HB 378: "An Act relating to the Public Employees' Retirement System of Alaska and the teachers' retirement system; and providing for an effective date."
00 HOUSE BILL NO. 378 01 "An Act relating to the Public Employees' Retirement System of Alaska and the 02 teachers' retirement system; and providing for an effective date." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 14.25.009 is amended to read: 05 Sec. 14.25.009. Applicability of AS 14.25.009 - 14.25.220. The provisions of 06 AS 14.25.009 - 14.25.220 apply only to members first hired before July 1, 2006, and 07 teachers who are also members of the public employees' defined benefit 08 retirement plan under AS 39.35.095 - 39.35.680 who do not elect under 09 AS 14.25.540 to participate in the defined contribution retirement plan under 10 AS 14.25.310 - 14.25.590. 11 * Sec. 2. AS 14.25.065(b) is amended to read: 12 (b) The contributions of employers under AS 14.25.070 must be transmitted to 13 the plan for deposit in the retirement fund and the Alaska retiree health care trust at the 14 close of each pay period. If the contributions are not submitted within the prescribed
01 time limit, interest must be assessed on the outstanding contributions for a period not 02 to exceed six months at a rate equal to [ONE AND ONE-HALF TIMES] the most 03 recent actuarially determined rate of earnings for the plan from the date that 04 contributions were originally due. Amounts due from an employer and interest as 05 prescribed in this section may be claimed by the administrator from any agency of the 06 state or political subdivision that has in its possession funds of the employer or that is 07 authorized to disburse funds to the employer that are not restricted by statute or 08 appropriation to a specific purpose. The amount claimed shall be certified by the 09 administrator as sufficient to pay the contributions and interest due from the employer. 10 The amount claimed shall be submitted to the administrator for deposit in the 11 retirement fund and the Alaska retiree health care trust. 12 * Sec. 3. AS 14.25.070(a) is amended to read: 13 (a) Each employer shall contribute to the system every payroll period the 14 lesser of 15 (1) an amount calculated by applying a rate of 12.56 percent to the 16 total of all base salaries paid by the employer to active members of the system and to 17 members who are retired from the plan and reemployed under AS 14.20.136, 18 including any adjustments to contributions required by AS 14.25.173(a); or 19 (2) an amount adopted by the board under AS 37.10.220. 20 * Sec. 4. AS 14.25.310 is amended to read: 21 Sec. 14.25.310. Applicability of AS 14.25.310 - 14.25.590. The provisions of 22 AS 14.25.310 - 14.25.590 apply only to teachers who first become members on or 23 after July 1, 2006, to members who are employed by employers that do not participate 24 in the defined benefit retirement plan established under AS 14.25.009 - 14.25.220, to 25 teachers who are also members of the defined benefit retirement plan under 26 AS 39.35.095 - 39.35.680 and elect to participate in this plan [TO FORMER 27 MEMBERS UNDER AS 14.25.220], or to members who transfer into the defined 28 contribution retirement plan under AS 14.25.540. 29 * Sec. 5. AS 14.25.330(a) is amended to read: 30 (a) A teacher who first becomes a member on or after July 1, 2006, and who 31 is not also a member of the defined benefit retirement plan under AS 39.35.095 -
01 39.35.680 shall participate in the system [PLAN] as a member of the defined 02 contribution retirement plan. 03 * Sec. 6. AS 14.25.470 is amended by adding a new subsection to read: 04 (h) Notwithstanding (a) and (g) of this section, a disabled employee who is 05 eligible to obtain a disability benefit under AS 14.25.483 or 14.25.485 is eligible to 06 obtain retiree major medical insurance benefits under AS 14.25.480. 07 * Sec. 7. AS 14.25.480(g) is amended to read: 08 (g) Except as provided under (l) of this section, the [THE] cost of 09 premiums for retiree major medical insurance coverage for an eligible member or 10 surviving spouse who is 11 (1) not eligible for Medicare is an amount equal to the full monthly 12 group premiums for retiree major medical insurance coverage; 13 (2) eligible for Medicare is the following percentage of the premium 14 amounts established for retirees who are eligible for Medicare: 15 (A) 30 percent if the member had 10 or more, but less than 15, 16 years of service; 17 (B) 25 percent if the member had 15 or more, but less than 20, 18 years of service; 19 (C) 20 percent if the member had 20 or more, but less than 25, 20 years of service; 21 (D) 15 percent if the member had 25 or more, but less than 30, 22 years of service; 23 (E) 10 percent if the member had 30 or more years of service. 24 * Sec. 8. AS 14.25.480 is amended by adding a new subsection to read: 25 (l) An eligible member or surviving spouse who receives a disability benefit as 26 provided under AS 14.25.483 or 14.25.485 and is not eligible for Medicare is not 27 required to pay a premium for retiree major medical insurance coverage. 28 * Sec. 9. AS 14.25 is amended by adding a new section to read: 29 Sec. 14.25.483. Nonoccupational disability benefits. (a) A member who has 30 10 or more years of credited service is eligible for a nonoccupational disability benefit 31 if the member's employment is terminated because of a total and apparently permanent
01 disability caused by a nonoccupational injury or illness, and the disability occurs 02 before the member's normal retirement age. 03 (b) The monthly amount of a nonoccupational disability benefit is 40 percent 04 of the disabled member's gross monthly compensation for the last full month the 05 member was employed before termination because of disability. 06 (c) While a member is receiving a nonoccupational disability benefit, the 07 employer shall contribute monthly 08 (1) to the member's individual account under AS 14.25.340; and 09 (2) to the trust account as provided under AS 14.25.350(e) in an 10 amount calculated by using the member's gross compensation as determined under (b) 11 of this section, without a deduction for a disability benefit. 12 (d) A member receiving a nonoccupational disability benefit may not elect 13 distribution under AS 14.25.410 of all or a portion of the member's individual account. 14 (e) A nonoccupational disability benefit terminates the last day of the month in 15 which the member 16 (1) dies; 17 (2) reaches normal retirement age; or 18 (3) is no longer totally and permanently disabled. 19 (f) When a member reaches normal retirement age, the member's retirement 20 eligibility and benefits shall be determined as if the member was an active member of 21 the plan while receiving the nonoccupational disability benefit. In this subsection, 22 "active member" has the meaning given in AS 14.25.220. 23 * Sec. 10. AS 39.35.120(b) is amended to read: 24 (b) Inclusion in the plan is a condition of employment for an employee except 25 as otherwise provided for 26 (1) an elected official; 27 (2) [REPEALED 28 (3)] an employee of the university who participates in a university 29 retirement program under AS 14.40.661 - 14.40.799; 30 (3) an employee who is a member of a defined contribution 31 retirement plan under AS 14.25.310 - 14.25.590 or AS 39.35.700 - 39.35.990.
01 * Sec. 11. AS 39.35.255(a) is amended to read: 02 (a) Each employer, except as provided in (h) of this section, shall contribute to 03 the system every payroll period the lesser of 04 (1) an amount calculated by applying a rate of 22 percent of the greater 05 of 06 (A) the total of all base salaries [(1)] paid by the employer to 07 employees who are active members of the system, including any adjustments 08 to contributions required by AS 39.35.520; or 09 (B) an amount calculated by applying a rate of 75 percent 10 of the annual average total of all base salaries [(2)] paid by the employer 11 over the immediately preceding five fiscal years to employees who were 12 active members of the system during that [THE CORRESPONDING 13 PAYROLL] period, as determined by the board; or 14 (2) an amount adopted by the board under AS 37.10.220 [FOR 15 THE FISCAL YEAR ENDING 16 (A) JUNE 30, 2008; OR 17 (B) JUNE 30, 2012, IF THAT TOTAL IS LESS THAN THE 18 TOTAL UNDER (A) OF THIS PARAGRAPH, AND THE EMPLOYER IS A 19 MUNICIPALITY IN WHICH THE POPULATION DECREASED BY 20 MORE THAN 25 PERCENT BETWEEN 2000 AND 2010, ACCORDING 21 TO THE DECENNIAL CENSUS CONDUCTED BY THE UNITED STATES 22 BUREAU OF THE CENSUS]. 23 * Sec. 12. AS 39.35.300 is amended by adding a new subsection to read: 24 (f) Notwithstanding AS 39.35.330 and (b) of this section, a seasonal employee 25 shall receive one year of credited service for each period of 12 consecutive months in 26 which the employee works not less than 1,560 hours. In this subsection, "seasonal 27 employee" does not include a temporary employee of the legislature. 28 * Sec. 13. AS 39.35.610(a) is amended to read: 29 (a) The contributions of an employer and the contributions of its employees 30 shall be transmitted to the administrator as soon as practicable after the close of the 31 payroll period for which the contributions are made. Subject to (c) of this section, if an
01 employer is delinquent in transferring the contributions for more than 15 days, interest 02 shall be assessed on the outstanding contributions for a period not to exceed six 03 months at a rate equal to [ONE AND ONE-HALF TIMES] the most recent 04 actuarially determined rate of earnings for the retirement plan from the date that the 05 contributions were originally due. 06 * Sec. 14. AS 39.35.680(22) is amended to read: 07 (22) "member" or "employee" 08 (A) means a person eligible to participate in the plan and who 09 is covered by the plan; 10 (B) includes 11 (i) an active member; 12 (ii) an inactive member; 13 (iii) a vested member; 14 (iv) a deferred vested member; 15 (v) a nonvested member; 16 (vi) a disabled member; 17 (vii) a retired member; 18 (viii) an elected public officer under AS 39.35.381; 19 (C) does not include 20 (i) former members; 21 (ii) persons compensated on a contractual or fee basis; 22 (iii) casual or emergency workers or nonpermanent 23 employees as defined in AS 39.25.200; 24 (iv) persons covered by the Alaska Teachers' 25 Retirement System except as provided under AS 14.25.009, 26 AS 39.35.131 and 39.35.381, or persons covered by a university 27 retirement program; 28 (v) employees of the division of marine transportation 29 engaged in operating the state ferry system who are covered by a union 30 or group retirement system to which the state makes contributions; 31 (vi) justices of the supreme court or judges of the court
01 of appeals or of the superior or district courts of Alaska; 02 (vii) the administrative director of the Alaska Court 03 System appointed under art. IV, sec. 16 of the state constitution unless 04 the director becomes a member under AS 39.35.158; 05 (viii) members of the elected public officers' retirement 06 system (former AS 39.37); and 07 (ix) contractual employees of the legislative branch of 08 state government under AS 24.10.060(f); 09 (D) may include employees of the division of marine 10 transportation excluded under (C)(v) of this paragraph if [PROVIDED THAT] 11 (i) the State of Alaska formally agrees to their inclusion 12 through the process of collective bargaining; and 13 (ii) no collective bargaining agreement has the effect of 14 obligating contributions made by the state under AS 39.30.150 in the 15 event the state resumes participation in the federal social security 16 system; 17 * Sec. 15. AS 39.35.870 is amended by adding a new subsection to read: 18 (h) Notwithstanding (a) and (g) of this section, a disabled employee who is 19 eligible to obtain a disability benefit under AS 39.35.888 or 39.35.890 is eligible to 20 obtain retiree major medical insurance benefits under AS 39.35.880. 21 * Sec. 16. AS 39.35.880(g) is amended to read: 22 (g) Except as provided under (l) of this section, the [THE] cost of 23 premiums for retiree major medical insurance coverage for an eligible member or 24 surviving spouse who is 25 (1) not eligible for Medicare is an amount equal to the full monthly 26 group premiums for retiree major medical insurance coverage; 27 (2) eligible for Medicare is the following percentage of the premium 28 amounts established for retirees who are eligible for Medicare: 29 (A) 30 percent if the member had 10 or more, but less than 15, 30 years of service; 31 (B) 25 percent if the member had 15 or more, but less than 20,
01 years of service; 02 (C) 20 percent if the member had 20 or more, but less than 25, 03 years of service; 04 (D) 15 percent if the member had 25 or more, but less than 30, 05 years of service; 06 (E) 10 percent if the member had 30 or more years of service. 07 * Sec. 17. AS 39.35.880 is amended by adding a new subsection to read: 08 (l) An eligible member or surviving spouse who receives a disability benefit as 09 provided under AS 39.35.888, 39.35.890, or 39.35.891 and is not eligible for Medicare 10 is not required to pay a premium for retiree major medical insurance coverage. 11 * Sec. 18. AS 39.35 is amended by adding a new section to read: 12 Sec. 39.35.888. Nonoccupational disability benefits. (a) A member who has 13 10 or more years of credited service is eligible for a nonoccupational disability benefit 14 if the member's employment is terminated because of a total and apparently permanent 15 disability caused by a nonoccupational injury or illness, and the disability occurs 16 before the member's normal retirement age. 17 (b) The monthly amount of a nonoccupational disability benefit is 40 percent 18 of the disabled member's gross compensation for the last full month the member was 19 employed. 20 (c) While a member is receiving a nonoccupational disability benefit, the 21 employer shall contribute monthly 22 (1) to the member's individual account under AS 39.35.730; and 23 (2) to the trust account as provided under AS 39.35.750(e) in an 24 amount calculated by using the member's monthly compensation for the last full 25 month the member was employed before termination because of disability. 26 (d) A member receiving a nonoccupational disability benefit may not elect 27 distribution under AS 39.35.810 of all or a portion of the member's individual account. 28 (e) A nonoccupational disability benefit terminates the last day of the month in 29 which the employee 30 (1) dies; 31 (2) reaches normal retirement age; or
01 (3) is no longer totally and permanently disabled. 02 (f) When a member reaches normal retirement age, the member's retirement 03 eligibility and benefits shall be determined as if the employee was an active member 04 of the plan while receiving the nonoccupational disability benefit. In this subsection, 05 "active member" has the meaning given in AS 39.35.680. 06 * Sec. 19. The uncodified law of the State of Alaska is amended by adding a new section to 07 read: 08 TRANSITION: RETIREMENT PLAN ELECTION. A teacher who became a member 09 of the defined contribution retirement plan under AS 14.25.310 - 14.25.590 after June 30, 10 2006, and before the effective date of this Act, and who, on the effective date of this Act, is a 11 member employed by an employer in that defined contribution retirement plan and is also a 12 member of the defined benefit retirement plan under AS 39.35.095 - 39.35.680 may, within 13 180 days after the effective date of this Act, make a one-time election to participate in the 14 defined benefit retirement plan under AS 14.25.009 - 14.25.220 and to transfer all 15 contributions that have been made or should be made to the defined contribution retirement 16 plan for service the member completes before the effective date of the member's participation 17 in the defined benefit retirement plan. The transferred contributions shall be used to purchase 18 credited service in the defined benefit retirement plan under AS 14.25.009 - 14.25.220 on an 19 actuarial equivalent basis determined by the Alaska Retirement Management Board 20 established under AS 37.10.210. The provisions of AS 14.25.044 apply to an election made 21 under this subsection. 22 * Sec. 20. This Act takes effect July 1, 2026.