Alaska 2023-2024 Regular Session

Alaska Senate Bill SB11 Compare Versions

Only one version of the bill is available at this time.

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11	11	SENATE BILL NO. 11
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13	13	IN THE LEGISLATURE OF THE STATE OF ALASKA
14	14
15	15	THIRTY-THIRD LEGISLATURE - FIRST SESSION
16	16
17	17	BY SENATOR KIEHL
18	18
19	19	Introduced: 1/9/23
20	20	Referred: Prefiled
21	21
22	22
23	23	A BILL
24	24
25	25	FOR AN ACT ENTITLED
26	26
27	27	"An Act relating to restoration of tenure for certain disabled individuals; relating to the 1
28	28	Public Employees' Retirement System of Alaska and the teachers' retirement system; 2
29	29	providing certain employees an opportunity to choose between the defined benefit and 3
30	30	defined contribution plans of the Public Employees' Retirement System of Alaska and 4
31	31	the teachers' retirement system; and providing for an effective date." 5
32	32	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 6
33	33	* Section 1. AS 14.20.165 is amended to read: 7
34	34	Sec. 14.20.165. Restoration of tenure rights. A teacher who held tenure 8
35	35	rights and who was retired due to disability under AS 14.25.130, but whose disability 9
36	36	(1) has been removed, and the removal of that disability is certified by a competent 10
37	37	physician following a physical or mental examination, or (2) has been compensated 11
38	38	for by rehabilitation or other appropriate restorative education or training, and that 12
39	39	rehabilitation or restoration to health has been certified by the commissioner of
40	40	13 33-LS0153\A
41	41	SB 11 -2- SB0011A
42	42	New Text Underlined [DELETED TEXT BRACKETED]
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44	44	administration [DIVISION OF VOCATIONAL REHABILITATION OF THE 1
45	45	DEPARTMENT OF LABOR AND WORKFORCE DEVELOPMENT], shall be 2
46	46	restored to full tenure rights in the district from which the teacher was retired, at such 3
47	47	time as an opening for which the teacher is qualified becomes available. 4
48	48	* Sec. 2. AS 14.25.009 is repealed and reenacted to read: 5
49	49	Sec. 14.25.009. Applicability of AS 14.25.009 - 14.25.220. (a) The provisions 6
50	50	of AS 14.25.009 - 14.25.220 apply to teachers who are eligible to be members of the 7
51	51	teachers' retirement system under AS 14.25.009 - 14.25.220 and are not members of 8
52	52	the defined contribution retirement plan under AS 14.25.310 - 14.25.590. 9
53	53	(b) An employer that participates in the plan shall also participate in the 10
54	54	defined contribution retirement plan under AS 14.25.310 - 14.25.590. 11
55	55	* Sec. 3. AS 14.25.040(a) is amended to read: 12
56	56	(a) Unless a teacher or member participates in a university retirement program 13
57	57	under AS 14.40.661 - 14.40.799 or has elected under AS 14.25.330 or former 14
58	58	AS 14.25.540 to participate in the plan established in AS 14.25.310 - 14.25.590, a 15
59	59	teacher or member contracting for service with a participating employer is subject to 16
60	60	AS 14.25.009 - 14.25.220. 17
61	61	* Sec. 4. AS 14.25.050(a) is amended to read: 18
62	62	(a) Except as provided in (c) and (e) of this section, beginning January 1, 19
63	63	1991, each member shall contribute to the plan an amount equal to 8.65 percent of the 20
64	64	member's base salary accrued from July 1 to the following June 30. [THE 21
65	65	EMPLOYER SHALL DEDUCT THE CONTRIBUTION FROM THE MEMBER'S 22
66	66	SALARY AT THE END OF EACH PAYROLL PERIOD, AND THE 23
67	67	CONTRIBUTION SHALL BE CREDITED BY THE PLAN TO THE MEMBER 24
68	68	CONTRIBUTION ACCOUNT. THE CONTRIBUTIONS SHALL BE DEDUCTED 25
69	69	FROM EMPLOYEE COMPENSATION BEFORE THE COMPUTATION OF 26
70	70	APPLICABLE FEDERAL TAXES AND SHALL BE TREATED AS EMPLOYER 27
71	71	CONTRIBUTIONS UNDER 26 U.S.C. 414(h)(2). A MEMBER MAY NOT HAVE 28
72	72	THE OPTION OF MAKING THE PAYROLL DEDUCTION DIRECTLY IN CASH 29
73	73	INSTEAD OF HAVING THE CONTRIBUTION PICKED UP BY THE 30
74	74	EMPLOYER.] 31 33-LS0153\A
75	75	SB0011A -3- SB 11
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78	78	* Sec. 5. AS 14.25.050 is amended by adding new subsections to read: 1
79	79	(e) Except as provided in (c) of this section, a member who first participates in 2
80	80	the plan after June 30, 2006, shall contribute to the plan an amount equal to eight 3
81	81	percent of the employee's base salary accrued from July 1 to the following June 30. 4
82	82	(f) The employer shall deduct the contributions under (a) and (e) of this 5
83	83	section from the member's salary at the end of each payroll period, and the 6
84	84	contributions shall be credited by the plan to the member contribution account. The 7
85	85	contributions shall be deducted from employee compensation before the computation 8
86	86	of applicable federal taxes and shall be treated as employer contributions under 26 9
87	87	U.S.C. 414(h)(2). A member may not have the option of making the payroll deduction 10
88	88	directly in cash instead of having the contribution picked up by the employer. 11
89	89	* Sec. 6. AS 14.25.130(c) is repealed and reenacted to read: 12
90	90	(c) A disabled member receiving a benefit under this section shall undergo a 13
91	91	medical examination as often as the administrator considers advisable, but not more 14
92	92	frequently than once each year. The administrator shall determine the place of the 15
93	93	examination and engage the physician or physicians. If the administrator determines 16
94	94	that the examination indicates that the disabled member is no longer incapacitated 17
95	95	because of a total and apparently permanent occupational disability, the administrator 18
96	96	may not issue further disability benefits to the disabled member. 19
97	97	* Sec. 7. AS 14.25.130 is amended by adding a new subsection to read: 20
98	98	(g) A person who first becomes a member after June 30, 2006, and who is 21
99	99	appointed to disability benefits shall, within 30 days after the date disability benefits 22
100	100	begin, provide the administrator with proof that the member has applied for enrollment 23
101	101	in a vocational rehabilitation program approved by the administrator. Unless the 24
102	102	member demonstrates cause, the benefits terminate at the end of the first month in 25
103	103	which the member 26
104	104	(1) fails to provide the administrator with the required proof of 27
105	105	application for enrollment; 28
106	106	(2) is certified by the administrator as failing to enroll in or cooperate 29
107	107	with a vocational rehabilitation program approved under this subsection; 30
108	108	(3) fails to interview for a job; or 31 33-LS0153\A
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112	112	(4) fails to accept a job offered. 1
113	113	* Sec. 8. AS 14.25.168(d) is amended to read: 2
114	114	(d) A benefit recipient who first became a member before July 1, 2006, or 3
115	115	the benefit recipient's surviving spouse may elect major medical insurance coverage 4
116	116	in accordance with regulations and under the following conditions: 5
117	117	(1) a benefit recipient [PERSON] who has less than 25 years of 6
118	118	membership service and who is younger than 60 years of age must pay an amount 7
119	119	equal to the full monthly group premium for retiree major medical insurance coverage; 8
120	120	(2) a disabled member, a disabled member who is appointed to normal 9
121	121	retirement, a person 60 years of age or older, or a person who has at least 25 years of 10
122	122	membership service is not required to make premium payments. 11
123	123	* Sec. 9. AS 14.25.168 is amended by adding new subsections to read: 12
124	124	(g) A benefit recipient, or the surviving spouse of a benefit recipient, who first 13
125	125	becomes a member after June 30, 2006, may elect major medical insurance coverage 14
126	126	that was in effect before July 1, 2006, in accordance with this section and applicable 15
127	127	regulations and under the following conditions: 16
128	128	(1) if the participating member or surviving spouse is not eligible for 17
129	129	Medicare, the cost of a monthly premium for retiree major medical insurance coverage 18
130	130	elected under this section is equal to the full monthly group premium for retiree major 19
131	131	medical insurance coverage; 20
132	132	(2) if the participating member or surviving spouse is eligible for 21
133	133	Medicare, the cost of a monthly premium for retiree major medical insurance coverage 22
134	134	is a percentage of the full monthly group premium, as follows: 23
135	135	(A) 30 percent if the member had 10 or more, but less than 15, 24
136	136	years of service; 25
137	137	(B) 25 percent if the member had 15 or more, but less than 20, 26
138	138	years of service; 27
139	139	(C) 20 percent if the member had 20 or more, but less than 25, 28
140	140	years of service; 29
141	141	(3) the cost of a monthly premium paid by the participating member or 30
142	142	the surviving spouse for retiree major medical insurance coverage is 31 33-LS0153\A
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146	146	(A) 15 percent of the full monthly group premium if the 1
147	147	participating member has 25 or more, but less than 30, years of service; 2
148	148	(B) 10 percent of the full monthly group premium if the 3
149	149	participating member has 30 or more years of service; 4
150	150	(4) a disabled member or a disabled member who is appointed to 5
151	151	normal retirement is not required to make premium payments. 6
152	152	(h) On or after July 1, 2028, and every five years thereafter, the administrator 7
153	153	shall adjust the percentages under (g)(2) and (3) of this section as needed to maintain, 8
154	154	but not to exceed, over the succeeding five years, an employer normal cost rate for 9
155	155	persons who first became participating members after June 30, 2006, and the surviving 10
156	156	spouses of those persons that does not exceed the combined total of the rates under 11
157	157	AS 14.25.350(a), (b), (d), and (e) minus the employer normal cost rate attributable to 12
158	158	persons who first became participating members after June 30, 2006, for benefits 13
159	159	under AS 14.25.009 - 14.25.167. An adjustment made under this subsection shall 14
160	160	remain in effect for five years. In making an adjustment under this subsection, the 15
161	161	administrator shall maintain the five percent differences between the percentages in 16
162	162	(g)(2)(A), (B), and (C) of this section and the five percent differences between the 17
163	163	percentages in (g)(3)(A) and (B) of this section. 18
164	164	(i) When a member is appointed to retirement, the member obtains a vested 19
165	165	right to the applicable percentage under (g)(2) or (3) of this section, as adjusted under 20
166	166	(h) of this section, that is in effect when the member is appointed to retirement. A 21
167	167	member does not obtain a vested right to a percentage under (g)(2) or (3) of this 22
168	168	section, as adjusted under (h) of this section, before the member is appointed to 23
169	169	retirement. 24
170	170	* Sec. 10. AS 14.25.310 is amended to read: 25
171	171	Sec. 14.25.310. Applicability of AS 14.25.310 - 14.25.590. The provisions of 26
172	172	AS 14.25.310 - 14.25.590 apply only to 27
173	173	(1) teachers who first become members on or after July 1, 2006, and 28
174	174	before the effective date of this section who do not transfer to a defined benefit 29
175	175	retirement plan under AS 14.25.009 - 14.25.220 or AS 39.35.095 - 39.35.680; 30
176	176	(2) teachers described in AS 14.25.330 who elect under that section 31 33-LS0153\A
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180	180	to become [TO MEMBERS WHO ARE EMPLOYED BY EMPLOYERS THAT DO 1
181	181	NOT PARTICIPATE IN THE DEFINED BENEFIT RETIREMENT PLAN 2
182	182	ESTABLISHED UNDER AS 14.25.009 - 14.25.220, TO FORMER MEMBERS 3
183	183	UNDER AS 14.25.220, OR TO] members; and 4
184	184	(3) teachers who transferred [TRANSFER] into the defined contribution 5
185	185	retirement plan under former AS 14.25.540. 6
186	186	* Sec. 11. AS 14.25.310 is amended by adding a new subsection to read: 7
187	187	(b) An employer that participates in the plan shall also participate in the 8
188	188	defined benefit retirement plan under AS 14.25.009 - 14.25.220. 9
189	189	* Sec. 12. AS 14.25.330 is repealed and reenacted to read: 10
190	190	Sec. 14.25.330. Retirement plan election option. (a) A teacher who is first 11
191	191	hired on or after the effective date of this section may make a one-time election to 12
192	192	participate in the defined contribution retirement plan under AS 14.25.310 - 14.25.590 13
193	193	retroactive to the date of hire and may transfer to that plan employee contributions, if 14
194	194	any, and employer contributions, if any, that have been made to the defined benefit 15
195	195	retirement plan under AS 14.25.009 - 14.25.220. Before employer contributions are 16
196	196	transferred under this subsection, the administrator shall recalculate them under 17
197	197	AS 14.25.070. 18
198	198	(b) The election to participate in the defined contribution retirement plan 19
199	199	under (a) of this section must be made within 90 days after the date of hire and be 20
200	200	made in writing on a form and in the manner prescribed by the administrator. Before 21
201	201	accepting an election to participate in the defined contribution retirement plan, the 22
202	202	administrator shall, within 20 days after the administrator receives notification of the 23
203	203	teacher's date of hire, provide the teacher eligible to make an election to participate in 24
204	204	the defined contribution retirement plan under AS 14.25.310 - 14.25.590 with 25
205	205	(1) information, including calculations to illustrate the effect of 26
206	206	moving the teacher's retirement plan from the defined benefit retirement plan to the 27
207	207	defined contribution retirement plan; and 28
208	208	(2) other information clearly to inform the teacher of the potential 29
209	209	consequences of the teacher's election. 30
210	210	(c) An election made under (a) of this section to participate in the defined 31 33-LS0153\A
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214	214	contribution retirement plan is irrevocable. Retroactive to the date of hire, the teacher 1
215	215	shall be enrolled in the defined contribution retirement plan under AS 14.25.310 - 2
216	216	14.25.590, the teacher's participation in the plan shall be governed by the provisions 3
217	217	for the defined contribution retirement plan, and the teacher's participation in the 4
218	218	defined benefit retirement plan under AS 14.25.009 - 14.25.220 shall terminate. 5
219	219	(d) When an eligible teacher makes an election under (a) of this section, the 6
220	220	administrator shall cause the total amount of the teacher's employee and employer 7
221	221	contributions, with investment earnings and losses through the final day of the 8
222	222	teacher's participation in the defined benefit retirement plan, to be actuarially 9
223	223	calculated and transferred to the teacher's designated account in the defined 10
224	224	contribution retirement plan. The administrator shall establish transfer procedures by 11
225	225	regulation, but the actual transfer may not be later than 30 days after the date the 12
226	226	administrator receives the teacher's completed election form under (b) of this section, 13
227	227	unless the major financial markets for securities available for a transfer are seriously 14
228	228	disrupted by an unforeseen event that also causes the suspension of trading on any 15
229	229	national securities exchange in the country where the securities were issued. In that 16
230	230	event, the 30-day period may be extended by a resolution of the board. Transfers are 17
231	231	not commissionable or subject to other fees and may be in the form of securities or 18
232	232	cash as determined by the board. Securities shall be valued on the date of receipt in the 19
233	233	teacher's account. 20
234	234	(e) An election made under (a) of this section by an eligible teacher who is 21
235	235	married may not take effect unless the election is signed by the teacher's spouse. An 22
236	236	eligible teacher whose accounts are subject to a qualified domestic relations order may 23
237	237	not make an election to participate in the defined contribution retirement plan under 24
238	238	this section unless the qualified domestic relations order is amended or vacated and 25
239	239	court-certified copies of the order are received by the administrator. 26
240	240	* Sec. 13. AS 14.25.485(h) is repealed and reenacted to read: 27
241	241	(h) A member who is appointed to disability benefits shall, within 30 days 28
242	242	after the date disability benefits begin, provide the administrator with proof that the 29
243	243	member has applied for enrollment in a vocational rehabilitation program approved by 30
244	244	the administrator. Unless the member demonstrates cause, the be
245	245	nefits terminate at the 31 33-LS0153\A
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249	249	end of the first month in which the member 1
250	250	(1) fails to provide the administrator with the required proof of 2
251	251	application for enrollment; 3
252	252	(2) is certified by the administrator as failing to enroll in or cooperate 4
253	253	with a vocational rehabilitation program approved under this subsection; 5
254	254	(3) fails to interview for a job; or 6
255	255	(4) fails to accept a job offered. 7
256	256	* Sec. 14. AS 39.35.095 is repealed and reenacted to read: 8
257	257	Sec. 39.35.095. Applicability of AS 39.35.095 - 39.35.680. (a) The provisions 9
258	258	of AS 39.35.095 - 39.35.680 apply to public employees who are eligible to be 10
259	259	members of the public employees' retirement system under AS 39.35.095 - 39.35.680 11
260	260	and are not members of the defined contribution retirement plan under AS 39.35.700 - 12
261	261	39.35.990. 13
262	262	(b) A public organization or a municipality or other political subdivision of the 14
263	263	state that participates in the plan shall also participate in the defined contribution 15
264	264	retirement plan under AS 39.35.700 - 39.35.990. 16
265	265	* Sec. 15. AS 39.35 is amended by adding a new section to read: 17
266	266	Sec. 39.35.128. Participation of elected officials of political subdivisions. (a) 18
267	267	Except as provided in (b) of this section, a person who is an elected official of a 19
268	268	political subdivision of the state and who, before July 1, 2023, has neither participated 20
269	269	in the plan nor waived participation in the plan becomes a member of the plan if 21
270	270	(1) the political subdivision has elected under AS 39.35.600 - 22
271	271	39.35.650 to designate elected officials in the classifications of employees entitled to 23
272	272	participate in the plan; and 24
273	273	(2) the elected official receives compensation from the political 25
274	274	subdivision for services as an elected official in the amount of at least $2,001 a month. 26
275	275	(b) An elected official entitled to participate under this section, and who either 27
276	276	has no previous service under the system with the political subdivision or is retired 28
277	277	under the system, may file a waiver of participation in the plan with the administrator
278	278	29
279	279	within 30 days after the later of July 1, 2023, or the date that the elected official's term 30
280	280	of office begins. A waiver is irrevocable for the remainder of the elected official's 31 33-LS0153\A
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283	283
284	284	service as an elected official or employee of the political subdivision. 1
285	285	* Sec. 16. AS 39.35.160(a) is amended to read: 2
286	286	(a) Except as provided in (e) of this section, beginning [BEGINNING] 3
287	287	January 1, 1987, each peace officer or firefighter shall contribute to the plan an 4
288	288	amount equal to seven and one-half percent of the peace officer's or firefighter's 5
289	289	compensation. Except as provided in (d) and (e) of this section, beginning January 1, 6
290	290	1987, each other employee shall contribute to the plan an amount equal to six and 7
291	291	three-quarters percent of the employee's compensation. [THE CONTRIBUTIONS 8
292	292	SHALL BE DEDUCTED BY THE EMPLOYER AT THE END OF EACH 9
293	293	PAYROLL PERIOD. THE CONTRIBUTIONS SHALL BE DEDUCTED FROM 10
294	294	EMPLOYEE COMPENSATION BEFORE COMPUTATION OF APPLICABLE 11
295	295	FEDERAL TAXES, AND THE CONTRIBUTIONS SHALL BE TREATED AS 12
296	296	EMPLOYER CONTRIBUTIONS UNDER 26 U.S.C. 414(h)(2). A MEMBER MAY 13
297	297	NOT HAVE THE OPTION OF MAKING THE PAYROLL DEDUCTION 14
298	298	DIRECTLY INSTEAD OF HAVING THE CONTRIBUTION PICKED UP BY THE 15
299	299	EMPLOYER.] 16
300	300	* Sec. 17. AS 39.35.160 is amended by adding new subsections to read: 17
301	301	(e) Except as provided in (d) of this section, an employee, including a peace 18
302	302	officer or firefighter, who first participates in the plan after June 30, 2006, shall 19
303	303	contribute to the plan an amount equal to eight percent of the employee's 20
304	304	compensation. 21
305	305	(f) Contributions under (a) and (e) of this section shall be deducted by the 22
306	306	employer at the end of each payroll period. The contributions shall be deducted from 23
307	307	employee compensation before computation of applicable federal taxes, and the 24
308	308	contributions shall be treated as employer contributions under 26 U.S.C. 414(h)(2). A 25
309	309	member may not have the option of making the payroll deduction directly instead of 26
310	310	having the contribution picked up by the employer. 27
311	311	* Sec. 18. AS 39.35.400(e) is amended to read: 28
312	312	(e) A disabled employee receiving a nonoccupational disability benefit shall 29
313	313	provide the administrator, within one year after appointment to disability benefits and 30
314	314	once within each year thereafter until disability benefits are denied or cease, with 31 33-LS0153\A
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318	318	proof that the disabled employee has applied [OF CONTINUING ELIGIBILITY] to 1
319	319	receive disability payments under the Social Security Act. If the disabled employee is 2
320	320	otherwise ineligible for a social security payment, the employee shall provide the 3
321	321	administrator with sufficient medical evidence once each year to demonstrate that 4
322	322	disability payments under the Social Security Act would be payable had the employee 5
323	323	been otherwise eligible. If the disabled employee fails to provide the administrator 6
324	324	with evidence of continuing eligibility for disability payments under the Social 7
325	325	Security Act or other medical evidence required by the administrator within 30 days 8
326	326	following each anniversary date, the disability benefits from the plan shall cease. If 9
327	327	that information is subsequently provided to the administrator, benefit payments will 10
328	328	resume beginning for the month following that in which the information is provided. 11
329	329	When disability payments under the Social Security Act cease, it is the responsibility 12
330	330	of the disabled employee to notify the administrator immediately. 13
331	331	* Sec. 19. AS 39.35.410 is amended by adding a new subsection to read: 14
332	332	(k) A person who first becomes an employee after June 30, 2006, and who is 15
333	333	appointed to disability benefits shall, within 30 days after the date disability benefits 16
334	334	begin, provide the administrator with proof that the employee has applied for 17
335	335	enrollment in a vocational rehabilitation program approved by administrator. Unless 18
336	336	the employee demonstrates cause, the benefits terminate at the end of the first month 19
337	337	in which the employee 20
338	338	(1) fails to provide the administrator with the required proof of 21
339	339	application for enrollment; 22
340	340	(2) is certified by the administrator as failing to enroll in or cooperate 23
341	341	with a vocational rehabilitation program approved under this subsection; 24
342	342	(3) fails to interview for a job; or 25
343	343	(4) fails to accept a job offered. 26
344	344	* Sec. 20. AS 39.35.535(c) is amended to read: 27
345	345	(c) A benefit recipient may elect major medical insurance coverage in 28
346	346	accordance with regulations and under the following conditions: 29
347	347	(1) a person who first became a member before July 1, 2006, or the 30
348	348	surviving spouse of the person, other than a disabled member or a disabled member 31 33-LS0153\A
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352	352	who is appointed to normal retirement, must pay an amount equal to the full monthly 1
353	353	group premium for retiree major medical insurance coverage if the person is 2
354	354	(A) younger than 60 years of age and has less than 3
355	355	(i) 25 years of credited service as a peace officer under 4
356	356	AS 39.35.360 and 39.35.370; or 5
357	357	(ii) 30 years of credited service under AS 39.35.360 and 6
358	358	39.35.370 that is not service as a peace officer; or 7
359	359	(B) of any age and has less than 10 years of credited service; 8
360	360	(2) a person who first became a member before July 1, 2006, or the 9
361	361	surviving spouse of the person is not required to make premium payments for retiree 10
362	362	major medical insurance coverage if the person 11
363	363	(A) is a disabled member; 12
364	364	(B) is a disabled member who is appointed to normal 13
365	365	retirement; 14
366	366	(C) is 60 years of age or older and has at least 10 years of 15
367	367	credited service; or 16
368	368	(D) has at least 17
369	369	(i) 25 years of credited service as a peace officer under 18
370	370	AS 39.35.360 and 39.35.370; or 19
371	371	(ii) 30 years of credited service under AS 39.35.360 and 20
372	372	39.35.370 not as a peace officer; 21
373	373	(3) a person who first becomes a member after June 30, 2006, or 22
374	374	the surviving spouse of the person shall, except as provided in (4) and (5) of this 23
375	375	subsection, pay an amount equal to the full monthly group premium for retiree 24
376	376	major medical insurance coverage; however, except as provided in (4) and (5) of 25
377	377	this subsection, if the member or surviving spouse is eligible for Medicare, the 26
378	378	cost of a monthly premium is a percentage of the full monthly group premium, as 27
379	379	follows: 28
380	380	(A) 30 percent if the member has 10 or more, but less than 29
381	381	15, years of service; 30
382	382	(B) 25 percent if the member has 15 or more, but less than 31 33-LS0153\A
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386	386	20, years of service; 1
387	387	(C) 20 percent if the member has 20 or more, but less than 2
388	388	25, years of service; 3
389	389	(D) 15 percent if the member has 25 or more, but less than 4
390	390	30, years of service not as a peace officer; 5
391	391	(4) except as provided in (5) of this subsection, a person who first 6
392	392	becomes a member after June 30, 2006, or the surviving spouse of the person 7
393	393	shall pay a monthly premium that is 8
394	394	(A) 15 percent of the cost of a full monthly group premium 9
395	395	if the member has 25 or more, but less than 30, years of service as a peace 10
396	396	officer; or 11
397	397	(B) 10 percent of the cost of a full monthly group premium 12
398	398	if the member has 30 or more years of service; 13
399	399	(5) a person who first becomes a member after June 30, 2006, is 14
400	400	not required to make premium payments for retiree major medical coverage if 15
401	401	the person 16
402	402	(A) is a disabled member; or 17
403	403	(B) is a disabled member who is appointed to normal 18
404	404	retirement; 19
405	405	(6) on or after July 1, 2028, and every five years thereafter, the 20
406	406	administrator shall adjust the percentages under (3) and (4) of this subsection as 21
407	407	needed to maintain, but not to exceed, over the succeeding five years, an 22
408	408	employer normal cost rate for persons who first became members after June 30, 23
409	409	2006, and the surviving spouses of those persons that does not exceed the 24
410	410	combined total of the rates under AS 39.35.750(a), (b), (d), and (e) minus the 25
411	411	employer normal cost rate attributable to the persons who first became members 26
412	412	after June 30, 2006, for benefits under AS 39.35.095 - 39.35.530; an adjustment 27
413	413	made under this paragraph shall remain in effect for five years; in making an 28
414	414	adjustment under this paragraph, the administrator shall maintain the five 29
415	415	percent differences between the percentages in (3)(A), (B), (C), and (D) of this 30
416	416	subsection and the five percent differences between the percentages in (4)(A) and 31 33-LS0153\A
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419	419
420	420	(B) of this subsection; 1
421	421	(7) when a member is appointed to retirement, the member 2
422	422	obtains a vested right to the applicable percentage under (3) or (4) of this 3
423	423	subsection, as adjusted under (6) of this subsection, that is in effect when the 4
424	424	member is appointed to retirement; a member does not obtain a vested right to a 5
425	425	percentage under (3) or (4) of this subsection, as adjusted under (6) of this 6
426	426	subsection, before appointment to retirement. 7
427	427	* Sec. 21. AS 39.35.620(k) is amended to read: 8
428	428	(k) Termination of an employer's participation in the plan does not bar future 9
429	429	participation in the system by that employer if the employer is current with payments 10
430	430	on amounts due under AS 39.35.625. [IF A PREVIOUSLY TERMINATED 11
431	431	EMPLOYER RETURNS TO THE SYSTEM, THE EMPLOYER MAY ONLY 12
432	432	PARTICIPATE IN THE PLAN ESTABLISHED UNDER AS 39.35.700 - 39.35.990. 13
433	433	EMPLOYEES MAY BE CREDITED UNDER AS 39.35.700 - 39.35.990 ONLY 14
434	434	WITH SERVICE SUBSEQUENT TO THE DATE OF RETURN.] 15
435	435	* Sec. 22. AS 39.35.680(18) is amended to read: 16
436	436	(18) "employer" means 17
437	437	(A) the State of Alaska; 18
438	438	(B) a political subdivision or public organization of the state 19
439	439	that participates in the plan based on a resolution to participate in the plan that 20
440	440	was approved by the administrator [ON OR BEFORE JULY 1, 2006]; or 21
441	441	(C) a political subdivision or public organization of the state 22
442	442	that, as a result of consolidation or reorganization [THAT OCCURS ON OR 23
443	443	AFTER JULY 1, 2006], assumes liability under the plan of a political 24
444	444	subdivision or public organization described in (B) of this paragraph; 25
445	445	* Sec. 23. AS 39.35.700 is amended to read: 26
446	446	Sec. 39.35.700. Applicability of AS 39.35.700 - 39.35.990. The provisions of 27
447	447	AS 39.35.700 - 39.35.990 apply only to 28
448	448	(1) members first hired on or after July 1, 2006, and before the 29
449	449	effective date of this section who do not transfer to a defined benefit retirement 30
450	450	plan under AS 14.25.009 - 14.25.220 or AS 39.35.095 - 39.35.680; 31 33-LS0153\A
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453	453
454	454	(2) public employees described in AS 39.35.720 who elect under 1
455	455	that section to become [TO MEMBERS WHO ARE EMPLOYED BY 2
456	456	EMPLOYERS THAT DO NOT PARTICIPATE IN THE DEFINED BENEFIT 3
457	457	RETIREMENT PLAN ESTABLISHED UNDER AS 39.35.095 - 39.35.680, TO 4
458	458	FORMER MEMBERS AS DEFINED IN AS 39.35.680, OR TO] members; and 5
459	459	(3) members who transferred [TRANSFER] into the defined contribution 6
460	460	retirement plan under former AS 39.35.940. 7
461	461	* Sec. 24. AS 39.35.700 is amended by adding a new subsection to read: 8
462	462	(b) A public organization as defined in AS 39.35.680 or a municipality or 9
463	463	other political subdivision of the state that participates in the plan shall also participate 10
464	464	in the defined benefit retirement plan under AS 39.35.095 - 39.35.680. 11
465	465	* Sec. 25. AS 39.35.720 is repealed and reenacted to read: 12
466	466	Sec. 39.35.720. Retirement plan election option. (a) A public employee who 13
467	467	is first hired on or after the effective date of this section may make a one-time election 14
468	468	to participate in the defined contribution retirement plan under AS 39.35.700 - 15
469	469	39.35.990 retroactive to the date of hire and may transfer to that plan employee 16
470	470	contributions, if any, and employer contributions, if any, that have been made to the 17
471	471	defined benefit retirement plan under AS 39.35.095 - 39.35.680. Before employer 18
472	472	contributions are transferred under this subsection, the administrator shall recalculate 19
473	473	them under AS 39.35.255. 20
474	474	(b) The election to participate in the defined contribution retirement plan 21
475	475	under (a) of this section must be made within 90 days after the date of hire and be 22
476	476	made in writing on a form and in the manner prescribed by the administrator. Before 23
477	477	accepting an election to participate in the defined contribution retirement plan under 24
478	478	AS 39.35.700 - 39.35.990, the administrator shall, within 20 days after the 25
479	479	administrator receives notice of the public employee's date of hire, provide the 26
480	480	employee eligible to make an election to participate in the defined contribution 27
481	481	retirement plan with 28
482	482	(1) information, including calculations to illustrate the effect of 29
483	483	moving the employee's retirement plan from the defined benefit retirement plan to the 30
484	484	defined contribution retirement plan; and 31 33-LS0153\A
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487	487
488	488	(2) other information that clearly informs the employee of the potential 1
489	489	consequences of the employee's election. 2
490	490	(c) An election made under (a) of this section to participate in the defined 3
491	491	contribution retirement plan is irrevocable. Retroactive to the date of hire, the 4
492	492	employee shall be enrolled in the defined contribution retirement plan under 5
493	493	AS 39.35.700 - 39.35.990, the employee's participation in the plan shall be governed 6
494	494	by the provisions for the defined contribution retirement plan, and the employee's 7
495	495	participation in the defined benefit retirement plan under AS 39.35.095 - 39.35.680 8
496	496	shall terminate. 9
497	497	(d) When an employee makes an election under (a) of this section, the 10
498	498	administrator shall cause the total amount of the employee's employee and employer 11
499	499	contributions, with investment earnings and losses through the final day of the 12
500	500	employee's participation in the defined benefit retirement plan, to be actuarially 13
501	501	calculated and transferred to the employee's designated account in the defined 14
502	502	contribution retirement plan. The administrator shall establish transfer procedures by 15
503	503	regulation, but the actual transfer may not be later than 30 days after the date the 16
504	504	administrator receives the employee's completed election form under (b) of this 17
505	505	section, unless the major financial markets for securities available for a transfer are 18
506	506	seriously disrupted by an unforeseen event that also causes the suspension of trading 19
507	507	on any national securities exchange in the country where the securities were issued. In 20
508	508	that event, the 30-day period may be extended by a resolution of the board. Transfers 21
509	509	are not commissionable or subject to other fees and may be in the form of securities or 22
510	510	cash as determined by the board. Securities shall be valued on the date of receipt in the 23
511	511	employee's account. 24
512	512	(e) An election made under (a) of this section by an eligible employee who is 25
513	513	married may not take effect unless the election is signed by the employee's spouse. An 26
514	514	eligible employee whose accounts are subject to a qualified domestic relations order 27
515	515	may not make an election to participate in the defined contribution retirement plan 28
516	516	under this section unless the qualified domestic relations order is amended or vacated 29
517	517	and court-certified copies of the order are received by the administrator. 30
518	518	* Sec. 26. AS 39.35.890(j) is repealed and reenacted to read:
519	519	31 33-LS0153\A
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522	522
523	523	(j) A member who is appointed to disability benefits shall, within 30 days after 1
524	524	the date disability benefits begin, provide the administrator with proof that the member 2
525	525	has applied for enrollment in a vocational rehabilitation program approved by the 3
526	526	administrator. Unless the member demonstrates cause, the benefits terminate at the 4
527	527	end of the first month in which the member 5
528	528	(1) fails to provide the administrator with the required proof of 6
529	529	application for enrollment; 7
530	530	(2) is certified by the administrator as failing to enroll in or cooperate 8
531	531	with a vocational rehabilitation program approved under this subsection; 9
532	532	(3) fails to interview for a job; or 10
533	533	(4) fails to accept a job offered. 11
534	534	* Sec. 27. AS 14.25.012(c), 14.25.540; AS 39.35.940, and 39.35.957(b) are repealed. 12
535	535	* Sec. 28. The uncodified law of the State of Alaska is amended by adding a new section to 13
536	536	read: 14
537	537	RETIREMENT PLAN ELECTION CHOICE. (a) A teacher who was first hired after 15
538	538	June 30, 2006, and before the effective date of this section and who is a member of the 16
539	539	defined contribution plan of the teachers' retirement system under AS 14.25.310 - 14.25.590 17
540	540	may make a one-time election, within 90 days after the effective date of this section, to 18
541	541	participate in the defined benefit retirement plan under AS 14.25.009 - 14.25.220 and to 19
542	542	transfer all contributions, including employer contributions, that have been made or should be 20
543	543	made to the defined contribution retirement plan for service the member completes before the 21
544	544	effective date of the member's participation in the defined benefit retirement plan. 22
545	545	(b) A public employee who was first hired after June 30, 2006, and before the 23
546	546	effective date of this section and who is a member of the defined contribution plan of the 24
547	547	public employees' retirement system under AS 39.35.700 - 39.35.990 may make a one-time 25
548	548	election, within 90 days after the effective date of this section, to participate in the defined 26
549	549	benefit retirement plan under AS 39.35.095 - 39.35.680 and to transfer all contributions, 27
550	550	including employer contributions, that have been made or should be made to the defined 28
551	551	contribution retirement plan for any service the member completes before the effective date of 29
552	552	the member's participation in the defined benefit retirement plan. 30
553	553	* Sec. 29. The uncodified law of the State of Alaska is amended by adding a new section to 31 33-LS0153\A
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556	556
557	557	read: 1
558	558	RETIREMENT PLAN ELECTION PROCEDURE. (a) An election made under sec. 2
559	559	28 of this Act to participate in the defined benefit retirement plan under AS 14.25.009 - 3
560	560	14.25.220 or AS 39.35.095 - 39.35.680 must be made in writing on one or more forms and in 4
561	561	the manner prescribed by the administrator. Before an eligible member makes an election 5
562	562	under sec. 28 of this Act, the administrator shall provide to the member 6
563	563	(1) written notice of the member's eligibility; and 7
564	564	(2) information about potential consequences of the member's election, 8
565	565	including calculations that illustrate the effect of changing the member's retirement plan from 9
566	566	the defined contribution retirement plan to the defined benefit retirement plan. 10
567	567	(b) An election made under sec. 28 of this Act to participate in the defined benefit 11
568	568	retirement plan is irrevocable. On the effective date of the election, an eligible member who 12
569	569	makes the election shall be enrolled as a member of the defined benefit retirement plan, the 13
570	570	member's participation in the plan shall be governed by the provisions for the defined benefit 14
571	571	retirement plan, and the member's participation in the defined contribution retirement plan 15
572	572	shall terminate. The member's enrollment in the defined benefit retirement plan shall be 16
573	573	effective retroactive to the date of hire. An election made by an eligible member who is 17
574	574	married is not effective unless the election is signed by the member's spouse. 18
575	575	(c) When an eligible member makes a one-time election under sec. 28 of this Act, the 19
576	576	administrator shall cause the total amount of the member's employee and employer 20
577	577	contributions, with investment earnings and losses through the final day of the member's 21
578	578	participation as a member in the defined contribution retirement plan, to be actuarially 22
579	579	calculated and, subject to (d) of this section, transferred to the pension fund in the defined 23
580	580	benefit retirement plan. On the effective date of the member's participation in the defined 24
581	581	benefit retirement plan, the member shall be credited with service in the defined benefit 25
582	582	retirement plan that is equal to the member's service in years, including fractional years, 26
583	583	recognized for computing benefits that may be due from the defined contribution retirement 27
584	584	plan. The board shall establish transfer procedures by regulation, but the actual transfer may 28
585	585	not be later than 30 days after the date the administrator receives the member's completed 29
586	586	election forms under (a) of this section, unless the major financial markets for securities 30
587	587	available for a transfer are seriously disrupted by an unforeseen event that also causes the
588	588	31 33-LS0153\A
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591	591
592	592	suspension of trading on any national securities exchange in the country where the securities 1
593	593	were issued. In that event, the 30-day period may be extended by a resolution of the board. 2
594	594	Transfers are not commissionable or subject to other fees and may be in the form of securities 3
595	595	or cash as determined by the board. Securities shall be valued on the date of receipt in the 4
596	596	member's account. 5
597	597	(d) If the value actuarially calculated under (c) of this section is insufficient to pay for 6
598	598	a service credit equal to the member's actual service, the administrator shall allow the member 7
599	599	to create an indebtedness up to the amount needed to eliminate the insufficiency; however, if 8
600	600	that value exceeds the amount needed to pay for a service credit equal to the member's actual 9
601	601	service, the administrator shall cause the excess to be paid to the employee as a rollover 10
602	602	transfer to either an individual employee annuity account in the Department of Administration 11
603	603	under the terms of AS 39.30.150 - 39.30.180 (State of Alaska Supplemental Annuity Plan) or, 12
604	604	if the member's employer does not participate in the State of Alaska Supplemental Annuity 13
605	605	Plan, to an eligible retirement plan as defined in AS 14.25.360(d) or AS 39.35.760(d). An 14
606	606	excess under this subsection may not be used to purchase service credit in a retirement plan 15
607	607	administered under AS 14.25 or AS 39.35. 16
608	608	(e) The provisions of this section are subject to the requirements of the Internal 17
609	609	Revenue Code and the limitations under AS 14.25.010, 14.25.320(c) and (d), 14.25.490, 18
610	610	AS 39.35.115, 39.35.678, 39.35.710(c) and (d), and 39.35.895. 19
611	611	(f) In this section, 20
612	612	(1) "administrator" means the commissioner of administration or the person 21
613	613	designated by the commissioner of administration under AS 39.35.003 for a public 22
614	614	employees' retirement plan and under AS 14.25.003 for a teachers' retirement plan; 23
615	615	(2) "board" means the Alaska Retirement Management Board established 24
616	616	under AS 37.10.210; 25
617	617	(3) "defined benefit retirement plan" means the retirement plan established 26
618	618	under 27
619	619	(A) AS 14.25.009 - 14.25.220 for a teacher; or 28
620	620	(B) AS 39.35.095 - 39.35.680 for a public employee; 29
621	621	(4) "defined contribution retirement plan" means the retirement plan 30
622	622	established under 31 33-LS0153\A
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625	625
626	626	(A) AS 14.25.310 - 14.25.590 for a teacher; or 1
627	627	(B) AS 39.35.700 - 39.35.990 for a public employee; 2
628	628	(5) "Internal Revenue Code" has the meaning given in AS 39.35.990. 3
629	629	* Sec. 30. The uncodified law of the State of Alaska is amended by adding a new section to 4
630	630	read: 5
631	631	ADOPTION OF REGULATIONS. The commi ssioner of administration shall adopt 6
632	632	regulations necessary to implement the changes made by this Act. The regulations take effect 7
633	633	under AS 44.62 (Administrative Procedure Act), but not before the effective date of the law 8
634	634	implemented by the regulation. 9
635	635	* Sec. 31. Sections 29 and 30 of this Act take effect immediately under AS 01.10.070(c). 10
636	636	* Sec. 32. Except as provided in sec. 31 of this Act, this Act takes effect July 1, 2023. 11