SB 88: "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 SENATE BILL NO. 88 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 AS 14.25.009 is repealed and reenacted to read: 08 Sec. 14.25.009.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. The provisions of 09 AS 14.25.009 - 14.25.220 apply to members of the teachers' retirement system who 10 are not members of the defined contribution retirement plan under AS 14.25.310 - 11 14.25.590. 12 * Sec. 2. AS 14.25.040(a) is amended to read: 13 (a) A teacher or member contracting for service with a participating
01 employer is subject to AS 14.25.009 - 14.25.220 unless the [A] teacher or member 02 (1) participates in a university retirement program under AS 14.40.661 03 - 14.40.799; 04 (2) became a member after June 30, 2006, and before July 1, 2024, 05 and does not, before November 1, 2024, elect to participate in the defined benefit 06 retirement plan under AS 14.25.009 - 14.25.220; or 07 (3) has elected under former AS 14.25.540 to participate in the plan 08 established in AS 14.25.310 - 14.25.590 [, A TEACHER OR MEMBER 09 CONTRACTING FOR SERVICE WITH A PARTICIPATING EMPLOYER IS 10 SUBJECT TO AS 14.25.009 - 14.25.220]. 11 * Sec. 3. AS 14.25.048(b) is amended to read: 12 (b) An employee or former employee who first became a member of the 13 plan before July 1, 2006, may receive credit for retroactive membership service for 14 employment before June 5, 1988, if the employee or former employee met the 15 requirements listed in (a) of this section at the time of the employment. To receive 16 credit for the retroactive membership service, the employee or former employee shall 17 claim the service and pay the retroactive contributions required under former 18 AS 14.25.061. However, an employee or former employee may not receive retroactive 19 credit under this subsection if the employee received credited service under AS 39.35 20 for the employment. 21 * Sec. 4. AS 14.25.048(c) is amended to read: 22 (c) An employee or former employee who first became a member of the 23 plan before July 1, 2006, and who received credit under AS 39.35 for service that 24 qualifies under (a) of this section may elect to transfer those periods of employment to 25 the plan. To receive credit for retroactive membership service under this subsection, 26 the employee or former employee shall claim the service and pay the retroactive 27 contributions required under former AS 14.25.061. 28 * Sec. 5. AS 14.25.050(a) is amended to read: 29 (a) Except as provided in (c) and (e) of this section, beginning January 1, 30 1991, each member shall contribute to the plan an amount equal to 8.65 percent of the 31 member's base salary accrued from July 1 to the following June 30. [THE
01 EMPLOYER SHALL DEDUCT THE CONTRIBUTION FROM THE MEMBER'S 02 SALARY AT THE END OF EACH PAYROLL PERIOD, AND THE 03 CONTRIBUTION SHALL BE CREDITED BY THE PLAN TO THE MEMBER 04 CONTRIBUTION ACCOUNT. THE CONTRIBUTIONS SHALL BE DEDUCTED 05 FROM EMPLOYEE COMPENSATION BEFORE THE COMPUTATION OF 06 APPLICABLE FEDERAL TAXES AND SHALL BE TREATED AS EMPLOYER 07 CONTRIBUTIONS UNDER 26 U.S.C. 414(h)(2). A MEMBER MAY NOT HAVE 08 THE OPTION OF MAKING THE PAYROLL DEDUCTION DIRECTLY IN CASH 09 INSTEAD OF HAVING THE CONTRIBUTION PICKED UP BY THE 10 EMPLOYER.] 11 * Sec. 6. AS 14.25.050 is amended by adding new subsections to read: 12 (e) A member who first participates in the plan after June 30, 2006, shall 13 contribute to the plan an amount equal to eight percent of the member's base salary 14 accrued from July 1 to the following June 30. The board may, from time to time, 15 adjust the contribution under this subsection to an amount that, 16 (1) if decreased, is not less than eight percent of the member's base 17 salary; and 18 (2) if increased, is not more than 10 percent of the member's base 19 salary. 20 (f) The employer shall deduct a contribution under this section from the 21 member's salary at the end of each payroll period, and the contribution shall be 22 credited by the plan to the member contribution account. The contributions shall be 23 deducted from member compensation before the computation of applicable federal 24 taxes and shall be treated as employer contributions under 26 U.S.C. 414(h)(2). A 25 member may not have the option of making the payroll deduction directly in cash 26 instead of having the contribution picked up by the employer. 27 * Sec. 7. AS 14.25.070(a) is amended to read: 28 (a) Except as provided in (i) of this section, each [EACH] employer shall 29 contribute to the system every payroll period an amount calculated by applying a rate 30 of 12.56 percent to the total of all base salaries paid by the employer, including any 31 adjustments to contributions required by AS 14.25.173(a), to
01 (1) active members of the system who first became members of the 02 plan before July 1, 2006; and 03 (2) [TO] members who first became members of the plan before 04 July 1, 2006, and who are retired from the plan and reemployed under AS 14.20.136 05 [, INCLUDING ANY ADJUSTMENTS TO CONTRIBUTIONS REQUIRED BY 06 AS 14.25.173(a)]. 07 * Sec. 8. AS 14.25.070(d) is amended to read: 08 (d) Notwithstanding (a) and (i) of this section, the annual employer 09 contribution rate may not be less than the rate sufficient to allow payment of the 10 employer normal cost and the employer contributions required under AS 14.25.350 11 and AS 39.30.370. 12 * Sec. 9. AS 14.25.070 is amended by adding new subsections to read: 13 (i) An employer that employs a member who first participates in the plan after 14 June 30, 2006, shall contribute to the system every payroll period an amount equal to 15 the greater of 16 (1) a per capita amount calculated by applying a rate, determined by 17 the board, of not less than 12 percent of the total monthly base salaries the employer 18 pays to all members who first became members of the plan after June 30, 2006; or 19 (2) a per capita amount, determined by the board, that is equal to the 20 amount calculated under (a) of this section expressed on a per capita basis. 21 (j) The board may, from time to time, increase the percentage rate determined 22 under (i)(1) of this section; however, the increase must be based on a concurrent 23 increase, if any, in the member contribution rate under AS 14.25.050(e). 24 * Sec. 10. AS 14.25.075(a) is amended to read: 25 (a) An employee who is eligible to purchase credited service under 26 AS 14.25.047 or 14.25.048, a member who is eligible to purchase credited service 27 under former AS 14.25.061 or under AS 14.25.048, 14.25.050, 14.25.060, 28 [14.25.061,] 14.25.100, or 14.25.107, or a teacher who is eligible to purchase credited 29 service under AS 14.20.345, AS 14.25.050, or 14.25.105, in lieu of making payments 30 directly to the plan, may elect to have the member's employer make payments as 31 provided in this section.
01 * Sec. 11. AS 14.25.075(b) is amended to read: 02 (b) A member may elect to have the employer make payments for all or any 03 portion of the amounts payable for the member's purchase of credited service through 04 a salary reduction program as follows: 05 (1) the amounts paid under a salary reduction program are in lieu of 06 contributions by the member making the election; the electing member's salary or 07 other compensation shall be reduced by the amount paid by the employer under this 08 subsection; 09 (2) the member shall make an irrevocable election under this 10 subsection to purchase credited service as permitted in former AS 14.25.061 or in 11 AS 14.20.345, AS 14.25.047, 14.25.048, 14.25.050, 14.25.060, [14.25.061,] 12 14.25.100, 14.25.105, or 14.25.107 before the member's termination of employment; 13 the irrevocable election must specify the number of payroll periods that deductions 14 will be made from the member's compensation and the dollar amount of deductions 15 for each payroll period during the specified number of payroll periods; the deductions 16 made under this paragraph cease upon the earlier of the member's termination of 17 employment with the employer or the member's death; amounts paid by an employer 18 under (f) of this section may not be applied toward the payment of the dollar amount 19 of the deductions representing the portion of the credited service that is being 20 purchased by the member through payroll deduction in accordance with the member's 21 irrevocable election under this paragraph; 22 (3) amounts paid by an employer under this subsection shall be treated 23 as employer contributions for the purpose of determining tax treatment under 26 24 U.S.C. (Internal Revenue Code); the amounts paid by the employer under this section 25 may not be included in the member's gross income for income tax purposes until those 26 amounts are distributed by refund or retirement benefit payments. 27 * Sec. 12. AS 14.25.075(i) is amended to read: 28 (i) On satisfaction of the eligibility requirements of former AS 14.25.061 or 29 of AS 14.20.345, AS 14.25.047, 14.25.048, 14.25.050, 14.25.060, [14.25.061,] 30 14.25.100, 14.25.105, or 14.25.107, the requirements of this section, and the 31 administrative filing requirements specified by the administrator, the plan shall adjust
01 the member's credited service history and add any additional service credits acquired. 02 * Sec. 13. AS 14.25.087 is amended to read: 03 Sec. 14.25.087. Contributions for medical benefits. Contributions made by 04 an employer under AS 14.25.070 and 14.25.085 must [SHALL] be separately 05 computed for benefits provided by AS 14.25.168 and 14.25.171. The contributions 06 computed for benefits provided by AS 14.25.168 must [AND SHALL] be deposited 07 in the Alaska retiree health care trust established under AS 39.30.097(a), and the 08 contributions computed for benefits provided by AS 14.25.171 must be deposited 09 in the teachers' and public employees' retiree health reimbursement arrangement 10 plan trust fund established under AS 39.30.340. 11 * Sec. 14. AS 14.25.110(a) is amended to read: 12 (a) Subject to AS 14.25.167, a member who first became a member of the 13 plan before July 1, 2006, is eligible for a normal retirement benefit if the member 14 (1) was first hired before July 1, 1975, has attained the age of 55 years, 15 and has at least 15 years of credited service, the last five of which have been 16 membership service, or is otherwise vested in the plan; 17 (2) has attained the age of 60 years and has at least eight years of 18 membership service; 19 (3) has attained the age of 60 years, has at least five years of 20 membership service, and has Alaska BIA service which, when added to the 21 membership service, will equal at least eight years; 22 (4) has at least 25 years of credited service, the last five of which have 23 been membership service; 24 (5) has at least 20 years of membership service; 25 (6) has at least 20 years of combined membership service and Alaska 26 BIA service, the last five of which have been membership service; or 27 (7) has, for each of 20 school years, 28 (A) at least one-half year of membership service as a part-time 29 teacher; 30 (B) one full year of membership service as a full-time teacher; 31 or
01 (C) any combination of service qualified under this paragraph. 02 * Sec. 15. AS 14.25.110(d) is amended to read: 03 (d) The monthly amount of a retirement benefit for a member who first 04 became a member of the plan before July 1, 2006, and who has paid the full 05 amount of any indebtedness is one-twelfth of the member's average base salary during 06 any three school years of membership service multiplied by 07 (1) two percent of the years of credited service earned before June 30, 08 1990, including credited fractional years, and the years of credited service through a 09 total of 20 years; plus 10 (2) two and one-half percent of the years of credited service earned 11 after June 30, 1990, that are more than 20 years of total credited service. 12 * Sec. 16. AS 14.25.110 is amended by adding new subsections to read: 13 (n) Subject to AS 14.25.167, a member who first became a member of the 14 plan after June 30, 2006, is eligible for a normal retirement benefit if the member 15 (1) has attained the age of 60 years and has at least five years of 16 membership service; or 17 (2) has at least 30 years of membership service. 18 (o) The monthly amount of a retirement benefit for a member who first 19 became a member of the plan after June 30, 2006, and who has paid the full amount of 20 any indebtedness is one-twelfth of the member's average base salary during any five 21 school years of membership service multiplied by 22 (1) two percent of the years of credited service through a total of 10 23 years; plus 24 (2) two and one-quarter percent of the years over 10 years of total 25 credited service through 20 years; plus 26 (3) two and one-half percent of the years of credited service that are 27 more than 20 years of total credited service. 28 * Sec. 17. AS 14.25.130(a) is amended to read: 29 (a) A member who first became a member of the plan before July 1, 2006, 30 and who has five or more years of membership service is eligible for a disability 31 pension if, after July 1, 1966, and before the member's normal retirement date, the
01 member's employment is terminated because of a permanent disability as defined in 02 AS 14.25.220. 03 * Sec. 18. AS 14.25 is amended by adding new sections to read: 04 Sec. 14.25.131. Nonoccupational disability benefits. (a) A member who first 05 became a member of the plan after June 30, 2006, is eligible for a nonoccupational 06 disability benefit if the member's employment is terminated because of a total and 07 apparently permanent nonoccupational disability, as defined in AS 14.25.220, before 08 the member's normal retirement date and after five or more years of membership 09 service. A member is not entitled to a nonoccupational disability benefit under this 10 section unless the member files an application for the benefit with the administrator 11 within 90 days after the member terminated employment. The board may waive a 12 filing deadline if there are extraordinary circumstances that resulted in the inability to 13 meet the deadline. The board may delegate the authority to waive a filing deadline 14 under this subsection to the administrator. 15 (b) The nonoccupational disability benefits accrue beginning the first day of 16 the month following termination of employment as a result of the disability and are 17 payable the last day of the month. If a final determination granting the benefit is not 18 made in time to pay the benefit when due, a retroactive payment shall be made to 19 cover the period of deferment. The last payment shall be for the first month in which 20 the disabled member 21 (1) dies; 22 (2) recovers from disability; 23 (3) fails to meet the requirements under (e) of this section or under 24 AS 14.25.133; or 25 (4) reaches normal retirement age. 26 (c) If the disabled member becomes ineligible to receive nonoccupational 27 disability benefits, the member is entitled to receive a normal or early retirement 28 benefit if the member would have been eligible for the benefit had employment 29 continued during the period of disability. However, the period of disability does not 30 constitute membership service. 31 (d) The monthly amount of the nonoccupational disability benefit shall be
01 determined in accordance with AS 14.25.110(o), considering the member's 02 membership service and base salary before termination of employment. 03 (e) A disabled member receiving a nonoccupational disability benefit shall 04 provide the administrator, one year after appointment to disability benefits and once 05 each year thereafter until disability benefits cease, proof of continuing eligibility to 06 receive disability payments under the Social Security Act. If the disabled member is 07 otherwise ineligible for a social security payment, the member shall provide the 08 administrator with sufficient medical evidence once each year to demonstrate that 09 disability payments under the Social Security Act would be payable had the member 10 been otherwise eligible. If the disabled member fails to provide the administrator with 11 evidence of continuing eligibility for disability payments under the Social Security Act 12 or other medical evidence required by the administrator within 30 days following each 13 anniversary date, the disability benefits from the plan shall cease. If that information is 14 subsequently provided to the administrator, benefit payments shall resume beginning 15 for the month following that in which the information is provided. When disability 16 payments under the Social Security Act cease, it is the responsibility of the disabled 17 member to notify the administrator immediately. 18 (f) A disabled member's nonoccupational disability benefit terminates when 19 the member first attains eligibility for normal retirement. At that time, the member's 20 retirement benefit shall be calculated under AS 14.25.110(o). 21 Sec. 14.25.132. Occupational disability benefits. (a) A member who first 22 became a member of the plan after June 30, 2006, is eligible for an occupational 23 disability benefit if employment is terminated because of a total and apparently 24 permanent occupational disability, as defined in AS 14.25.220, before the member's 25 normal retirement date. 26 (b) The occupational disability benefits accrue beginning the first day of the 27 month following termination of employment as a result of the disability and are 28 payable the last day of the month. If a final determination granting the benefit is not 29 made in time to pay the benefit when due, a retroactive payment shall be made to 30 cover the period of deferment. The last payment shall be for the first month in which 31 the disabled member
01 (1) dies; 02 (2) recovers from disability; 03 (3) fails to meet the requirements under (f) of this section or under 04 AS 14.25.133; or 05 (4) reaches normal retirement age. 06 (c) If the disabled member becomes ineligible to receive occupational 07 disability benefits before the normal retirement date, the disabled member shall then 08 be entitled to receive an early retirement benefit if the member would have been 09 eligible for the benefit had employment continued during the period of disability. The 10 period of disability constitutes membership service. 11 (d) The monthly amount of an occupational disability benefit is 40 percent of 12 the disabled member's base salary at the time of termination due to disability, divided 13 by 12. 14 (e) A member is not entitled to an occupational disability benefit unless the 15 member files an application for it with the administrator within 90 days of the date of 16 terminating employment. If the member is unable to meet a filing requirement of this 17 subsection, it may be waived by the commissioner if there are extraordinary 18 circumstances that resulted in the member's inability to meet the filing requirement. 19 (f) A disabled member receiving an occupational disability benefit shall 20 undergo a medical examination as often as the administrator considers advisable but 21 not more frequently than once each year. The administrator shall determine the place 22 of the examination and engage the physician or physicians. If, in the judgment of the 23 administrator, the examination indicates that the retired member is no longer 24 incapacitated because of a total and apparently permanent occupational disability, the 25 administrator may not issue further disability benefits to the member. 26 (g) A disabled member's occupational disability benefit terminates when the 27 disabled member first attains eligibility for normal retirement. At that time, the 28 member's retirement benefit shall be calculated under AS 14.25.110(o). 29 Sec. 14.25.133. Reemployment of disabled members. A member who first 30 became a member of the plan after June 30, 2006, appointed to disability benefits 31 under AS 14.25.131 or 14.25.132 shall apply to the division of vocational
01 rehabilitation within 30 days of the date disability benefits commence. The member 02 shall be enrolled in a rehabilitation program if the member meets the eligibility 03 requirements of the division of vocational rehabilitation. Unless the member 04 demonstrates cause, benefits shall terminate at the end of the first month in which a 05 disabled member 06 (1) fails to report to the division of vocational rehabilitation; 07 (2) is certified by the division of vocational rehabilitation as failing to 08 cooperate in a vocational rehabilitation program; 09 (3) fails to interview for a job; or 10 (4) fails to accept a position offered. 11 Sec. 14.25.134. Death after occupational disability. (a) Upon the death of a 12 disabled member who is receiving or is entitled to receive an occupational disability 13 benefit, the administrator shall pay the surviving spouse a surviving spouse's pension, 14 equal to 40 percent of the member's base salary at the termination of employment 15 because of occupational disability, divided by 12. If there is no surviving spouse, the 16 administrator shall pay the survivor's pension in equal parts to the dependent children 17 of the member. On the date the normal retirement of the member would have occurred 18 if the member had lived, the administrator shall adjust the monthly payments to equal 19 the monthly amount of the normal retirement benefit to which the member, had the 20 member lived and continued employment until the member's normal retirement date, 21 would have been entitled with an average base salary as existed at death and the 22 membership service to which the member would have been entitled. If the death of a 23 member occurs from occupational causes but no surviving spouse or dependent 24 children exist at the time of the death, or if the member designates as beneficiary 25 under AS 14.25.166 someone other than the surviving spouse or dependent children, 26 the administrator shall pay the member's designated beneficiary those benefits 27 available to a beneficiary under AS 14.25.156(c) and may not pay an occupational 28 death benefit to the surviving spouse or dependent children. 29 (b) The first payment of the surviving spouse's pension or of a dependent 30 child's pension shall accrue from the first day of the month following the member's 31 death and is payable the last day of the month. The last payment shall be made for the
01 last month in which there is an eligible surviving spouse or child. 02 * Sec. 19. AS 14.25.142(a) is amended to read: 03 (a) While residing in the state, a person who first became a member of the 04 plan before July 1, 2006, who is receiving a benefit under AS 14.25.009 - 14.25.220, 05 and who is at least 65 years of age or a person who first became a member of the 06 plan before July 1, 2006, and who is receiving a disability benefit under 07 AS 14.25.009 - 14.25.220 is entitled to receive a monthly cost-of-living allowance in 08 addition to the basic benefit. The amount of this allowance is 10 percent of the basic 09 benefit. 10 * Sec. 20. AS 14.25.143(a) is amended to read: 11 (a) Once each year, the administrator shall increase benefit payments to 12 eligible disabled members, to persons age 60 or older receiving benefits under this 13 plan in the preceding calendar year, and to persons who have received benefits under 14 this plan for at least five [EIGHT] years who are not otherwise eligible for an increase 15 under this section. 16 * Sec. 21. AS 14.25.143(b) is amended to read: 17 (b) Subject to (g) of this section, the [THE] increase in benefit payments 18 applies to total benefit payments except for the cost-of-living allowance under 19 AS 14.25.142. The amount of the increase is a percentage of the current benefit equal 20 to 21 (1) the lesser of 75 percent of the increase in the cost of living in the 22 preceding calendar year or nine percent, for recipients who on July 1 are at least 65 23 years old and for members receiving disability benefits; and 24 (2) the lesser of 50 percent of the increase in the cost of living in the 25 preceding calendar year or six percent, for recipients who on July 1 are at least 60 but 26 less than 65 years old or for recipients who on July 1 are less than 60 years old but 27 who have received benefits from the plan for at least eight years. 28 * Sec. 22. AS 14.25.143(e) is amended to read: 29 (e) When computing a death benefit under AS 14.25.155 - 14.25.160 30 [AS 14.25.155, 14.25.157, OR 14.25.160] or a survivor's benefit under AS 14.25.162, 31 14.25.164, or 14.25.167, adjustments granted to the deceased member or survivor
01 under this section shall be included in the computation. 02 * Sec. 23. AS 14.25.143 is amended by adding a new subsection to read: 03 (g) If the board determines that the portion of unfunded liability of the plan 04 that is attributable to all members who first became members of the plan after June 30, 05 2006, is greater than 10 percent, the board may reduce the amount of the increase 06 under (b) of this section that is payable to a member who first became a member after 07 June 30, 2006. At any time, the board may terminate a reduction made under this 08 subsection. 09 * Sec. 24. AS 14.25.155 is amended to read: 10 Sec. 14.25.155. Nonoccupational death benefits; members first hired 11 before July 1, 2006. (a) If the death of a member who first became a member of the 12 plan before July 1, 2006, occurs after completing less than one year of membership 13 service and the proximate cause of death is not a bodily injury sustained or hazard 14 undergone while in the performance and within the scope of the member's duties of 15 employment, the member's designated beneficiary shall be paid the balance of the 16 member contribution account. 17 (b) If the death of a member who first became a member of the plan before 18 July 1, 2006, occurs after completing at least one year of membership service but 19 before becoming a vested member, and the proximate cause of death is not a bodily 20 injury sustained or hazard undergone while in the performance and within the scope of 21 the member's duties of employment, the lump-sum death benefit described in 22 AS 14.25.160(b) and (c) shall be paid to the designated beneficiary of the member. 23 (c) If the death of a vested member or deferred vested member, who first 24 became a member of the plan before July 1, 2006, occurs and the proximate cause 25 of death is not a bodily injury sustained or hazard undergone while in the performance 26 and within the scope of the member's duties of employment, the surviving spouse may 27 elect to receive either the benefits described in (b) of this section or a 50 percent joint 28 and survivor option as provided under AS 14.25.167(a)(2) based on credited service to 29 the date of the member's termination. If no spouse survives a vested or deferred vested 30 member, or if a person other than the spouse is designated as beneficiary in 31 accordance with AS 14.25.166, the administrator shall pay the designated beneficiary
01 the benefits described in AS 14.25.160(b) and (c). Benefits accrue from the first day of 02 the month following the member's death and are payable the last day of the month. 03 (d) Benefits are not payable under this section if benefits are payable under 04 AS 14.25.156 - 14.25.162 [AS 14.25.157, 14.25.160, 14.25.162], 14.25.164, or 05 14.25.167. 06 * Sec. 25. AS 14.25 is amended by adding a new section to read: 07 Sec. 14.25.156. Nonoccupational death benefits; members first hired after 08 June 30, 2006. (a) If the death of a member who first became a member of the plan 09 after June 30, 2006, occurs from nonoccupational causes after completing less than 10 one year of membership service, the member's designated beneficiary shall be paid the 11 balance of the member contribution account. If the death of a member occurs from 12 nonoccupational causes after completing at least one year but less than five years of 13 membership service, a death benefit shall be paid to the member's designated 14 beneficiary. The amount of the death benefit shall be the amount set out in (c) of this 15 section. 16 (b) If the death of a vested member or deferred vested member, who first 17 became a member of the plan after June 30, 2006, occurs from nonoccupational causes 18 and the member designated no person other than the surviving spouse as beneficiary to 19 receive nonoccupational death benefits, the surviving spouse may elect to receive 20 either the amounts set out in (c) of this section or a 50 percent joint and survivor 21 option based on credited service to the date of the member's death or termination. 22 Benefits accrue from the first day of the month following the member's death and are 23 payable the last day of the month. 24 (c) If, under AS 14.25.166, a vested or deferred vested member, who first 25 became a member of the plan after June 30, 2006, designates as beneficiary to receive 26 nonoccupational benefits someone other than the surviving spouse to whom the 27 member has been married for at least one year, the administrator shall pay the 28 designated beneficiary 29 (1) the balance of the deceased member's member contribution 30 account; and 31 (2) a lump-sum death benefit; the amount of the lump-sum death
01 benefit is $100 times the years of membership service of the deceased member plus 02 $1,000. 03 * Sec. 26. AS 14.25.157(a) is amended to read: 04 (a) If (1) the death of a member who first became a member of the plan 05 before July 1, 2006, occurs before the member first attains eligibility for normal 06 retirement, and (2) the proximate cause of death is a bodily injury sustained or hazard 07 undergone while in the performance and within the scope of the member's duties of 08 employment, and (3) the injury or hazard is not the proximate result of wilful 09 negligence on the part of the member, the administrator shall pay a monthly survivor's 10 pension equal to 40 percent of the member's base salary at the time of termination of 11 employment, divided by 12, to the member's surviving spouse. If there is no surviving 12 spouse, the administrator shall pay the monthly survivor's pension in equal parts to the 13 dependent children of the member. On the date the normal retirement of the member 14 would have occurred if the member had lived, monthly payments must equal the 15 monthly amount of the normal retirement benefit to which the member, had the 16 member lived and continued employment until the member's normal retirement date, 17 would have been entitled with an average base salary as existed at the member's death 18 and the credited service to which the member would have been entitled. If the member 19 does not have a spouse or dependent children at the time of death or if the member 20 designates as beneficiary under AS 14.25.166 someone other than the surviving 21 spouse or dependent children, the administrator shall pay the member's designated 22 beneficiary those benefits available to a beneficiary under AS 14.25.160(b) and (c) 23 and may not pay a benefit to the surviving spouse or dependent children. 24 * Sec. 27. AS 14.25.157(c) is amended to read: 25 (c) Benefits are not payable under this section if benefits are payable under 26 AS 14.25.155, 14.25.156, 14.25.158 - 14.25.162 [14.25.160, 14.25.162], 14.25.164, or 27 14.25.167. 28 * Sec. 28. AS 14.25.157(d) is amended to read: 29 (d) If the [A MEMBER'S] death of a member who first became a member 30 of the plan before July 1, 2006, is caused by an act of assault, assassination, or 31 terrorism directly related to the person's status as a member, whether the act occurs on
01 or off the member's job site, the death shall be considered to have occurred in the 02 performance of and within the scope of the member's duties for purposes of (a)(2) of 03 this section. If the expressed or apparent motive and intent of the perpetrator of the 04 harm inflicted on [UPON] the member was due to the performance of the member's 05 job duties or employment as a member, the death shall be considered to be directly 06 related to the member's status as a member. A member's job duties are those 07 performed within the course and scope of the member's employment with an 08 employer. 09 * Sec. 29. AS 14.25 is amended by adding a new section to read: 10 Sec. 14.25.158. Occupational death benefit; members first hired after 11 June 30, 2006. (a) If the death of a member who first became a member of the plan 12 after June 30, 2006, occurs before the member's retirement and before the member's 13 normal retirement date, the proximate cause of death is a bodily injury sustained or a 14 hazard undergone while in the performance and within the scope of the member's 15 duties, and the injury or hazard is not the proximate result of wilful negligence of the 16 member, a monthly survivor's pension shall be paid to the surviving spouse. If there is 17 no surviving spouse or if the spouse later dies, the monthly survivor's pension shall be 18 paid in equal parts to the dependent children of the member. On the date the normal 19 retirement of the member would have occurred if the member had lived, monthly 20 payments shall equal the monthly amount of the normal retirement benefit to which 21 the member, had the member lived and continued employment until the member's 22 normal retirement date, would have been entitled with an average base salary as 23 existed at death and the credited service to which the member would have been 24 entitled. 25 (b) The first payment of the surviving spouse's pension or of a dependent 26 child's pension shall be made for the month following the month in which the member 27 dies and payment shall cease to be made beginning with the month in which there is 28 no surviving spouse or no dependent child. 29 (c) If the death of a member occurs from occupational causes but no surviving 30 spouse or dependent children exist at the time of the death or if the member designates 31 as beneficiary under AS 14.25.166 someone other than the surviving spouse or
01 dependent children, the member's designated beneficiary is entitled to receive those 02 benefits available to a beneficiary under AS 14.25.156(c) and an occupational death 03 benefit may not be paid to the surviving spouse or dependent children. 04 (d) The monthly survivor's pension in (a) of this section for survivors of 05 members is 40 percent of the member's base salary when the member dies. 06 (e) If a member's death is caused by an act of assault, assassination, or 07 terrorism directly related to the person's status as a member, whether the act occurs on 08 or off the member's job site, the death shall be considered to have occurred in the 09 performance of and within the scope of the member's duties for purposes of (a) of this 10 section. If the expressed or apparent motive and intent of the perpetrator of the harm 11 inflicted on the member was due to the performance of the member's job duties or 12 employment, the death shall be considered to be directly related to the member's status 13 as a member. A member's job duties are those performed within the course and scope 14 of the person's employment with an employer. 15 * Sec. 30. AS 14.25.162(b) is amended to read: 16 (b) A survivor's allowance is payable under this section as follows: 17 (1) an allowance of 10 percent of the member's base salary 18 immediately before the member's death, retirement, or disability shall be paid for each 19 dependent child; if there are four or more dependent children, the total amount paid to 20 those children is 40 percent of the member's base salary before the member's death, 21 retirement, or disability, paid in equal amounts to each child; the allowance shall be 22 recomputed for the month in which the number of dependent children is less than four 23 and the benefits shall be decreased accordingly; the adoption of a dependent child does 24 not terminate the survivor's allowance payable under this section; 25 (2) an allowance of 35 percent of the member's base salary shall be 26 paid to the member's surviving spouse as long as there is an eligible dependent child, 27 as determined under (b)(1) of this section, for whom the surviving spouse is legally 28 responsible; if there is no surviving spouse, an allowance of 10 percent of the 29 member's base salary shall be paid to each court-appointed guardian, not to exceed one 30 allowance for each child or for each group of children who have the same guardian or 31 joint guardians;
01 (3) when no further benefits are payable under this section, the 02 difference between the amount that would have been paid under AS 14.25.160 and any 03 payments made to the member, spouse, guardian, or dependent children under this 04 section shall be paid to those beneficiaries described in AS 14.25.166; 05 (4) benefits are not payable under this section if benefits are payable 06 under AS 14.25.155 - 14.25.158 [AS 14.25.155, 14.25.157], 14.25.164, or 14.25.167. 07 * Sec. 31. AS 14.25.164(b) is amended to read: 08 (b) A spouse's pension is payable under this section as follows: 09 (1) a spouse's pension is equal to 50 percent of the retirement benefit 10 that the deceased member was receiving; if the member was not receiving a retirement 11 benefit, the spouse's pension is equal to 50 percent of the amount the member would 12 have received, based on the member's average base salary and credited service to the 13 date of the member's death and assuming that the member would have been eligible 14 for a normal retirement benefit as of that date; 15 (2) in the event of the death of a member's spouse who is receiving a 16 spouse's pension, the difference between the amount that would have been paid under 17 AS 14.25.160 and any payments made to the member, spouse, guardian, or dependent 18 children shall be paid to those beneficiaries described in AS 14.25.166; 19 (3) benefits are not payable under this section if benefits are payable 20 under AS 14.25.155 - 14.25.158 [AS 14.25.155, 14.25.157], 14.25.162, or 14.25.167. 21 * Sec. 32. AS 14.25.167(a) is amended to read: 22 (a) Benefits payable under this section are in place of benefits payable under 23 AS 14.25.110, 14.25.125, 14.25.155 - 14.25.162 [14.25.155, 14.25.157, 14.25.160, 24 14.25.162], or 14.25.164. Upon filing an application for retirement with the 25 administrator, or when a disabled member becomes eligible for normal retirement 26 under AS 14.25.130(e), the member shall designate the person who is the member's 27 spouse at the time of appointment to retirement as the contingent beneficiary. 28 However, if the designation of the spouse is revoked under (c) of this section, the 29 member may designate a dependent approved by the administrator as the contingent 30 beneficiary or may take normal or early retirement under AS 14.25.110 or 14.25.125. 31 The administrator shall pay benefits under the option elected by the member. The
01 member may elect an option that provides that 02 (1) the member is entitled to receive a reduced benefit payable for life, 03 and, after the member's death, the contingent beneficiary is entitled to receive 04 payments in the amount of 75 percent of the reduced benefit for life; 05 (2) the member is entitled to receive a reduced benefit payable for life, 06 and, after the member's death, the contingent beneficiary is entitled to receive 07 payments in the amount of 50 percent of the reduced benefit for life; or 08 (3) the member is entitled to receive a reduced benefit payable during 09 the joint lifetime of the member and the contingent beneficiary, and, after the death of 10 either the member or the contingent beneficiary, the survivor is entitled to receive 11 payments in the amount of 66-2/3 percent of the reduced benefit for life. 12 * Sec. 33. AS 14.25.167(e) is amended to read: 13 (e) If either the member or contingent beneficiary dies before the member is 14 appointed to retirement, the election becomes inoperative. Once the member is 15 appointed to retirement, the election is irrevocable, even if the retired member is 16 reemployed. Any additional retirement benefit to which the reemployed member may 17 become entitled shall [WILL] be paid in accordance with the initial election made 18 under this section, unless the contingent beneficiary is deceased. If the contingent 19 beneficiary is deceased, the benefits earned during the period of reemployment are 20 subject to AS 14.25.110, or this section if another contingent beneficiary was 21 designated during the period of reemployment. All other benefits earned during 22 previous periods of employment are subject to the election at the time the member was 23 appointed to retirement. If death occurs during the period of reemployment and the 24 proximate cause of death is not a bodily injury sustained or hazard undergone while in 25 the performance and within the scope of the member's duties of employment, those 26 benefits earned while reemployed are subject to AS 14.25.155(c) or 14.25.156. All 27 other benefits earned during previous periods of employment are subject to the 28 election at the time the member was appointed to retirement. If death occurs during the 29 period of reemployment and the proximate cause of death is a bodily injury sustained 30 or hazard undergone while in the performance and within the scope of the member's 31 duties of employment and the injury or hazard is not the proximate result of wilful
01 negligence on the part of the member, all benefits earned during all periods of 02 employment are subject to AS 14.25.157 or 14.25.158. 03 * Sec. 34. 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 June 30 [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. 35. 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 AS 14.25.155 - 14.25.162 [AS 14.25.155, 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. 36. 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, receives a monthly benefit from the plan, and 12 has elected benefits under this section is entitled to medical benefits under this section. 13 A member who applies for medical benefits under this section shall apply on the forms 14 and in the manner prescribed by the administrator. 15 (b) The member's surviving spouse is eligible to elect medical benefits if the 16 member had retired or was eligible for retirement and medical benefits at the time of 17 the member's death. 18 (c) The medical benefits available to eligible persons are access to the retiree 19 major medical insurance plan and access to the health reimbursement arrangement 20 plan under AS 39.30.300. Access to the retiree major medical insurance plan means 21 that an eligible person may not be denied insurance coverage except for failure to pay 22 the required premium. 23 (d) Retiree major medical insurance plan coverage elected by an eligible 24 member under this section covers the eligible member, the spouse of the eligible 25 member, and the dependent children of the eligible member. 26 (e) Retiree major medical insurance plan coverage elected by a surviving 27 spouse of an eligible member under this section covers the surviving spouse and the 28 dependent children of the eligible member who are dependent on the surviving spouse. 29 (f) Participation in the retiree major medical insurance plan is not required in 30 order to participate in the health reimbursement arrangement plan. 31 (g) A person eligible for medical benefits under this section is not required to
01 participate in the health reimbursement arrangement plan in order to participate in the 02 retiree major medical insurance plan. 03 (h) A person who is eligible for medical benefits under this section must make 04 the irrevocable election to participate or not participate in the retiree major medical 05 insurance plan on or before the date the person reaches 70 1/2 years of age or when the 06 person applies for retirement and medical benefits, whichever is later. 07 (i) Major medical insurance coverage takes effect on the first day of the month 08 following the date of the administrator's approval of the election and stops when the 09 person who elects coverage dies or fails to make a required premium payment. 10 (j) The coverage for persons 65 years of age or older is the same as that 11 available for persons under 65 years of age. The benefits payable to those persons 65 12 years of age or older supplement any benefits provided under the federal old age, 13 survivors, and disability insurance program. 14 (k) The medical and optional insurance premiums owed by the person who 15 elects coverage may be deducted from the health reimbursement arrangement plan. If 16 the amount of the health reimbursement arrangement plan becomes insufficient to pay 17 the premiums, the person who elects coverage under (a) of this section shall pay the 18 premiums directly. 19 (l) The cost of premiums for retiree major medical insurance coverage under 20 this section for an eligible member or surviving spouse who is 21 (1) not eligible for Medicare is an amount equal to the full monthly 22 group premiums for retiree major medical insurance coverage; 23 (2) eligible for Medicare is the following percentage of the premium 24 amounts established for retirees who are eligible for Medicare: 25 (A) 30 percent if the member had 10 or more, but less than 15, 26 years of service; 27 (B) 25 percent if the member had 15 or more, but less than 20, 28 years of service; 29 (C) 20 percent if the member had 20 or more, but less than 25, 30 years of service; 31 (D) 15 percent if the member had 25 or more, but less than 30,
01 years of service; 02 (E) 10 percent if the member had 30 or more years of service. 03 (m) The eligibility for retiree major medical insurance coverage for an 04 alternate payee under a qualified domestic relations order shall be determined based 05 on the eligibility of the member to elect coverage. The alternate payee shall pay the 06 full monthly premium for retiree major medical insurance coverage. 07 (n) The administrator shall 08 (1) inform a person entitled to retiree major medical insurance 09 coverage under this section in writing 10 (A) that the health insurance coverage available to retired 11 members may be different from the health insurance coverage provided to 12 employees; 13 (B) of time limits for selecting optional health insurance 14 coverage; and 15 (C) whether the election is irrevocable; and 16 (2) require that a person entitled to retiree major medical insurance 17 coverage under this section indicate in writing on a form provided by the administrator 18 whether the person has chosen to receive optional health insurance coverage. 19 (o) The monthly group premiums for retiree major medical insurance coverage 20 under this section are established by the administrator in accordance with 21 AS 39.30.095. Nothing in this chapter guarantees a person who elects coverage under 22 (a) of this section a monthly group premium rate for retiree major medical insurance 23 coverage other than the premium in effect for the month in which the premium is due 24 for coverage for that month. 25 (p) In this section, "health reimbursement arrangement plan" means the State 26 of Alaska Teachers' and Public Employees' Retiree Health Reimbursement 27 Arrangement Plan established in AS 39.30.300. 28 * Sec. 37. AS 14.25.220(5) is amended to read: 29 (5) "average base salary" means, 30 (A) for a teacher who first became a member before July 1, 31 2006, the result obtained by dividing the sum of the member's three highest
01 years' base salary by three, or if a member does not have three years base 02 salary, then by dividing the sum of all base salaries by the number of years of 03 base salary; the base salary for a year in which credit is granted for disability 04 totaling more than one-third of a year may not be used in the computation of 05 the average base salary; the base salary in a school year for which the member 06 receives compensation for less than two-thirds of a year may not be used in the 07 computation of the average base salary; if compensation is received for more 08 than two-thirds of a year, the full base salary for that school year shall be used 09 in the computation of the average base salary; 10 (B) for a teacher who first became a member after June 30, 11 2006, the result obtained by dividing the sum of the member's five highest 12 consecutive years' base salary by five, or if a member does not have five 13 years' base salary, then by dividing the sum of all base salaries by the 14 number of years of base salary; the base salary for a year in which credit 15 is granted for disability totaling more than one-third of a year may not be 16 used in the computation of the average base salary; the base salary in a 17 school year for which the member receives compensation for less than 18 two-thirds of a year may not be used in the computation of the average 19 base salary; if compensation is received for more than two-thirds of a 20 year, the full base salary for that school year shall be used in the 21 computation of the average base salary; 22 * Sec. 38. AS 14.25.220(46) is amended to read: 23 (46) "vested member" or "vested teacher" means an active member 24 who [HAS COMPLETED EITHER] 25 (A) first became a member before July 1, 2006, and has 26 completed 27 (i) 15 years of service, the last five of which have been 28 membership service, for a member first hired before July 1, 1975; 29 (ii) [(B)] eight years of membership service; 30 (iii) [(C)] five years of membership and three years of 31 BIA service; or
01 (iv) [(D)] 12 school years of part-time membership 02 service or 12 school years in each of which the member earned either 03 part-time or full-time membership service; 04 (B) first became a member after June 30, 2006, and has 05 completed five years of membership service; 06 * Sec. 39. AS 14.25.220 is amended by adding new paragraphs to read: 07 (48) "nonoccupational disability" means a physical or mental condition 08 that, in the judgment of the administrator, presumably permanently prevents a member 09 from satisfactorily performing the member's usual duties for an employer or the duties 10 of another position or job that an employer makes available and for which the member 11 is qualified by training or education, not including a condition resulting from a cause 12 that the board, in its regulations, has excluded; 13 (49) "occupational disability" means a physical or mental condition 14 that, in the judgment of the administrator, presumably permanently prevents a member 15 from satisfactorily performing the member's usual duties for an employer or the duties 16 of another comparable position or job that an employer makes available and for which 17 the member is qualified by training or education; however, the proximate cause of the 18 condition must be a bodily injury sustained, or a hazard undergone, while in the 19 performance and within the scope of the member's duties and not the proximate result 20 of the wilful negligence of the member. 21 * Sec. 40. AS 14.25.310 is amended to read: 22 Sec. 14.25.310. Applicability of AS 14.25.310 - 14.25.590. The provisions of 23 AS 14.25.310 - 14.25.590 apply only to 24 (1) teachers who first become members [ON OR] after June 30, 2006, 25 and before July 1, 2024, and who do not, before November 1, 2024, elect to 26 participate in a defined benefit retirement plan under AS 14.25.009 - 14.25.220 or 27 AS 39.35.095 - 39.35.680; and 28 (2) teachers [JULY 1, 2006, TO MEMBERS WHO ARE 29 EMPLOYED BY EMPLOYERS THAT DO NOT PARTICIPATE IN THE 30 DEFINED BENEFIT RETIREMENT PLAN ESTABLISHED UNDER AS 14.25.009 31 - 14.25.220, TO FORMER MEMBERS UNDER AS 14.25.220, OR TO MEMBERS]
01 who transferred [TRANSFER] into the defined contribution retirement plan under 02 former AS 14.25.540. 03 * Sec. 41. AS 14.25.310 is amended by adding a new subsection to read: 04 (b) An employer that participates in the plan shall also participate in the 05 defined benefit retirement plan under AS 14.25.009 - 14.25.220. 06 * Sec. 42. AS 14.25.330(a) is amended to read: 07 (a) A teacher who first becomes a member [ON OR] after June 30, 2006, and 08 before July 1, 2024, and who does not, before November 1, 2024, elect to 09 participate in a defined benefit retirement plan under AS 14.25.009 - 14.25.220 or 10 AS 39.35.095 - 39.35.680 [JULY 1, 2006,] shall participate in the plan as a member of 11 the defined contribution retirement plan. 12 * Sec. 43. AS 14.25.350 is amended by adding a new subsection to read: 13 (f) This section does not apply to contributions made under AS 14.25.070(i) 14 and does not require an employer that makes a contribution for a member under 15 AS 14.25.070(i) to make another contribution for that member. 16 * Sec. 44. AS 14.25.490(a) is amended to read: 17 (a) Subject to art. XII, sec. 7, Constitution of the State of Alaska, the 18 [THE] state may [HAS THE RIGHT TO] amend the plan at any time and from time to 19 time, in whole or in part, including the right to make retroactive amendments referred 20 to in 26 U.S.C. 401(b). 21 * Sec. 45. AS 14.25.490(b) is amended to read: 22 (b) The plan administrator may not modify or amend the plan retroactively [IN 23 SUCH A MANNER AS] to reduce [THE] benefits accrued by a [OF ANY] member 24 [ACCRUED TO DATE UNDER THE PLAN BY REASON OF CONTRIBUTIONS 25 MADE] before the modification or amendment except to the extent that the reduction 26 is permitted by art. XII, sec. 7, Constitution of the State of Alaska, and the Internal 27 Revenue Code. 28 * Sec. 46. AS 14.25.490(c) is amended to read: 29 (c) Subject to art. XII, sec. 7, Constitution of the State of Alaska, and the 30 Internal Revenue Code, the [THE] state may [, IN ITS DISCRETION,] terminate the 31 plan in whole or part [AT ANY TIME] without liability for the termination. If the plan
01 is terminated, all investments at the time of termination remain in force until all 02 individual accounts have been completely distributed under the plan. After [, AND, 03 AFTER] all plan liabilities are satisfied, excess assets of the plan revert to the 04 employer. 05 * Sec. 47. AS 14.25.490(d) is repealed and reenacted to read: 06 (d) Within one year after determining that a contribution to the plan by an 07 employer was the result of a mistake of fact, the administrator shall return the 08 contribution to the employer. 09 * Sec. 48. AS 37.10.220(a) is amended to read: 10 (a) The board shall 11 (1) hold regular and special meetings at the call of the chair or of at 12 least five members; meetings are open to the public, and the board shall keep a full 13 record of all its proceedings; 14 (2) after reviewing recommendations from the Department of 15 Revenue, adopt investment policies for each of the funds entrusted to the board; 16 (3) determine the appropriate investment objectives for the defined 17 benefit plans established under the teachers' retirement system under AS 14.25 and the 18 public employees' retirement system under AS 39.35; 19 (4) assist in prescribing the policies for the proper operation of the 20 systems and take other actions necessary to carry out the intent and purpose of the 21 systems in accordance with AS 37.10.210 - 37.10.390; 22 (5) provide a range of investment options and establish the rules by 23 which participants can direct their investments among those options with respect to 24 accounts established under 25 (A) AS 14.25.340 - 14.25.350 (teachers' retirement system 26 defined contribution individual accounts); 27 (B) AS 39.30.150 - 39.30.180 (State of Alaska Supplementary 28 Annuity Plan); 29 (C) AS 39.35.730 - 39.35.750 (public employees' retirement 30 system defined contribution individual accounts); and 31 (D) AS 39.45.010 - 39.45.060 (public employees' deferred
01 compensation program); 02 (6) establish the rate of interest that shall be annually credited to each 03 member's individual contribution account in accordance with AS 14.25.145 and 04 AS 39.35.100 and the rate of interest that shall be annually credited to each member's 05 account in the health reimbursement arrangement plan under AS 39.30.300 - 06 39.30.495; the rate of interest shall be adopted on the basis of the probable effective 07 rate of interest on a long-term basis, and the rate may be changed from time to time; 08 (7) adopt a contribution surcharge as necessary under AS 39.35.160(c); 09 (8) coordinate with the retirement system administrator to have an 10 annual actuarial valuation of each retirement system prepared to determine system 11 assets, accrued liabilities, and funding ratios and to certify to the appropriate 12 budgetary authority of each employer in the system 13 (A) an appropriate contribution rate for normal costs; [AND] 14 (B) an appropriate contribution rate for liquidating any past 15 service liability; in this subparagraph, the appropriate contribution rate for 16 liquidating the past service liability of the defined benefit retirement plan under 17 AS 14.25.009 - 14.25.220 or the past service liability of the defined benefit 18 retirement plan under AS 39.35.095 - 39.35.680 must be determined by a level 19 percent of pay method based on amortization of the past service liability for a 20 closed term of 25 years; 21 (C) an appropriate monthly employer contribution rate 22 under AS 14.25.070(i) and AS 39.35.255(j); and 23 (D) appropriate adjustments, if any, under AS 14.25.050(e) 24 and AS 39.35.160(e) and (f); 25 (9) review actuarial assumptions prepared and certified by a member 26 of the American Academy of Actuaries and conduct experience analyses of the 27 retirement systems not less than once every four years, except for health cost 28 assumptions, which shall be reviewed annually; the results of all actuarial assumptions 29 prepared under this paragraph shall be reviewed and certified by a second member of 30 the American Academy of Actuaries before presentation to the board; 31 (10) contract for an independent audit of the state's actuary not less
01 than once every four years; 02 (11) contract for an independent audit of the state's performance 03 consultant not less than once every four years; 04 (12) obtain an external performance review to evaluate the investment 05 policies of each fund entrusted to the board and report the results of the review to the 06 appropriate fund fiduciary; 07 (13) by the first day of each regular legislative session, report to the 08 governor, the legislature, and the individual employers participating in the state's 09 retirement systems on the financial condition of the systems in regard to 10 (A) the valuation of trust fund assets and liabilities; 11 (B) current investment policies adopted by the board; 12 (C) a summary of assets held in trust listed by the categories of 13 investment; 14 (D) the income and expenditures for the previous fiscal year; 15 (E) the return projections for the next calendar year; 16 (F) one-year, three-year, five-year, and 10-year investment 17 performance for each of the funds entrusted to the board; and 18 (G) other statistical data necessary for a proper understanding 19 of the financial status of the systems; 20 (14) submit quarterly updates of the investment performance reports to 21 the Legislative Budget and Audit Committee; 22 (15) develop an annual operating budget; [AND] 23 (16) administer pension forfeitures required under AS 37.10.310 using 24 the procedures of AS 44.62 (Administrative Procedure Act); and 25 (17) determine the amount of the monthly employer contributions 26 under AS 14.25.070(i) and AS 39.35.255(j). 27 * Sec. 49. AS 37.10.220(b) is amended to read: 28 (b) The board may 29 (1) employ outside investment advisors to review investment policies; 30 (2) enter into an agreement with the fiduciary of another state fund in 31 order to assume the management and investment of those assets;
01 (3) contract for other services necessary to execute the board's powers 02 and duties; 03 (4) enter into confidentiality agreements that would exempt records 04 from AS 40.25.110 and 40.25.120 if the records contain information that could affect 05 the value of investment by the board or that could impair the ability of the board to 06 acquire, maintain, or dispose of investments; 07 (5) adjust the amount of the increase in benefits payable to a 08 member who first became a member after June 30, 2006, as provided under 09 AS 14.25.143 and AS 39.35.475; 10 (6) adjust contribution rates under AS 14.25.050(e) and 11 AS 39.35.160(e) and (f). 12 * Sec. 50. AS 39.30.090(a) is amended to read: 13 (a) The Department of Administration may obtain a policy or policies of group 14 insurance covering state employees, persons entitled to coverage under AS 14.25.168, 15 14.25.171, 14.25.480, AS 22.25.090, AS 39.35.535, 39.35.537, 39.35.880, or former 16 AS 39.37.145, employees of other participating governmental units, or persons 17 entitled to coverage under AS 23.15.136, subject to the following conditions: 18 (1) a group insurance policy shall provide one or more of the following 19 benefits: life insurance, accidental death and dismemberment insurance, weekly 20 indemnity insurance, hospital expense insurance, surgical expense insurance, dental 21 expense insurance, audiovisual insurance, or other medical care insurance; 22 (2) each eligible employee of the state, the spouse and the unmarried 23 children chiefly dependent on the eligible employee for support, and each eligible 24 employee of another participating governmental unit shall be covered by the group 25 policy, unless exempt under regulations adopted by the commissioner of 26 administration; 27 (3) a governmental unit may participate under a group policy if 28 (A) its governing body adopts a resolution authorizing 29 participation and payment of required premiums; 30 (B) a certified copy of the resolution is filed with the 31 Department of Administration; and
01 (C) the commissioner of administration approves the 02 participation in writing; 03 (4) in procuring a policy of group health or group life insurance as 04 provided under this section or excess loss insurance as provided in AS 39.30.091, the 05 Department of Administration shall comply with the dual choice requirements of 06 AS 21.86.310, and shall obtain the insurance policy from an insurer authorized to 07 transact business in the state under AS 21.09, a hospital or medical service corporation 08 authorized to transact business in this state under AS 21.87, or a health maintenance 09 organization authorized to operate in this state under AS 21.86; an excess loss 10 insurance policy may be obtained from a life or health insurer authorized to transact 11 business in this state under AS 21.09 or from a hospital or medical service corporation 12 authorized to transact business in this state under AS 21.87; 13 (5) the Department of Administration shall make available bid 14 specifications for desired insurance benefits or for administration of benefit claims and 15 payments to (A) all insurance carriers authorized to transact business in this state 16 under AS 21.09 and all hospital or medical service corporations authorized to transact 17 business under AS 21.87 who are qualified to provide the desired benefits; and (B) 18 insurance carriers authorized to transact business in this state under AS 21.09, hospital 19 or medical service corporations authorized to transact business under AS 21.87, and 20 third-party administrators licensed to transact business in this state and qualified to 21 provide administrative services; the specifications shall be made available at least once 22 every five years; the lowest responsible bid submitted by an insurance carrier, hospital 23 or medical service corporation, or third-party administrator with adequate servicing 24 facilities shall govern selection of a carrier, hospital or medical service corporation, or 25 third-party administrator under this section or the selection of an insurance carrier or a 26 hospital or medical service corporation to provide excess loss insurance as provided in 27 AS 39.30.091; 28 (6) if the aggregate of dividends payable under the group insurance 29 policy exceeds the governmental unit's share of the premium, the excess shall be 30 applied by the governmental unit for the sole benefit of the employees; 31 (7) a person receiving benefits under AS 14.25.110, AS 22.25,
01 AS 39.35, or former AS 39.37 may continue the life insurance coverage that was in 02 effect under this section at the time of termination of employment with the state or 03 participating governmental unit; 04 (8) a person electing to have insurance under (7) of this subsection 05 shall pay the cost of this insurance; 06 (9) for each permanent part-time employee electing coverage under 07 this section, the state shall contribute one-half the state contribution rate for permanent 08 full-time state employees, and the permanent part-time employee shall contribute the 09 other one-half; 10 (10) a person receiving benefits under AS 14.25, AS 22.25, AS 39.35, 11 or former AS 39.37 may obtain auditory, visual, and dental insurance for that person 12 and eligible dependents under this section; the level of coverage for persons over 65 13 shall be the same as that available before reaching age 65 except that the benefits 14 payable shall be supplemental to any benefits provided under the federal old age, 15 survivors, and disability insurance program; a person electing to have insurance under 16 this paragraph shall pay the cost of the insurance; the commissioner of administration 17 shall adopt regulations implementing this paragraph; 18 (11) a person receiving benefits under AS 14.25, AS 22.25, AS 39.35, 19 or former AS 39.37 may obtain long-term care insurance for that person and eligible 20 dependents under this section; a person who elects insurance under this paragraph 21 shall pay the cost of the insurance premium; the commissioner of administration shall 22 adopt regulations to implement this paragraph; 23 (12) each licensee holding a current operating agreement for a vending 24 facility under AS 23.15.010 - 23.15.210 shall be covered by the group policy that 25 applies to governmental units other than the state. 26 * Sec. 51. AS 39.30.097(a) is amended to read: 27 (a) The commissioner of administration is authorized to prefund medical 28 benefits provided by AS 14.25.168, 14.25.171, AS 22.25.090, [AND] AS 39.35.535, 29 and 39.35.537 by establishing an irrevocable trust that is exempt from federal income 30 tax under 26 U.S.C. 115 and subject to the applicable financial reporting, disclosure, 31 and actuarial requirements of the Governmental Accounting Standards Board.
01 * Sec. 52. AS 39.30.097(b) is amended to read: 02 (b) The commissioner of administration is authorized to prefund medical 03 benefits provided by AS 14.25.171, 14.25.480 [AS 14.25.480], AS 39.30.300, 04 AS 39.35.537, and 39.35.880 [AS 39.35.880] by establishing an irrevocable trust that 05 is exempt from federal income tax under 26 U.S.C. 115 and subject to the applicable 06 financial reporting, disclosure, and actuarial requirements of the Governmental 07 Accounting Standards Board. 08 * Sec. 53. AS 39.30.300 is amended to read: 09 Sec. 39.30.300. State of Alaska Teachers' and Public Employees' Retiree 10 Health Reimbursement Arrangement Plan established. The State of Alaska 11 Teachers' and Public Employees' Retiree Health Reimbursement Arrangement Plan is 12 established for teachers who first become members of the [DEFINED 13 CONTRIBUTION PLAN OF THE ] teachers' retirement system under AS 14.25.009 - 14 14.25.590 [AS 14.25.310 - 14.25.590 ON OR] after June 30 [JULY 1], 2006, and 15 employees of the state, political subdivisions of the state, and public organizations of 16 the state who first become members [OF THE DEFINED CONTRIBUTION PLAN] 17 of the Public Employees' Retirement System of Alaska (AS 39.35) [PUBLIC 18 EMPLOYEES' RETIREMENT SYSTEM UNDER AS 39.35.700 - 39.35.990 ON 19 OR] after June 30 [JULY 1], 2006. 20 * Sec. 54. AS 39.30.380 is amended to read: 21 Sec. 39.30.380. Termination of employment. A person who terminates 22 employment before meeting the eligibility requirements of AS 14.25.171, 14.25.470, 23 AS 39.35.537, or 39.35.870 [AS 14.25.470 OR AS 39.35.870] loses any right to the 24 contributions made on behalf of the person to the teachers' and public employees' 25 retiree health reimbursement arrangement trust fund. If a person returns to 26 employment with a participating employer by December 31 of the year in which the 27 person reaches 65 years of age, the person's account balance shall be restored in the 28 amount recorded on the date of termination from the trust, adjusted for inflation at the 29 rate of the Consumer Price Index for Anchorage, Alaska. The earlier period of 30 employment with a participating employer shall be credited toward eligibility for 31 medical benefits.
01 * Sec. 55. AS 39.30.390 is amended to read: 02 Sec. 39.30.390. Eligibility and reimbursement. Persons who meet the 03 eligibility requirements of AS 14.25.171, 14.25.470, AS 39.35.537, or 39.35.870 04 [AS 14.25.470 AND AS 39.35.870] are eligible for reimbursements from the 05 individual account established for a member under the plan, except members do not 06 have to retire directly from the system. A person who is the dependent child of an 07 eligible member is eligible for reimbursements if the eligible member and surviving 08 spouse have both died so long as the person meets the definition of dependent child. 09 * Sec. 56. AS 39.30.400(a) is amended to read: 10 (a) The administrator may deduct the cost of monthly premiums from the 11 individual account for retiree major medical insurance on behalf of an eligible person 12 who elected retiree major medical insurance under AS 14.25.171, 14.25.480, 13 AS 39.35.537, or 39.35.880 [AS 14.25.480 OR AS 39.35.880]. 14 * Sec. 57. AS 39.30.420(a) is amended to read: 15 (a) Subject to art. XII, sec. 7, Constitution of the State of Alaska, the 16 [THE] state may [HAS THE RIGHT TO] amend the plan at any time and from time to 17 time, in whole or in part, including the right to make retroactive amendments referred 18 to in 26 U.S.C. 401(b). 19 * Sec. 58. AS 39.30.420(b) is amended to read: 20 (b) The plan administrator may not modify or amend the plan retroactively [IN 21 SUCH A MANNER AS] to reduce [THE] benefits accrued by a [OF ANY] member 22 [ACCRUED TO DATE UNDER THE PLAN BY REASON OF CONTRIBUTIONS 23 MADE] before the modification or amendment except to the extent that the reduction 24 is permitted by art. XII, sec. 7, Constitution of the State of Alaska, and the Internal 25 Revenue Code. 26 * Sec. 59. AS 39.30.420(c) is amended to read: 27 (c) Subject to art. XII, sec. 7, Constitution of the State of Alaska, and the 28 Internal Revenue Code, the [THE] state may [, IN ITS DISCRETION,] terminate the 29 plan in whole or part [AT ANY TIME] without liability for the termination. If the plan 30 is terminated, all investments at the time of termination remain in force until all 31 individual accounts have been completely distributed under the plan. After [, AND,
01 AFTER] all plan liabilities are satisfied, excess assets of the plan revert to the 02 employer. 03 * Sec. 60. AS 39.30.420(d) is repealed and reenacted to read: 04 (d) Within one year after determining that a contribution to the plan by an 05 employer was the result of a mistake of fact, the administrator shall return the 06 contribution to the employer. 07 * Sec. 61. AS 39.30.495(5) is amended to read: 08 (5) "eligible person" means a person who meets the eligibility 09 requirements of AS 14.25.171, 14.25.470, AS 39.35.537, or 39.35.870 [AS 14.25.470 10 OR AS 39.35.870]; 11 * Sec. 62. AS 39.35.095 is amended to read: 12 Sec. 39.35.095. Applicability of AS 39.35.095 - 39.35.680. The 13 [FOLLOWING] provisions of AS 39.35.095 - 39.35.680 [THIS CHAPTER] apply 14 only to members first hired 15 (1) before July 1, 2006; 16 (2) after June 30, 2006, and before July 1, 2024, who are former 17 members of the defined contribution retirement plan under AS 39.35.700 - 18 39.35.990; or 19 (3) on or after July 1, 2024 [: AS 39.35.095 - 39.35.680]. 20 * Sec. 63. AS 39.35.160(a) is amended to read: 21 (a) Subject to (e) and (f) of this section, beginning [BEGINNING] 22 January 1, 1987, each peace officer or firefighter shall contribute to the plan an 23 amount equal to seven and one-half percent of the peace officer's or firefighter's 24 compensation, and, except [. EXCEPT] as provided in (d) - (f) [(d)] of this section, 25 beginning January 1, 1987, each other employee shall contribute to the plan an amount 26 equal to six and three-quarters percent of the employee's compensation. [THE 27 CONTRIBUTIONS SHALL BE DEDUCTED BY THE EMPLOYER AT THE END 28 OF EACH PAYROLL PERIOD. THE CONTRIBUTIONS SHALL BE DEDUCTED 29 FROM EMPLOYEE COMPENSATION BEFORE COMPUTATION OF 30 APPLICABLE FEDERAL TAXES, AND THE CONTRIBUTIONS SHALL BE 31 TREATED AS EMPLOYER CONTRIBUTIONS UNDER 26 U.S.C. 414(h)(2). A
01 MEMBER MAY NOT HAVE THE OPTION OF MAKING THE PAYROLL 02 DEDUCTION DIRECTLY INSTEAD OF HAVING THE CONTRIBUTION 03 PICKED UP BY THE EMPLOYER.] 04 * Sec. 64. AS 39.35.160 is amended by adding new subsections to read: 05 (e) A peace officer or firefighter who first participates in the plan after 06 June 30, 2006, shall contribute to the plan an amount equal to eight percent of the 07 employee's compensation. The board may, from time to time, adjust the employee 08 contribution under this subsection to an amount that, 09 (1) if decreased, is not less than eight percent of the employee's 10 compensation; and 11 (2) if increased, is not more than 10 percent of the employee's 12 compensation. 13 (f) An employee who first participates in the plan after June 30, 2006, and is 14 not a peace officer or firefighter shall contribute to the plan an amount equal to eight 15 percent of the employee's compensation. The board may, from time to time, adjust the 16 employee contribution under this subsection to an amount that, 17 (1) if decreased, is not less than eight percent of the employee's 18 compensation; and 19 (2) if increased, is not more than 10 percent of the employee's 20 compensation. 21 (g) Contributions under (a), (e), and (f) of this section shall be deducted by the 22 employer at the end of each payroll period. The contributions shall be deducted from 23 employee compensation before computation of applicable federal taxes, and the 24 contributions shall be treated as employer contributions under 26 U.S.C. 414(h)(2). A 25 member may not have the option of making the payroll deduction directly instead of 26 having the contribution picked up by the employer. 27 * Sec. 65. AS 39.35.255(a) is amended to read: 28 (a) Each employer, except as provided in (h) and (j) of this section, shall 29 contribute to the system every payroll period an amount calculated by applying a rate 30 of 22 percent of the greater of the total of all base salaries 31 (1) paid by the employer to employees who first became members of
01 the plan before July 1, 2006, and who are active members of the system, including 02 any adjustments to contributions required by AS 39.35.520; or 03 (2) paid by the employer to employees who first became members of 04 the plan before July 1, 2006, and who were active members of the system during the 05 corresponding payroll period for the fiscal year ending 06 (A) June 30, 2008; or 07 (B) June 30, 2012, if that total is less than the total under (A) of 08 this paragraph, and the employer is a municipality in which the population 09 decreased by more than 25 percent between 2000 and 2010, according to the 10 decennial census conducted by the United States Bureau of the Census. 11 * Sec. 66. AS 39.35.255(d) is amended to read: 12 (d) Notwithstanding (a) and (j) of this section, the annual employer 13 contribution rate may not be less than the rate sufficient to allow payment of the 14 employer normal cost and the employer contributions required under AS 39.30.370 15 and AS 39.35.750. 16 * Sec. 67. AS 39.35.255(e) is amended to read: 17 (e) An employer of a retired member rehired under AS 39.35.150 shall include 18 that member's base salary when calculating the contribution amount established in (a) 19 or (j) of this section. 20 * Sec. 68. AS 39.35.255 is amended by adding new subsections to read: 21 (j) An employer that employs an employee who first participates in the plan 22 after June 30, 2006, shall contribute to the system every payroll period an amount 23 equal to the greater of 24 (1) a per capita amount calculated by applying a rate, determined by 25 the board, of not less than 12 percent of the total monthly compensation the employer 26 pays to all members who first became members of the plan after June 30, 2006; or 27 (2) a per capita amount, determined by the board, that is equal to the 28 amount calculated under (a) of this section expressed on a per capita basis. 29 (k) The board may, from time to time, increase the percentage rate determined 30 under (j)(1) of this section; however, the increase must be based on a concurrent 31 increase, if any, in the member contribution rate under AS 39.35.160(e) or (f).
01 * Sec. 69. AS 39.35.282 is amended to read: 02 Sec. 39.35.282. Contributions for medical benefits. Contributions made by 03 an employer under AS 39.35.255 and 39.35.280 must [SHALL] be separately 04 computed for benefits provided by AS 39.35.535 and 39.35.537. The contributions 05 computed for benefits provided by AS 39.35.535 must [AND SHALL] be deposited 06 in the Alaska retiree health care trust established under AS 39.30.097(a), and the 07 contributions computed for benefits provided by AS 39.35.537 must be deposited 08 in the teachers' and public employees' retiree health reimbursement arrangement 09 plan trust fund established under AS 39.30.340. 10 * Sec. 70. AS 39.35.370(a) is amended to read: 11 (a) Subject to AS 39.35.450, a terminated employee who first became a 12 member before July 1, 2006, is eligible for a normal retirement benefit 13 (1) at age 60 with at least five years of credited service; 14 (2) with at least 20 years of credited service as a peace officer or 15 firefighter; or 16 (3) with at least 30 years of credited service [FOR ALL OTHER 17 EMPLOYEES]. 18 * Sec. 71. AS 39.35.370 is amended by adding a new subsection to read: 19 (l) Subject to AS 39.35.450, a terminated employee who first became a 20 member after June 30, 2006, is eligible for a normal retirement benefit 21 (1) at age 60 with at least five years of credited service; 22 (2) at age 55 with at least 20 years of credited service as a peace 23 officer or firefighter; 24 (3) at age 50 with at least 25 years of credited service as a peace 25 officer or firefighter; or 26 (4) with at least 30 years of credited service. 27 * Sec. 72. AS 39.35.381(e) is amended to read: 28 (e) A person who retires under this section is not entitled to disability or death 29 benefits under AS 39.35.400 - 39.35.440, a minimum benefit under AS 39.35.485, or 30 to medical benefits under AS 39.35.535 or 39.35.537. Service earned under this 31 section may not be used for vesting under AS 39.35.095 - 39.35.680.
01 * Sec. 73. AS 39.35.475(b) is amended to read: 02 (b) Subject to (g) of this section, the [THE] increase in benefit payments 03 applies to total benefit payments except for the cost-of-living allowance under 04 AS 39.35.480. The amount of the increase is a percentage of the current benefit equal 05 to 06 (1) the lesser of 75 percent of the increase in the cost of living in the 07 preceding calendar year or nine percent, for recipients who on July 1 are at least 65 08 years old and for members receiving disability benefits; and 09 (2) the lesser of 50 percent of the increase in the cost of living in the 10 preceding calendar year or six percent, for recipients who on July 1 are at least 60 but 11 less than 65 years old or for recipients who are less than 60 years old on July 1 but 12 who have received benefits from the plan for at least five years. 13 * Sec. 74. AS 39.35.475 is amended by adding a new subsection to read: 14 (g) If the board determines that the portion of unfunded liability of the plan 15 that is attributable to all members who first became members of the plan after June 30, 16 2006, is greater than 10 percent, the board may reduce the amount of the increase 17 under (b) of this section that is payable to a member who first became a member after 18 June 30, 2006. At any time, the board may terminate a reduction made under this 19 subsection. 20 * Sec. 75. AS 39.35.480(a) is amended to read: 21 (a) While residing in the state, a person who first became a member of the 22 plan before July 1, 2006, who is receiving a benefit under AS 39.35.095 - 39.35.680, 23 and who is 65 years of age or older or a person who first became a member of the 24 plan before July 1, 2006, and who is receiving a disability benefit is entitled to 25 receive a monthly cost-of-living allowance in addition to the basic benefit. The 26 amount of this allowance shall be $50 or 10 percent of the basic benefit, whichever is 27 greater. 28 * Sec. 76. AS 39.35.535(a) is amended to read: 29 (a) Except as provided in (d) and (g) of this section, the following persons are 30 entitled to major medical insurance coverage under this section: 31 (1) for employees first hired before July 1, 1986,
01 (A) an employee who is receiving a monthly benefit from the 02 plan and who has elected coverage; 03 (B) the spouse and dependent children of the employee 04 described in (A) of this paragraph; 05 (C) the surviving spouse of a deceased employee who is 06 receiving a monthly benefit from the plan and who has elected coverage; 07 (D) the dependent children of a deceased employee who are 08 dependent on the surviving spouse described in (C) of this paragraph; 09 (2) for members first hired [ON OR] after June 30 [JULY 1], 1986, 10 (A) an employee who is receiving a monthly benefit from the 11 plan and who has elected coverage for the employee; 12 (B) the spouse of the employee described in (A) of this 13 paragraph if the employee elected coverage for the spouse; 14 (C) the dependent children of the employee described in (A) of 15 this paragraph if the employee elected coverage for the dependent children; 16 (D) the surviving spouse of a deceased employee who is 17 receiving a monthly benefit from the plan and who has elected coverage; 18 (E) the dependent children of a deceased employee who are 19 dependent on the surviving spouse described in (D) of this paragraph if the 20 surviving spouse has elected coverage for the dependent children. 21 * Sec. 77. AS 39.35.535(c) is amended to read: 22 (c) A benefit recipient who became a member before July 1, 2006, or the 23 surviving spouse of the member may elect major medical insurance coverage in 24 accordance with regulations and under the following conditions: 25 (1) a person, other than a disabled member or a disabled member who 26 is appointed to normal retirement, shall [MUST] pay an amount equal to the full 27 monthly group premium for retiree major medical insurance coverage if the person is 28 (A) younger than 60 years of age and has less than 29 (i) 25 years of credited service as a peace officer under 30 AS 39.35.360 and 39.35.370; or 31 (ii) 30 years of credited service under AS 39.35.360 and
01 39.35.370 that is not service as a peace officer; or 02 (B) of any age and has less than 10 years of credited service; 03 (2) a person is not required to make premium payments for retiree 04 major medical coverage if the person 05 (A) is a disabled member; 06 (B) is a disabled member who is appointed to normal 07 retirement; 08 (C) is 60 years of age or older and has at least 10 years of 09 credited service; or 10 (D) has at least 11 (i) 25 years of credited service as a peace officer under 12 AS 39.35.360 and 39.35.370; or 13 (ii) 30 years of credited service under AS 39.35.360 and 14 39.35.370 not as a peace officer. 15 * Sec. 78. AS 39.35.535 is amended by adding a new subsection to read: 16 (g) A benefit recipient who first becomes a member after June 30, 2006, or a 17 surviving spouse who is eligible under AS 39.35.537(b), is not eligible for benefits 18 under this section but may elect medical benefits under AS 39.35.537. 19 * Sec. 79. AS 39.35 is amended by adding a new section to read: 20 Sec. 39.35.537. Medical benefit; eligibility of employees first hired after 21 June 30, 2006; surviving spouses and dependents. (a) An employee who became a 22 member of the plan after June 30, 2006, receives a monthly benefit from the plan, and 23 has elected benefits under this section is entitled to medical benefits under this section. 24 A member who applies for medical benefits under this section shall apply on the forms 25 and in the manner prescribed by the administrator. 26 (b) The member's surviving spouse is eligible to elect medical benefits if the 27 member had retired or was eligible for retirement and medical benefits at the time of 28 the member's death. 29 (c) The medical benefits available to eligible persons are access to the retiree 30 major medical insurance plan and access to the health reimbursement arrangement 31 plan under AS 39.30.300. Access to the retiree major medical insurance plan means
01 that an eligible person may not be denied insurance coverage except for failure to pay 02 the required premium. 03 (d) Retiree major medical insurance plan coverage elected by an eligible 04 member under this section covers the eligible member, the spouse of the eligible 05 member, and the dependent children of the eligible member. 06 (e) Retiree major medical insurance plan coverage elected by a surviving 07 spouse of an eligible member under this section covers the surviving spouse and the 08 dependent children of the eligible member who are dependent on the surviving spouse. 09 (f) Participation in the retiree major medical insurance plan is not required in 10 order to participate in the health reimbursement arrangement plan. 11 (g) A person eligible for medical benefits under this section is not required to 12 participate in the health reimbursement arrangement plan in order to participate in the 13 retiree major medical insurance plan. 14 (h) A person who is eligible for medical benefits under this section must make 15 the irrevocable election to participate or not participate in the retiree major medical 16 insurance plan on or before the date the person reaches 70 1/2 years of age or when the 17 person applies for retirement and medical benefits, whichever is later. 18 (i) Major medical insurance coverage takes effect on the first day of the month 19 following the date of the administrator's approval of the election and stops when the 20 person who elects coverage dies or fails to make a required premium payment. 21 (j) The coverage for persons 65 years of age or older is the same as that 22 available for persons under 65 years of age. The benefits payable to those persons 65 23 years of age or older supplement any benefits provided under the federal old age, 24 survivors, and disability insurance program. 25 (k) The medical and optional insurance premiums owed by the person who 26 elects coverage may be deducted from the health reimbursement arrangement plan. If 27 the amount of the health reimbursement arrangement plan becomes insufficient to pay 28 the premiums, the person who elects coverage under (a) of this section shall pay the 29 premiums directly. 30 (l) The cost of premiums for retiree major medical insurance coverage under 31 this section for an eligible member or surviving spouse who is
01 (1) not eligible for Medicare is an amount equal to the full monthly 02 group premiums for retiree major medical insurance coverage; 03 (2) eligible for Medicare is the following percentage of the premium 04 amounts established for retirees who are eligible for Medicare: 05 (A) 30 percent if the member had 10 or more, but less than 15, 06 years of service; 07 (B) 25 percent if the member had 15 or more, but less than 20, 08 years of service; 09 (C) 20 percent if the member had 20 or more, but less than 25, 10 years of service; 11 (D) 15 percent if the member had 25 or more, but less than 30, 12 years of service; 13 (E) 10 percent if the member had 30 or more years of service. 14 (m) The eligibility for retiree major medical insurance coverage for an 15 alternate payee under a qualified domestic relations order shall be determined based 16 on the eligibility of the member to elect coverage. The alternate payee shall pay the 17 full monthly premium for retiree major medical insurance coverage. 18 (n) The administrator shall 19 (1) inform a person entitled to retiree major medical insurance 20 coverage under this section in writing 21 (A) that the health insurance coverage available to retired 22 members may be different from the health insurance coverage provided to 23 employees; 24 (B) of time limits for selecting optional health insurance 25 coverage; and 26 (C) whether the election is irrevocable; and 27 (2) require that a person entitled to retiree major medical insurance 28 coverage under this section indicate in writing on a form provided by the administrator 29 whether the person has chosen to receive optional health insurance coverage. 30 (o) The monthly group premiums for retiree major medical insurance coverage 31 under this section are established by the administrator in accordance with
01 AS 39.30.095. Nothing in this chapter guarantees a person who elects coverage under 02 (a) of this section a monthly group premium rate for retiree major medical insurance 03 coverage other than the premium in effect for the month in which the premium is due 04 for coverage for that month. 05 (p) In this section, "health reimbursement arrangement plan" means the State 06 of Alaska Teachers' and Public Employees' Retiree Health Reimbursement 07 Arrangement Plan established in AS 39.30.300. 08 * Sec. 80. AS 39.35.680(4) is amended to read: 09 (4) "average monthly compensation" means the result obtained by 10 dividing the compensation earned by an employee during a considered period by the 11 number of months, including fractional months, for which compensation was earned; 12 an employee must have at least 115 days of credited service in the last payroll year in 13 order for that year to be used as part of the consecutive payroll years; the considered 14 period consists of 15 (A) for employees first hired before July 1, 1996, the three 16 consecutive payroll years during the period of credited service that yield the 17 highest average; 18 (B) for employees first hired [ON OR] after June 30 [JULY 1], 19 1996, the five consecutive payroll years during the period of credited service 20 that yield the highest average; 21 (C) if the employee does not have the number of consecutive 22 payroll years required by (A) or (B) of this paragraph, the actual number of 23 months, including fractional months, that the employee worked; 24 (D) for an employee who has made an election under 25 AS 39.35.300(c) or 39.35.310(c), the actual number of months, including 26 fractional months, that the employee worked; 27 (E) for a peace officer or firefighter hired before July 1, 2006 28 [AT ANY TIME], the three consecutive payroll years during the period of 29 credited service that yield the highest average; 30 * Sec. 81. AS 39.35.680(26) is amended to read: 31 (26) "normal retirement" means retirement for a member who is
01 eligible to receive benefits under AS 39.35.370(a) or (l) or [UNDER] 39.35.385(a) or 02 (f); 03 * Sec. 82. AS 39.35.700 is amended to read: 04 Sec. 39.35.700. Applicability of AS 39.35.700 - 39.35.990. The provisions of 05 AS 39.35.700 - 39.35.990 apply only to 06 (1) members first hired [ON OR] after June 30, 2006, and before 07 July 1, 2024, who do not, before November 1, 2024, elect to participate in a 08 defined benefit retirement plan under AS 14.25.009 - 14.25.220 or AS 39.35.095 - 09 39.35.680; and 10 (2) [JULY 1, 2006, TO] members [WHO ARE EMPLOYED BY 11 EMPLOYERS THAT DO NOT PARTICIPATE IN THE DEFINED BENEFIT 12 RETIREMENT PLAN ESTABLISHED UNDER AS 39.35.095 - 39.35.680, TO 13 FORMER MEMBERS AS DEFINED IN AS 39.35.680, OR TO MEMBERS] who 14 transferred [TRANSFER] into the defined contribution retirement plan under former 15 AS 39.35.940. 16 * Sec. 83. AS 39.35.700 is amended by adding a new subsection to read: 17 (b) A public organization as defined in AS 39.35.680 or a municipality or 18 other political subdivision of the state that participates in the plan shall also participate 19 in the defined benefit retirement plan under AS 39.35.095 - 39.35.680. 20 * Sec. 84. AS 39.35.720 is amended to read: 21 Sec. 39.35.720. Membership. An employee who becomes a member [ON OR] 22 after June 30, 2006, and before July 1, 2024, who does not, before November 1, 23 2024, elect to participate in a defined benefit retirement plan under AS 14.25.009 24 - 14.25.220 or AS 39.35.095 - 39.35.680 [JULY 1, 2006,] shall participate in the plan 25 set out in AS 39.35.700 - 39.35.990. 26 * Sec. 85. AS 39.35.750 is amended by adding a new subsection to read: 27 (f) This section does not apply to contributions made under AS 39.35.255(j) 28 and does not require an employer that makes a contribution for an employee under 29 AS 39.35.255(j) to make another contribution for that employee. 30 * Sec. 86. AS 39.35.895(a) is amended to read: 31 (a) Subject to art. XII, sec. 7, Constitution of the State of Alaska, the
01 [THE] state may [HAS THE RIGHT TO] amend the plan at any time and from time to 02 time, in whole or in part, including the right to make retroactive amendments referred 03 to in 26 U.S.C. 401(b). 04 * Sec. 87. AS 39.35.895(b) is amended to read: 05 (b) The plan administrator may not modify or amend the plan retroactively [IN 06 SUCH A MANNER AS] to reduce [THE] benefits accrued by a [OF ANY] member 07 [ACCRUED TO DATE UNDER THE PLAN BY REASON OF CONTRIBUTIONS 08 MADE] before the modification or amendment except to the extent that the reduction 09 is permitted by art. XII, sec. 7, Constitution of the State of Alaska, and the Internal 10 Revenue Code. 11 * Sec. 88. AS 39.35.895(c) is amended to read: 12 (c) Subject to art. XII, sec. 7, Constitution of the State of Alaska, and the 13 Internal Revenue Code, the [THE] state may [, IN ITS DISCRETION,] terminate the 14 plan in whole or part [AT ANY TIME] without liability for the termination. If the plan 15 is terminated, all investments at the time of termination remain in force until all 16 individual accounts have been completely distributed under the plan. After [, AND, 17 AFTER] all plan liabilities are satisfied, excess assets of the plan revert to the 18 employer. 19 * Sec. 89. AS 39.35.895(d) is repealed and reenacted to read: 20 (d) Within one year after determining that a contribution to the plan by an 21 employer was the result of a mistake of fact, the administrator shall return the 22 contribution to the employer. 23 * Sec. 90. AS 14.25.012(c), 14.25.061, 14.25.540; and AS 39.35.940 are repealed. 24 * Sec. 91. The uncodified law of the State of Alaska is amended by adding a new section to 25 read: 26 RETIREMENT PLAN ELECTION. (a) A teacher who was first hired after June 30, 27 2006, and before the effective date of this section, and who is a member of the defined 28 contribution retirement plan of the teachers' retirement system under AS 14.25.310 - 29 14.25.590 may, before November 1, 2024, make a one-time election to participate in the 30 defined benefit retirement plan under AS 14.25.009 - 14.25.220 and to transfer all 31 contributions that have been made or should be made to the defined contribution retirement
01 plan for service the member completes before the effective date of the member's participation 02 in the defined benefit retirement plan. The transferred contributions shall be used to purchase 03 credited service in the defined benefit retirement plan on an actuarial equivalent basis 04 determined by the Alaska Retirement Management Board established under AS 37.10.210. 05 (b) An employee who was first hired after June 30, 2006, and before the effective date 06 of this section, and who is a member of the defined contribution retirement plan of the public 07 employees' retirement system under AS 39.35.700 - 39.35.990, may, before November 1, 08 2024, make a one-time election to participate in the defined benefit retirement plan under 09 AS 39.35.095 - 39.35.680 and to transfer all contributions that have been made or should be 10 made to the defined contribution retirement plan for service the member completes before the 11 effective date of the member's participation in the defined benefit retirement plan. The 12 transferred contributions shall be used to purchase credited service in the defined benefit 13 retirement plan on an actuarial equivalent basis determined by the Alaska Retirement 14 Management Board established under AS 37.10.210. 15 * Sec. 92. The uncodified law of the State of Alaska is amended by adding a new section to 16 read: 17 RETIREMENT PLAN ELECTION PROCEDURE. (a) An election made under sec. 18 91 of this Act to participate in a defined benefit retirement plan must be made in writing on 19 one or more forms and in the manner prescribed by the administrator. Before accepting an 20 election to participate in a defined benefit retirement plan, the administrator shall provide the 21 employee who plans on making an election to participate in a defined benefit retirement plan 22 with information, including calculations to illustrate the effect of moving the employee's 23 retirement plan from a defined contribution retirement plan to a defined benefit retirement 24 plan as well as other information that informs the employee of potential consequences of the 25 employee's election. 26 (b) An election made under sec. 91 of this Act to participate in a defined benefit 27 retirement plan is irrevocable. On the effective date of the election, an eligible employee who 28 makes the election shall be enrolled as a member of a defined benefit retirement plan, and the 29 employee's participation in the plan shall be governed by the applicable provisions of the 30 defined benefit retirement plan. The employee's enrollment in a defined benefit retirement 31 plan is retroactive to the date of hire. An election made by an eligible employee who is
01 married is not effective unless the election is signed by the employee's spouse. 02 (c) When an eligible employee makes a one-time election under sec. 91 of this Act, 03 the administrator shall cause the total amount of the employee's employee and employer 04 contributions, with investment earnings and losses through the day of the employee's election 05 to participate as a member in a defined benefit retirement plan, to be actuarially calculated 06 and, subject to (e) of this section, transferred to the pension fund in the corresponding defined 07 benefit retirement plan. On the effective date of the employee's participation in a defined 08 benefit retirement plan, the employee shall be credited with service in the defined benefit 09 retirement plan that may be purchased under an actuarial equivalent purchase formula as 10 determined by the board. The board shall establish transfer procedures by regulation, but the 11 actual transfer may not occur later than 60 days after the date the administrator receives the 12 employee's completed forms under (a) of this section, unless the major financial markets for 13 securities available for a transfer are seriously disrupted by an unforeseen event that also 14 causes the suspension of trading on any national securities exchange in the country where the 15 securities were issued. In that event, the 60-day period may be extended by a resolution of the 16 board. A transfer is not commissionable or subject to other fees and may be in the form of 17 cash or a security as determined by the board. A security shall be valued on the date of receipt 18 in the employee's account. In this subsection, "board" means the Alaska Retirement 19 Management Board established under AS 37.10.210. 20 (d) When making a transfer for an eligible employee under (c) of this section, the 21 administrator shall cause an amount equal to the 22 (1) decrease in the accrued actuarial liability of the death and disability trust in 23 the defined contribution retirement plan resulting from the transfer as of the date of transfer, 24 based on the most recent actuarial valuation of the death and disability trust, to be transferred 25 from the death and disability trust in the defined contribution retirement plan to the pension 26 fund in the defined benefit retirement plan; and 27 (2) increase in the accrued actuarial liability of the health care trust in the 28 defined benefit retirement plan resulting from the transfer as of the date of transfer, based on 29 the actuarial assumptions set out in (g) of this section, to be transferred from the trust 30 established under AS 39.30.097(b) for the prefunding of medical benefits provided by 31 AS 14.25.480 and AS 39.35.880 to the trust established under AS 39.30.097(a) for the
01 prefunding of medical benefits provided by AS 14.25.171 and AS 39.35.537. 02 (e) If the value actuarially calculated under (c) of this section is insufficient to pay for 03 service credit equal to the employee's actual service, the administrator shall allow the 04 employee the option of purchasing any indebtedness up to the amount needed to eliminate the 05 insufficiency; however, if that value exceeds the amount needed to pay for a service credit 06 equal to the employee's actual service, the administrator shall cause the excess to remain in 07 the employee's retirement plan established under AS 14.25.310 - 14.25.590 or AS 39.35.700 - 08 39.35.990. An excess under this subsection may not be used to purchase service credit in a 09 retirement plan administered under AS 14.25 or AS 39.35. 10 (f) The amount of service that can be purchased under (e) of this section is based on 11 the transferred employee's accrued actuarial liability of pension benefits in the defined benefit 12 retirement plan. The actuarial assumptions under this section are based on the actuarial 13 assumptions set out in (g) of this section. 14 (g) Actuarial assumptions about either the teachers' retirement system or the Public 15 Employees' Retirement System of Alaska must be based on the most recent actuarial 16 valuation of the corresponding defined benefit retirement plan, except that the retirement rates 17 are computed at 25 percent of the retirement rates used in the most recent actuarial valuation 18 of the pension trust for that plan plus 75 percent of the retirement rates used in the most recent 19 actuarial valuation of the corresponding defined contribution retirement plan. 20 (h) The provisions of this section are subject to the requirements of the Internal 21 Revenue Code and the limitations under AS 14.25.010, 14.25.181, 14.25.320(c) and (d), 22 14.25.490, AS 39.35.115, 39.35.678, 39.35.710(c) and (d), and 39.35.895. In this subsection, 23 "Internal Revenue Code" has the meaning given in AS 39.35.990. 24 (i) In this section, 25 (1) "administrator" means the commissioner of administration or the person 26 designated by the commissioner of administration under AS 39.35.003 for a public 27 employees' retirement plan; 28 (2) "defined benefit retirement plan" means a retirement plan established 29 under AS 14.25.009 - 14.25.220 or AS 39.35.095 - 39.35.680; 30 (3) "defined contribution retirement plan" means a retirement plan established 31 under AS 14.25.310 - 14.25.590 or AS 39.35.700 - 39.35.990.
01 * Sec. 93. The uncodified law of the State of Alaska is amended by adding a new section to 02 read: 03 ADOPTION OF REGULATIONS. (a) The Alaska Retirement Management Board 04 may adopt regulations necessary to implement secs. 48 and 49 of this Act. Regulations 05 adopted by the Alaska Retirement Management Board under this Act relate to the internal 06 management of a state agency and are not subject to AS 44.62 (Administrative Procedure Act) 07 under AS 37.10.240. 08 (b) The commissioner of administration may adopt regulations necessary to 09 implement secs. 1 - 47 and 50 - 92 of this Act. Regulations adopted by the commissioner of 10 administration under this Act relate to the internal management of a state agency and are not 11 subject to AS 44.62 (Administrative Procedure Act) under AS 14.25.005, AS 39.30.098, and 12 AS 39.35.005. 13 (c) Regulations adopted under this section may not take effect before the effective 14 date of the law being implemented by the regulation. 15 * Sec. 94. Section 93 of this Act takes effect immediately under AS 01.10.070(c). 16 * Sec. 95. Except as provided in sec. 94 of this Act, this Act takes effect July 1, 2024.