CSHB 220(FIN): "An Act relating to the Public Employees' Retirement System of Alaska and the teachers' retirement system; providing certain employees an opportunity to choose between the defined benefit and defined contribution plans of the Public Employees' Retirement System of Alaska and the teachers' retirement system; and providing for an effective date."
00 CS FOR HOUSE BILL NO. 220(FIN) 01 "An Act relating to the Public Employees' Retirement System of Alaska and the 02 teachers' retirement system; providing certain employees an opportunity to choose 03 between the defined benefit and defined contribution plans of the Public Employees' 04 Retirement System of Alaska and the teachers' retirement system; and providing for an 05 effective date." 06 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 07 * Section 1. AS 14.25.009 is repealed and reenacted to read: 08 Sec. 14.25.009. Applicability of AS 14.25.009 - 14.25.220. (a) The provisions 09 of AS 14.25.009 - 14.25.220 apply to teachers who are eligible to be members of the 10 teachers' retirement system under AS 14.25.009 - 14.25.220 and are not members of 11 the defined contribution retirement plan under AS 14.25.310 - 14.25.590. 12 (b) An employer that participates in the plan shall also participate in the 13 defined contribution retirement plan under AS 14.25.310 - 14.25.590.
01 * Sec. 2. AS 14.25.040(a) is amended to read: 02 (a) Unless a teacher or member participates in a university retirement program 03 under AS 14.40.661 - 14.40.799 or has elected under AS 14.25.330 or former 04 AS 14.25.540 to participate in the plan established in AS 14.25.310 - 14.25.590, a 05 teacher or member contracting for service with a participating employer is subject to 06 AS 14.25.009 - 14.25.220. 07 * Sec. 3. AS 14.25.050(a) is amended to read: 08 (a) Except as provided in (c) and (e) of this section, beginning January 1, 09 1991, each member shall contribute to the plan an amount equal to 8.65 percent of the 10 member's base salary accrued from July 1 to the following June 30. [THE 11 EMPLOYER SHALL DEDUCT THE CONTRIBUTION FROM THE MEMBER'S 12 SALARY AT THE END OF EACH PAYROLL PERIOD, AND THE 13 CONTRIBUTION SHALL BE CREDITED BY THE PLAN TO THE MEMBER 14 CONTRIBUTION ACCOUNT. THE CONTRIBUTIONS SHALL BE DEDUCTED 15 FROM EMPLOYEE COMPENSATION BEFORE THE COMPUTATION OF 16 APPLICABLE FEDERAL TAXES AND SHALL BE TREATED AS EMPLOYER 17 CONTRIBUTIONS UNDER 26 U.S.C. 414(h)(2). A MEMBER MAY NOT HAVE 18 THE OPTION OF MAKING THE PAYROLL DEDUCTION DIRECTLY IN CASH 19 INSTEAD OF HAVING THE CONTRIBUTION PICKED UP BY THE 20 EMPLOYER.] 21 * Sec. 4. AS 14.25.050 is amended by adding new subsections to read: 22 (e) A member who first participates in the plan after June 30, 2006, shall 23 contribute to the plan an amount equal to eight percent of the member's compensation. 24 The board may, from time to time, adjust the contribution under this subsection to an 25 amount that, 26 (1) if decreased, is not less than eight percent of the member's 27 compensation; and 28 (2) if increased, is not more than 12 percent of the member's 29 compensation. 30 (f) The employer shall deduct the contribution from the member's salary at the 31 end of each payroll period, and the contribution shall be credited by the plan to the
01 member contribution account. The contributions shall be deducted from member 02 compensation before the computation of applicable federal taxes and shall be treated 03 as employer contributions under 26 U.S.C. 414(h)(2). A member may not have the 04 option of making the payroll deduction directly in cash instead of having the 05 contribution picked up by the employer. 06 * Sec. 5. AS 14.25.087 is amended to read: 07 Sec. 14.25.087. Contributions for medical benefits. Contributions made by 08 an employer under AS 14.25.070 and 14.25.085 must [SHALL] be separately 09 computed for benefits provided by AS 14.25.168 and 14.25.171. The contributions 10 computed for benefits provided by AS 14.25.168 must [AND SHALL] be deposited 11 in the Alaska retiree health care trust established under AS 39.30.097(a), and the 12 contributions computed for benefits provided by AS 14.25.171 must be deposited 13 in the teachers' and public employees' retiree health reimbursement arrangement 14 plan trust fund established under AS 39.30.340. 15 * Sec. 6. AS 14.25.110(a) is amended to read: 16 (a) Subject to AS 14.25.167, a member who first became a member of the 17 plan before July 1, 2006, is eligible for a normal retirement benefit if the member 18 (1) was first hired before July 1, 1975, has attained the age of 55 years, 19 and has at least 15 years of credited service, the last five of which have been 20 membership service, or is otherwise vested in the plan; 21 (2) has attained the age of 60 years and has at least eight years of 22 membership service; 23 (3) has attained the age of 60 years, has at least five years of 24 membership service, and has Alaska BIA service which, when added to the 25 membership service, will equal at least eight years; 26 (4) has at least 25 years of credited service, the last five of which have 27 been membership service; 28 (5) has at least 20 years of membership service; 29 (6) has at least 20 years of combined membership service and Alaska 30 BIA service, the last five of which have been membership service; or 31 (7) has, for each of 20 school years,
01 (A) at least one-half year of membership service as a part-time 02 teacher; 03 (B) one full year of membership service as a full-time teacher; 04 or 05 (C) any combination of service qualified under this paragraph. 06 * Sec. 7. AS 14.25.110 is amended by adding a new subsection to read: 07 (n) Subject to AS 14.25.167, a member who first became a member of the 08 plan on or after July 1, 2006, is eligible for a normal retirement benefit if the member 09 (1) has attained the age of 60 years; or 10 (2) has at least 30 years of membership service. 11 * Sec. 8. AS 14.25.143(e) is amended to read: 12 (e) When computing a death benefit under former AS 14.25.155 or under 13 AS 14.25.157 [, 14.25.157,] or 14.25.160 or a survivor's benefit under AS 14.25.162, 14 14.25.164, or 14.25.167, adjustments granted to the deceased member or survivor 15 under this section shall be included in the computation. 16 * Sec. 9. AS 14.25.157(a) is amended to read: 17 (a) If [(1)] the death of a member occurs before the member first attains 18 eligibility for normal retirement [, AND (2) THE PROXIMATE CAUSE OF DEATH 19 IS A BODILY INJURY SUSTAINED OR HAZARD UNDERGONE WHILE IN 20 THE PERFORMANCE AND WITHIN THE SCOPE OF THE MEMBER'S DUTIES 21 OF EMPLOYMENT,] and the death [(3) THE INJURY OR HAZARD] is not the 22 proximate result of wilful negligence on the part of the member, the administrator 23 shall pay a monthly survivor's pension equal to 40 percent of the member's base salary 24 at the time of termination of employment, divided by 12, to the member's surviving 25 spouse. If there is no surviving spouse, the administrator shall pay the monthly 26 survivor's pension in equal parts to the dependent children of the member. On the date 27 the normal retirement of the member would have occurred if the member had lived, 28 monthly payments must equal the monthly amount of the normal retirement benefit to 29 which the member, had the member lived and continued employment until the 30 member's normal retirement date, would have been entitled with an average base 31 salary as existed at the member's death and the credited service to which the member
01 would have been entitled. If the member does not have a spouse or dependent children 02 at the time of death or if the member designates as beneficiary under AS 14.25.166 03 someone other than the surviving spouse or dependent children, the administrator shall 04 pay the member's designated beneficiary those benefits available to a beneficiary 05 under AS 14.25.160(b) and (c) and may not pay a benefit to the surviving spouse or 06 dependent children. 07 * Sec. 10. AS 14.25.157(c) is amended to read: 08 (c) Benefits are not payable under this section if benefits are payable under 09 former AS 14.25.155 or under AS 14.25.160 [, 14.25.160], 14.25.162, 14.25.164, or 10 14.25.167. 11 * Sec. 11. AS 14.25.162(b) is amended to read: 12 (b) A survivor's allowance is payable under this section as follows: 13 (1) an allowance of 10 percent of the member's base salary 14 immediately before the member's death, retirement, or disability shall be paid for each 15 dependent child; if there are four or more dependent children, the total amount paid to 16 those children is 40 percent of the member's base salary before the member's death, 17 retirement, or disability, paid in equal amounts to each child; the allowance shall be 18 recomputed for the month in which the number of dependent children is less than four 19 and the benefits shall be decreased accordingly; the adoption of a dependent child does 20 not terminate the survivor's allowance payable under this section; 21 (2) an allowance of 35 percent of the member's base salary shall be 22 paid to the member's surviving spouse as long as there is an eligible dependent child, 23 as determined under (b)(1) of this section, for whom the surviving spouse is legally 24 responsible; if there is no surviving spouse, an allowance of 10 percent of the 25 member's base salary shall be paid to each court-appointed guardian, not to exceed one 26 allowance for each child or for each group of children who have the same guardian or 27 joint guardians; 28 (3) when no further benefits are payable under this section, the 29 difference between the amount that would have been paid under AS 14.25.160 and any 30 payments made to the member, spouse, guardian, or dependent children under this 31 section shall be paid to those beneficiaries described in AS 14.25.166;
01 (4) benefits are not payable under this section if benefits are payable 02 under former AS 14.25.155 or under AS 14.25.157 [, 14.25.157], 14.25.164, or 03 14.25.167. 04 * Sec. 12. AS 14.25.164(b) is amended to read: 05 (b) A spouse's pension is payable under this section as follows: 06 (1) a spouse's pension is equal to 50 percent of the retirement benefit 07 that the deceased member was receiving; if the member was not receiving a retirement 08 benefit, the spouse's pension is equal to 50 percent of the amount the member would 09 have received, based on the member's average base salary and credited service to the 10 date of the member's death and assuming that the member would have been eligible 11 for a normal retirement benefit as of that date; 12 (2) in the event of the death of a member's spouse who is receiving a 13 spouse's pension, the difference between the amount that would have been paid under 14 AS 14.25.160 and any payments made to the member, spouse, guardian, or dependent 15 children shall be paid to those beneficiaries described in AS 14.25.166; 16 (3) benefits are not payable under this section if benefits are payable 17 under former AS 14.25.155 or under AS 14.25.157 [, 14.25.157], 14.25.162, or 18 14.25.167. 19 * Sec. 13. AS 14.25.167(a) is amended to read: 20 (a) Benefits payable under this section are in place of benefits payable under 21 former AS 14.25.155 or under AS 14.25.110, 14.25.125, [14.25.155,] 14.25.157, 22 14.25.160, 14.25.162, or 14.25.164. Upon filing an application for retirement with the 23 administrator, or when a disabled member becomes eligible for normal retirement 24 under AS 14.25.130(e), the member shall designate the person who is the member's 25 spouse at the time of appointment to retirement as the contingent beneficiary. 26 However, if the designation of the spouse is revoked under (c) of this section, the 27 member may designate a dependent approved by the administrator as the contingent 28 beneficiary or may take normal or early retirement under AS 14.25.110 or 14.25.125. 29 The administrator shall pay benefits under the option elected by the member. The 30 member may elect an option that provides that 31 (1) the member is entitled to receive a reduced benefit payable for life,
01 and, after the member's death, the contingent beneficiary is entitled to receive 02 payments in the amount of 75 percent of the reduced benefit for life; 03 (2) the member is entitled to receive a reduced benefit payable for life, 04 and, after the member's death, the contingent beneficiary is entitled to receive 05 payments in the amount of 50 percent of the reduced benefit for life; or 06 (3) the member is entitled to receive a reduced benefit payable during 07 the joint lifetime of the member and the contingent beneficiary, and, after the death of 08 either the member or the contingent beneficiary, the survivor is entitled to receive 09 payments in the amount of 66-2/3 percent of the reduced benefit for life. 10 * Sec. 14. AS 14.25.167(e) is amended to read: 11 (e) If either the member or contingent beneficiary dies before the member is 12 appointed to retirement, the election becomes inoperative. Once the member is 13 appointed to retirement, the election is irrevocable, even if the retired member is 14 reemployed. Any additional retirement benefit to which the reemployed member may 15 become entitled will be paid in accordance with the initial election made under this 16 section, unless the contingent beneficiary is deceased. If the contingent beneficiary is 17 deceased, the benefits earned during the period of reemployment are subject to 18 AS 14.25.110, or this section if another contingent beneficiary was designated during 19 the period of reemployment. All other benefits earned during previous periods of 20 employment are subject to the election at the time the member was appointed to 21 retirement. [IF DEATH OCCURS DURING THE PERIOD OF REEMPLOYMENT 22 AND THE PROXIMATE CAUSE OF DEATH IS NOT A BODILY INJURY 23 SUSTAINED OR HAZARD UNDERGONE WHILE IN THE PERFORMANCE 24 AND WITHIN THE SCOPE OF THE MEMBER'S DUTIES OF EMPLOYMENT, 25 THOSE BENEFITS EARNED WHILE REEMPLOYED ARE SUBJECT TO 26 AS 14.25.155(c).] All other benefits earned during previous periods of employment 27 are subject to the election at the time the member was appointed to retirement. If death 28 occurs during the period of reemployment and [THE PROXIMATE CAUSE OF 29 DEATH IS A BODILY INJURY SUSTAINED OR HAZARD UNDERGONE 30 WHILE IN THE PERFORMANCE AND WITHIN THE SCOPE OF THE 31 MEMBER'S DUTIES OF EMPLOYMENT AND THE INJURY OR HAZARD] is
01 not the proximate result of wilful negligence on the part of the member, all benefits 02 earned during all periods of employment are subject to AS 14.25.157. 03 * Sec. 15. AS 14.25.168(a) is amended to read: 04 (a) Except as provided in AS 14.25.171 and (c) of this section, the following 05 persons are entitled to major medical insurance coverage under this section: 06 (1) for teachers first hired before July 1, 1990, 07 (A) a teacher who is receiving a monthly benefit from the plan 08 and who has elected coverage; 09 (B) the spouse and dependent children of the teacher described 10 in (A) of this paragraph; 11 (C) the surviving spouse of a deceased teacher who is receiving 12 a monthly benefit from the plan and who has elected coverage; 13 (D) the dependent children of a deceased teacher who are 14 dependent on the surviving spouse described in (C) of this paragraph; 15 (2) for teachers first hired on or after July 1, 1990, 16 (A) a teacher who is receiving a monthly benefit from the plan 17 and who has elected coverage for the teacher; 18 (B) the spouse of the teacher described in (A) of this paragraph 19 if the teacher elected coverage for the spouse; 20 (C) the dependent children of the teacher described in (A) of 21 this paragraph if the teacher elected coverage for the dependent children; 22 (D) the surviving spouse of a deceased teacher who is receiving 23 a monthly benefit from the plan and who has elected coverage; 24 (E) the dependent children of a deceased teacher who are 25 dependent on the surviving spouse described in (D) of this paragraph if the 26 surviving spouse has elected coverage for the dependent children. 27 * Sec. 16. AS 14.25.169 is amended to read: 28 Sec. 14.25.169. Duplicate benefits. If payments from this retirement plan are 29 due to a teacher or to the teacher's spouse under more than one provision of this plan, 30 the teacher or spouse shall elect under which provision and which benefit the teacher 31 or spouse wishes to receive and no payments may be made under any other provision.
01 However, benefits under former AS 14.25.155 or under AS 14.25.157 [, 14.25.157], 02 14.25.160, 14.25.162, 14.25.164, and 14.25.167 shall be paid in addition to those 03 benefits or that service credit a person is entitled to receive because of the person's 04 own membership in the retirement plan. A teacher may not receive (1) duplicate credit 05 under this plan for the same period of service, (2) more than one year of service credit 06 in the course of a school year, or (3) a benefit while accruing service credit under this 07 plan, except as provided in this section. 08 * Sec. 17. AS 14.25 is amended by adding a new section to read: 09 Sec. 14.25.171. Medical benefit; eligibility of employees first hired after 10 June 30, 2006; surviving spouses and dependents. (a) An employee who became a 11 member of the plan after June 30, 2006, retired directly from the plan, receives a 12 monthly benefit from the plan, and has elected benefits under this section is entitled to 13 medical benefits under this section. A member who applies for medical benefits under 14 this section shall apply on the forms and in the manner prescribed by the 15 administrator. 16 (b) The member's surviving spouse is eligible to elect medical benefits if the 17 member had retired or was eligible for retirement and medical benefits at the time of 18 the member's death. 19 (c) The medical benefits available to eligible persons are access to the retiree 20 major medical insurance plan and access to the health reimbursement arrangement 21 plan under AS 39.30.300. Access to the retiree major medical insurance plan means 22 that an eligible person may not be denied insurance coverage except for failure to pay 23 the required premium. 24 (d) Retiree major medical insurance plan coverage elected by an eligible 25 member under this section covers the eligible member, the spouse of the eligible 26 member, and the dependent children of the eligible member. 27 (e) Retiree major medical insurance plan coverage elected by a surviving 28 spouse of an eligible member under this section covers the surviving spouse and the 29 dependent children of the eligible member who are dependent on the surviving spouse. 30 (f) Participation in the retiree major medical insurance plan is not required in 31 order to participate in the health reimbursement arrangement plan.
01 (g) A person eligible for medical benefits under this section is not required to 02 participate in the health reimbursement arrangement plan in order to participate in the 03 retiree major medical insurance plan. 04 (h) A person who is eligible for medical benefits under this section must make 05 the irrevocable election to participate or not participate in the retiree major medical 06 insurance plan on or before the date the person reaches 70 1/2 years of age or when the 07 person applies for retirement and medical benefits, whichever is later. 08 (i) Major medical insurance coverage takes effect on the first day of the month 09 following the date of the administrator's approval of the election and stops when the 10 person who elects coverage dies or fails to make a required premium payment. 11 (j) The coverage for persons 65 years of age or older is the same as that 12 available for persons under 65 years of age. The benefits payable to those persons 65 13 years of age or older supplement any benefits provided under the federal old age, 14 survivors, and disability insurance program. 15 (k) The medical and optional insurance premiums owed by the person who 16 elects coverage may be deducted from the health reimbursement arrangement plan. If 17 the amount of the health reimbursement arrangement plan becomes insufficient to pay 18 the premiums, the person who elects coverage under (a) of this section shall pay the 19 premiums directly. 20 (l) The cost of premiums for retiree major medical insurance coverage under 21 this section for an eligible member or surviving spouse who is 22 (1) not eligible for Medicare is an amount equal to the full monthly 23 group premiums for retiree major medical insurance coverage; 24 (2) eligible for Medicare is the following percentage of the premium 25 amounts established for retirees who are eligible for Medicare: 26 (A) 30 percent if the member had 10 or more, but less than 15, 27 years of service; 28 (B) 25 percent if the member had 15 or more, but less than 20, 29 years of service; 30 (C) 20 percent if the member had 20 or more, but less than 25, 31 years of service;
01 (D) 15 percent if the member had 25 or more, but less than 30, 02 years of service; 03 (E) 10 percent if the member had 30 or more years of service. 04 (m) The eligibility for retiree major medical insurance coverage for an 05 alternate payee under a qualified domestic relations order shall be determined based 06 on the eligibility of the member to elect coverage. The alternate payee shall pay the 07 full monthly premium for retiree major medical insurance coverage. 08 (n) The administrator shall 09 (1) inform a person entitled to retiree major medical insurance 10 coverage under this section in writing 11 (A) that the health insurance coverage available to retired 12 members may be different from the health insurance coverage provided to 13 employees; 14 (B) of time limits for selecting optional health insurance 15 coverage; and 16 (C) whether the election is irrevocable; and 17 (2) require that a person entitled to retiree major medical insurance 18 coverage under this section indicate in writing on a form provided by the administrator 19 whether the person has 20 (A) received the information required by this subsection; and 21 (B) chosen to receive optional health insurance coverage. 22 (o) The monthly group premiums for retiree major medical insurance coverage 23 under this section are established by the administrator in accordance with 24 AS 39.30.095. Nothing in this chapter guarantees a person who elects coverage under 25 (a) of this section a monthly group premium rate for retiree major medical insurance 26 coverage other than the premium in effect for the month in which the premium is due 27 for coverage for that month. 28 (p) In this section, "health reimbursement arrangement plan" means the State 29 of Alaska Teachers' and Public Employees' Retiree Health Reimbursement 30 Arrangement Plan established in AS 39.30.300. 31 * Sec. 18. AS 14.25.220(5) is amended to read:
01 (5) "average base salary" means, 02 (A) for a teacher who first became a member before July 1, 03 2006, the result obtained by dividing the sum of the member's three highest 04 years' base salary by three, or if a member does not have three years base 05 salary, then by dividing the sum of all base salaries by the number of years of 06 base salary; 07 (B) for a teacher who first became a member on or after 08 July 1, 2006, the result obtained by dividing the sum of the member's five 09 highest consecutive years' base salary by five, or if a member does not 10 have five years' base salary, then by dividing the sum of all base salaries 11 by the number of years of base salary; the base salary for a year in which 12 credit is granted for disability totaling more than one-third of a year may not be 13 used in the computation of the average base salary; the base salary in a school 14 year for which the member receives compensation for less than two-thirds of a 15 year may not be used in the computation of the average base salary; if 16 compensation is received for more than two-thirds of a year, the full base 17 salary for that school year shall be used in the computation of the average base 18 salary; 19 * Sec. 19. AS 14.25.310 is amended to read: 20 Sec. 14.25.310. Applicability of AS 14.25.310 - 14.25.590. The provisions of 21 AS 14.25.310 - 14.25.590 apply only to 22 (1) teachers who first become members on or after July 1, 2006, and 23 before the effective date of this section who do not transfer to a defined benefit 24 retirement plan under AS 14.25.009 - 14.25.220 or AS 39.35.095 - 39.35.680; 25 (2) teachers described in AS 14.25.330 who elect under that section 26 to become [TO MEMBERS WHO ARE EMPLOYED BY EMPLOYERS THAT DO 27 NOT PARTICIPATE IN THE DEFINED BENEFIT RETIREMENT PLAN 28 ESTABLISHED UNDER AS 14.25.009 - 14.25.220, TO FORMER MEMBERS 29 UNDER AS 14.25.220, OR TO] members; and 30 (3) teachers who transferred [TRANSFER] into the defined 31 contribution retirement plan under former AS 14.25.540.
01 * Sec. 20. AS 14.25.310 is amended by adding a new subsection to read: 02 (b) An employer that participates in the plan shall also participate in the 03 defined benefit retirement plan under AS 14.25.009 - 14.25.220. 04 * Sec. 21. AS 14.25.330 is repealed and reenacted to read: 05 Sec. 14.25.330. Retirement plan election option. (a) Except as provided in (f) 06 of this section, a teacher who is first hired on or after the effective date of this section 07 may make a one-time election to participate in the defined contribution retirement plan 08 under AS 14.25.310 - 14.25.590 retroactive to the date of hire and may transfer to that 09 plan employee contributions, if any, and employer contributions, if any, that have been 10 made to the defined benefit retirement plan under AS 14.25.009 - 14.25.220. Before 11 employer contributions are transferred under this subsection, the administrator shall 12 recalculate them under AS 14.25.070. 13 (b) The election to participate in the defined contribution retirement plan 14 under (a) of this section must be made within 90 days after the date of hire and be 15 made in writing on a form and in the manner prescribed by the administrator. Before 16 accepting an election to participate in the defined contribution retirement plan, the 17 administrator shall, within 20 days after the administrator receives notification of the 18 teacher's date of hire, provide the teacher eligible to make an election to participate in 19 the defined contribution retirement plan under AS 14.25.310 - 14.25.590 with 20 (1) information, including calculations to illustrate the effect of 21 moving the teacher's retirement plan from the defined benefit retirement plan to the 22 defined contribution retirement plan; and 23 (2) other information clearly to inform the teacher of the potential 24 consequences of the teacher's election. 25 (c) An election made under (a) of this section to participate in the defined 26 contribution retirement plan is irrevocable. Retroactive to the date of hire, the teacher 27 shall be enrolled in the defined contribution retirement plan under AS 14.25.310 - 28 14.25.590, the teacher's participation in the plan shall be governed by the provisions 29 for the defined contribution retirement plan, and the teacher's participation in the 30 defined benefit retirement plan under AS 14.25.009 - 14.25.220 shall terminate. 31 (d) When an eligible teacher makes an election under (a) of this section, the
01 administrator shall cause the total amount of the teacher's employee and employer 02 contributions, with investment earnings and losses through the final day of the 03 teacher's participation in the defined benefit retirement plan, to be actuarially 04 calculated and transferred to the teacher's designated account in the defined 05 contribution retirement plan. The administrator shall establish transfer procedures by 06 regulation, but the actual transfer may not be later than 30 days after the date the 07 administrator receives the teacher's completed election form under (b) of this section, 08 unless the major financial markets for securities available for a transfer are seriously 09 disrupted by an unforeseen event that also causes the suspension of trading on any 10 national securities exchange in the country where the securities were issued. In that 11 event, the 30-day period may be extended by a resolution of the board. Transfers are 12 not commissionable or subject to other fees and may be in the form of securities or 13 cash as determined by the board. Securities shall be valued on the date of receipt in the 14 teacher's account. 15 (e) An election made under (a) of this section by an eligible teacher who is 16 married may not take effect unless the election is signed by the teacher's spouse. An 17 eligible teacher whose accounts are subject to a qualified domestic relations order may 18 not make an election to participate in the defined contribution retirement plan under 19 this section unless the qualified domestic relations order is amended or vacated and 20 court-certified copies of the order are received by the administrator. 21 (f) A teacher who is participating in a university retirement program under 22 AS 14.40.661 - 14.40.799 may not participate as a member of the defined contribution 23 retirement plan. 24 * Sec. 22. AS 14.25.350(e) is amended to read: 25 (e) An employer shall make annual contributions to a trust account in the plan, 26 applied as a percentage of each member's compensation from July 1 to the following 27 June 30, in an amount determined by the board to be actuarially required to fully fund 28 the cost of providing [OCCUPATIONAL] disability and [OCCUPATIONAL] death 29 benefits under AS 14.25.310 - 14.25.590. 30 * Sec. 23. AS 14.25.487(a) is amended to read: 31 (a) If [(1)] the death of a member occurs before the member's retirement and
01 before the member's normal retirement date [, (2) THE PROXIMATE CAUSE OF 02 DEATH IS A BODILY INJURY SUSTAINED OR A HAZARD UNDERGONE 03 WHILE IN THE PERFORMANCE AND WITHIN THE SCOPE OF THE 04 MEMBER'S DUTIES,] and the death [(3) THE INJURY OR HAZARD] is not the 05 proximate result of wilful negligence of the member, a monthly survivor's pension 06 shall be paid to the surviving spouse. If there is no surviving spouse or if the spouse 07 later dies, the monthly survivor's pension shall be paid in equal parts to the dependent 08 children of the member. 09 * Sec. 24. AS 14.25.490(a) is amended to read: 10 (a) Subject to art. XII, sec. 7, Constitution of the State of Alaska, the 11 [THE] state may [HAS THE RIGHT TO] amend the plan at any time and from time to 12 time, in whole or in part, including the right to make retroactive amendments referred 13 to in 26 U.S.C. 401(b). 14 * Sec. 25. AS 14.25.490(b) is amended to read: 15 (b) The plan administrator may not modify or amend the plan retroactively [IN 16 SUCH A MANNER AS] to reduce [THE] benefits accrued by a [OF ANY] member 17 [ACCRUED TO DATE UNDER THE PLAN BY REASON OF CONTRIBUTIONS 18 MADE] before the modification or amendment except to the extent that the reduction 19 is permitted by art. XII, sec. 7, Constitution of the State of Alaska, and the Internal 20 Revenue Code. 21 * Sec. 26. AS 14.25.490(c) is amended to read: 22 (c) Subject to art. XII, sec. 7, Constitution of the State of Alaska, and the 23 Internal Revenue Code, the [THE] state may [, IN ITS DISCRETION,] terminate the 24 plan in whole or part [AT ANY TIME] without liability for the termination. If the plan 25 is terminated, all investments at the time of termination remain in force until all 26 individual accounts have been completely distributed under the plan. After [, AND, 27 AFTER] all plan liabilities are satisfied, excess assets of the plan revert to the 28 employer. 29 * Sec. 27. AS 14.25.490(d) is repealed and reenacted to read: 30 (d) Within one year after determining that a contribution to the plan by an 31 employer was the result of a mistake of fact, the administrator shall return the
01 contribution to the employer. 02 * Sec. 28. AS 37.10.220(a) is amended to read: 03 (a) The board shall 04 (1) hold regular and special meetings at the call of the chair or of at 05 least five members; meetings are open to the public, and the board shall keep a full 06 record of all its proceedings; 07 (2) after reviewing recommendations from the Department of 08 Revenue, adopt investment policies for each of the funds entrusted to the board; 09 (3) determine the appropriate investment objectives for the defined 10 benefit plans established under the teachers' retirement system under AS 14.25 and the 11 public employees' retirement system under AS 39.35; 12 (4) assist in prescribing the policies for the proper operation of the 13 systems and take other actions necessary to carry out the intent and purpose of the 14 systems in accordance with AS 37.10.210 - 37.10.390; 15 (5) provide a range of investment options and establish the rules by 16 which participants can direct their investments among those options with respect to 17 accounts established under 18 (A) AS 14.25.340 - 14.25.350 (teachers' retirement system 19 defined contribution individual accounts); 20 (B) AS 39.30.150 - 39.30.180 (State of Alaska Supplementary 21 Annuity Plan); 22 (C) AS 39.35.730 - 39.35.750 (public employees' retirement 23 system defined contribution individual accounts); and 24 (D) AS 39.45.010 - 39.45.060 (public employees' deferred 25 compensation program); 26 (6) establish the rate of interest that shall be annually credited to each 27 member's individual contribution account in accordance with AS 14.25.145 and 28 AS 39.35.100 and the rate of interest that shall be annually credited to each member's 29 account in the health reimbursement arrangement plan under AS 39.30.300 - 30 39.30.495; the rate of interest shall be adopted on the basis of the probable effective 31 rate of interest on a long-term basis, and the rate may be changed from time to time;
01 (7) adopt a contribution surcharge as necessary under AS 39.35.160(c); 02 (8) coordinate with the retirement system administrator to have an 03 annual actuarial valuation of each retirement system prepared to determine system 04 assets, accrued liabilities, and funding ratios and to certify to the appropriate 05 budgetary authority of each employer in the system 06 (A) an appropriate contribution rate for normal costs; [AND] 07 (B) an appropriate contribution rate for liquidating any past 08 service liability; in this subparagraph, the appropriate contribution rate for 09 liquidating the past service liability of the defined benefit retirement plan under 10 AS 14.25.009 - 14.25.220 or the past service liability of the defined benefit 11 retirement plan under AS 39.35.095 - 39.35.680 must be determined by a level 12 percent of pay method based on amortization of the past service liability for a 13 closed term of 25 years; and 14 (C) appropriate adjustments, if any, under (b)(5) of this 15 section; 16 (9) review actuarial assumptions prepared and certified by a member 17 of the American Academy of Actuaries and conduct experience analyses of the 18 retirement systems not less than once every four years, except for health cost 19 assumptions, which shall be reviewed annually; the results of all actuarial assumptions 20 prepared under this paragraph shall be reviewed and certified by a second member of 21 the American Academy of Actuaries before presentation to the board; 22 (10) contract for an independent audit of the state's actuary not less 23 than once every four years; 24 (11) contract for an independent audit of the state's performance 25 consultant not less than once every four years; 26 (12) obtain an external performance review to evaluate the investment 27 policies of each fund entrusted to the board and report the results of the review to the 28 appropriate fund fiduciary; 29 (13) by the first day of each regular legislative session, report to the 30 governor, the legislature, and the individual employers participating in the state's 31 retirement systems on the financial condition of the systems in regard to
01 (A) the valuation of trust fund assets and liabilities; 02 (B) current investment policies adopted by the board; 03 (C) a summary of assets held in trust listed by the categories of 04 investment; 05 (D) the income and expenditures for the previous fiscal year; 06 (E) the return projections for the next calendar year; 07 (F) one-year, three-year, five-year, and 10-year investment 08 performance for each of the funds entrusted to the board; and 09 (G) other statistical data necessary for a proper understanding 10 of the financial status of the systems; 11 (14) submit quarterly updates of the investment performance reports to 12 the Legislative Budget and Audit Committee; 13 (15) develop an annual operating budget; [AND] 14 (16) administer pension forfeitures required under AS 37.10.310 using 15 the procedures of AS 44.62 (Administrative Procedure Act). 16 * Sec. 29. AS 37.10.220(b) is amended to read: 17 (b) The board may 18 (1) employ outside investment advisors to review investment policies; 19 (2) enter into an agreement with the fiduciary of another state fund in 20 order to assume the management and investment of those assets; 21 (3) contract for other services necessary to execute the board's powers 22 and duties; 23 (4) enter into confidentiality agreements that would exempt records 24 from AS 40.25.110 and 40.25.120 if the records contain information that could affect 25 the value of investment by the board or that could impair the ability of the board to 26 acquire, maintain, or dispose of investments; 27 (5) adjust contribution rates under AS 14.25.050(e) and 28 AS 39.35.160(e) and (f). 29 * Sec. 30. AS 39.30.090(a) is amended to read: 30 (a) The Department of Administration may obtain a policy or policies of group 31 insurance covering state employees, persons entitled to coverage under AS 14.25.168,
01 14.25.171, 14.25.480, AS 22.25.090, AS 39.35.535, 39.35.537, 39.35.880, or former 02 AS 39.37.145, employees of other participating governmental units, or persons 03 entitled to coverage under AS 23.15.136, subject to the following conditions: 04 (1) a group insurance policy shall provide one or more of the following 05 benefits: life insurance, accidental death and dismemberment insurance, weekly 06 indemnity insurance, hospital expense insurance, surgical expense insurance, dental 07 expense insurance, audiovisual insurance, or other medical care insurance; 08 (2) each eligible employee of the state, the spouse and the unmarried 09 children chiefly dependent on the eligible employee for support, and each eligible 10 employee of another participating governmental unit shall be covered by the group 11 policy, unless exempt under regulations adopted by the commissioner of 12 administration; 13 (3) a governmental unit may participate under a group policy if 14 (A) its governing body adopts a resolution authorizing 15 participation and payment of required premiums; 16 (B) a certified copy of the resolution is filed with the 17 Department of Administration; and 18 (C) the commissioner of administration approves the 19 participation in writing; 20 (4) in procuring a policy of group health or group life insurance as 21 provided under this section or excess loss insurance as provided in AS 39.30.091, the 22 Department of Administration shall comply with the dual choice requirements of 23 AS 21.86.310, and shall obtain the insurance policy from an insurer authorized to 24 transact business in the state under AS 21.09, a hospital or medical service corporation 25 authorized to transact business in this state under AS 21.87, or a health maintenance 26 organization authorized to operate in this state under AS 21.86; an excess loss 27 insurance policy may be obtained from a life or health insurer authorized to transact 28 business in this state under AS 21.09 or from a hospital or medical service corporation 29 authorized to transact business in this state under AS 21.87; 30 (5) the Department of Administration shall make available bid 31 specifications for desired insurance benefits or for administration of benefit claims and
01 payments to (A) all insurance carriers authorized to transact business in this state 02 under AS 21.09 and all hospital or medical service corporations authorized to transact 03 business under AS 21.87 who are qualified to provide the desired benefits; and (B) 04 insurance carriers authorized to transact business in this state under AS 21.09, hospital 05 or medical service corporations authorized to transact business under AS 21.87, and 06 third-party administrators licensed to transact business in this state and qualified to 07 provide administrative services; the specifications shall be made available at least once 08 every five years; the lowest responsible bid submitted by an insurance carrier, hospital 09 or medical service corporation, or third-party administrator with adequate servicing 10 facilities shall govern selection of a carrier, hospital or medical service corporation, or 11 third-party administrator under this section or the selection of an insurance carrier or a 12 hospital or medical service corporation to provide excess loss insurance as provided in 13 AS 39.30.091; 14 (6) if the aggregate of dividends payable under the group insurance 15 policy exceeds the governmental unit's share of the premium, the excess shall be 16 applied by the governmental unit for the sole benefit of the employees; 17 (7) a person receiving benefits under AS 14.25.110, AS 22.25, 18 AS 39.35, or former AS 39.37 may continue the life insurance coverage that was in 19 effect under this section at the time of termination of employment with the state or 20 participating governmental unit; 21 (8) a person electing to have insurance under (7) of this subsection 22 shall pay the cost of this insurance; 23 (9) for each permanent part-time employee electing coverage under 24 this section, the state shall contribute one-half the state contribution rate for permanent 25 full-time state employees, and the permanent part-time employee shall contribute the 26 other one-half; 27 (10) a person receiving benefits under AS 14.25, AS 22.25, AS 39.35, 28 or former AS 39.37 may obtain auditory, visual, and dental insurance for that person 29 and eligible dependents under this section; the level of coverage for persons over 65 30 shall be the same as that available before reaching age 65 except that the benefits 31 payable shall be supplemental to any benefits provided under the federal old age,
01 survivors, and disability insurance program; a person electing to have insurance under 02 this paragraph shall pay the cost of the insurance; the commissioner of administration 03 shall adopt regulations implementing this paragraph; 04 (11) a person receiving benefits under AS 14.25, AS 22.25, AS 39.35, 05 or former AS 39.37 may obtain long-term care insurance for that person and eligible 06 dependents under this section; a person who elects insurance under this paragraph 07 shall pay the cost of the insurance premium; the commissioner of administration shall 08 adopt regulations to implement this paragraph; 09 (12) each licensee holding a current operating agreement for a vending 10 facility under AS 23.15.010 - 23.15.210 shall be covered by the group policy that 11 applies to governmental units other than the state. 12 * Sec. 31. AS 39.30.097(a) is amended to read: 13 (a) The commissioner of administration is authorized to prefund medical 14 benefits provided by AS 14.25.168, 14.25.171, AS 22.25.090, [AND] AS 39.35.535, 15 and 39.35.537 by establishing an irrevocable trust that is exempt from federal income 16 tax under 26 U.S.C. 115 and subject to the applicable financial reporting, disclosure, 17 and actuarial requirements of the Governmental Accounting Standards Board. 18 * Sec. 32. AS 39.30.097(b) is amended to read: 19 (b) The commissioner of administration is authorized to prefund medical 20 benefits provided by AS 14.25.171, 14.25.480 [AS 14.25.480], AS 39.30.300, 21 AS 39.35.537, and 39.35.880 [AS 39.35.880] by establishing an irrevocable trust that 22 is exempt from federal income tax under 26 U.S.C. 115 and subject to the applicable 23 financial reporting, disclosure, and actuarial requirements of the Governmental 24 Accounting Standards Board. 25 * Sec. 33. AS 39.30.300 is amended to read: 26 Sec. 39.30.300. State of Alaska Teachers' and Public Employees' Retiree 27 Health Reimbursement Arrangement Plan established. The State of Alaska 28 Teachers' and Public Employees' Retiree Health Reimbursement Arrangement Plan is 29 established for teachers who first become members of the [DEFINED 30 CONTRIBUTION PLAN OF THE ] teachers' retirement system under AS 14.25.009 - 31 14.25.590 [AS 14.25.310 - 14.25.590] on or after July 1, 2006, and employees of the
01 state, political subdivisions of the state, and public organizations of the state who first 02 become members [OF THE DEFINED CONTRIBUTION PLAN] of the Public 03 Employees' Retirement System of Alaska (AS 39.35) [PUBLIC EMPLOYEES' 04 RETIREMENT SYSTEM UNDER AS 39.35.700 - 39.35.990] on or after July 1, 05 2006. 06 * Sec. 34. AS 39.30.380 is amended to read: 07 Sec. 39.30.380. Termination of employment. A person who terminates 08 employment before meeting the eligibility requirements of AS 14.25.171, 14.25.470, 09 AS 39.35.537, or 39.35.870 [AS 14.25.470 OR AS 39.35.870] loses any right to the 10 contributions made on behalf of the person to the teachers' and public employees' 11 retiree health reimbursement arrangement trust fund. If a person returns to 12 employment with a participating employer by December 31 of the year in which the 13 person reaches 65 years of age, the person's account balance shall be restored in the 14 amount recorded on the date of termination from the trust, adjusted for inflation at the 15 rate of the Consumer Price Index for Anchorage, Alaska. The earlier period of 16 employment with a participating employer shall be credited toward eligibility for 17 medical benefits. 18 * Sec. 35. AS 39.30.390 is amended to read: 19 Sec. 39.30.390. Eligibility and reimbursement. Persons who meet the 20 eligibility requirements of AS 14.25.171, 14.25.470, AS 39.35.537, or 39.35.870 21 [AS 14.25.470 AND AS 39.35.870] are eligible for reimbursements from the 22 individual account established for a member under the plan, except members do not 23 have to retire directly from the system. A person who is the dependent child of an 24 eligible member is eligible for reimbursements if the eligible member and surviving 25 spouse have both died so long as the person meets the definition of dependent child. 26 * Sec. 36. AS 39.30.400(a) is amended to read: 27 (a) The administrator may deduct the cost of monthly premiums from the 28 individual account for retiree major medical insurance on behalf of an eligible person 29 who elected retiree major medical insurance under AS 14.25.171, 14.25.480, 30 AS 39.35.537, or 39.35.880 [AS 14.25.480 OR AS 39.35.880]. 31 * Sec. 37. AS 39.30.420(a) is amended to read:
01 (a) Subject to art. XII, sec. 7, Constitution of the State of Alaska, the 02 [THE] state may [HAS THE RIGHT TO] amend the plan at any time and from time to 03 time, in whole or in part, including the right to make retroactive amendments referred 04 to in 26 U.S.C. 401(b). 05 * Sec. 38. AS 39.30.420(b) is amended to read: 06 (b) The plan administrator may not modify or amend the plan retroactively [IN 07 SUCH A MANNER AS] to reduce [THE] benefits accrued by a [OF ANY] member 08 [ACCRUED TO DATE UNDER THE PLAN BY REASON OF CONTRIBUTIONS 09 MADE] before the modification or amendment except to the extent that the reduction 10 is permitted by art. XII, sec. 7, Constitution of the State of Alaska, and the Internal 11 Revenue Code. 12 * Sec. 39. AS 39.30.420(c) is amended to read: 13 (c) Subject to art. XII, sec. 7, Constitution of the State of Alaska, and the 14 Internal Revenue Code, the [THE] state may [, IN ITS DISCRETION,] terminate the 15 plan in whole or part [AT ANY TIME] without liability for the termination. If the plan 16 is terminated, all investments at the time of termination remain in force until all 17 individual accounts have been completely distributed under the plan. After [, AND, 18 AFTER] all plan liabilities are satisfied, excess assets of the plan revert to the 19 employer. 20 * Sec. 40. AS 39.30.420(d) is repealed and reenacted to read: 21 (d) Within one year after determining that a contribution to the plan by an 22 employer was the result of a mistake of fact, the administrator shall return the 23 contribution to the employer. 24 * Sec. 41. AS 39.30.495(5) is amended to read: 25 (5) "eligible person" means a person who meets the eligibility 26 requirements of AS 14.25.171, 14.25.470, AS 39.35.537, or 39.35.870 [AS 14.25.470 27 OR AS 39.35.870]; 28 * Sec. 42. AS 39.35.095 is amended to read: 29 Sec. 39.35.095. Applicability of AS 39.35.095 - 39.35.680. The 30 [FOLLOWING] provisions of AS 39.35.095 - 39.35.680 [THIS CHAPTER] apply 31 only to members first hired
01 (1) before July 1, 2006; or 02 (2) after June 30, 2006, who 03 (A) are former members of the defined contribution 04 retirement plan under AS 39.35.700 - 39.35.990; or 05 (B) have not been members of the defined contribution 06 retirement plan under AS 39.35.700 - 39.35.990 [: AS 39.35.095 - 07 39.35.680]. 08 * Sec. 43. AS 39.35.160(a) is amended to read: 09 (a) Subject to (e) and (f) of this section, beginning [BEGINNING] 10 January 1, 1987, each peace officer or firefighter shall contribute to the plan an 11 amount equal to seven and one-half percent of the peace officer's or firefighter's 12 compensation, and, except [. EXCEPT] as provided in (d) - (f) [(d)] of this section, 13 beginning January 1, 1987, each other employee shall contribute to the plan an amount 14 equal to six and three-quarters percent of the employee's compensation. [THE 15 CONTRIBUTIONS SHALL BE DEDUCTED BY THE EMPLOYER AT THE END 16 OF EACH PAYROLL PERIOD. THE CONTRIBUTIONS SHALL BE DEDUCTED 17 FROM EMPLOYEE COMPENSATION BEFORE COMPUTATION OF 18 APPLICABLE FEDERAL TAXES, AND THE CONTRIBUTIONS SHALL BE 19 TREATED AS EMPLOYER CONTRIBUTIONS UNDER 26 U.S.C. 414(h)(2). A 20 MEMBER MAY NOT HAVE THE OPTION OF MAKING THE PAYROLL 21 DEDUCTION DIRECTLY INSTEAD OF HAVING THE CONTRIBUTION 22 PICKED UP BY THE EMPLOYER.] 23 * Sec. 44. AS 39.35.160 is amended by adding new subsections to read: 24 (e) A peace officer or firefighter who first participates in the plan after 25 June 30, 2006, shall contribute to the plan an amount equal to eight percent of the 26 employee's compensation. The board may, from time to time, adjust the employee 27 contribution under this subsection to an amount that, 28 (1) if decreased, is not less than eight percent of the employee's 29 compensation; and 30 (2) if increased, is not more than 12 percent of the employee's 31 compensation.
01 (f) An employee who first participates in the plan after June 30, 2006, and is 02 not a peace officer or firefighter shall contribute to the plan an amount equal to eight 03 percent of the employee's compensation. The board may, from time to time, adjust the 04 employee contribution under this subsection to an amount that, 05 (1) if decreased, is not less than eight percent of the employee's 06 compensation; and 07 (2) if increased, is not more than 12 percent of the employee's 08 compensation. 09 (g) Contributions under (a), (e), and (f) of this section shall be deducted by the 10 employer at the end of each payroll period. The contributions shall be deducted from 11 employee compensation before computation of applicable federal taxes, and the 12 contributions shall be treated as employer contributions under 26 U.S.C. 414(h)(2). A 13 member may not have the option of making the payroll deduction directly instead of 14 having the contribution picked up by the employer. 15 * Sec. 45. AS 39.35.282 is amended to read: 16 Sec. 39.35.282. Contributions for medical benefits. Contributions made by 17 an employer under AS 39.35.255 and 39.35.280 must [SHALL] be separately 18 computed for benefits provided by AS 39.35.535 and 39.35.537. The contributions 19 computed for benefits provided by AS 39.35.535 must [AND SHALL] be deposited 20 in the Alaska retiree health care trust established under AS 39.30.097(a), and the 21 contributions computed for benefits provided by AS 39.35.537 must be deposited 22 in the teachers' and public employees' retiree health reimbursement arrangement 23 plan trust fund established under AS 39.30.340. 24 * Sec. 46. AS 39.35.340(g) is amended to read: 25 (g) A surviving spouse receiving or entitled to receive benefits under former 26 AS 39.35.420(b) or under AS 39.35.430 [, 39.35.430,] or 39.35.440 or benefits under 27 a joint and survivor option filed under AS 39.35.450 is eligible to receive increased 28 benefits based on military service as described in (a) of this section. To receive 29 credited service for military service, the surviving spouse shall verify the employee's 30 military service. When verified, the surviving spouse is entitled to receive an increased 31 benefit which shall be actuarially adjusted to reflect the indebtedness for that credit.
01 The indebtedness shall be calculated in the same manner as described in (b) of this 02 section except that it shall be based on the average monthly compensation used in 03 calculating the benefit. Benefits payable under this subsection are effective the first 04 day of the month following that in which eligibility has been established. 05 * Sec. 47. AS 39.35.370(a) is amended to read: 06 (a) Subject to AS 39.35.450, a terminated employee who first became a 07 member before July 1, 2006, is eligible for a normal retirement benefit 08 (1) at age 60 with at least five years of credited service; 09 (2) with at least 20 years of credited service as a peace officer or 10 firefighter; or 11 (3) with at least 30 years of credited service that is not service as a 12 peace officer or firefighter [FOR ALL OTHER EMPLOYEES]. 13 * Sec. 48. AS 39.35.370 is amended by adding a new subsection to read: 14 (l) Subject to AS 39.35.450, a terminated employee who first becomes a 15 member after June 30, 2006, is eligible for a normal retirement benefit 16 (1) at age 60 with at least 30 years of credited service in the system; 17 (2) at age 55 with at least 20 years of credited service in the system as 18 a peace officer or firefighter; or 19 (3) at age 65. 20 * Sec. 49. AS 39.35.381(e) is amended to read: 21 (e) A person who retires under this section is not entitled to disability or death 22 benefits under AS 39.35.400 - 39.35.440, a minimum benefit under AS 39.35.485, or 23 to medical benefits under AS 39.35.535 or 39.35.537. Service earned under this 24 section may not be used for vesting under AS 39.35.095 - 39.35.680. 25 * Sec. 50. AS 39.35.430(b) is amended to read: 26 (b) If [(1)] the death of an employee occurs before the employee's retirement 27 and before the employee's normal retirement date [, AND (2) THE PROXIMATE 28 CAUSE OF DEATH IS A BODILY INJURY SUSTAINED OR A HAZARD 29 UNDERGONE WHILE IN THE PERFORMANCE AND WITHIN THE SCOPE OF 30 THE EMPLOYEE'S DUTIES,] and the death [(3) THE INJURY OR HAZARD] is 31 not the proximate result of wilful negligence of the employee, a monthly survivor's
01 pension shall be paid to the surviving spouse. If there is no surviving spouse or if the 02 spouse later dies, the monthly survivor's pension shall be paid in equal parts to the 03 dependent children of the employee. On the date the normal retirement of the 04 employee would have occurred if the employee had lived, monthly payments shall 05 equal the monthly amount of the normal retirement benefit to which the employee, had 06 the employee lived and continued employment until the employee's normal retirement 07 date, would have been entitled with an average monthly compensation as existed at 08 death and the credited service to which the employee would have been entitled. 09 * Sec. 51. AS 39.35.430(f) is amended to read: 10 (f) If the death of an employee who was hired before July 1, 2006, occurs 11 [FROM OCCUPATIONAL CAUSES] but no surviving spouse or dependent children 12 exist at the time of the death or if the employee designates as beneficiary under 13 AS 39.35.490 someone other than the surviving spouse or dependent children, the 14 employee's designated beneficiary is entitled to receive those benefits available to a 15 beneficiary under former AS 39.35.420(c) and a [AN OCCUPATIONAL] death 16 benefit may not be paid to the surviving spouse or dependent children. 17 * Sec. 52. AS 39.35.440(b) is amended to read: 18 (b) Upon the death of a disabled employee who is receiving or is entitled to 19 receive an occupational disability benefit, the administrator shall pay the surviving 20 spouse a surviving spouse's pension, equal to 40 percent of the employee's monthly 21 compensation at the termination of employment because of occupational disability. If 22 there is no surviving spouse, the administrator shall pay the survivor's pension in equal 23 parts to the dependent children of the employee. On the date the normal retirement of 24 the employee would have occurred if the employee had lived, the administrator shall 25 adjust the monthly payments to equal the monthly amount of the normal retirement 26 benefit to which the employee, had the employee lived and continued employment 27 until the employee's normal retirement date, would have been entitled with an average 28 monthly compensation as existed at death and the credited service to which the 29 employee would have been entitled. If the death of an employee who was hired 30 before July 1, 2006, occurs [FROM OCCUPATIONAL CAUSES] but no surviving 31 spouse or dependent children exist at the time of the death, or if the employee
01 designates as beneficiary under AS 39.35.490 someone other than the surviving 02 spouse or dependent children, the administrator shall pay the employee's designated 03 beneficiary those benefits available to a beneficiary under former AS 39.35.420(c) 04 and may not pay a [AN OCCUPATIONAL] death benefit to the surviving spouse or 05 dependent children. 06 * Sec. 53. AS 39.35.450(e) is amended to read: 07 (e) If either the employee or contingent beneficiary dies before the employee 08 is appointed to retirement, the election becomes inoperative. Once the employee is 09 appointed to retirement, the election is irrevocable. If a retired employee is 10 reemployed and is subsequently reappointed to retirement, those benefits earned 11 during the period of reemployment are subject to the initial election made under this 12 section, unless the contingent beneficiary is deceased. If the contingent beneficiary is 13 deceased, the benefits earned during the period of reemployment are subject to 14 AS 39.35.370 or this section if another contingent beneficiary was elected during the 15 period of reemployment. All other benefits earned during prior periods of employment 16 are subject to the election at the time the employee was appointed to retirement. [IF 17 DEATH OCCURS FROM NONOCCUPATIONAL CAUSES DURING THE 18 PERIOD OF REEMPLOYMENT, THOSE BENEFITS EARNED WHILE 19 REEMPLOYED ARE SUBJECT TO AS 39.35.420(b). ALL OTHER BENEFITS 20 EARNED DURING PRIOR PERIODS OF EMPLOYMENT ARE SUBJECT TO 21 THE ELECTION AT THE TIME THE EMPLOYEE WAS APPOINTED TO 22 RETIREMENT.] If death occurs [FROM OCCUPATIONAL CAUSES] during the 23 period of reemployment, all benefits earned during all periods of employment are 24 subject to AS 39.35.430(b) and (c). 25 * Sec. 54. AS 39.35.475(a) is amended to read: 26 (a) Subject to (g) of this section, once [ONCE] each year the administrator 27 shall increase benefit payments to eligible disabled members, to persons age 60 or 28 older receiving benefits under this plan in the preceding calendar year, and to persons 29 who have received benefits under this plan for at least five years who are not 30 otherwise eligible for an increase under this section. 31 * Sec. 55. AS 39.35.475(e) is amended to read:
01 (e) When computing a [AN OCCUPATIONAL] death benefit under 02 AS 39.35.430 or 39.35.440 or a survivor's benefit under AS 39.35.450, adjustments 03 granted to the deceased member or survivor under this section shall be included. 04 * Sec. 56. AS 39.35.475 is amended by adding a new subsection to read: 05 (g) A person who receives a benefit under AS 39.35.370(l) is eligible to 06 receive an increase in benefits under this section. 07 * Sec. 57. AS 39.35.485(a) is amended to read: 08 (a) An employee who is eligible for a benefit calculated in accordance with 09 AS 39.35.370(c) is entitled to a benefit of at least $25 a month for each year of 10 credited service, not including adjustments made under AS 39.35.340 for military 11 service, AS 39.35.360 for credit for earlier service, AS 39.35.370(c) for early 12 retirement, former AS 39.35.420 for nonoccupational death benefits payable for an 13 employee hired before July 1, 2006, AS 39.35.450 for the survivor's option, former 14 AS 39.35.460 for the level income option, AS 39.35.475 for the post-retirement 15 pension adjustment, and AS 39.35.480 for the cost of living. 16 * Sec. 58. AS 39.35.530 is amended to read: 17 Sec. 39.35.530. Limit on pension. An employee may not simultaneously 18 receive a pension under more than one section of AS 39.35.095 - 39.35.680. However, 19 benefits under former AS 39.35.420(b) or under AS 39.35.430 [, 39.35.430], 20 39.35.440, or 39.35.450 shall be paid in addition to the benefits or service credit a 21 person is entitled to receive because of the person's own membership in the retirement 22 plan. An employee may not (1) receive duplicate credit under this plan for the same 23 period of service, (2) receive more than one year of service credit in the course of any 24 calendar year, or (3) receive a benefit while accruing service credit under this plan, 25 except as provided in this section. 26 * Sec. 59. AS 39.35.535(a) is amended to read: 27 (a) Except as provided in (d) and (g) of this section, the following persons are 28 entitled to major medical insurance coverage under this section: 29 (1) for employees first hired before July 1, 1986, 30 (A) an employee who is receiving a monthly benefit from the 31 plan and who has elected coverage;
01 (B) the spouse and dependent children of the employee 02 described in (A) of this paragraph; 03 (C) the surviving spouse of a deceased employee who is 04 receiving a monthly benefit from the plan and who has elected coverage; 05 (D) the dependent children of a deceased employee who are 06 dependent on the surviving spouse described in (C) of this paragraph; 07 (2) for members first hired on or after July 1, 1986, 08 (A) an employee who is receiving a monthly benefit from the 09 plan and who has elected coverage for the employee; 10 (B) the spouse of the employee described in (A) of this 11 paragraph if the employee elected coverage for the spouse; 12 (C) the dependent children of the employee described in (A) of 13 this paragraph if the employee elected coverage for the dependent children; 14 (D) the surviving spouse of a deceased employee who is 15 receiving a monthly benefit from the plan and who has elected coverage; 16 (E) the dependent children of a deceased employee who are 17 dependent on the surviving spouse described in (D) of this paragraph if the 18 surviving spouse has elected coverage for the dependent children. 19 * Sec. 60. AS 39.35.535(c) is amended to read: 20 (c) A benefit recipient who became a member before July 1, 2006, or the 21 surviving spouse of the member may elect major medical insurance coverage in 22 accordance with regulations and under the following conditions: 23 (1) a person, other than a disabled member or a disabled member who 24 is appointed to normal retirement, shall [MUST] pay an amount equal to the full 25 monthly group premium for retiree major medical insurance coverage if the person is 26 (A) younger than 60 years of age and has less than 27 (i) 25 years of credited service as a peace officer under 28 AS 39.35.360 and 39.35.370; or 29 (ii) 30 years of credited service under AS 39.35.360 and 30 39.35.370 that is not service as a peace officer; or 31 (B) of any age and has less than 10 years of credited service;
01 (2) a person is not required to make premium payments for retiree 02 major medical coverage if the person 03 (A) is a disabled member; 04 (B) is a disabled member who is appointed to normal 05 retirement; 06 (C) is 60 years of age or older and has at least 10 years of 07 credited service; or 08 (D) has at least 09 (i) 25 years of credited service as a peace officer under 10 AS 39.35.360 and 39.35.370; or 11 (ii) 30 years of credited service under AS 39.35.360 and 39.35.370 not as a 12 peace officer. 13 * Sec. 61. AS 39.35.535 is amended by adding a new subsection to read: 14 (g) A benefit recipient who is a peace officer or firefighter and who first 15 becomes a member after June 30, 2006, or a surviving spouse who is eligible under 16 AS 39.35.537(b) may elect medical benefits under AS 39.35.537. 17 * Sec. 62. AS 39.35 is amended by adding a new section to read: 18 Sec. 39.35.537. Medical benefit; eligibility of employees first hired after 19 June 30, 2006; surviving spouses and dependents. (a) An employee who became a 20 member of the plan after June 30, 2006, retired directly from the plan, receives a 21 monthly benefit from the plan, and has elected benefits under this section is entitled to 22 medical benefits under this section. A member who applies for medical benefits under 23 this section shall apply on the forms and in the manner prescribed by the 24 administrator. 25 (b) The member's surviving spouse is eligible to elect medical benefits if the 26 member had retired or was eligible for retirement and medical benefits at the time of 27 the member's death. 28 (c) The medical benefits available to eligible persons are access to the retiree 29 major medical insurance plan and access to the health reimbursement arrangement 30 plan under AS 39.30.300. Access to the retiree major medical insurance plan means 31 that an eligible person may not be denied insurance coverage except for failure to pay
01 the required premium. 02 (d) Retiree major medical insurance plan coverage elected by an eligible 03 member under this section covers the eligible member, the spouse of the eligible 04 member, and the dependent children of the eligible member. 05 (e) Retiree major medical insurance plan coverage elected by a surviving 06 spouse of an eligible member under this section covers the surviving spouse and the 07 dependent children of the eligible member who are dependent on the surviving spouse. 08 (f) Participation in the retiree major medical insurance plan is not required in 09 order to participate in the health reimbursement arrangement plan. 10 (g) A person eligible for medical benefits under this section is not required to 11 participate in the health reimbursement arrangement plan in order to participate in the 12 retiree major medical insurance plan. 13 (h) A person who is eligible for medical benefits under this section must make 14 the irrevocable election to participate or not participate in the retiree major medical 15 insurance plan on or before the date the person reaches 70 1/2 years of age or when the 16 person applies for retirement and medical benefits, whichever is later. 17 (i) Major medical insurance coverage takes effect on the first day of the month 18 following the date of the administrator's approval of the election and stops when the 19 person who elects coverage dies or fails to make a required premium payment. 20 (j) The coverage for persons 65 years of age or older is the same as that 21 available for persons under 65 years of age. The benefits payable to those persons 65 22 years of age or older supplement any benefits provided under the federal old age, 23 survivors, and disability insurance program. 24 (k) The medical and optional insurance premiums owed by the person who 25 elects coverage may be deducted from the health reimbursement arrangement plan. If 26 the amount of the health reimbursement arrangement plan becomes insufficient to pay 27 the premiums, the person who elects coverage under (a) of this section shall pay the 28 premiums directly. 29 (l) The cost of premiums for retiree major medical insurance coverage under 30 this section for an eligible member or surviving spouse who is 31 (1) not eligible for Medicare is an amount equal to the full monthly
01 group premiums for retiree major medical insurance coverage; 02 (2) eligible for Medicare is the following percentage of the premium 03 amounts established for retirees who are eligible for Medicare: 04 (A) 30 percent if the member had 10 or more, but less than 15, 05 years of service; 06 (B) 25 percent if the member had 15 or more, but less than 20, 07 years of service; 08 (C) 20 percent if the member had 20 or more, but less than 25, 09 years of service; 10 (D) 15 percent if the member had 25 or more, but less than 30, 11 years of service; 12 (E) 10 percent if the member had 30 or more years of service. 13 (m) The eligibility for retiree major medical insurance coverage for an 14 alternate payee under a qualified domestic relations order shall be determined based 15 on the eligibility of the member to elect coverage. The alternate payee shall pay the 16 full monthly premium for retiree major medical insurance coverage. 17 (n) The administrator shall 18 (1) inform a person entitled to retiree major medical insurance 19 coverage under this section in writing 20 (A) that the health insurance coverage available to retired 21 members may be different from the health insurance coverage provided to 22 employees; 23 (B) of time limits for selecting optional health insurance 24 coverage; and 25 (C) whether the election is irrevocable; and 26 (2) require that a person entitled to retiree major medical insurance 27 coverage under this section indicate in writing on a form provided by the administrator 28 whether the person has 29 (A) received the information required by this subsection; and 30 (B) chosen to receive optional health insurance coverage. 31 (o) The monthly group premiums for retiree major medical insurance coverage
01 under this section are established by the administrator in accordance with 02 AS 39.30.095. Nothing in this chapter guarantees a person who elects coverage under 03 (a) of this section a monthly group premium rate for retiree major medical insurance 04 coverage other than the premium in effect for the month in which the premium is due 05 for coverage for that month. 06 (p) In this section, "health reimbursement arrangement plan" means the State 07 of Alaska Teachers' and Public Employees' Retiree Health Reimbursement 08 Arrangement Plan established in AS 39.30.300. 09 * Sec. 63. AS 39.35.680(4) is amended to read: 10 (4) "average monthly compensation" means the result obtained by 11 dividing the compensation earned by an employee during a considered period by the 12 number of months, including fractional months, for which compensation was earned; 13 an employee must have at least 115 days of credited service in the last payroll year in 14 order for that year to be used as part of the consecutive payroll years; the considered 15 period consists of 16 (A) for employees first hired before July 1, 1996, the three 17 consecutive payroll years during the period of credited service that yield the 18 highest average; 19 (B) for employees first hired on or after July 1, 1996, the five 20 consecutive payroll years during the period of credited service that yield the 21 highest average; 22 (C) if the employee does not have the number of consecutive 23 payroll years required by (A) or (B) of this paragraph, the actual number of 24 months, including fractional months, that the employee worked; 25 (D) for an employee who has made an election under 26 AS 39.35.300(c) or 39.35.310(c), the actual number of months, including 27 fractional months, that the employee worked; 28 (E) for a peace officer or firefighter hired before July 1, 2006 29 [AT ANY TIME], the three consecutive payroll years during the period of 30 credited service that yield the highest average; 31 (F) for an employee first hired after June 30, 2006, the five
01 consecutive payroll years during the period of credited service that yield 02 the highest average; 03 * Sec. 64. AS 39.35.680(26) is amended to read: 04 (26) "normal retirement" means retirement for a member who is 05 eligible to receive benefits under AS 39.35.370(a) or (l) or [UNDER] 39.35.385(a) or 06 (f); 07 * Sec. 65. AS 39.35.700 is amended to read: 08 Sec. 39.35.700. Applicability of AS 39.35.700 - 39.35.990. The provisions of 09 AS 39.35.700 - 39.35.990 apply only to 10 (1) members first hired on or after July 1, 2006, and before the 11 effective date of this section who do not transfer to a defined benefit retirement 12 plan under AS 14.25.009 - 14.25.220 or AS 39.35.095 - 39.35.680; 13 (2) public employees described in AS 39.35.720 who elect under 14 that section to become [TO MEMBERS WHO ARE EMPLOYED BY 15 EMPLOYERS THAT DO NOT PARTICIPATE IN THE DEFINED BENEFIT 16 RETIREMENT PLAN ESTABLISHED UNDER AS 39.35.095 - 39.35.680, TO 17 FORMER MEMBERS AS DEFINED IN AS 39.35.680, OR TO] members; and 18 (3) members who transferred [TRANSFER] into the defined 19 contribution retirement plan under former AS 39.35.940. 20 * Sec. 66. AS 39.35.700 is amended by adding a new subsection to read: 21 (b) A public organization as defined in AS 39.35.680 or a municipality or 22 other political subdivision of the state that participates in the plan shall also participate 23 in the defined benefit retirement plan under AS 39.35.095 - 39.35.680. 24 * Sec. 67. AS 39.35.720 is repealed and reenacted to read: 25 Sec. 39.35.720. Retirement plan election option. (a) A public employee who 26 is first hired on or after the effective date of this section may make a one-time election 27 to participate in the defined contribution retirement plan under AS 39.35.700 - 28 39.35.990 retroactive to the date of hire and may transfer to that plan employee 29 contributions, if any, and employer contributions, if any, that have been made to the 30 defined benefit retirement plan under AS 39.35.095 - 39.35.680. Before employer 31 contributions are transferred under this subsection, the administrator shall recalculate
01 them under AS 39.35.255. 02 (b) The election to participate in the defined contribution retirement plan 03 under (a) of this section must be made within 90 days after the date of hire and be 04 made in writing on a form and in the manner prescribed by the administrator. Before 05 accepting an election to participate in the defined contribution retirement plan under 06 AS 39.35.700 - 39.35.990, the administrator shall, within 20 days after the 07 administrator receives notice of the public employee's date of hire, provide the 08 employee eligible to make an election to participate in the defined contribution 09 retirement plan with 10 (1) information, including calculations to illustrate the effect of 11 moving the employee's retirement plan from the defined benefit retirement plan to the 12 defined contribution retirement plan; and 13 (2) other information clearly to inform the employee of the potential 14 consequences of the employee's election. 15 (c) An election made under (a) of this section to participate in the defined 16 contribution retirement plan is irrevocable. Retroactive to the date of hire, the 17 employee shall be enrolled in the defined contribution retirement plan under 18 AS 39.35.700 - 39.35.990, the employee's participation in the plan shall be governed 19 by the provisions for the defined contribution retirement plan, and the employee's 20 participation in the defined benefit retirement plan under AS 39.35.095 - 39.35.680 21 shall terminate. 22 (d) When an employee makes an election under (a) of this section, the 23 administrator shall cause the total amount of the employee's employee and employer 24 contributions, with investment earnings and losses through the final day of the 25 employee's participation in the defined benefit retirement plan, to be actuarially 26 calculated and transferred to the employee's designated account in the defined 27 contribution retirement plan. The administrator shall establish transfer procedures by 28 regulation, but the actual transfer may not be later than 30 days after the date the 29 administrator receives the employee's completed election form under (b) of this 30 section, unless the major financial markets for securities available for a transfer are 31 seriously disrupted by an unforeseen event that also causes the suspension of trading
01 on any national securities exchange in the country where the securities were issued. In 02 that event, the 30-day period may be extended by a resolution of the board. Transfers 03 are not commissionable or subject to other fees and may be in the form of securities or 04 cash as determined by the board. Securities shall be valued on the date of receipt in the 05 employee's account. 06 (e) An election made under (a) of this section by an eligible employee who is 07 married may not take effect unless the election is signed by the employee's spouse. An 08 eligible employee whose accounts are subject to a qualified domestic relations order 09 may not make an election to participate in the defined contribution retirement plan 10 under this section unless the qualified domestic relations order is amended or vacated 11 and court-certified copies of the order are received by the administrator. 12 * Sec. 68. AS 39.35.750(e) is amended to read: 13 (e) An employer shall make annual contributions to a trust account in the plan, 14 applied as a percentage of each member's compensation from July 1 to the following 15 June 30, in an amount determined by the board to be actuarially required to fully fund 16 the cost of providing [OCCUPATIONAL] disability and [OCCUPATIONAL] death 17 benefits under AS 39.35.700 - 39.35.990 and retirement benefits elected by disabled 18 peace officers and firefighters under AS 39.35.890(h)(2). The contribution required 19 under this subsection for peace officers and firefighters and the contribution required 20 under this subsection for other employees shall be separately calculated based on the 21 actuarially calculated costs for each group of employees. 22 * Sec. 69. AS 39.35.892(a) is amended to read: 23 (a) If [(1)] the death of an employee occurs before the employee's retirement 24 and before the employee's normal retirement date [, (2) THE PROXIMATE CAUSE 25 OF DEATH IS A BODILY INJURY SUSTAINED OR A HAZARD UNDERGONE 26 WHILE IN THE PERFORMANCE AND WITHIN THE SCOPE OF THE 27 EMPLOYEE'S DUTIES,] and the death [(3) THE INJURY OR HAZARD] is not the 28 proximate result of wilful negligence of the employee, a monthly survivor's pension 29 shall be paid to the surviving spouse. If there is no surviving spouse or if the spouse 30 later dies, the monthly survivor's pension shall be paid in equal parts to the dependent 31 children of the employee.
01 * Sec. 70. AS 39.35.892(e) is amended to read: 02 (e) On the date the employee would have first qualified for normal retirement 03 if the employee had survived, the retirement benefit shall be determined under the 04 provisions of AS 39.35.820 - 39.35.840, 39.35.870, and 39.35.880. In addition to 05 payment of the member's individual account, the surviving spouse or, if there is no 06 surviving spouse, the surviving dependent children of the member, shall receive an 07 additional benefit in an amount equal to the accumulated contributions that would 08 have been made to the deceased member's individual account under AS 39.35.730(a) 09 and 39.35.750(a), based on the deceased member's gross monthly compensation at the 10 time of [OCCUPATIONAL] death, from the time of the member's death to the date 11 the member would have first qualified for normal retirement if the member had 12 survived. Earnings shall be allocated to the additional benefit calculated under this 13 subsection based on the actual rate of return, net of expenses, of the trust account 14 established under AS 39.35.750(e) over the period that such contributions would have 15 been made. This additional amount and allocated earnings shall be paid in the same 16 manner as determined for the member's individual account under AS 39.35.820 - 17 39.35.860 to the extent permitted by the Internal Revenue Service. An employee who 18 died and whose survivors receive [OCCUPATIONAL] death benefits under this 19 section shall be considered to have retired directly from the plan on the date the 20 employee would have first qualified for normal retirement if the employee had 21 survived. The period of time during which a survivor's pension is paid under this 22 section constitutes membership service for the purpose of determining vesting in 23 employer contributions under AS 39.35.790(b) and eligibility for medical benefits 24 under AS 39.30.300 - 39.30.495 and AS 39.35.700 - 39.35.990. 25 * Sec. 71. AS 39.35.895(a) is amended to read: 26 (a) Subject to art. XII, sec. 7, Constitution of the State of Alaska, the 27 [THE] state may [HAS THE RIGHT TO] amend the plan at any time and from time to 28 time, in whole or in part, including the right to make retroactive amendments referred 29 to in 26 U.S.C. 401(b). 30 * Sec. 72. AS 39.35.895(b) is amended to read: 31 (b) The plan administrator may not modify or amend the plan retroactively [IN
01 SUCH A MANNER AS] to reduce [THE] benefits accrued by a [OF ANY] member 02 [ACCRUED TO DATE UNDER THE PLAN BY REASON OF CONTRIBUTIONS 03 MADE] before the modification or amendment except to the extent that the reduction 04 is permitted by art. XII, sec. 7, Constitution of the State of Alaska, and the Internal 05 Revenue Code. 06 * Sec. 73. AS 39.35.895(c) is amended to read: 07 (c) Subject to art. XII, sec. 7, Constitution of the State of Alaska, and the 08 Internal Revenue Code, the [THE] state may [, IN ITS DISCRETION,] terminate the 09 plan in whole or part [AT ANY TIME] without liability for the termination. If the plan 10 is terminated, all investments at the time of termination remain in force until all 11 individual accounts have been completely distributed under the plan. After [, AND, 12 AFTER] all plan liabilities are satisfied, excess assets of the plan revert to the 13 employer. 14 * Sec. 74. AS 39.35.895(d) is repealed and reenacted to read: 15 (d) Within one year after determining that a contribution to the plan by an 16 employer was the result of a mistake of fact, the administrator shall return the 17 contribution to the employer. 18 * Sec. 75. AS 39.35.958(c) is amended to read: 19 (c) When an employer's participation in the plan is terminated, or when an 20 employer terminates coverage of a department, group, or other classification of 21 employees under AS 39.35.957(c), the administrator shall assess the employer a 22 termination cost that the administrator determines is actuarially required to fully fund 23 the costs to the plan for employees whose coverage is terminated, including the cost of 24 providing the employer's share of retiree health benefits under AS 39.35.880, 25 [OCCUPATIONAL] disability and [OCCUPATIONAL] death benefits under 26 AS 39.35.890 and 39.35.892, and pension benefits elected under AS 39.35.890(h)(2). 27 * Sec. 76. AS 14.25.012(c), 14.25.155, 14.25.157(d), 14.25.487(d), 14.25.540; 28 AS 39.35.420, 39.35.430(h), 39.35.892(d), and 39.35.940 are repealed. 29 * Sec. 77. The uncodified law of the State of Alaska is amended by adding a new section to 30 read: 31 RETIREMENT PLAN ELECTION. (a) A teacher who was first hired after June 30,
01 2006, and before the effective date of this section, and who is a member of the defined 02 contribution retirement plan under AS 14.25.310 - 14.25.590 may, within 90 days after the 03 effective date of this section, make a one-time election to participate in the defined benefit 04 retirement plan under AS 14.25.009 - 14.25.220 and to transfer all contributions that have 05 been made or should be made to the defined contribution retirement plan for service the 06 member completes before the effective date of the member's participation in the defined 07 benefit retirement plan. The transferred contributions shall be used to purchase credited 08 service in the defined benefit retirement plan on an actuarial equivalent basis determined by 09 the Alaska Retirement Management Board established under AS 37.10.210. 10 (b) An employee who was first hired after June 30, 2006, and before the effective date 11 of this section, and who is a member of the defined contribution retirement plan under 12 AS 39.35.700 - 39.35.990, may, within 90 days after the effective date of this section, make a 13 one-time election to participate in the defined benefit retirement plan under AS 39.35.095 - 14 39.35.680 and to transfer all contributions that have been made or should be made to the 15 defined contribution retirement plan for service the member completes before the effective 16 date of the member's participation in the defined benefit retirement plan. The transferred 17 contributions shall be used to purchase credited service in the defined benefit retirement plan 18 on an actuarial equivalent basis determined by the Alaska Retirement Management Board 19 established under AS 37.10.210. 20 * Sec. 78. The uncodified law of the State of Alaska is amended by adding a new section to 21 read: 22 RETIREMENT PLAN ELECTION PROCEDURE. (a) An election made under sec. 23 77 of this Act to participate in a defined benefit retirement plan must be made in writing on 24 one or more forms and in the manner prescribed by the administrator. Before accepting an 25 election to participate in a defined benefit retirement plan, the administrator shall provide the 26 employee who plans on making an election to participate in a defined benefit retirement plan 27 with information, including calculations to illustrate the effect of moving the employee's 28 retirement plan from a defined contribution retirement plan to a defined benefit retirement 29 plan as well as other information that informs the employee of potential consequences of the 30 employee's election. 31 (b) An election made under sec. 77 of this Act to participate in a defined benefit
01 retirement plan is irrevocable. On the effective date of the election, an eligible employee who 02 makes the election shall be enrolled as a member of a defined benefit retirement plan, and the 03 employee's participation in the plan shall be governed by the applicable provisions of the 04 defined benefit retirement plan. The employee's enrollment in the defined benefit retirement 05 plan is retroactive to the date of hire. An election made by an eligible employee who is 06 married is not effective unless the election is signed by the employee's spouse. 07 (c) When an eligible employee makes a one-time election under sec. 77 of this Act, 08 the administrator shall cause the total amount of the employee's employee and employer 09 contributions, with investment earnings and losses through the day of the employee's election 10 to participate as a member in a defined benefit retirement plan, to be actuarially calculated 11 and, subject to (e) of this section, transferred to the pension fund in the corresponding defined 12 benefit retirement plan. On the effective date of the employee's participation in a defined 13 benefit retirement plan, the employee shall be credited with service in the defined benefit 14 retirement plan that may be purchased under an actuarial equivalent purchase formula as 15 determined by the board. The board shall establish transfer procedures by regulation, but the 16 actual transfer may not occur later than 30 days after the date the administrator receives the 17 employee's completed forms under (a) of this section, unless the major financial markets for 18 securities available for a transfer are seriously disrupted by an unforeseen event that also 19 causes the suspension of trading on any national securities exchange in the country where the 20 securities were issued. In that event, the 30-day period may be extended by a resolution of the 21 board. A transfer is not commissionable or subject to other fees and may be in the form of 22 cash or a security as determined by the board. A security shall be valued on the date of receipt 23 in the employee's account. In this subsection, "board" means the Alaska Retirement 24 Management Board established under AS 37.10.210. 25 (d) When making a transfer for an eligible employee under (c) of this section, the 26 administrator shall cause an amount equal to the 27 (1) decrease in the accrued actuarial liability of the death and disability trust in 28 the defined contribution retirement plan resulting from the transfer as of the date of transfer, 29 based on the most recent actuarial valuation of the death and disability trust, to be transferred 30 from the death and disability trust in the defined contribution retirement plan to the pension 31 fund in the defined benefit retirement plan; and
01 (2) increase in the accrued actuarial liability of the health care trust in the 02 defined benefit retirement plan resulting from the transfer as of the date of transfer, based on 03 the actuarial assumptions set out in (g) of this section, to be transferred from the trust 04 established under AS 39.30.097(b) for the prefunding of medical benefits provided by 05 AS 14.25.480 and AS 39.35.880 to the trust established under AS 39.30.097(a) for the 06 prefunding of medical benefits provided by AS 14.25.171 and AS 39.35.537. 07 (e) If the value actuarially calculated under (c) of this section is insufficient to pay for 08 service credit equal to the employee's actual service, the administrator shall allow the 09 employee the option of purchasing any indebtedness up to the amount needed to eliminate the 10 insufficiency; however, if that value exceeds the amount needed to pay for a service credit 11 equal to the employee's actual service, the administrator shall cause the excess to remain in 12 the employee's retirement plan established under AS 14.25.310 - 14.25.590 or AS 39.35.700 - 13 39.35.990. An excess under this subsection may not be used to purchase service credit in a 14 retirement plan administered under AS 14.25 or AS 39.35. 15 (f) The amount of service that can be purchased under (e) of this section is based on 16 the transferred employee's accrued actuarial liability of pension benefits in the defined benefit 17 retirement plan. The actuarial assumptions under this section are based on the actuarial 18 assumptions set out in (g) of this section. 19 (g) Actuarial assumptions about either the teachers' retirement system or the Public 20 Employees' Retirement System of Alaska must be based on the most recent actuarial 21 valuation of the corresponding defined benefit retirement plan, except that the retirement rates 22 are computed at 25 percent of the retirement rates used in the most recent actuarial valuation 23 of the pension trust for that plan plus 75 percent of the retirement rates used in the most recent 24 actuarial valuation of the corresponding defined contribution retirement plan. 25 (h) The provisions of this section are subject to the requirements of the Internal 26 Revenue Code and the limitations under AS 39.35.115, 39.35.678, 39.35.710(c) and (d), and 27 39.35.895. In this subsection, "Internal Revenue Code" has the meaning given in 28 AS 39.35.990. 29 (i) In this section, 30 (1) "administrator" means the commissioner of administration or the person 31 designated by the commissioner of administration under AS 39.35.003 for a public
01 employees' retirement plan; 02 (2) "defined benefit retirement plan" means a retirement plan established 03 under AS 14.25.009 - 14.25.220 or AS 39.35.095 - 39.35.680; 04 (3) "defined contribution retirement plan" means a retirement plan established 05 under AS 14.25.310 - 14.25.590 or AS 39.35.700 - 39.35.990. 06 * Sec. 79. The uncodified law of the State of Alaska is amended by adding a new section to 07 read: 08 ADOPTION OF REGULATIONS. (a) The Alaska Retirement Management Board 09 may adopt regulations necessary to implement secs. 28 and 29 of this Act. Regulations 10 adopted by the Alaska Retirement Management Board under this Act relate to the internal 11 management of a state agency and are not subject to AS 44.62 (Administrative Procedure Act) 12 under AS 37.10.240. 13 (b) The commissioner of administration may adopt regulations necessary to 14 implement secs. 1 - 27 and 30 - 78 of this Act. Regulations adopted by the commissioner of 15 administration under this Act relate to the internal management of a state agency and are not 16 subject to AS 44.62 (Administrative Procedure Act) under AS 14.25.005, AS 39.30.098, and 17 AS 39.35.005. 18 (c) Regulations adopted under this section may not take effect before the effective 19 date of the law being implemented by the regulation. 20 * Sec. 80. Section 79 of this Act takes effect immediately under AS 01.10.070(c). 21 * Sec. 81. Except as provided in sec. 80 of this Act, this Act takes effect July 1, 2022.