance with 20 AS 39.35.370(c) or (m), except that the member may irrevocably elect to substitute 21 one-twelfth of the "average base salary" as defined in AS 14.25.220(5) in place of 22 average monthly compensation. 23 * Sec. 12. AS 39.35.400(d) is repealed and reenacted to read: 24 (d) The monthly amount of the nonoccupational disability benefit 25 (1) for a disabled employee who first became a member before July 1, 26 2006, shall be determined in accordance with AS 39.35.370(c), based on the 27 employee's credited service and compensation before termination of employment; 28 (2) for a disabled employee who first becomes a member after June 30, 29 2006, shall be determined in accordance with AS 39.35.370(m) and (n). 30 * Sec. 13. AS 39.35.400(f) is amended to read: 31 (f) A disabled employee's nonoccupational disability benefit terminates when
01 the employee first attains eligibility for normal retirement. At that time, retirement 02 benefits will be calculated under AS 39.35.370(c) or (m). 03 * Sec. 14. AS 39.35.410(h) is amended to read: 04 (h) A disabled employee's occupational disability benefit terminates when the 05 disabled employee first attains eligibility for normal retirement. At that time, if the 06 employee first became a member before July 1, 2006, the employee's retirement 07 benefit shall be calculated under the provisions of AS 39.35.370(c). 08 * Sec. 15. AS 39.35.410(i) is repealed and reenacted to read: 09 (i) Notwithstanding (h) of this section, a peace officer or firefighter who first 10 became a member before July 1, 2006, and who is receiving occupational disability 11 benefits under this section at the time the peace officer or firefighter first attains 12 eligibility for normal retirement shall, within 30 days after attaining eligibility for 13 normal retirement, irrevocably elect to receive benefits in an amount calculated as 14 (1) the monthly occupational disability benefit calculated under (d) of 15 this section; or 16 (2) the employee's retirement benefit calculated under the provisions of 17 AS 39.35.370(c). 18 * Sec. 16. AS 39.35.410 is amended by adding a new subsection to read: 19 (k) Notwithstanding (h) of this section, a protective occupation employee who 20 first becomes a member after June 30, 2006, and who is receiving occupational 21 disability benefits under this section at the time the employee first attains eligibility for 22 normal retirement shall, within 30 days after attaining eligibility for normal retirement, 23 irrevocably elect to receive retirement benefits in the amount calculated as 24 (1) the monthly occupational disability benefit calculated under (d) of 25 this section; or 26 (2) the employee's retirement benefit calculated under 27 AS 39.35.370(m) and (n). 28 * Sec. 17. AS 39.35.430(g) is amended to read: 29 (g) The monthly survivor's pension in (b) of this section for survivors of 30 employees who were not peace officers or firefighters is 40 percent of the employee's 31 monthly compensation in the month in which the employee dies. The monthly
01 survivor's pension in (b) of this section for survivors of employees who were peace 02 officers or firefighters is the greater of 03 (1) 50 percent of the monthly compensation in the month in which the 04 employee dies; or 05 (2) 75 percent of the employee's retirement benefit calculated under 06 the provisions of AS 39.35.370(c) or (m) if the employee had survived to normal 07 retirement age. 08 * Sec. 18. AS 39.35.485(a) is amended to read: 09 (a) An employee who is eligible for a benefit calculated in accordance with 10 AS 39.35.370(c) or (m) is entitled to a benefit of at least $25 a month for each year of 11 credited service, not including adjustments made under AS 39.35.340 for military 12 service, AS 39.35.360 for credit for earlier service, AS 39.35.370(c) or (m) for early 13 retirement, AS 39.35.420 for nonoccupational death benefits, AS 39.35.450 for the 14 survivor's option, former AS 39.35.460 for the level income option, AS 39.35.475 for 15 the post-retirement pension adjustment, and AS 39.35.480 for the cost of living. 16 * Sec. 19. AS 39.35.535(c) is amended to read: 17 (c) A benefit recipient may elect major medical insurance coverage in 18 accordance with regulations and under the following conditions: 19 (1) a person who became a member before July 1, 2006, or the 20 surviving spouse of the person, other than a disabled member or a disabled member 21 who is appointed to normal retirement, shall [MUST] pay an amount equal to the full 22 monthly group premium for retiree major medical insurance coverage if the person is 23 (A) younger than 60 years of age and has less than 24 (i) 25 years of credited service as a peace officer under 25 AS 39.35.360 and 39.35.370; or 26 (ii) 30 years of credited service under AS 39.35.360 and 27 39.35.370 that is not service as a peace officer; or 28 (B) of any age and has less than 10 years of credited service; 29 (2) a person who became a member before July 1, 2006, or the 30 surviving spouse of the person, is not required to make premium payments for retiree 31 major medical coverage if the person
01 (A) is a disabled member; 02 (B) is a disabled member who is appointed to normal 03 retirement; 04 (C) is 60 years of age or older and has at least 10 years of 05 credited service; or 06 (D) has at least 07 (i) 25 years of credited service as a peace officer under 08 AS 39.35.360 and 39.35.370; or 09 (ii) 30 years of credited service under AS 39.35.360 and 10 39.35.370 not as a peace officer; 11 (3) a benefit recipient who is a protective occupation employee and 12 who first becomes a member after June 30, 2006, or a benefit recipient who is the 13 surviving spouse of a person who is a protective occupation employee and who 14 first becomes a member after June 30, 2006, shall receive as an annual stipend 15 for the purpose of purchasing major medical insurance coverage an amount that 16 (A) if the employee has 10 years or more of service as a 17 peace officer or firefighter, is equal to four percent of the full annual 18 premium in 2013 for retiree major medical insurance, multiplied by the 19 employee's years of service as a peace officer or firefighter; 20 (B) if the employee is not a peace officer or firefighter, is 21 equal to three and three-tenths percent of the full annual premium in 2013 22 for retiree major medical insurance, multiplied by the employee's years of 23 service; 24 (4) a benefit recipient who is a protective occupation employee and 25 who first becomes a member after June 30, 2006, shall receive an annual stipend 26 for an amount equal to the full annual group premium for retiree major medical 27 coverage if the recipient 28 (A) is a disabled member; or 29 (B) is a disabled member who is appointed to normal 30 retirement. 31 * Sec. 20. AS 39.35.535 is amended by adding a new subsection to read:
01 (g) The Protective Occupation Retirement Council established under 02 AS 37.10.450 shall reduce the stipend payable to a benefit recipient under (c)(3) of 03 this section by a percentage determined by the council under AS 37.10.460(a)(3). 04 * Sec. 21. AS 39.35.620 is amended by adding a new subsection to read: 05 (l) Notwithstanding the provision under (k) of this section that limits employer 06 participation of a previously terminated employer that returns to the system, an 07 employer who terminates participation for one or more protective occupation 08 employees and later returns to the system may participate in the defined benefit 09 retirement plan under AS 39.35.095 - 39.35.680 and defined contribution retirement 10 plan under AS 39.35.700 - 39.35.990. 11 * Sec. 22. AS 39.35.680(18) is amended to read: 12 (18) "employer" means 13 (A) the State of Alaska; 14 (B) a political subdivision or public organization of the state 15 that participates in the plan based on a resolution to participate in the plan that 16 was approved by the administrator 17 (i) on or before July 1, 2006; or 18 (ii) for protective occupation employees; or 19 (C) a political subdivision or public organization of the state 20 that assumes liability for participation in the plan by another political 21 subdivision or public organization of the state [,] as a result of consolidation 22 or reorganization that occurs 23 (i) at any time, with respect to protective occupation 24 employees; 25 (ii) on or after July 1, 2006, with respect to employees who are not 26 protective occupation employees [ASSUMES LIABILITY UNDER THE PLAN OF 27 A POLITICAL SUBDIVISION OR PUBLIC ORGANIZATION DESCRIBED IN (B) 28 OF THIS PARAGRAPH]; 29 * Sec. 23. AS 39.35.680(26) is amended to read: 30 (26) "normal retirement" means retirement for a member who is 31 eligible to receive benefits under AS 39.35.370(a) or (l) or under 39.35.385(a) or (f);
01 * Sec. 24. AS 39.35.680 is amended by adding a new paragraph to read: 02 (44) "protective occupation employee" has the meaning given in 03 AS 37.10.490. 04 * Sec. 25. AS 39.35.700 is amended to read: 05 Sec. 39.35.700. Applicability of AS 39.35.700 - 39.35.990. The provisions of 06 AS 39.35.700 - 39.35.990 apply only to members first hired on or after July 1, 2006, 07 to members who are employed by employers that do not participate in the defined 08 benefit retirement plan established under AS 39.35.095 - 39.35.680, to former 09 members as defined in AS 39.35.680, [OR] to members who transfer into the defined 10 contribution retirement plan under AS 39.35.940, or, subject to the limitations and 11 requirements of AS 39.35.705, to members of the defined benefit retirement plan 12 established under AS 39.35.095 - 39.35.680 who are protective occupation 13 employees. 14 * Sec. 26. AS 39.35 is amended by adding a new section to read: 15 Sec. 39.35.705. Limitation on applicability of AS 39.35.700 - 39.35.990. 16 Notwithstanding AS 39.35.700, the benefits and requirements under AS 39.35.890 - 17 39.35.894 and 39.35.960 - 39.35.970 do not apply to an employee who contributes to 18 an individual account under AS 39.35.700 - 39.35.990 solely as required by 19 AS 39.35.160(h). 20 * Sec. 27. AS 39.35.720 is amended to read: 21 Sec. 39.35.720. Membership. Except as provided in AS 39.35.095 and 22 39.35.705, an [AN] employee who becomes a member on or after July 1, 2006, shall 23 participate in the plan set out in AS 39.35.700 - 39.35.990. 24 * Sec. 28. AS 39.35.730(a) is amended to read: 25 (a) Each member shall contribute to the member's individual account 26 (1) an amount equal to eight percent of the member's compensation 27 from July 1 to the following June 30; or 28 (2) the amount required under AS 39.35.160(h) if the member is a 29 protective occupation employee and a member of the defined benefit retirement 30 plan established under AS 39.35.095 - 39.35.680. 31 * Sec. 29. AS 39.35.750 is amended by adding a new subsection to read:
01 (f) This section does not apply to contributions made under AS 39.35.257(c) 02 and does not require an employer who makes a contribution for an employee under 03 AS 39.35.257(c) to make another contribution for that employee. 04 * Sec. 30. AS 39.35.870 is amended by adding a new subsection to read: 05 (h) Except as provided in (c) of this section, a protective occupation employee 06 who makes contributions under AS 39.35.160(h) is not eligible for benefits under this 07 section. 08 * Sec. 31. AS 39.35.880 is amended by adding a new subsection to read: 09 (l) Except as provided in AS 39.35.870(c), a protective occupation employee 10 who makes contributions under AS 39.35.160(h) is not eligible for benefits under this 11 section. 12 * Sec. 32. AS 39.35.990 is amended by adding a new paragraph to read: 13 (28) "protective occupation employee" has the meaning given in 14 AS 37.10.490. 15 * Sec. 33. The uncodified law of the State of Alaska is amended by adding a new section to 16 read: 17 TRANSITION: APPOINTMENTS TO PROTECTIVE OCCUPATION 18 RETIREMENT COUNCIL. (a) The governor shall appoint as members of the first Protective 19 Occupation Retirement Council established under AS 37.10.450, enacted by sec. 1 of this Act, 20 the following: 21 (1) six protective occupation employees who are members of either the 22 defined benefit retirement plan under AS 39.35.095 - 39.35.680 or the defined contribution 23 retirement plan under AS 39.35.700 - 39.35.990, including 24 (A) one member of the Public Safety Employees Association; 25 (B) one member of the Alaska Correctional Officers Association; 26 (C) one member of the Alaska Professional Fire Fighters Association; 27 (D) one member of the Anchorage Police Department Employees 28 Association; 29 (E) one employee who is employed as a firefighter by a municipal fire 30 department; 31 (F) one employee who is employed in a position other than a peace
01 officer or firefighter; 02 (2) one member of the legislature; and 03 (3) two retirees who participate in the defined benefit retirement plan under 04 AS 39.35.095 - 39.35.680. 05 (b) In this section, 06 (1) "peace officer" or "firefighter" has the meaning given in AS 39.35.680; 07 (2) "protective occupation employee" has the meaning given in AS 37.10.490, 08 enacted by sec. 1 of this Act. 09 * Sec. 34. The uncodified law of the State of Alaska is amended by adding a new section to 10 read: 11 RETIREMENT PLAN ELECTION. (a) A protective occupation employee who was 12 first hired after June 30, 2006, and before the effective date of this section and who is a 13 member of the defined contribution retirement plan of the public employees' retirement 14 system under AS 39.35.700 - 39.35.990 may, within 90 days after the effective date of this 15 section, make a one-time election to participate in the defined benefit retirement plan under 16 AS 39.35.095 - 39.35.680 and to transfer all contributions that have been made or should be 17 made to the defined contribution retirement plan for service the member completes before the 18 effective date of the member's participation in the defined benefit retirement plan. The 19 transferred contributions shall be used to purchase credited service in the defined benefit 20 retirement plan on an actuarial equivalent basis determined by the Protective Occupation 21 Retirement Council established under AS 37.10.450, enacted by sec. 1 of this Act. 22 (b) In this section, 23 (1) "peace officer" or "firefighter" has the meaning given in AS 39.35.680; 24 (2) "protective occupation employee" has the meaning given in AS 37.10.490, 25 enacted by sec. 1 of this Act. 26 * Sec. 35. The uncodified law of the State of Alaska is amended by adding a new section to 27 read: 28 RETIREMENT PLAN ELECTION PROCEDURE; REGULATIONS REQUIRED. 29 (a) An election made under sec. 34 of this Act to participate in the defined benefit retirement 30 plan under AS 39.35.095 - 39.35.680 must be made in writing on one or more forms and in 31 the manner prescribed by the administrator. Before accepting an election to participate in the
01 defined benefit retirement plan, the administrator shall provide the employee who plans on 02 making an election to participate in the defined benefit retirement plan with information, 03 including calculations to illustrate the effect of moving the employee's retirement plan from 04 the defined contribution retirement plan to the defined benefit retirement plan as well as other 05 information that clearly informs the employee of potential consequences of the employee's 06 election. 07 (b) An election made under sec. 34 of this Act to participate in the defined benefit 08 retirement plan is irrevocable. On the effective date of the election, an eligible employee who 09 makes the election shall be enrolled as a member of the defined benefit retirement plan, and 10 the employee's participation in the plan shall be governed by the applicable provisions of the 11 defined benefit retirement plan. The employee's enrollment in the defined benefit retirement 12 plan is retroactive to the date of hire. An election made by an eligible employee who is 13 married is not effective unless the election is signed by the employee's spouse. 14 (c) When an eligible employee makes a one-time election under sec. 34 of this Act, 15 the administrator shall cause the total amount of the employee's employee and employer 16 contributions, with investment earnings and losses through the day of the employee's election 17 to participate as a member in the defined benefit retirement plan, to be actuarially calculated 18 and, subject to (d) of this section, transferred to the pension fund in the defined benefit 19 retirement plan. On the effective date of the employee's participation in the defined benefit 20 retirement plan, the employee shall be credited with service in the defined benefit retirement 21 plan that may be purchased under an actuarial equivalent purchase formula as determined by 22 the board. The board shall establish transfer procedures by regulation, but the actual transfer 23 may not occur later than 30 days after the date the administrator receives the employee's 24 completed forms under (a) of this section, unless the major financial markets for securities 25 available for a transfer are seriously disrupted by an unforeseen event that also causes the 26 suspension of trading on any national securities exchange in the country where the securities 27 were issued. In that event, the 30-day period may be extended by a resolution of the board. A 28 transfer is not commissionable or subject to other fees and may be in the form of one or more 29 securities or cash as determined by the board. A security shall be valued on the date of receipt 30 in the employee's account. 31 (d) If the value actuarially calculated under (c) of this section is insufficient to pay for
01 service credit equal to the employee's actual service, the administrator shall allow the 02 employee the option of creating an indebtedness up to the amount needed to eliminate the 03 insufficiency; however, if that value exceeds the amount needed to pay for a service credit 04 equal to the employee's actual service, the administrator shall cause the excess to remain in 05 the employee's retirement plan established under AS 39.35.700 - 39.35.990. An excess under 06 this subsection may not be used to purchase service credit in a retirement plan administered 07 under AS 39.35. 08 (e) The provisions of this section are subject to the requirements of the Internal 09 Revenue Code and the limitations under AS 39.35.115, 39.35.678, 39.35.710(c) and (d), and 10 39.35.895. 11 (f) In this section, 12 (1) "administrator" means the commissioner of administration or the person 13 designated by the commissioner of administration under AS 39.35.003 for a public 14 employees' retirement plan; 15 (2) "board" means the Alaska Retirement Management Board established 16 under AS 37.10.210; 17 (3) "defined benefit retirement plan" means the retirement plan established 18 under AS 39.35.095 - 39.35.680 for a public employee; 19 (4) "defined contribution retirement plan" means the retirement plan 20 established under AS 39.35.700 - 39.35.990 for a public employee; 21 (5) "Internal Revenue Code" has the meaning given in AS 39.35.990. 22 * Sec. 36. The uncodified law of the State of Alaska is amended by adding a new section to 23 read: 24 ADOPTION OF REGULATIONS. The commissioner of administration shall adopt 25 regulations necessary to implement the changes made by this Act. The regulations take effect 26 under AS 44.62 (Administrative Procedure Act), but not before the effective date of the law 27 implemented by the regulation. 28 * Sec. 37. Sections 35 and 36 of this Act take effect immediately under AS 01.10.070(c). 29 * Sec. 38. Except as provided in sec. 37 of this Act, this Act takes effect July 1, 2015.