CSSB 88(L&C): "An Act relating to the Public Employees' Retirement System of Alaska and the teachers' retirement system; providing certain employees an opportunity to choose between the defined benefit and defined contribution plans of the Public Employees' Retirement System of Alaska and the teachers' retirement system; and providing for an effective date."
00 CS FOR SENATE BILL NO. 88(L&C) 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 AS 14.25.009 is repealed and reenacted to read: 08 Sec. 14.25.009.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 teachers who are eligible to be members of the 10 defined benefit retirement plan under AS 14.25.009 - 14.25.220 and are not members 11 of the defined contribution retirement plan under AS 14.25.310 - 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 [UNLESS A] teacher or 02 member 03 (1) participates in a university retirement program under AS 14.40.661 04 - 14.40.799; 05 (2) became a member after June 30, 2006, and before July 1, 2024, 06 is eligible to participate in the defined contribution retirement plan under 07 AS 14.25.310 - 14.25.590, and does not elect to participate in the defined benefit 08 retirement plan under AS 14.25.009 - 14.25.220; or 09 (3) has elected under former AS 14.25.540 to participate in the plan 10 established in AS 14.25.310 - 14.25.590 and does not elect to participate in the 11 defined benefit retirement plan under AS 14.25.009 - 14.25.220 [, A TEACHER 12 OR MEMBER CONTRACTING FOR SERVICE WITH A PARTICIPATING 13 EMPLOYER IS SUBJECT TO AS 14.25.009 - 14.25.220]. 14 * Sec. 3. AS 14.25.040 is amended by adding new subsections to read: 15 (f) An active member of this plan who is also employed in a position in the 16 public employees' retirement plan under AS 39.35.095 - 39.35.680 may elect to 17 participate solely in this plan if 18 (1) the member directs the public employees' retirement plan employer 19 in writing to 20 (A) pay into this plan the employer contributions required for a 21 member under AS 14.25.009 - 14.25.220; and 22 (B) deduct from the member's salary and pay into this plan 23 (i) the employee contributions required for a member 24 under AS 14.25.009 - 14.25.220; and 25 (ii) an amount equal to the difference between the total 26 employer and state contributions required for a member under 27 AS 14.25.009 - 14.25.220 and the employer contributions that would be 28 required under AS 39.35.095 - 39.35.680 if the member participated in 29 that plan; and 30 (2) the member provides written notice to the administrator. 31 (g) An active member of this plan who elects to participate solely in this plan
01 under (f) of this section may not, while participating solely in this plan, receive 02 credited service for benefit eligibility for service performed in a position in the public 03 employees' retirement plan. 04 (h) A teacher who became a member after June 30, 2006, and before July 1, 05 2024, is subject to AS 14.25.009 - 14.25.220 and is not eligible to participate in the 06 defined contribution retirement plan established in AS 14.25.310 - 14.25.590 if the 07 teacher 08 (1) is not employed by an employer on July 1, 2024; 09 (2) is reemployed by an employer after July 1, 2024; and 10 (3) has, before the date of reemployment, received 11 (A) a distribution, other than a rollover distribution, of the 12 entire balance in the teacher's individual account in the defined contribution 13 retirement plan; or 14 (B) a rollover distribution of the entire balance in the teacher's 15 individual account in the defined contribution retirement plan under 16 AS 14.25.310 - 14.25.590 and has not within 120 days of reemployment had 17 all or part of a direct rollover distribution from an eligible retirement plan 18 owned by the teacher paid directly into the teacher's individual account under 19 AS 14.25.310 - 14.25.590. 20 * Sec. 4. AS 14.25 is amended by adding a new section to read: 21 Sec. 14.25.044. Election of defined benefit retirement plan by reemployed 22 teachers. (a) A teacher may make a one-time election to participate in the defined 23 benefit retirement plan under AS 14.25.009 - 14.25.220 if the teacher 24 (1) was first hired after June 30, 2006, and before July 1, 2024; 25 (2) is not employed by an employer on July 1, 2024; 26 (3) is reemployed by an employer after July 1, 2024; and 27 (4) before the date of reemployment, 28 (A) has not received a distribution of the entire balance in the 29 teacher's individual account under the defined contribution retirement plan 30 under AS 14.25.310 - 14.25.590; or 31 (B) has received a rollover distribution of the entire balance in
01 the teacher's individual account in the plan under AS 14.25.310 - 14.25.590 02 and has within 120 days of reemployment had all or part of a direct rollover 03 distribution from an eligible retirement plan owned by the teacher paid directly 04 into the teacher's individual account under AS 14.25.310 - 14.25.590. 05 (b) An election under (a) of this section may be made not more than 120 days 06 after the date of reemployment. A reemployed teacher electing to participate under (a) 07 of this section shall use the balance of the member's individual account in the plan 08 under AS 14.25.310 - 14.25.590, including any rollover contributions, to purchase 09 credited service in the plan under AS 14.25.009 - 14.25.220. An election made under 10 (a) of this section must be made in writing in the manner prescribed by the 11 administrator. An election made by a teacher who is married is not effective unless the 12 election is signed by the teacher's spouse. The administrator shall provide a teacher 13 who is eligible to make an election under (a) of this section with information about the 14 potential consequences of the teacher's election, including calculations to illustrate the 15 effect of moving the teacher's retirement plan from a defined contribution retirement 16 plan to a defined benefit retirement plan. 17 (c) An election made under (a) of this section to participate in the plan under 18 AS 14.25.009 - 14.25.220 is irrevocable. On the effective date of the election, the 19 teacher shall be enrolled as a member of the plan, and the teacher's participation in the 20 plan shall be governed by the applicable provisions of the plan. The teacher's 21 enrollment in the plan is retroactive to the date of hire. 22 (d) When a teacher makes an election under this section, the administrator 23 shall cause the total amount of the teacher's member and employer contributions to the 24 plan under AS 14.25.310 - 14.25.590, with investment earnings and losses through the 25 day of the teacher's election to participate as a member in the plan under AS 14.25.009 26 - 14.25.220, to be actuarially calculated and, subject to (f) of this section, transferred 27 to the retirement fund in the plan under AS 14.25.009 - 14.25.220. On the effective 28 date of the teacher's participation in the plan under AS 14.25.009 - 14.25.220, the 29 teacher shall be credited with service in the plan. The board shall determine the cost of 30 the teacher's actual service time based on the teacher's accrued actuarial liability of 31 pension benefits in the plan, and credit the teacher with service time equal to the value
01 actuarially calculated and transferred to the retirement fund in the plan under 02 AS 14.25.009 - 14.25.220. The board shall adopt regulations establishing transfer 03 procedures. The transfer may not occur later than 60 days after the date the 04 administrator receives the teacher's election, unless the major financial markets for 05 securities available for a transfer are seriously disrupted by an unforeseen event that 06 also causes the suspension of trading on any national securities exchange in the 07 country where the securities were issued. In that event, the 60-day period may be 08 extended by a resolution of the board. A transfer is not commissionable or subject to 09 other fees and may be in the form of cash or a security as determined by the board. A 10 security shall be valued on the date of receipt in the teacher's account. 11 (e) When making a transfer under (d) of this section, or for a reemployed 12 teacher entering the plan under AS 14.25.040(h), the administrator shall transfer an 13 amount equal to the decrease in the accrued actuarial liability of the death and 14 disability trust in the plan established under 14.25.310 - 14.25.590 resulting from the 15 transfer as of the date of transfer, based on the most recent actuarial valuation of the 16 death and disability trust, from the death and disability trust in the plan established 17 under 14.25.310 - 14.25.590 to the retirement fund in the plan under AS 14.25.009 - 18 14.25.220. 19 (f) If the value actuarially calculated under (d) of this section is insufficient to 20 pay for service credit equal to the teacher's actual service time, the administrator shall 21 allow the teacher the option of purchasing service credit in an amount up to the 22 amount needed to eliminate the insufficiency; however, if that value exceeds the 23 amount needed to pay for service credit equal to the teacher's actual service, the 24 administrator shall cause the excess to remain in the teacher's individual account in the 25 plan under AS 14.25.310 - 14.25.590. The excess may not be used to purchase 26 additional service credit in the plan under AS 14.25.009 - 14.25.220. When a 27 reemployed teacher enters the plan under AS 14.25.040(h), the administrator shall 28 allow the teacher to pay for a period of service credit up to the teacher's actual service. 29 When a teacher elects to purchase service credit under this section and does not 30 immediately pay for the service credit purchased, an indebtedness is established. 31 Interest as prescribed by regulation accrues on a teacher's indebtedness. Indebtedness
01 that exists at the time the teacher is appointed to retirement necessitates an actuarial 02 adjustment to the benefits payable due to service in the defined contribution retirement 03 plan. 04 (g) Actuarial assumptions about the plan under AS 14.25.009 - 14.25.220 05 must be based on the most recent actuarial valuation of the plan, except that the 06 retirement rates are computed at 25 percent of the retirement rates used in the most 07 recent actuarial valuation of the retirement fund plus 75 percent of the retirement rates 08 used in the most recent actuarial valuation of the plan under AS 14.25.310 - 14.25.590. 09 (h) The provisions of this section are subject to the requirements of the 10 Internal Revenue Code and the limitations under AS 14.25.010, 14.25.181, 11 14.25.320(c) and (d), and 14.25.490. 12 * Sec. 5. AS 14.25.048(b) is amended to read: 13 (b) An employee or former employee who first became a member of the 14 plan before July 1, 2006, may receive credit for retroactive membership service for 15 employment before June 5, 1988, if the employee or former employee met the 16 requirements listed in (a) of this section at the time of the employment. To receive 17 credit for the retroactive membership service, the employee or former employee shall 18 claim the service and pay the retroactive contributions required under former 19 AS 14.25.061. However, an employee or former employee may not receive retroactive 20 credit under this subsection if the employee received credited service under AS 39.35 21 for the employment. 22 * Sec. 6. AS 14.25.048(c) is amended to read: 23 (c) An employee or former employee who first became a member of the 24 plan before July 1, 2006, and who received credit under AS 39.35 for service that 25 qualifies under (a) of this section may elect to transfer those periods of employment to 26 the plan. To receive credit for retroactive membership service under this subsection, 27 the employee or former employee shall claim the service and pay the retroactive 28 contributions required under former AS 14.25.061. 29 * Sec. 7. AS 14.25.050(a) is amended to read: 30 (a) Except as provided in (c) and (e) of this section, beginning January 1, 31 1991, each member shall contribute to the plan an amount equal to 8.65 percent of the
01 member's base salary accrued from July 1 to the following June 30. [THE 02 EMPLOYER SHALL DEDUCT THE CONTRIBUTION FROM THE MEMBER'S 03 SALARY AT THE END OF EACH PAYROLL PERIOD, AND THE 04 CONTRIBUTION SHALL BE CREDITED BY THE PLAN TO THE MEMBER 05 CONTRIBUTION ACCOUNT. THE CONTRIBUTIONS SHALL BE DEDUCTED 06 FROM EMPLOYEE COMPENSATION BEFORE THE COMPUTATION OF 07 APPLICABLE FEDERAL TAXES AND SHALL BE TREATED AS EMPLOYER 08 CONTRIBUTIONS UNDER 26 U.S.C. 414(h)(2). A MEMBER MAY NOT HAVE 09 THE OPTION OF MAKING THE PAYROLL DEDUCTION DIRECTLY IN CASH 10 INSTEAD OF HAVING THE CONTRIBUTION PICKED UP BY THE 11 EMPLOYER.] 12 * Sec. 8. AS 14.25.050 is amended by adding new subsections to read: 13 (e) A member who first participates in the plan after June 30, 2006, shall 14 contribute to the plan an amount equal to eight percent of the member's base salary 15 accrued from July 1 to the following June 30. The board may, from time to time, 16 adjust the contribution under this subsection to an amount that, 17 (1) if decreased, is not less than eight percent of the member's base 18 salary; and 19 (2) if increased, is not more than 12 percent of the member's base 20 salary. 21 (f) The employer shall deduct a contribution under this section from the 22 member's salary at the end of each payroll period, and the contribution shall be 23 credited by the plan to the member contribution account. The contributions shall be 24 deducted from member compensation before the computation of applicable federal 25 taxes and shall be treated as employer contributions under 26 U.S.C. 414(h)(2). A 26 member may not have the option of making the payroll deduction directly in cash 27 instead of having the contribution picked up by the employer. 28 (g) The board may increase the member contribution rate under (e) of this 29 section if the board determines that the portion of the liability of the plan that is 30 attributable to all members who first became members of the plan after June 30, 2006, 31 is funded below 90 percent. Before increasing the member contribution rate under (e)
01 of this section, the board shall determine an amount sufficient to address the plan's 02 past service liability attributable to all members who first became members of the plan 03 after June 30, 2006. An increase to the member contribution rate may raise not more 04 than 50 percent of the amount sufficient to address the plan's past service liability 05 attributable to all members who first became members of the plan after June 30, 2006. 06 The board may decrease the rate under (e) of this section if the board determines that 07 the portion of the liability of the plan that is attributable to all members who first 08 became members of the plan after June 30, 2006, is funded above 90 percent. 09 * Sec. 9. AS 14.25.065(b) is amended to read: 10 (b) The contributions of employers under AS 14.25.070 must be transmitted to 11 the plan for deposit in the retirement fund and the Alaska retiree health care trust at the 12 close of each pay period. If the contributions are not submitted within the prescribed 13 time limit, interest must be assessed on the outstanding contributions at [ONE AND 14 ONE-HALF TIMES] the most recent actuarially determined rate of earnings for the 15 plan from the date that contributions were originally due. Amounts due from an 16 employer and interest as prescribed in this section may be claimed by the 17 administrator from any agency of the state or political subdivision that has in its 18 possession funds of the employer or that is authorized to disburse funds to the 19 employer that are not restricted by statute or appropriation to a specific purpose. The 20 amount claimed shall be certified by the administrator as sufficient to pay the 21 contributions and interest due from the employer. The amount claimed shall be 22 submitted to the administrator for deposit in the retirement fund and the Alaska retiree 23 health care trust. 24 * Sec. 10. AS 14.25.070(a) is amended to read: 25 (a) Each employer shall contribute to the system every payroll period the 26 lesser of 27 (1) an amount calculated by applying a rate of 12.56 percent to the 28 total of all base salaries paid by the employer to active members of the system and to 29 members who are retired from the plan and reemployed under AS 14.20.136, 30 including any adjustments to contributions required by AS 14.25.173(a); or 31 (2) an amount calculated by applying a rate established by the
01 board under AS 37.10.220 to the total of all base salaries paid by the employer to 02 active members of the system and to members who are retired from the plan and 03 reemployed under AS 14.20.136, including any adjustments to contributions 04 required by AS 14.25.173(a); the rate must be at least 12 percent and be sufficient 05 to pay the actuarially determined employer normal cost, all contributions 06 required under AS 14.25.350 and AS 39.30.370, and past service cost for 07 members of the system. 08 * Sec. 11. AS 14.25.070 is amended by adding a new subsection to read: 09 (i) If the legislature appropriates funds for the purpose of decreasing an 10 employer's contribution, the employer's contribution under (a) of this section shall 11 decrease by that amount. 12 * Sec. 12. AS 14.25.075(a) is amended to read: 13 (a) An employee who is eligible to purchase credited service under 14 AS 14.25.047 or 14.25.048, a member who is eligible to purchase credited service 15 under former AS 14.25.061 or under AS 14.25.048, 14.25.050, 14.25.060, 16 [14.25.061,] 14.25.100, or 14.25.107, or a teacher who is eligible to purchase credited 17 service under AS 14.20.345, AS 14.25.044, 14.25.050 [AS 14.25.050], or 14.25.105, 18 in lieu of making payments directly to the plan, may elect to have the member's 19 employer make payments as provided in this section. 20 * Sec. 13. AS 14.25.075(b) is amended to read: 21 (b) A member may elect to have the employer make payments for all or any 22 portion of the amounts payable for the member's purchase of credited service through 23 a salary reduction program as follows: 24 (1) the amounts paid under a salary reduction program are in lieu of 25 contributions by the member making the election; the electing member's salary or 26 other compensation shall be reduced by the amount paid by the employer under this 27 subsection; 28 (2) the member shall make an irrevocable election under this 29 subsection to purchase credited service as permitted in former AS 14.25.061 or in 30 AS 14.20.345, AS 14.25.044, 14.25.047 [AS 14.25.047], 14.25.048, 14.25.050, 31 14.25.060, [14.25.061,] 14.25.100, 14.25.105, or 14.25.107 before the member's
01 termination of employment; the irrevocable election must specify the number of 02 payroll periods that deductions will be made from the member's compensation and the 03 dollar amount of deductions for each payroll period during the specified number of 04 payroll periods; the deductions made under this paragraph cease upon the earlier of the 05 member's termination of employment with the employer or the member's death; 06 amounts paid by an employer under (f) of this section may not be applied toward the 07 payment of the dollar amount of the deductions representing the portion of the credited 08 service that is being purchased by the member through payroll deduction in 09 accordance with the member's irrevocable election under this paragraph; 10 (3) amounts paid by an employer under this subsection shall be treated 11 as employer contributions for the purpose of determining tax treatment under 26 12 U.S.C. (Internal Revenue Code); the amounts paid by the employer under this section 13 may not be included in the member's gross income for income tax purposes until those 14 amounts are distributed by refund or retirement benefit payments. 15 * Sec. 14. AS 14.25.075(i) is amended to read: 16 (i) On satisfaction of the eligibility requirements of former AS 14.25.061 or 17 of AS 14.20.345, AS 14.25.044, 14.25.047 [AS 14.25.047], 14.25.048, 14.25.050, 18 14.25.060, [14.25.061,] 14.25.100, 14.25.105, or 14.25.107, the requirements of this 19 section, and the administrative filing requirements specified by the administrator, the 20 plan shall adjust the member's credited service history and add any additional service 21 credits acquired. 22 * Sec. 15. AS 14.25 is amended by adding a new section to read: 23 Sec. 14.25.086. Contributions for member who first became a member 24 after June 30, 2006. Contributions made by an employer under AS 14.25.070 and 25 14.25.085 for a member who first became a member after June 30, 2006, other than 26 contributions separately computed for medical benefits under AS 14.25.087, and the 27 member's contribution account must be deposited in a sub-trust of the retirement fund 28 established by the board. 29 * Sec. 16. AS 14.25.087 is amended to read: 30 Sec. 14.25.087. Contributions for medical benefits. Contributions made by 31 an employer under AS 14.25.070 and 14.25.085 must [SHALL] be separately
01 computed for benefits provided by AS 14.25.168, 14.25.171, and AS 39.30.400. The 02 contributions computed for benefits provided under 03 (1) AS 14.25.168 must [AND SHALL] be deposited in the Alaska 04 retiree health care trust established under AS 39.30.097(a); 05 (2) AS 14.25.171 must be deposited in the Alaska retiree health 06 care trust established under AS 39.30.097(b); and 07 (3) AS 39.30.400 must be deposited in the teachers' and public 08 employees' retiree health reimbursement arrangement plan trust fund 09 established under AS 39.30.340. 10 * Sec. 17. AS 14.25.110(a) is amended to read: 11 (a) Subject to AS 14.25.167, 12 (1) a member who first became a member of the plan before July 1, 13 2006, is eligible for a normal retirement benefit if the member 14 (A) [(1)] was first hired before July 1, 1975, has attained the 15 age of 55 years, and has at least 15 years of credited service, the last five of 16 which have been membership service, or is otherwise vested in the plan; 17 (B) [(2)] has attained the age of 60 years and has at least eight 18 years of membership service; 19 (C) [(3)] has attained the age of 60 years, has at least five years 20 of membership service, and has Alaska BIA service which, when added to the 21 membership service, will equal at least eight years; 22 (D) [(4)] has at least 25 years of credited service, the last five 23 of which have been membership service; 24 (E) [(5)] has at least 20 years of membership service; 25 (F) [(6)] has at least 20 years of combined membership service 26 and Alaska BIA service, the last five of which have been membership service; 27 or 28 (G) [(7)] has, for each of 20 school years, 29 (i) [(A)] at least one-half year of membership service as 30 a part-time teacher; 31 (ii) [(B)] one full year of membership service as a full-
01 time teacher; or 02 (iii) [(C)] any combination of service qualified under 03 this subparagraph; 04 (2) a member who first became a member of the plan after 05 June 30, 2006, is eligible for a normal retirement benefit if the member 06 (A) has attained the age of 60 years and has at least five 07 years of membership service; or 08 (B) has at least 30 years of membership service 09 [PARAGRAPH]. 10 * Sec. 18. AS 14.25.110(b) is amended to read: 11 (b) Subject to AS 14.25.167, a member is eligible for an early retirement 12 benefit upon completing the service requirements in (a)(1)(A) [(a)(1)] of this section 13 and attaining the age of 50 years or upon completing the service requirements in 14 (a)(1)(B) or (C) [(a)(2) OR (3)] of this section and attaining the age of 55 years. 15 * Sec. 19. AS 14.25.110(d) is amended to read: 16 (d) The monthly amount of a retirement benefit 17 (1) for a member who first became a member of the plan before 18 July 1, 2006, and who has paid the full amount of any indebtedness is one-twelfth of 19 the member's average base salary during any three school years of membership service 20 multiplied by 21 (A) [(1)] two percent of the years of credited service earned 22 before June 30, 1990, including credited fractional years, and the years of 23 credited service through a total of 20 years; plus 24 (B) [(2)] two and one-half percent of the years of credited 25 service earned after June 30, 1990, that are more than 20 years of total credited 26 service; 27 (2) for a member who first became a member of the plan after 28 June 30, 2006, and who has paid the full amount of any indebtedness is one- 29 twelfth of the member's average base salary during any five school years of 30 membership service multiplied by 31 (A) two percent of the years of credited service through a
01 total of 10 years; plus 02 (B) two and one-quarter percent of the years over 10 years 03 of total credited service through 20 years; plus 04 (C) two and one-half percent of the years of credited service 05 that are more than 20 years of total credited service. 06 * Sec. 20. AS 14.25.142(a) is amended to read: 07 (a) While residing in the state, a person who first became a member of the 08 plan before July 1, 2006, who is receiving a benefit under AS 14.25.009 - 14.25.220, 09 and who is at least 65 years of age or a person who first became a member of the 10 plan before July 1, 2006, and who is receiving a disability benefit under 11 AS 14.25.009 - 14.25.220 is entitled to receive a monthly cost-of-living allowance in 12 addition to the basic benefit. The amount of this allowance is 10 percent of the basic 13 benefit. 14 * Sec. 21. AS 14.25.143(a) is amended to read: 15 (a) Once each year, the administrator shall increase benefit payments to 16 eligible disabled members, to persons age 60 or older receiving benefits under this 17 plan in the preceding calendar year, and to persons who have received benefits under 18 this plan for at least five [EIGHT] years who are not otherwise eligible for an increase 19 under this section. 20 * Sec. 22. AS 14.25.143(b) is amended to read: 21 (b) Subject to (g) and (h) of this section, the [THE] increase in benefit 22 payments applies to total benefit payments except for the cost-of-living allowance 23 under AS 14.25.142. The amount of the increase is a percentage of the current benefit 24 equal to 25 (1) the lesser of 75 percent of the increase in the cost of living in the 26 preceding calendar year or nine percent, for recipients who on July 1 are at least 65 27 years old and for members receiving disability benefits; and 28 (2) the lesser of 50 percent of the increase in the cost of living in the 29 preceding calendar year or six percent, for recipients who on July 1 are at least 60 but 30 less than 65 years old or for recipients who on July 1 are less than 60 years old but 31 who have received benefits from the plan for at least eight years.
01 * Sec. 23. AS 14.25.143 is amended by adding new subsections to read: 02 (g) Subject to (h) of this section, the amount of an increase for members who 03 first became members of the plan after June 30, 2006, and do not meet the eligibility 04 requirements for a permanent fund dividend in effect on July 1, 2024, under 05 AS 43.23.005(a) is equal to one-half of the applicable percentage under (b) of this 06 section. 07 (h) If the board determines that the portion of the liability of the plan that is 08 attributable to all members who first became members of the plan after June 30, 2006, 09 is funded below 90 percent, the board may reduce the amount of the increase 10 determined under (b) or (g) of this section that is payable to a member who first 11 became a member after June 30, 2006. At any time, the board may terminate a 12 reduction made under this subsection. 13 * Sec. 24. AS 14.25.168(a) is amended to read: 14 (a) Except as provided in AS 14.25.171 and (c) of this section, the following 15 persons are entitled to major medical insurance coverage under this section: 16 (1) for teachers first hired before July 1, 1990, 17 (A) a teacher who is receiving a monthly benefit from the plan 18 and who has elected coverage; 19 (B) the spouse and dependent children of the teacher described 20 in (A) of this paragraph; 21 (C) the surviving spouse of a deceased teacher who is receiving 22 a monthly benefit from the plan and who has elected coverage; 23 (D) the dependent children of a deceased teacher who are 24 dependent on the surviving spouse described in (C) of this paragraph; 25 (2) for teachers first hired [ON OR] after June 30 [JULY 1], 1990, 26 (A) a teacher who is receiving a monthly benefit from the plan 27 and who has elected coverage for the teacher; 28 (B) the spouse of the teacher described in (A) of this paragraph 29 if the teacher elected coverage for the spouse; 30 (C) the dependent children of the teacher described in (A) of 31 this paragraph if the teacher elected coverage for the dependent children;
01 (D) the surviving spouse of a deceased teacher who is receiving 02 a monthly benefit from the plan and who has elected coverage; 03 (E) the dependent children of a deceased teacher who are 04 dependent on the surviving spouse described in (D) of this paragraph if the 05 surviving spouse has elected coverage for the dependent children. 06 * Sec. 25. AS 14.25 is amended by adding a new section to read: 07 Sec. 14.25.171. Medical benefit; eligibility of employees first hired after 08 June 30, 2006; surviving spouses and dependents. (a) A teacher who first became a 09 member of the plan after June 30, 2006, receives a monthly benefit from the plan, 10 retired directly from the plan, and has elected benefits under this section is entitled to 11 medical benefits under this section. A member who applies for medical benefits under 12 this section shall apply on the forms and in the manner prescribed by the 13 administrator. A member is eligible to retire from the plan if the member has been an 14 active member for at least 12 months before application for retirement and the member 15 (1) has at least 30 years of service; or 16 (2) reaches the age set for Medicare eligibility and has at least 10 years 17 of service. 18 (b) The member's surviving spouse is eligible to elect medical benefits if the 19 member had retired or was eligible for retirement and medical benefits at the time of 20 the member's death. 21 (c) The medical benefits available to eligible persons are access to the retiree 22 major medical insurance plan and access to the health reimbursement arrangement 23 plan under AS 39.30.300. Access to the retiree major medical insurance plan means 24 that an eligible person may not be denied insurance coverage except for failure to pay 25 the required premium. 26 (d) Retiree major medical insurance plan coverage elected by an eligible 27 member under this section covers the eligible member, the spouse of the eligible 28 member, and the dependent children of the eligible member. 29 (e) Retiree major medical insurance plan coverage elected by a surviving 30 spouse of an eligible member under this section covers the surviving spouse and the 31 dependent children of the eligible member who are dependent on the surviving spouse.
01 (f) Participation in the retiree major medical insurance plan is not required in 02 order to participate in the health reimbursement arrangement plan. 03 (g) A person eligible for medical benefits under this section is not required to 04 participate in the health reimbursement arrangement plan in order to participate in the 05 retiree major medical insurance plan. 06 (h) A person who is eligible for medical benefits under this section must make 07 the irrevocable election to participate or not participate in the retiree major medical 08 insurance plan on or before the date the person reaches 70 1/2 years of age or when the 09 person applies for retirement and medical benefits, whichever is later. 10 (i) Major medical insurance coverage takes effect on the first day of the month 11 following the date of the administrator's approval of the election and stops when the 12 person who elects coverage dies or fails to make a required premium payment. 13 (j) The coverage for persons 65 years of age or older is the same as that 14 available for persons under 65 years of age. The benefits payable to those persons 65 15 years of age or older supplement any benefits provided under the federal old age, 16 survivors, and disability insurance program. 17 (k) The medical and optional insurance premiums owed by the person who 18 elects coverage may be deducted from the health reimbursement arrangement plan. If 19 the amount of the health reimbursement arrangement plan becomes insufficient to pay 20 the premiums, the person who elects coverage under (a) of this section shall pay the 21 premiums directly. 22 (l) The cost of premiums for retiree major medical insurance coverage under 23 this section for an eligible member or surviving spouse who is 24 (1) not eligible for Medicare is an amount equal to the full monthly 25 group premiums for retiree major medical insurance coverage; 26 (2) eligible for Medicare is the following percentage of the premium 27 amounts established for retirees who are eligible for Medicare: 28 (A) 30 percent if the member had 10 or more, but less than 15, 29 years of service; 30 (B) 25 percent if the member had 15 or more, but less than 20, 31 years of service;
01 (C) 20 percent if the member had 20 or more, but less than 25, 02 years of service; 03 (D) 15 percent if the member had 25 or more, but less than 30, 04 years of service; 05 (E) 10 percent if the member had 30 or more years of service. 06 (m) The eligibility for retiree major medical insurance coverage for an 07 alternate payee under a qualified domestic relations order shall be determined based 08 on the eligibility of the member to elect coverage. The alternate payee shall pay the 09 full monthly premium for retiree major medical insurance coverage. 10 (n) The administrator shall 11 (1) inform a person entitled to retiree major medical insurance 12 coverage under this section in writing 13 (A) that the health insurance coverage available to retired 14 members may be different from the health insurance coverage provided to 15 employees; 16 (B) of time limits for selecting optional health insurance 17 coverage; and 18 (C) whether the election is irrevocable; and 19 (2) require that a person entitled to retiree major medical insurance 20 coverage under this section indicate in writing on a form provided by the administrator 21 whether the person has chosen to receive optional health insurance coverage. 22 (o) The monthly group premiums for retiree major medical insurance coverage 23 under this section are established by the administrator in accordance with 24 AS 39.30.095. Nothing in this chapter guarantees a person who elects coverage under 25 (a) of this section a monthly group premium rate for retiree major medical insurance 26 coverage other than the premium in effect for the month in which the premium is due 27 for coverage for that month. 28 (p) In this section, "health reimbursement arrangement plan" means the State 29 of Alaska Teachers' and Public Employees' Retiree Health Reimbursement 30 Arrangement Plan established in AS 39.30.300. 31 * Sec. 26. AS 14.25.220(5) is amended to read:
01 (5) "average base salary" means, 02 (A) for a teacher who first became a member before July 1, 03 2006, the result obtained by dividing the sum of the member's three highest 04 years' base salary by three, or if a member does not have three years base 05 salary, then by dividing the sum of all base salaries by the number of years of 06 base salary; the base salary for a year in which credit is granted for disability 07 totaling more than one-third of a year may not be used in the computation of 08 the average base salary; the base salary in a school year for which the member 09 receives compensation for less than two-thirds of a year may not be used in the 10 computation of the average base salary; if compensation is received for more 11 than two-thirds of a year, the full base salary for that school year shall be used 12 in the computation of the average base salary; 13 (B) for a teacher who first became a member after June 30, 14 2006, the result obtained by dividing the sum of the member's five highest 15 years' base salary by five, or if a member does not have five years' base 16 salary, then by dividing the sum of all base salaries by the number of 17 years of base salary; the base salary for a year in which credit is granted 18 for disability totaling more than one-third of a year may not be used in the 19 computation of the average base salary; the base salary in a school year 20 for which the member receives compensation for less than two-thirds of a 21 year may not be used in the computation of the average base salary; if 22 compensation is received for more than two-thirds of a year, the full base 23 salary for that school year shall be used in the computation of the average 24 base salary; 25 * Sec. 27. AS 14.25.220(6) is amended to read: 26 (6) "base salary" 27 (A) means the total remuneration payable under contract for a 28 full year of membership service, including addenda to the contract and, for a 29 member who elects to participate solely in this plan under AS 14.25.040(f), 30 remuneration paid by the public employees' retirement plan employer, 31 but, for a member first hired on or after July 1, 1996, does not include
01 remuneration in excess of the limitations set out in 26 U.S.C. 401(a)(17); 02 (B) has the same meaning as "compensation" under 03 AS 39.35.680(9) when applied to a state legislator who elects membership 04 under AS 14.25.040(b); 05 * Sec. 28. AS 14.25.220(46) is amended to read: 06 (46) "vested member" or "vested teacher" means an active member 07 who [HAS COMPLETED EITHER] 08 (A) first became a member before July 1, 2006, and has 09 completed 10 (i) 15 years of service, the last five of which have been 11 membership service, for a member first hired before July 1, 1975; 12 (ii) [(B)] eight years of membership service; 13 (iii) [(C)] five years of membership and three years of 14 BIA service; or 15 (iv) [(D)] 12 school years of part-time membership 16 service or 12 school years in each of which the member earned either 17 part-time or full-time membership service; 18 (B) first became a member after June 30, 2006, and has 19 completed five years of membership service; 20 * Sec. 29. AS 14.25.220 is amended by adding a new paragraph to read: 21 (48) "first became a member after June 30, 2006" includes a member 22 who elected under former AS 14.25.540 to participate in the defined contribution 23 retirement plan under AS 14.25.310 - 14.25.590 and who elects to participate in the 24 defined benefit retirement plan under AS 14.25.009 - 14.25.220. 25 * Sec. 30. AS 14.25.310 is amended to read: 26 Sec. 14.25.310. Applicability of AS 14.25.310 - 14.25.590. The provisions of 27 AS 14.25.310 - 14.25.590 apply only to 28 (1) teachers who first become members [ON OR] after June 30, 2006, 29 and before July 1, 2024, and who are eligible but do not elect to participate in a 30 defined benefit retirement plan under AS 14.25.009 - 14.25.220 or AS 39.35.095 - 31 39.35.680; and
01 (2) teachers [JULY 1, 2006, TO MEMBERS WHO ARE 02 EMPLOYED BY EMPLOYERS THAT DO NOT PARTICIPATE IN THE 03 DEFINED BENEFIT RETIREMENT PLAN ESTABLISHED UNDER AS 14.25.009 04 - 14.25.220, TO FORMER MEMBERS UNDER AS 14.25.220, OR TO MEMBERS] 05 who transferred [TRANSFER] into the defined contribution retirement plan under 06 former AS 14.25.540 and do not elect to participate in the defined benefit 07 retirement plan under AS 14.25.009 - 14.25.220. 08 * Sec. 31. AS 14.25.310 is amended by adding a new subsection to read: 09 (b) An employer that participates in the plan shall also participate in the 10 defined benefit retirement plan under AS 14.25.009 - 14.25.220. 11 * Sec. 32. AS 14.25.330(a) is amended to read: 12 (a) A teacher who first becomes a member [ON OR] after June 30, 2006, and 13 before July 1, 2024, and who does not participate in a defined benefit retirement 14 plan under AS 14.25.009 - 14.25.220 or AS 39.35.095 - 39.35.680 is [JULY 1, 2006, 15 SHALL PARTICIPATE IN THE PLAN AS] a member of the defined contribution 16 retirement plan. 17 * Sec. 33. AS 14.25.490(a) is amended to read: 18 (a) Subject to art. XII, sec. 7, Constitution of the State of Alaska, the 19 [THE] state may [HAS THE RIGHT TO] amend the plan at any time and from time to 20 time, in whole or in part, including the right to make retroactive amendments referred 21 to in 26 U.S.C. 401(b). 22 * Sec. 34. AS 14.25.490(b) is amended to read: 23 (b) The plan administrator may not modify or amend the plan retroactively [IN 24 SUCH A MANNER AS] to reduce [THE] benefits accrued by a [OF ANY] member 25 [ACCRUED TO DATE UNDER THE PLAN BY REASON OF CONTRIBUTIONS 26 MADE] before the modification or amendment except to the extent that the reduction 27 is permitted by art. XII, sec. 7, Constitution of the State of Alaska, and the Internal 28 Revenue Code. 29 * Sec. 35. AS 14.25.490(c) is amended to read: 30 (c) Subject to art. XII, sec. 7, Constitution of the State of Alaska, and the 31 Internal Revenue Code, the [THE] state may [, IN ITS DISCRETION,] terminate the
01 plan in whole or part [AT ANY TIME] without liability for the termination. If the plan 02 is terminated, all investments at the time of termination remain in force until all 03 individual accounts have been completely distributed under the plan. After [, AND, 04 AFTER] all plan liabilities are satisfied, excess assets of the plan revert to the 05 employer. 06 * Sec. 36. AS 14.25.490(d) is repealed and reenacted to read: 07 (d) Within one year after determining that a contribution to the plan by an 08 employer was the result of a mistake of fact, the administrator shall return the 09 contribution to the employer. 10 * Sec. 37. AS 37.10.220(a) is amended to read: 11 (a) The board shall 12 (1) hold regular and special meetings at the call of the chair or of at 13 least five members; meetings are open to the public, and the board shall keep a full 14 record of all its proceedings; 15 (2) after reviewing recommendations from the Department of 16 Revenue, adopt investment policies for each of the funds entrusted to the board; 17 (3) determine the appropriate investment objectives for the defined 18 benefit plans established under the teachers' retirement system under AS 14.25 and the 19 public employees' retirement system under AS 39.35; 20 (4) assist in prescribing the policies for the proper operation of the 21 systems and take other actions necessary to carry out the intent and purpose of the 22 systems in accordance with AS 37.10.210 - 37.10.390; 23 (5) provide a range of investment options and establish the rules by 24 which participants can direct their investments among those options with respect to 25 accounts established under 26 (A) AS 14.25.340 - 14.25.350 (teachers' retirement system 27 defined contribution individual accounts); 28 (B) AS 39.30.150 - 39.30.180 (State of Alaska Supplementary 29 Annuity Plan); 30 (C) AS 39.35.730 - 39.35.750 (public employees' retirement 31 system defined contribution individual accounts); and
01 (D) AS 39.45.010 - 39.45.060 (public employees' deferred 02 compensation program); 03 (6) establish the rate of interest that shall be annually credited to each 04 member's individual contribution account in accordance with AS 14.25.145 and 05 AS 39.35.100 and the rate of interest that shall be annually credited to each member's 06 account in the health reimbursement arrangement plan under AS 39.30.300 - 07 39.30.495; the rate of interest shall be adopted on the basis of the probable effective 08 rate of interest on a long-term basis, and the rate may be changed from time to time; 09 (7) adopt a contribution surcharge as necessary under AS 39.35.160(c); 10 (8) coordinate with the retirement system administrator to have an 11 annual actuarial valuation of each retirement system prepared to determine system 12 assets, accrued liabilities, and funding ratios and to certify to the appropriate 13 budgetary authority of each employer in the system 14 (A) an appropriate contribution rate for normal costs; [AND] 15 (B) an appropriate contribution rate for liquidating any past 16 service liability; in this subparagraph, the appropriate contribution rate for 17 liquidating the past service liability of the defined benefit retirement plan under 18 AS 14.25.009 - 14.25.220 or the past service liability of the defined benefit 19 retirement plan under AS 39.35.095 - 39.35.680 must be determined by a level 20 percent of pay method based on amortization of the past service liability for a 21 closed term of 25 years; 22 (C) an appropriate monthly employer contribution rate 23 under AS 14.25.070 and AS 39.35.255; and 24 (D) appropriate adjustments, if any, under AS 14.25.050(e) 25 and AS 39.35.160(e); 26 (9) review actuarial assumptions prepared and certified by a member 27 of the American Academy of Actuaries and conduct experience analyses of the 28 retirement systems not less than once every four years, except for health cost 29 assumptions, which shall be reviewed annually; the results of all actuarial assumptions 30 prepared under this paragraph shall be reviewed and certified by a second member of 31 the American Academy of Actuaries before presentation to the board;
01 (10) contract for an independent audit of the state's actuary not less 02 than once every four years; 03 (11) contract for an independent audit of the state's performance 04 consultant not less than once every four years; 05 (12) obtain an external performance review to evaluate the investment 06 policies of each fund entrusted to the board and report the results of the review to the 07 appropriate fund fiduciary; 08 (13) by the first day of each regular legislative session, report to the 09 governor, the legislature, and the individual employers participating in the state's 10 retirement systems on the financial condition of the systems in regard to 11 (A) the valuation of trust fund assets and liabilities; 12 (B) current investment policies adopted by the board; 13 (C) a summary of assets held in trust listed by the categories of 14 investment; 15 (D) the income and expenditures for the previous fiscal year; 16 (E) the return projections for the next calendar year; 17 (F) one-year, three-year, five-year, and 10-year investment 18 performance for each of the funds entrusted to the board; and 19 (G) other statistical data necessary for a proper understanding 20 of the financial status of the systems; 21 (14) submit quarterly updates of the investment performance reports to 22 the Legislative Budget and Audit Committee; 23 (15) develop an annual operating budget; [AND] 24 (16) administer pension forfeitures required under AS 37.10.310 using 25 the procedures of AS 44.62 (Administrative Procedure Act); 26 (17) establish one or more sub-trusts of the pension fund to hold 27 employer contributions, employee contributions, assets, and earnings attributable 28 to members of the defined benefit retirement plan under AS 14.25.009 - 14.25.220 29 or the defined benefit retirement plan under AS 39.35.095 - 39.35.680 who first 30 became members of the respective plan after June 30, 2006; and 31 (18) account for and track employer contributions, employee
01 contributions, assets, and earnings in each trust fund or sub-trust attributable to 02 members who first became members after June 30, 2006, of the defined benefit 03 retirement plan under AS 14.25.009 - 14.25.220 and members who first became 04 members after June 30, 2006, of the defined benefit retirement plan under 05 AS 39.35.095 - 39.35.680; employer contributions that exceed those assigned to 06 members who first became members after June 30, 2006, of the defined benefit 07 retirement plan under AS 14.25.009 - 14.25.220 and members who first became 08 members after June 30, 2006, of the defined benefit retirement plan under 09 AS 39.35.095 - 39.35.680 shall be transferred or retained in trusts or sub-trusts 10 with liability allocated toward employer normal costs for members who became 11 members of the respective defined benefit retirement plan before July 1, 2024, 12 past service costs, the State of Alaska Teachers' and Public Employees' Retiree 13 Health Reimbursement Arrangement Plan under AS 39.30.300 - 39.30.495, and 14 employer contributions under AS 14.25.350 and AS 39.35.750. 15 * Sec. 38. AS 37.10.220(b) is amended to read: 16 (b) The board may 17 (1) employ outside investment advisors to review investment policies; 18 (2) enter into an agreement with the fiduciary of another state fund in 19 order to assume the management and investment of those assets; 20 (3) contract for other services necessary to execute the board's powers 21 and duties; 22 (4) enter into confidentiality agreements that would exempt records 23 from AS 40.25.110 and 40.25.120 if the records contain information that could affect 24 the value of investment by the board or that could impair the ability of the board to 25 acquire, maintain, or dispose of investments; 26 (5) adjust the amount of the increase in benefits payable to a 27 member who first became a member after June 30, 2006, as provided under 28 AS 14.25.143 and AS 39.35.475; 29 (6) adjust contribution rates under AS 14.25.050(e) and 30 AS 39.35.160(e). 31 * Sec. 39. AS 39.30.090(a) is amended to read:
01 (a) The Department of Administration may obtain a policy or policies of group 02 insurance covering state employees, persons entitled to coverage under AS 14.25.168, 03 14.25.171, 14.25.480, AS 22.25.090, AS 39.35.535, 39.35.537, 39.35.880, or former 04 AS 39.37.145, employees of other participating governmental units, or persons 05 entitled to coverage under AS 23.15.136, subject to the following conditions: 06 (1) a group insurance policy shall provide one or more of the following 07 benefits: life insurance, accidental death and dismemberment insurance, weekly 08 indemnity insurance, hospital expense insurance, surgical expense insurance, dental 09 expense insurance, audiovisual insurance, or other medical care insurance; 10 (2) each eligible employee of the state, the spouse and the unmarried 11 children chiefly dependent on the eligible employee for support, and each eligible 12 employee of another participating governmental unit shall be covered by the group 13 policy, unless exempt under regulations adopted by the commissioner of 14 administration; 15 (3) a governmental unit may participate under a group policy if 16 (A) its governing body adopts a resolution authorizing 17 participation and payment of required premiums; 18 (B) a certified copy of the resolution is filed with the 19 Department of Administration; and 20 (C) the commissioner of administration approves the 21 participation in writing; 22 (4) in procuring a policy of group health or group life insurance as 23 provided under this section or excess loss insurance as provided in AS 39.30.091, the 24 Department of Administration shall comply with the dual choice requirements of 25 AS 21.86.310, and shall obtain the insurance policy from an insurer authorized to 26 transact business in the state under AS 21.09, a hospital or medical service corporation 27 authorized to transact business in this state under AS 21.87, or a health maintenance 28 organization authorized to operate in this state under AS 21.86; an excess loss 29 insurance policy may be obtained from a life or health insurer authorized to transact 30 business in this state under AS 21.09 or from a hospital or medical service corporation 31 authorized to transact business in this state under AS 21.87;
01 (5) the Department of Administration shall make available bid 02 specifications for desired insurance benefits or for administration of benefit claims and 03 payments to (A) all insurance carriers authorized to transact business in this state 04 under AS 21.09 and all hospital or medical service corporations authorized to transact 05 business under AS 21.87 who are qualified to provide the desired benefits; and (B) 06 insurance carriers authorized to transact business in this state under AS 21.09, hospital 07 or medical service corporations authorized to transact business under AS 21.87, and 08 third-party administrators licensed to transact business in this state and qualified to 09 provide administrative services; the specifications shall be made available at least once 10 every five years; the lowest responsible bid submitted by an insurance carrier, hospital 11 or medical service corporation, or third-party administrator with adequate servicing 12 facilities shall govern selection of a carrier, hospital or medical service corporation, or 13 third-party administrator under this section or the selection of an insurance carrier or a 14 hospital or medical service corporation to provide excess loss insurance as provided in 15 AS 39.30.091; 16 (6) if the aggregate of dividends payable under the group insurance 17 policy exceeds the governmental unit's share of the premium, the excess shall be 18 applied by the governmental unit for the sole benefit of the employees; 19 (7) a person receiving benefits under AS 14.25.110, AS 22.25, 20 AS 39.35, or former AS 39.37 may continue the life insurance coverage that was in 21 effect under this section at the time of termination of employment with the state or 22 participating governmental unit; 23 (8) a person electing to have insurance under (7) of this subsection 24 shall pay the cost of this insurance; 25 (9) for each permanent part-time employee electing coverage under 26 this section, the state shall contribute one-half the state contribution rate for permanent 27 full-time state employees, and the permanent part-time employee shall contribute the 28 other one-half; 29 (10) a person receiving benefits under AS 14.25, AS 22.25, AS 39.35, 30 or former AS 39.37 may obtain auditory, visual, and dental insurance for that person 31 and eligible dependents under this section; the level of coverage for persons over 65
01 shall be the same as that available before reaching age 65 except that the benefits 02 payable shall be supplemental to any benefits provided under the federal old age, 03 survivors, and disability insurance program; a person electing to have insurance under 04 this paragraph shall pay the cost of the insurance; the commissioner of administration 05 shall adopt regulations implementing this paragraph; 06 (11) a person receiving benefits under AS 14.25, AS 22.25, AS 39.35, 07 or former AS 39.37 may obtain long-term care insurance for that person and eligible 08 dependents under this section; a person who elects insurance under this paragraph 09 shall pay the cost of the insurance premium; the commissioner of administration shall 10 adopt regulations to implement this paragraph; 11 (12) each licensee holding a current operating agreement for a vending 12 facility under AS 23.15.010 - 23.15.210 shall be covered by the group policy that 13 applies to governmental units other than the state. 14 * Sec. 40. AS 39.30.097(b) is amended to read: 15 (b) The commissioner of administration is authorized to prefund medical 16 benefits provided by AS 14.25.171, 14.25.480 [AS 14.25.480], AS 39.30.300, 17 AS 39.35.537, and 39.35.880 [AS 39.35.880] by establishing an irrevocable trust that 18 is exempt from federal income tax under 26 U.S.C. 115 and subject to the applicable 19 financial reporting, disclosure, and actuarial requirements of the Governmental 20 Accounting Standards Board. 21 * Sec. 41. AS 39.30.300 is amended to read: 22 Sec. 39.30.300. State of Alaska Teachers' and Public Employees' Retiree 23 Health Reimbursement Arrangement Plan established. The State of Alaska 24 Teachers' and Public Employees' Retiree Health Reimbursement Arrangement Plan is 25 established for 26 (1) teachers who first become members of the [DEFINED 27 CONTRIBUTION PLAN OF THE] teachers' retirement system under AS 14.25.009 - 28 14.25.590 [AS 14.25.310 - 14.25.590 ON OR] after June 30, 2006 [JULY 1, 2006], 29 and teachers who elected under former AS 14.25.540 to participate in the plan 30 under AS 14.25.310 - 14.25.590; and 31 (2) employees of the state, political subdivisions of the state, and
01 public organizations of the state who first become members [OF THE DEFINED 02 CONTRIBUTION PLAN] of the Public Employees' Retirement System of Alaska 03 (AS 39.35) [PUBLIC EMPLOYEES' RETIREMENT SYSTEM UNDER 04 AS 39.35.700 - 39.35.990 ON OR] after June 30, 2006, and employees of the state, 05 political subdivisions of the state, and public organizations of the state who 06 elected under former AS 39.35.940 to participate in the plan established under 07 AS 39.35.700 - 39.35.990 [JULY 1, 2006]. 08 * Sec. 42. AS 39.30.380 is amended to read: 09 Sec. 39.30.380. Termination of employment. A person who terminates 10 employment before meeting the eligibility requirements of AS 14.25.171, 14.25.470, 11 AS 39.35.537, or 39.35.870 [AS 14.25.470 OR AS 39.35.870] loses any right to the 12 contributions made on behalf of the person to the teachers' and public employees' 13 retiree health reimbursement arrangement trust fund. If a person returns to 14 employment with a participating employer by December 31 of the year in which the 15 person reaches 65 years of age, the person's account balance shall be restored in the 16 amount recorded on the date of termination from the trust, adjusted for inflation at the 17 rate of the Consumer Price Index for Anchorage, Alaska. The earlier period of 18 employment with a participating employer shall be credited toward eligibility for 19 medical benefits. 20 * Sec. 43. AS 39.30.390 is amended to read: 21 Sec. 39.30.390. Eligibility and reimbursement. Persons who meet the 22 eligibility requirements of AS 14.25.171, 14.25.470, AS 39.35.537, or 39.35.870 23 [AS 14.25.470 AND AS 39.35.870] are eligible for reimbursements from the 24 individual account established for a member under the plan, except members do not 25 have to retire directly from the system. A person who is the dependent child of an 26 eligible member is eligible for reimbursements if the eligible member and surviving 27 spouse have both died so long as the person meets the definition of dependent child. 28 * Sec. 44. AS 39.30.400(a) is amended to read: 29 (a) The administrator may deduct the cost of monthly premiums from the 30 individual account for retiree major medical insurance on behalf of an eligible person 31 who elected retiree major medical insurance under AS 14.25.171, 14.25.480,
01 AS 39.35.537, or 39.35.880 [AS 14.25.480 OR AS 39.35.880]. 02 * Sec. 45. AS 39.30.420(a) is amended to read: 03 (a) Subject to art. XII, sec. 7, Constitution of the State of Alaska, the 04 [THE] state may [HAS THE RIGHT TO] amend the plan at any time and from time to 05 time, in whole or in part, including the right to make retroactive amendments referred 06 to in 26 U.S.C. 401(b). 07 * Sec. 46. AS 39.30.420(b) is amended to read: 08 (b) The plan administrator may not modify or amend the plan retroactively [IN 09 SUCH A MANNER AS] to reduce [THE] benefits accrued by a [OF ANY] member 10 [ACCRUED TO DATE UNDER THE PLAN BY REASON OF CONTRIBUTIONS 11 MADE] before the modification or amendment except to the extent that the reduction 12 is permitted by art. XII, sec. 7, Constitution of the State of Alaska, and the Internal 13 Revenue Code. 14 * Sec. 47. AS 39.30.420(c) is amended to read: 15 (c) Subject to art. XII, sec. 7, Constitution of the State of Alaska, and the 16 Internal Revenue Code, the [THE] state may [, IN ITS DISCRETION,] terminate the 17 plan in whole or part [AT ANY TIME] without liability for the termination. If the plan 18 is terminated, all investments at the time of termination remain in force until all 19 individual accounts have been completely distributed under the plan. After [, AND, 20 AFTER] all plan liabilities are satisfied, excess assets of the plan revert to the 21 employer. 22 * Sec. 48. AS 39.30.420(d) is repealed and reenacted to read: 23 (d) Within one year after determining that a contribution to the plan by an 24 employer was the result of a mistake of fact, the administrator shall return the 25 contribution to the employer. 26 * Sec. 49. AS 39.30.495(5) is amended to read: 27 (5) "eligible person" means a person who meets the eligibility 28 requirements of AS 14.25.171, 14.25.470, AS 39.35.537, or 39.35.870 [AS 14.25.470 29 OR AS 39.35.870]; 30 * Sec. 50. AS 39.30.495(6) is amended to read: 31 (6) "employer" has the meaning given in AS 14.25.220 for employers
01 of teachers in the defined benefit retirement plan established in AS 14.25.009 - 02 14.25.220, has the meaning given in AS 14.25.590 for employers of teachers in the 03 defined contribution plan established in AS 14.25.310 - 14.25.590, has the meaning 04 given in AS 39.35.680 for employers of public employees in the defined benefit 05 retirement plan established in AS 39.35.095 - 39.35.680, and has the meaning given 06 in AS 39.35.990 for employers of public employees in the defined contribution plan 07 established in AS 39.35.700 - 39.35.990; 08 * Sec. 51. AS 39.30.495(9) is amended to read: 09 (9) "member" means a member of the State of Alaska Teachers' and 10 Public Employees' Retiree Health Reimbursement Arrangement Plan established 11 in AS 39.30.300 - 39.30.495 [DEFINED CONTRIBUTION PLAN OF THE 12 TEACHERS' RETIREMENT SYSTEM IN AS 14.25.310 - 14.25.590 OR A 13 MEMBER OF THE PUBLIC EMPLOYEES' RETIREMENT SYSTEM IN 14 AS 39.35.700 - 39.35.990]; 15 * Sec. 52. AS 39.35.095 is amended to read: 16 Sec. 39.35.095. Applicability of AS 39.35.095 - 39.35.680. The 17 [FOLLOWING] provisions of AS 39.35.095 - 39.35.680 [THIS CHAPTER] apply 18 only to members first hired 19 (1) before July 1, 2006, who have not elected under former 20 AS 39.35.940 to participate in the defined contribution retirement plan under 21 AS 39.35.700 - 39.35.990; 22 (2) after June 30, 2006, and before July 1, 2024, who are former 23 members of the defined contribution retirement plan under AS 39.35.700 - 24 39.35.990; or 25 (3) on or after July 1, 2024 [: AS 39.35.095 - 39.35.680]. 26 * Sec. 53. AS 39.35.095 is amended by adding a new subsection to read: 27 (b) An employee who became a member after June 30, 2006, and before 28 July 1, 2024, is subject to AS 39.35.095 - 39.35.680 if the employee 29 (1) is not employed by an employer on July 1, 2024; 30 (2) is reemployed by an employer after July 1, 2024; and 31 (3) has, before the date of reemployment, received
01 (A) a distribution, other than a rollover distribution, of the 02 entire balance in the member's individual account in the defined contribution 03 retirement plan; or 04 (B) a rollover distribution of the entire balance in the member's 05 individual account in the defined contribution retirement plan and has not 06 within 120 days of reemployment had all or part of a direct rollover 07 distribution from an eligible retirement plan owned by the member paid 08 directly into the member's individual account. 09 * Sec. 54. AS 39.35.100(b) is amended to read: 10 (b) An individual account shall be maintained for each employee to record the 11 amount of the employee's mandatory contributions collected under AS 39.35.160 12 [AS 39.35.160(a)]. As of the last day of each calendar year and of each fiscal year, this 13 account shall be credited with interest by applying the prescribed rate of interest, as 14 determined by the board, to the balance in the account as of that date. When the 15 employee is appointed to retirement, the amount held in the individual account shall 16 be used first to fully finance the benefits paid. Once this account has been exhausted, 17 the plan shall fully finance the benefits paid that were not financed by the employee's 18 individual account. 19 * Sec. 55. AS 39.35 is amended by adding a new section to article 3 to read: 20 Sec. 39.35.159. Election of defined benefit retirement plan by reemployed 21 employees. (a) An employee may make a one-time election to participate in the plan 22 under AS 39.35.095 - 39.35.680 if the employee 23 (1) was first hired after June 30, 2006, and before July 1, 2024; 24 (2) is not employed by an employer on July 1, 2024; 25 (3) is reemployed by an employer after July 1, 2024; and 26 (4) before the date of reemployment, 27 (A) has not received a distribution of the entire balance in the 28 employee's individual account under the defined contribution retirement plan 29 established in AS 39.35.700 - 39.35.990; or 30 (B) has received a rollover distribution of the entire balance in 31 the member's individual account in the defined contribution retirement plan
01 and has within 120 days of reemployment had all or part of a direct rollover 02 distribution from an eligible retirement plan owned by the member paid 03 directly into the member's individual account. 04 (b) An election under (a) of this section may be made not more than 120 days 05 after the date of reemployment. A reemployed employee electing to participate under 06 (a) of this section shall use the balance of the employee's individual account in the 07 plan under AS 39.35.700 - 39.35.990, including any rollover contributions, to 08 purchase credited service in the plan under AS 39.35.095 - 39.35.680. An election 09 made under (a) of this section must be made in writing in the manner prescribed by the 10 administrator. An election made by an employee who is married is not effective unless 11 the election is signed by the employee's spouse. The administrator shall provide an 12 employee who is eligible to make an election under (a) of this section with 13 information about the potential consequences of the employee's election, including 14 calculations to illustrate the effect of moving the employee's retirement plan from a 15 defined contribution retirement plan to a defined benefit retirement plan. 16 (c) An election made under (a) of this section to participate in the plan under 17 AS 39.35.095 - 39.35.680 is irrevocable. On the effective date of the election, an 18 eligible employee shall be enrolled as a member of the plan, and the employee's 19 participation in the plan shall be governed by the applicable provisions of the plan. 20 The employee's enrollment in the plan is retroactive to the date of hire. 21 (d) When an eligible employee makes an election under this section, the 22 administrator shall cause the total amount of the employee's employee and employer 23 contributions to the plan under AS 39.35.700 - 39.35.990, with investment earnings 24 and losses through the day of the employee's election to participate as a member in the 25 plan under AS 39.35.095 - 39.35.680, to be actuarially calculated and, subject to (f) of 26 this section, transferred to the pension fund in the plan under AS 39.35.095 - 27 39.35.680. On the effective date of the employee's participation in the plan under 28 AS 39.35.095 - 39.35.680, the employee shall be credited with service in the plan. The 29 board shall determine the cost of the employee's actual service time based on the 30 employee's accrued actuarial liability of pension benefits in the plan, and credit the 31 employee with service time equal to the value actuarially calculated and transferred to
01 the pension fund in the plan under AS 39.35.095 - 39.35.680. The board shall adopt 02 regulations establishing transfer procedures. The transfer may not occur later than 60 03 days after the date the administrator receives the employee's election, unless the major 04 financial markets for securities available for a transfer are seriously disrupted by an 05 unforeseen event that also causes the suspension of trading on any national securities 06 exchange in the country where the securities were issued. In that event, the 60-day 07 period may be extended by a resolution of the board. A transfer is not commissionable 08 or subject to other fees and may be in the form of cash or a security as determined by 09 the board. A security shall be valued on the date of receipt in the employee's account. 10 (e) When making a transfer under (d) of this section, or for a reemployed 11 employee entering the plan under AS 39.35.095(b), the administrator shall transfer an 12 amount equal to the decrease in the accrued actuarial liability of the death and 13 disability trust in the plan under AS 39.35.700 - 39.35.990 resulting from the transfer 14 as of the date of transfer, based on the most recent actuarial valuation of the death and 15 disability trust, from the death and disability trust in the plan under AS 39.35.700 - 16 39.35.990 to the pension fund in the plan under AS 39.35.095 - 39.35.680. 17 (f) If the value actuarially calculated under (d) of this section is insufficient to 18 pay for service credit equal to the employee's actual service, the administrator shall 19 allow the employee the option of purchasing service credit in an amount up to the 20 amount needed to eliminate the insufficiency; however, if that value exceeds the 21 amount needed to pay for service credit equal to the employee's actual service, the 22 administrator shall cause the excess to remain in the employee's individual account in 23 the plan under AS 39.35.700 - 39.35.990. The excess may not be used to purchase 24 additional service credit in the plan under AS 39.35.095 - 39.35.680. When a 25 reemployed employee enters the plan under AS 39.35.095(b), the administrator shall 26 allow the employee to pay for a period of service credit up to the employee's actual 27 service. When an employee elects to purchase service credit under this section and 28 does not immediately pay for the service credit purchased, an indebtedness is 29 established. Interest as prescribed by regulation accrues on an employee's 30 indebtedness. Indebtedness that exists at the time the employee is appointed to 31 retirement necessitates an actuarial adjustment to the benefits payable due to service in
01 the defined contribution retirement plan. 02 (g) Actuarial assumptions about the plan under AS 39.35.095 - 39.35.680 03 must be based on the most recent actuarial valuation of the plan, except that the 04 retirement rates are computed at 25 percent of the retirement rates used in the most 05 recent actuarial valuation of the pension fund for the plan plus 75 percent of the 06 retirement rates used in the most recent actuarial valuation of the plan under 07 AS 39.35.700 - 39.35.990. 08 (h) The provisions of this section are subject to the requirements of the 09 Internal Revenue Code and the limitations under AS 39.35.115, 39.35.678, 10 39.35.710(c) and (d), and 39.35.895. In this subsection, "Internal Revenue Code" has 11 the meaning given in AS 39.35.990. 12 * Sec. 56. AS 39.35.160(a) is amended to read: 13 (a) Subject to (e) of this section, beginning [BEGINNING] January 1, 1987, 14 each peace officer or firefighter shall contribute to the plan an amount equal to seven 15 and one-half percent of the peace officer's or firefighter's compensation, and, except [. 16 EXCEPT] as provided in (d) - (e) [(d)] of this section, beginning January 1, 1987, 17 each other employee shall contribute to the plan an amount equal to six and three- 18 quarters percent of the employee's compensation. [THE CONTRIBUTIONS SHALL 19 BE DEDUCTED BY THE EMPLOYER AT THE END OF EACH PAYROLL 20 PERIOD. THE CONTRIBUTIONS SHALL BE DEDUCTED FROM EMPLOYEE 21 COMPENSATION BEFORE COMPUTATION OF APPLICABLE FEDERAL 22 TAXES, AND THE CONTRIBUTIONS SHALL BE TREATED AS EMPLOYER 23 CONTRIBUTIONS UNDER 26 U.S.C. 414(h)(2). A MEMBER MAY NOT HAVE 24 THE OPTION OF MAKING THE PAYROLL DEDUCTION DIRECTLY INSTEAD 25 OF HAVING THE CONTRIBUTION PICKED UP BY THE EMPLOYER.] 26 * Sec. 57. AS 39.35.160 is amended by adding new subsections to read: 27 (e) An employee who first participates in the plan after June 30, 2006, shall 28 contribute to the plan an amount equal to eight percent of the employee's 29 compensation. The board may, from time to time, adjust the employee contribution 30 under this subsection to an amount that, 31 (1) if decreased, is not less than eight percent of the employee's
01 compensation; and 02 (2) if increased, is not more than 12 percent of the employee's 03 compensation. 04 (f) Contributions under (a) and (e) of this section shall be deducted by the 05 employer at the end of each payroll period. The contributions shall be deducted from 06 employee compensation before computation of applicable federal taxes, and the 07 contributions shall be treated as employer contributions under 26 U.S.C. 414(h)(2). A 08 member may not have the option of making the payroll deduction directly instead of 09 having the contribution picked up by the employer. 10 (g) The board may increase the employee contribution rate under (e) of this 11 section if the board determines that the portion of the liability of the plan that is 12 attributable to employees who first participate in the plan after June 30, 2006, is 13 funded below 90 percent. Before increasing the member contribution rate under (e) of 14 this section, the board shall determine an amount sufficient to address the plan's past 15 service liability attributable to all members who first became members of the plan 16 after June 30, 2006. An increase to the employee contribution rate may raise not more 17 than 50 percent of the amount sufficient to address the plan's past service liability 18 attributable to all members who first became members of the plan after June 30, 2006. 19 The board may decrease the rate under (e) of this section if the board determines that 20 the portion of the liability of the plan that is attributable to all members who first 21 became members of the plan after June 30, 2006, is funded above 90 percent. 22 * Sec. 58. AS 39.35.165(a) is amended to read: 23 (a) An employee who is eligible to purchase credited service under 24 AS 39.35.159, 39.35.310 [AS 39.35.310], 39.35.330, 39.35.340, 39.35.342, 39.35.345, 25 39.35.360, or 39.35.370, a member who is eligible to purchase credited service under 26 AS 39.35.375, or an elected public official who is eligible to purchase credited service 27 under AS 39.35.381 is an employee for purposes of this section. An employee may, in 28 lieu of making payments directly to the plan, elect to have the employee's employer 29 make payments as provided in this section. 30 * Sec. 59. AS 39.35.165(b) is amended to read: 31 (b) An employee may elect to have the employer make payments for all or any
01 portion of the amounts payable for the employee's purchase of credited service 02 through a salary reduction program as follows: 03 (1) the amounts paid under a salary reduction program are in lieu of 04 contributions by the employee making the election; the electing employee's salary or 05 other compensation shall be reduced by the amount paid by the employer under this 06 subsection; 07 (2) the employee shall make an irrevocable election under this section 08 to purchase credited service as permitted in AS 39.35.159, 39.35.310 [AS 39.35.310], 09 39.35.330, 39.35.340, 39.35.342, 39.35.345, 39.35.360, 39.35.370, 39.35.375, or 10 39.35.381 and before the employee's termination of employment; the irrevocable 11 election must specify the number of payroll periods that deductions will be made from 12 the employee's compensation and the dollar amount of deductions for each payroll 13 period during the specified number of payroll periods; the deductions made under this 14 paragraph cease upon the earlier of the member's termination of employment with the 15 employer or the member's death; amounts paid by an employer under (f) of this 16 section may not be applied toward the payment of the dollar amount of the deductions 17 representing the portion of the credited service that is being purchased by the member 18 through payroll deduction in accordance with the member's irrevocable election under 19 this subsection; 20 (3) amounts paid by an employer under this subsection shall be treated 21 as employer contributions for the purpose of determining tax treatment under the 22 Internal Revenue Code; the amounts paid by the employer under this section may not 23 be included in the member's gross income for income tax purposes until those amounts 24 are distributed by refund or retirement benefit payments. 25 * Sec. 60. AS 39.35.165(g) is amended to read: 26 (g) Payments made under this section shall be applied to reduce the 27 employee's outstanding indebtedness described in AS 39.35.159, 39.35.310 28 [AS 39.35.310], 39.35.330, 39.35.340, 39.35.342, 39.35.345, 39.35.360, 39.35.370, 29 39.35.375, or 39.35.381 at the time that the contributions are received by the plan. 30 * Sec. 61. AS 39.35.165(i) is amended to read: 31 (i) On satisfaction of the eligibility requirements of AS 39.35.159, 39.35.310
01 [AS 39.35.310], 39.35.330, 39.35.340, 39.35.341, 39.35.345, 39.35.360, 39.35.370, 02 39.35.375, or 39.35.381, the requirements of this section, and the administrative filing 03 requirements specified by the commissioner, the plan shall adjust the employee's 04 credited service history and add any additional service credits acquired. 05 * Sec. 62. AS 39.35.255(a) is amended to read: 06 (a) Each employer, except as provided in (h) of this section, shall contribute to 07 the system every payroll period the lesser of 08 (1) an amount calculated by applying a rate of 22 percent of the greater 09 of the total of all base salaries 10 (A) [(1)] paid by the employer to employees who are active 11 members of the system, including any adjustments to contributions required by 12 AS 39.35.520; or 13 (B) [(2)] paid by the employer to employees who were active 14 members of the system during the corresponding payroll period for the fiscal 15 year ending 16 (i) [(A)] June 30, 2008; or 17 (ii) [(B)] June 30, 2012, if that total is less than the total 18 under (i) of this subparagraph [(A) OF THIS PARAGRAPH], and the 19 employer is a municipality in which the population decreased by more 20 than 25 percent between 2000 and 2010, according to the decennial 21 census conducted by the United States Bureau of the Census; or 22 (2) an amount calculated by applying a rate established by the 23 board under AS 37.10.220 to the total of all base salaries paid by the employer to 24 active members of the system; the rate must be at least 12 percent and be 25 sufficient to pay the actuarially determined employer normal cost, all 26 contributions required under AS 39.30.370 and AS 39.35.750, and past service 27 cost for members of the system. 28 * Sec. 63. AS 39.35.255 is amended by adding a new subsection to read: 29 (j) If the legislature appropriates funds for the purpose of decreasing an 30 employer's contribution, the employer's contribution under (a) of this section shall 31 decrease by that amount.
01 * Sec. 64. AS 39.35 is amended by adding a new section to read: 02 Sec. 39.35.281. Contributions for employee who first became a member 03 after June 30, 2006. Contributions made by an employer under AS 39.35.255 and 04 39.35.280 for an employee who first became a member after June 30, 2006, other than 05 contributions separately computed for medical benefits under AS 14.25.087, and the 06 employee's contribution account must be deposited in a sub-trust of the pension fund 07 established by the board. 08 * Sec. 65. AS 39.35.282 is amended to read: 09 Sec. 39.35.282. Contributions for medical benefits. Contributions made by 10 an employer under AS 39.35.255 and 39.35.280 must [SHALL] be separately 11 computed for benefits provided by AS 39.35.535, 39.35.537, and AS 39.30.400. The 12 contributions computed for benefits provided under 13 (1) AS 39.35.535 must [AND SHALL] be deposited in the Alaska 14 retiree health care trust established under AS 39.30.097(a); 15 (2) AS 39.35.537 must be deposited in the Alaska retiree health 16 care trust established under AS 39.30.097(b); and 17 (3) AS 39.30.400 must be deposited in the teachers' and public 18 employees' retiree health reimbursement arrangement plan trust fund 19 established under AS 39.30.340. 20 * Sec. 66. AS 39.35.340(i) is amended to read: 21 (i) Notwithstanding (d) of this section, a member who retires as a peace officer 22 or firefighter may elect to use five or fewer years of credited service granted under this 23 section in computing years of credited service under AS 39.35.535(c) or 39.35.537. 24 When eligibility for credited service for military service has been established and an 25 election under this subsection has been made, an indebtedness in addition to the 26 indebtedness determined under (b) of this section shall be determined for each year of 27 military service used under this subsection, in an amount based on the increase, if any, 28 in the present value of future benefits for that year as determined by the department. 29 * Sec. 67. AS 39.35.345(d) is amended to read: 30 (d) An employee may choose whether the credited service granted under this 31 section is used to satisfy the credited service requirements for normal retirement under
01 AS 39.35.370(a)(1)(B) or (C), 39.35.370(a)(2)(B), (C), or (D), [AS 39.35.370(a)(2) 02 OR (3)] or 39.35.385(f) or is only used for the calculation of benefits. An election 03 under this subsection is irrevocable and applies to all temporary credited service that 04 the employee has accrued when the employee retires. An election under this 05 subsection does not change the date that an employee is considered to have 06 commenced participation in the plan under AS 39.35.120. 07 * Sec. 68. AS 39.35.370(a) is amended to read: 08 (a) Subject to AS 39.35.450, a terminated employee 09 (1) who first became a member before July 1, 2006, is eligible for a 10 normal retirement benefit 11 (A) [(1)] at age 60 with at least five years of credited service; 12 (B) [(2)] with at least 20 years of credited service as a peace 13 officer or firefighter; or 14 (C) [(3)] with at least 30 years of credited service; 15 (2) who first became a member after June 30, 2006, is eligible for a 16 normal retirement benefit 17 (A) at age 60 with at least five years of credited service; 18 (B) at age 55 with at least 20 years of credited service as a 19 peace officer or firefighter; 20 (C) at age 50 with at least 25 years of credited service as a 21 peace officer or firefighter; or 22 (D) with at least 30 years of credited service [FOR ALL 23 OTHER EMPLOYEES]. 24 * Sec. 69. AS 39.35.381(e) is amended to read: 25 (e) A person who retires under this section is not entitled to disability or death 26 benefits under AS 39.35.400 - 39.35.440, a minimum benefit under AS 39.35.485, or 27 to medical benefits under AS 39.35.535 or 39.35.537. Service earned under this 28 section may not be used for vesting under AS 39.35.095 - 39.35.680. 29 * Sec. 70. AS 39.35.475(b) is amended to read: 30 (b) Subject to (g) and (h) of this section, the [THE] increase in benefit 31 payments applies to total benefit payments except for the cost-of-living allowance
01 under AS 39.35.480. The amount of the increase is a percentage of the current benefit 02 equal to 03 (1) the lesser of 75 percent of the increase in the cost of living in the 04 preceding calendar year or nine percent, for recipients who on July 1 are at least 65 05 years old and for members receiving disability benefits; and 06 (2) the lesser of 50 percent of the increase in the cost of living in the 07 preceding calendar year or six percent, for recipients who on July 1 are at least 60 but 08 less than 65 years old or for recipients who are less than 60 years old on July 1 but 09 who have received benefits from the plan for at least five years. 10 * Sec. 71. AS 39.35.475 is amended by adding new subsections to read: 11 (g) Subject to (h) of this section, the amount of an increase for members who 12 first became members of the plan after June 30, 2006, and do not meet the eligibility 13 requirements for a permanent fund dividend in effect on July 1, 2024, under 14 AS 43.23.005(a) is equal to one-half of the applicable percentage under (b) of this 15 section. 16 (h) If the board determines that the portion of the liability of the plan that is 17 attributable to all members who first became members of the plan after June 30, 2006, 18 is funded below 90 percent, the board may reduce the amount of the increase 19 determined under (b) or (g) of this section that is payable to a member who first 20 became a member after June 30, 2006. At any time, the board may terminate a 21 reduction made under this subsection. 22 * Sec. 72. AS 39.35.480(a) is amended to read: 23 (a) While residing in the state, a person who first became a member of the 24 plan before July 1, 2006, who is receiving a benefit under AS 39.35.095 - 39.35.680, 25 and who is 65 years of age or older or a person who first became a member of the 26 plan before July 1, 2006, and who is receiving a disability benefit is entitled to 27 receive a monthly cost-of-living allowance in addition to the basic benefit. The 28 amount of this allowance shall be $50 or 10 percent of the basic benefit, whichever is 29 greater. 30 * Sec. 73. AS 39.35.535(a) is amended to read: 31 (a) Except as provided in (d) and (g) of this section, the following persons are
01 entitled to major medical insurance coverage under this section: 02 (1) for employees first hired before July 1, 1986, 03 (A) an employee who is receiving a monthly benefit from the 04 plan and who has elected coverage; 05 (B) the spouse and dependent children of the employee 06 described in (A) of this paragraph; 07 (C) the surviving spouse of a deceased employee who is 08 receiving a monthly benefit from the plan and who has elected coverage; 09 (D) the dependent children of a deceased employee who are 10 dependent on the surviving spouse described in (C) of this paragraph; 11 (2) for members first hired [ON OR] after June 30 [JULY 1], 1986, 12 (A) an employee who is receiving a monthly benefit from the 13 plan and who has elected coverage for the employee; 14 (B) the spouse of the employee described in (A) of this 15 paragraph if the employee elected coverage for the spouse; 16 (C) the dependent children of the employee described in (A) of 17 this paragraph if the employee elected coverage for the dependent children; 18 (D) the surviving spouse of a deceased employee who is 19 receiving a monthly benefit from the plan and who has elected coverage; 20 (E) the dependent children of a deceased employee who are 21 dependent on the surviving spouse described in (D) of this paragraph if the 22 surviving spouse has elected coverage for the dependent children. 23 * Sec. 74. AS 39.35.535(c) is amended to read: 24 (c) A benefit recipient who became a member before July 1, 2006, or the 25 surviving spouse of the member may elect major medical insurance coverage in 26 accordance with regulations and under the following conditions: 27 (1) a person, other than a disabled member or a disabled member who 28 is appointed to normal retirement, shall [MUST] pay an amount equal to the full 29 monthly group premium for retiree major medical insurance coverage if the person is 30 (A) younger than 60 years of age and has less than 31 (i) 25 years of credited service as a peace officer under
01 AS 39.35.360 and 39.35.370; or 02 (ii) 30 years of credited service under AS 39.35.360 and 03 39.35.370 that is not service as a peace officer; or 04 (B) of any age and has less than 10 years of credited service; 05 (2) a person is not required to make premium payments for retiree 06 major medical coverage if the person 07 (A) is a disabled member; 08 (B) is a disabled member who is appointed to normal 09 retirement; 10 (C) is 60 years of age or older and has at least 10 years of 11 credited service; or 12 (D) has at least 13 (i) 25 years of credited service as a peace officer under 14 AS 39.35.360 and 39.35.370; or 15 (ii) 30 years of credited service under AS 39.35.360 and 16 39.35.370 not as a peace officer. 17 * Sec. 75. AS 39.35.535 is amended by adding a new subsection to read: 18 (g) A benefit recipient who first became a member after June 30, 2006, or a 19 surviving spouse who is eligible under AS 39.35.537(b), is not eligible for benefits 20 under this section but may elect medical benefits under AS 39.35.537. 21 * Sec. 76. AS 39.35 is amended by adding a new section to read: 22 Sec. 39.35.537. Medical benefit; eligibility of employees first hired after 23 June 30, 2006; surviving spouses and dependents. (a) An employee who first 24 became a member of the plan after June 30, 2006, receives a monthly benefit from the 25 plan, retired directly from the plan, and has elected benefits under this section is 26 entitled to medical benefits under this section. A member who applies for medical 27 benefits under this section shall apply on the forms and in the manner prescribed by 28 the administrator. A member is eligible to retire from the plan if the member has been 29 an active member for at least 12 months before application for retirement and the 30 member 31 (1) is at least
01 (A) 50 years of age and has at least 25 years of membership 02 service as a peace officer or firefighter; 03 (B) 55 years of age and has at least 20 years of membership 04 service as a peace officer or firefighter; 05 (2) has at least 30 years of membership; or 06 (3) reaches the age set for Medicare eligibility and has at least 10 years 07 of membership service. 08 (b) The member's surviving spouse is eligible to elect medical benefits if the 09 member had retired or was eligible for retirement and medical benefits at the time of 10 the member's death. 11 (c) The medical benefits available to eligible persons are access to the retiree 12 major medical insurance plan and access to the health reimbursement arrangement 13 plan under AS 39.30.300. Access to the retiree major medical insurance plan means 14 that an eligible person may not be denied insurance coverage except for failure to pay 15 the required premium. 16 (d) Retiree major medical insurance plan coverage elected by an eligible 17 member under this section covers the eligible member, the spouse of the eligible 18 member, and the dependent children of the eligible member. 19 (e) Retiree major medical insurance plan coverage elected by a surviving 20 spouse of an eligible member under this section covers the surviving spouse and the 21 dependent children of the eligible member who are dependent on the surviving spouse. 22 (f) Participation in the retiree major medical insurance plan is not required in 23 order to participate in the health reimbursement arrangement plan. 24 (g) A person eligible for medical benefits under this section is not required to 25 participate in the health reimbursement arrangement plan in order to participate in the 26 retiree major medical insurance plan. 27 (h) A person who is eligible for medical benefits under this section must make 28 the irrevocable election to participate or not participate in the retiree major medical 29 insurance plan on or before the date the person reaches 70 1/2 years of age or when the 30 person applies for retirement and medical benefits, whichever is later. 31 (i) Major medical insurance coverage takes effect on the first day of the month
01 following the date of the administrator's approval of the election and stops when the 02 person who elects coverage dies or fails to make a required premium payment. 03 (j) The coverage for persons 65 years of age or older is the same as that 04 available for persons under 65 years of age. The benefits payable to those persons 65 05 years of age or older supplement any benefits provided under the federal old age, 06 survivors, and disability insurance program. 07 (k) The medical and optional insurance premiums owed by the person who 08 elects coverage may be deducted from the health reimbursement arrangement plan. If 09 the amount of the health reimbursement arrangement plan becomes insufficient to pay 10 the premiums, the person who elects coverage under (a) of this section shall pay the 11 premiums directly. 12 (l) The cost of premiums for retiree major medical insurance coverage under 13 this section for an eligible member or surviving spouse who is 14 (1) not eligible for Medicare is an amount equal to the full monthly 15 group premiums for retiree major medical insurance coverage; 16 (2) eligible for Medicare is the following percentage of the premium 17 amounts established for retirees who are eligible for Medicare: 18 (A) 30 percent if the member had 10 or more, but less than 15, 19 years of service; 20 (B) 25 percent if the member had 15 or more, but less than 20, 21 years of service; 22 (C) 20 percent if the member had 20 or more, but less than 25, 23 years of service; 24 (D) 15 percent if the member had 25 or more, but less than 30, 25 years of service; 26 (E) 10 percent if the member had 30 or more years of service. 27 (m) The eligibility for retiree major medical insurance coverage for an 28 alternate payee under a qualified domestic relations order shall be determined based 29 on the eligibility of the member to elect coverage. The alternate payee shall pay the 30 full monthly premium for retiree major medical insurance coverage. 31 (n) The administrator shall
01 (1) inform a person entitled to retiree major medical insurance 02 coverage under this section in writing 03 (A) that the health insurance coverage available to retired 04 members may be different from the health insurance coverage provided to 05 employees; 06 (B) of time limits for selecting optional health insurance 07 coverage; and 08 (C) whether the election is irrevocable; and 09 (2) require that a person entitled to retiree major medical insurance 10 coverage under this section indicate in writing on a form provided by the administrator 11 whether the person has chosen to receive optional health insurance coverage. 12 (o) The monthly group premiums for retiree major medical insurance coverage 13 under this section are established by the administrator in accordance with 14 AS 39.30.095. Nothing in this chapter guarantees a person who elects coverage under 15 (a) of this section a monthly group premium rate for retiree major medical insurance 16 coverage other than the premium in effect for the month in which the premium is due 17 for coverage for that month. 18 (p) In this section, "health reimbursement arrangement plan" means the State 19 of Alaska Teachers' and Public Employees' Retiree Health Reimbursement 20 Arrangement Plan established in AS 39.30.300. 21 * Sec. 77. AS 39.35.610(a) is amended to read: 22 (a) The contributions of an employer and the contributions of its employees 23 shall be transmitted to the administrator as soon as practicable after the close of the 24 payroll period for which the contributions are made. Subject to (c) of this section, if an 25 employer is delinquent in transferring the contributions for more than 15 days, interest 26 shall be assessed on the outstanding contributions at [ONE AND ONE-HALF TIMES] 27 the most recent actuarially determined rate of earnings for the retirement plan from the 28 date that the contributions were originally due. 29 * Sec. 78. AS 39.35.680(4) is amended to read: 30 (4) "average monthly compensation" means the result obtained by 31 dividing the compensation earned by an employee during a considered period by the
01 number of months, including fractional months, for which compensation was earned; 02 an employee must have at least 115 days of credited service in the last payroll year in 03 order for that year to be used as part of the consecutive payroll years; the considered 04 period consists of 05 (A) for employees first hired before July 1, 1996, the three 06 consecutive payroll years during the period of credited service that yield the 07 highest average; 08 (B) for employees first hired [ON OR] after June 30 [JULY 1], 09 1996, the five consecutive payroll years during the period of credited service 10 that yield the highest average; 11 (C) if the employee does not have the number of consecutive 12 payroll years required by (A) or (B) of this paragraph, the actual number of 13 months, including fractional months, that the employee worked; 14 (D) for an employee who has made an election under 15 AS 39.35.300(c) or 39.35.310(c), the actual number of months, including 16 fractional months, that the employee worked; 17 (E) for a peace officer or firefighter hired before July 1, 2006 18 [AT ANY TIME], the three consecutive payroll years during the period of 19 credited service that yield the highest average; 20 * Sec. 79. AS 39.35.680(18) is amended to read: 21 (18) "employer" means 22 (A) the State of Alaska; 23 (B) a political subdivision or public organization of the state 24 that participates in the plan based on a resolution to participate in the plan that 25 was approved by the administrator [ON OR BEFORE JULY 1, 2006]; or 26 (C) a political subdivision or public organization of the state 27 that, as a result of consolidation or reorganization [THAT OCCURS ON OR 28 AFTER JULY 1, 2006], assumes liability under the plan of a political 29 subdivision or public organization described in (B) of this paragraph; 30 * Sec. 80. AS 39.35.680 is amended by adding a new paragraph to read: 31 (44) "first became a member after June 30, 2006," includes a member
01 who elected under former AS 39.35.940 to participate in the plan under AS 39.35.700 02 - 39.35.990 and who elects to participate in the defined benefit retirement plan under 03 AS 39.35.095 - 39.35.680. 04 * Sec. 81. AS 39.35.700 is amended to read: 05 Sec. 39.35.700. Applicability of AS 39.35.700 - 39.35.990. The provisions of 06 AS 39.35.700 - 39.35.990 apply only to 07 (1) members first hired [ON OR] after June 30, 2006, and before 08 July 1, 2024, who do not participate in a defined benefit retirement plan under 09 AS 14.25.009 - 14.25.220 or AS 39.35.095 - 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 and do not elect to participate in the defined benefit retirement plan 16 under AS 39.35.095 - 39.35.680. 17 * Sec. 82. AS 39.35.700 is amended by adding a new subsection to read: 18 (b) A public organization as defined in AS 39.35.680 or a municipality or 19 other political subdivision of the state that participates in the plan shall also participate 20 in the defined benefit retirement plan under AS 39.35.095 - 39.35.680. 21 * Sec. 83. AS 39.35.720 is amended to read: 22 Sec. 39.35.720. Membership. An employee who becomes a member [ON OR] 23 after June 30, 2006, and before July 1, 2024, who does not participate in a defined 24 benefit retirement plan under AS 14.25.009 - 14.25.220 or AS 39.35.095 - 25 39.35.680 [JULY 1, 2006,] shall participate in the plan set out in AS 39.35.700 - 26 39.35.990. 27 * Sec. 84. AS 39.35.895(a) is amended to read: 28 (a) Subject to art. XII, sec. 7, Constitution of the State of Alaska, the 29 [THE] state may [HAS THE RIGHT TO] amend the plan at any time and from time to 30 time, in whole or in part, including the right to make retroactive amendments referred 31 to in 26 U.S.C. 401(b).
01 * Sec. 85. AS 39.35.895(b) is amended to read: 02 (b) The plan administrator may not modify or amend the plan retroactively [IN 03 SUCH A MANNER AS] to reduce [THE] benefits accrued by a [OF ANY] member 04 [ACCRUED TO DATE UNDER THE PLAN BY REASON OF CONTRIBUTIONS 05 MADE] before the modification or amendment except to the extent that the reduction 06 is permitted by art. XII, sec. 7, Constitution of the State of Alaska, and the Internal 07 Revenue Code. 08 * Sec. 86. AS 39.35.895(c) is amended to read: 09 (c) Subject to art. XII, sec. 7, Constitution of the State of Alaska, and the 10 Internal Revenue Code, the [THE] state may [, IN ITS DISCRETION,] terminate the 11 plan in whole or part [AT ANY TIME] without liability for the termination. If the plan 12 is terminated, all investments at the time of termination remain in force until all 13 individual accounts have been completely distributed under the plan. After [, AND, 14 AFTER] all plan liabilities are satisfied, excess assets of the plan revert to the 15 employer. 16 * Sec. 87. AS 39.35.895(d) is repealed and reenacted to read: 17 (d) Within one year after determining that a contribution to the plan by an 18 employer was the result of a mistake of fact, the administrator shall return the 19 contribution to the employer. 20 * Sec. 88. AS 14.25.012(c), 14.25.061, 14.25.540; and AS 39.35.940 are repealed. 21 * Sec. 89. The uncodified law of the State of Alaska is amended by adding a new section to 22 read: 23 TRANSITION: RETIREMENT PLAN ELECTION. (a) A teacher who was first hired 24 after June 30, 2006, and before July 1, 2024, and who, on July 1, 2024, is a member of the 25 defined contribution retirement plan of the teachers' retirement system may, before 26 November 1, 2024, make a one-time election to participate in the defined benefit retirement 27 plan and to transfer all contributions that have been made or should be made to the defined 28 contribution retirement plan for service the member completes before the effective date of the 29 member's participation in the defined benefit retirement plan. The transferred contributions 30 shall be used to purchase credited service in the defined benefit retirement plan on an actuarial 31 equivalent basis determined by the Alaska Retirement Management Board established under
01 AS 37.10.210. The provisions of AS 14.25.044 apply to an election made under this 02 subsection. 03 (b) An employee who was first hired after June 30, 2006, and before July 1, 2024, and 04 who, on July 1, 2024, is a member of the defined contribution retirement plan of the public 05 employees' retirement system may, before November 1, 2024, make a one-time election to 06 participate in the defined benefit retirement plan under AS 39.35.095 - 39.35.680 and to 07 transfer all contributions that have been made or should be made to the defined contribution 08 retirement plan for service the member completes before the effective date of the member's 09 participation in the defined benefit retirement plan. The transferred contributions shall be used 10 to purchase credited service in the defined benefit retirement plan on an actuarial equivalent 11 basis determined by the Alaska Retirement Management Board established under 12 AS 37.10.210. The provisions of AS 39.35.159 apply to an election made under this 13 subsection. 14 * Sec. 90. The uncodified law of the State of Alaska is amended by adding a new section to 15 read: 16 ADOPTION OF REGULATIONS. (a) The Alaska Retirement Management Board 17 may adopt regulations necessary to implement secs. 37 and 38 of this Act. Regulations 18 adopted by the Alaska Retirement Management Board under this Act relate to the internal 19 management of a state agency and are not subject to AS 44.62 (Administrative Procedure Act) 20 under AS 37.10.240. 21 (b) The commissioner of administration may adopt regulations necessary to 22 implement secs. 1 - 36 and 39 - 89 of this Act. Regulations adopted by the commissioner of 23 administration under this Act relate to the internal management of a state agency and are not 24 subject to AS 44.62 (Administrative Procedure Act) under AS 14.25.005, AS 39.30.098, and 25 AS 39.35.005. 26 (c) Regulations adopted under this section may not take effect before the effective 27 date of the law being implemented by the regulation. 28 * Sec. 91. Section 90 of this Act takes effect immediately under AS 01.10.070(c). 29 * Sec. 92. Except as provided in sec. 91 of this Act, this Act takes effect July 1, 2024.