SB0011A -1- SB 11
New Text Underlined [DELETED TEXT BRACKETED]
33-LS0153\A
SENATE BILL NO. 11
IN THE LEGISLATURE OF THE STATE OF ALASKA
THIRTY-THIRD LEGISLATURE - FIRST SESSION
BY SENATOR KIEHL
Introduced: 1/9/23
Referred: Prefiled
A BILL
FOR AN ACT ENTITLED
"An Act relating to restoration of tenure for certain disabled individuals; relating to the 1
Public Employees' Retirement System of Alaska and the teachers' retirement system; 2
providing certain employees an opportunity to choose between the defined benefit and 3
defined contribution plans of the Public Employees' Retirement System of Alaska and 4
the teachers' retirement system; and providing for an effective date." 5
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 6
* Section 1. AS 14.20.165 is amended to read: 7
Sec. 14.20.165. Restoration of tenure rights. A teacher who held tenure 8
rights and who was retired due to disability under AS 14.25.130, but whose disability 9
(1) has been removed, and the removal of that disability is certified by a competent 10
physician following a physical or mental examination, or (2) has been compensated 11
for by rehabilitation or other appropriate restorative education or training, and that 12
rehabilitation or restoration to health has been certified by the commissioner of
13 33-LS0153\A
SB 11 -2- SB0011A
New Text Underlined [DELETED TEXT BRACKETED]
administration [DIVISION OF VOCATIONAL REHABILITATION OF THE 1
DEPARTMENT OF LABOR AND WORKFORCE DEVELOPMENT], shall be 2
restored to full tenure rights in the district from which the teacher was retired, at such 3
time as an opening for which the teacher is qualified becomes available. 4
* Sec. 2. AS 14.25.009 is repealed and reenacted to read: 5
Sec. 14.25.009. Applicability of AS 14.25.009 - 14.25.220. (a) The provisions 6
of AS 14.25.009 - 14.25.220 apply to teachers who are eligible to be members of the 7
teachers' retirement system under AS 14.25.009 - 14.25.220 and are not members of 8
the defined contribution retirement plan under AS 14.25.310 - 14.25.590. 9
(b) An employer that participates in the plan shall also participate in the 10
defined contribution retirement plan under AS 14.25.310 - 14.25.590. 11
* Sec. 3. AS 14.25.040(a) is amended to read: 12
(a) Unless a teacher or member participates in a university retirement program 13
under AS 14.40.661 - 14.40.799 or has elected under AS 14.25.330 or former 14
AS 14.25.540 to participate in the plan established in AS 14.25.310 - 14.25.590, a 15
teacher or member contracting for service with a participating employer is subject to 16
AS 14.25.009 - 14.25.220. 17
* Sec. 4. AS 14.25.050(a) is amended to read: 18
(a) Except as provided in (c) and (e) of this section, beginning January 1, 19
1991, each member shall contribute to the plan an amount equal to 8.65 percent of the 20
member's base salary accrued from July 1 to the following June 30. [THE 21
EMPLOYER SHALL DEDUCT THE CONTRIBUTION FROM THE MEMBER'S 22
SALARY AT THE END OF EACH PAYROLL PERIOD, AND THE 23
CONTRIBUTION SHALL BE CREDITED BY THE PLAN TO THE MEMBER 24
CONTRIBUTION ACCOUNT. THE CONTRIBUTIONS SHALL BE DEDUCTED 25
FROM EMPLOYEE COMPENSATION BEFORE THE COMPUTATION OF 26
APPLICABLE FEDERAL TAXES AND SHALL BE TREATED AS EMPLOYER 27
CONTRIBUTIONS UNDER 26 U.S.C. 414(h)(2). A MEMBER MAY NOT HAVE 28
THE OPTION OF MAKING THE PAYROLL DEDUCTION DIRECTLY IN CASH 29
INSTEAD OF HAVING THE CONTRIBUTION PICKED UP BY THE 30
EMPLOYER.] 31 33-LS0153\A
SB0011A -3- SB 11
New Text Underlined [DELETED TEXT BRACKETED]
* Sec. 5. AS 14.25.050 is amended by adding new subsections to read: 1
(e) Except as provided in (c) of this section, a member who first participates in 2
the plan after June 30, 2006, shall contribute to the plan an amount equal to eight 3
percent of the employee's base salary accrued from July 1 to the following June 30. 4
(f) The employer shall deduct the contributions under (a) and (e) of this 5
section from the member's salary at the end of each payroll period, and the 6
contributions shall be credited by the plan to the member contribution account. The 7
contributions shall be deducted from employee compensation before the computation 8
of applicable federal taxes and shall be treated as employer contributions under 26 9
U.S.C. 414(h)(2). A member may not have the option of making the payroll deduction 10
directly in cash instead of having the contribution picked up by the employer. 11
* Sec. 6. AS 14.25.130(c) is repealed and reenacted to read: 12
(c) A disabled member receiving a benefit under this section shall undergo a 13
medical examination as often as the administrator considers advisable, but not more 14
frequently than once each year. The administrator shall determine the place of the 15
examination and engage the physician or physicians. If the administrator determines 16
that the examination indicates that the disabled member is no longer incapacitated 17
because of a total and apparently permanent occupational disability, the administrator 18
may not issue further disability benefits to the disabled member. 19
* Sec. 7. AS 14.25.130 is amended by adding a new subsection to read: 20
(g) A person who first becomes a member after June 30, 2006, and who is 21
appointed to disability benefits shall, within 30 days after the date disability benefits 22
begin, provide the administrator with proof that the member has applied for enrollment 23
in a vocational rehabilitation program approved by the administrator. Unless the 24
member demonstrates cause, the benefits terminate at the end of the first month in 25
which the member 26
(1) fails to provide the administrator with the required proof of 27
application for enrollment; 28
(2) is certified by the administrator as failing to enroll in or cooperate 29
with a vocational rehabilitation program approved under this subsection; 30
(3) fails to interview for a job; or 31 33-LS0153\A
SB 11 -4- SB0011A
New Text Underlined [DELETED TEXT BRACKETED]
(4) fails to accept a job offered. 1
* Sec. 8. AS 14.25.168(d) is amended to read: 2
(d) A benefit recipient who first became a member before July 1, 2006, or 3
the benefit recipient's surviving spouse may elect major medical insurance coverage 4
in accordance with regulations and under the following conditions: 5
(1) a benefit recipient [PERSON] who has less than 25 years of 6
membership service and who is younger than 60 years of age must pay an amount 7
equal to the full monthly group premium for retiree major medical insurance coverage; 8
(2) a disabled member, a disabled member who is appointed to normal 9
retirement, a person 60 years of age or older, or a person who has at least 25 years of 10
membership service is not required to make premium payments. 11
* Sec. 9. AS 14.25.168 is amended by adding new subsections to read: 12
(g) A benefit recipient, or the surviving spouse of a benefit recipient, who first 13
becomes a member after June 30, 2006, may elect major medical insurance coverage 14
that was in effect before July 1, 2006, in accordance with this section and applicable 15
regulations and under the following conditions: 16
(1) if the participating member or surviving spouse is not eligible for 17
Medicare, the cost of a monthly premium for retiree major medical insurance coverage 18
elected under this section is equal to the full monthly group premium for retiree major 19
medical insurance coverage; 20
(2) if the participating member or surviving spouse is eligible for 21
Medicare, the cost of a monthly premium for retiree major medical insurance coverage 22
is a percentage of the full monthly group premium, as follows: 23
(A) 30 percent if the member had 10 or more, but less than 15, 24
years of service; 25
(B) 25 percent if the member had 15 or more, but less than 20, 26
years of service; 27
(C) 20 percent if the member had 20 or more, but less than 25, 28
years of service; 29
(3) the cost of a monthly premium paid by the participating member or 30
the surviving spouse for retiree major medical insurance coverage is 31 33-LS0153\A
SB0011A -5- SB 11
New Text Underlined [DELETED TEXT BRACKETED]
(A) 15 percent of the full monthly group premium if the 1
participating member has 25 or more, but less than 30, years of service; 2
(B) 10 percent of the full monthly group premium if the 3
participating member has 30 or more years of service; 4
(4) a disabled member or a disabled member who is appointed to 5
normal retirement is not required to make premium payments. 6
(h) On or after July 1, 2028, and every five years thereafter, the administrator 7
shall adjust the percentages under (g)(2) and (3) of this section as needed to maintain, 8
but not to exceed, over the succeeding five years, an employer normal cost rate for 9
persons who first became participating members after June 30, 2006, and the surviving 10
spouses of those persons that does not exceed the combined total of the rates under 11
AS 14.25.350(a), (b), (d), and (e) minus the employer normal cost rate attributable to 12
persons who first became participating members after June 30, 2006, for benefits 13
under AS 14.25.009 - 14.25.167. An adjustment made under this subsection shall 14
remain in effect for five years. In making an adjustment under this subsection, the 15
administrator shall maintain the five percent differences between the percentages in 16
(g)(2)(A), (B), and (C) of this section and the five percent differences between the 17
percentages in (g)(3)(A) and (B) of this section. 18
(i) When a member is appointed to retirement, the member obtains a vested 19
right to the applicable percentage under (g)(2) or (3) of this section, as adjusted under 20
(h) of this section, that is in effect when the member is appointed to retirement. A 21
member does not obtain a vested right to a percentage under (g)(2) or (3) of this 22
section, as adjusted under (h) of this section, before the member is appointed to 23
retirement. 24
* Sec. 10. AS 14.25.310 is amended to read: 25
Sec. 14.25.310. Applicability of AS 14.25.310 - 14.25.590. The provisions of 26
AS 14.25.310 - 14.25.590 apply only to 27
(1) teachers who first become members on or after July 1, 2006, and 28
before the effective date of this section who do not transfer to a defined benefit 29
retirement plan under AS 14.25.009 - 14.25.220 or AS 39.35.095 - 39.35.680; 30
(2) teachers described in AS 14.25.330 who elect under that section 31 33-LS0153\A
SB 11 -6- SB0011A
New Text Underlined [DELETED TEXT BRACKETED]
to become [TO MEMBERS WHO ARE EMPLOYED BY EMPLOYERS THAT DO 1
NOT PARTICIPATE IN THE DEFINED BENEFIT RETIREMENT PLAN 2
ESTABLISHED UNDER AS 14.25.009 - 14.25.220, TO FORMER MEMBERS 3
UNDER AS 14.25.220, OR TO] members; and 4
(3) teachers who transferred [TRANSFER] into the defined contribution 5
retirement plan under former AS 14.25.540. 6
* Sec. 11. AS 14.25.310 is amended by adding a new subsection to read: 7
(b) An employer that participates in the plan shall also participate in the 8
defined benefit retirement plan under AS 14.25.009 - 14.25.220. 9
* Sec. 12. AS 14.25.330 is repealed and reenacted to read: 10
Sec. 14.25.330. Retirement plan election option. (a) A teacher who is first 11
hired on or after the effective date of this section may make a one-time election to 12
participate in the defined contribution retirement plan under AS 14.25.310 - 14.25.590 13
retroactive to the date of hire and may transfer to that plan employee contributions, if 14
any, and employer contributions, if any, that have been made to the defined benefit 15
retirement plan under AS 14.25.009 - 14.25.220. Before employer contributions are 16
transferred under this subsection, the administrator shall recalculate them under 17
AS 14.25.070. 18
(b) The election to participate in the defined contribution retirement plan 19
under (a) of this section must be made within 90 days after the date of hire and be 20
made in writing on a form and in the manner prescribed by the administrator. Before 21
accepting an election to participate in the defined contribution retirement plan, the 22
administrator shall, within 20 days after the administrator receives notification of the 23
teacher's date of hire, provide the teacher eligible to make an election to participate in 24
the defined contribution retirement plan under AS 14.25.310 - 14.25.590 with 25
(1) information, including calculations to illustrate the effect of 26
moving the teacher's retirement plan from the defined benefit retirement plan to the 27
defined contribution retirement plan; and 28
(2) other information clearly to inform the teacher of the potential 29
consequences of the teacher's election. 30
(c) An election made under (a) of this section to participate in the defined 31 33-LS0153\A
SB0011A -7- SB 11
New Text Underlined [DELETED TEXT BRACKETED]
contribution retirement plan is irrevocable. Retroactive to the date of hire, the teacher 1
shall be enrolled in the defined contribution retirement plan under AS 14.25.310 - 2
14.25.590, the teacher's participation in the plan shall be governed by the provisions 3
for the defined contribution retirement plan, and the teacher's participation in the 4
defined benefit retirement plan under AS 14.25.009 - 14.25.220 shall terminate. 5
(d) When an eligible teacher makes an election under (a) of this section, the 6
administrator shall cause the total amount of the teacher's employee and employer 7
contributions, with investment earnings and losses through the final day of the 8
teacher's participation in the defined benefit retirement plan, to be actuarially 9
calculated and transferred to the teacher's designated account in the defined 10
contribution retirement plan. The administrator shall establish transfer procedures by 11
regulation, but the actual transfer may not be later than 30 days after the date the 12
administrator receives the teacher's completed election form under (b) of this section, 13
unless the major financial markets for securities available for a transfer are seriously 14
disrupted by an unforeseen event that also causes the suspension of trading on any 15
national securities exchange in the country where the securities were issued. In that 16
event, the 30-day period may be extended by a resolution of the board. Transfers are 17
not commissionable or subject to other fees and may be in the form of securities or 18
cash as determined by the board. Securities shall be valued on the date of receipt in the 19
teacher's account. 20
(e) An election made under (a) of this section by an eligible teacher who is 21
married may not take effect unless the election is signed by the teacher's spouse. An 22
eligible teacher whose accounts are subject to a qualified domestic relations order may 23
not make an election to participate in the defined contribution retirement plan under 24
this section unless the qualified domestic relations order is amended or vacated and 25
court-certified copies of the order are received by the administrator. 26
* Sec. 13. AS 14.25.485(h) is repealed and reenacted to read: 27
(h) A member who is appointed to disability benefits shall, within 30 days 28
after the date disability benefits begin, provide the administrator with proof that the 29
member has applied for enrollment in a vocational rehabilitation program approved by 30
the administrator. Unless the member demonstrates cause, the be
nefits terminate at the 31 33-LS0153\A
SB 11 -8- SB0011A
New Text Underlined [DELETED TEXT BRACKETED]
end of the first month in which the member 1
(1) fails to provide the administrator with the required proof of 2
application for enrollment; 3
(2) is certified by the administrator as failing to enroll in or cooperate 4
with a vocational rehabilitation program approved under this subsection; 5
(3) fails to interview for a job; or 6
(4) fails to accept a job offered. 7
* Sec. 14. AS 39.35.095 is repealed and reenacted to read: 8
Sec. 39.35.095. Applicability of AS 39.35.095 - 39.35.680. (a) The provisions 9
of AS 39.35.095 - 39.35.680 apply to public employees who are eligible to be 10
members of the public employees' retirement system under AS 39.35.095 - 39.35.680 11
and are not members of the defined contribution retirement plan under AS 39.35.700 - 12
39.35.990. 13
(b) A public organization or a municipality or other political subdivision of the 14
state that participates in the plan shall also participate in the defined contribution 15
retirement plan under AS 39.35.700 - 39.35.990. 16
* Sec. 15. AS 39.35 is amended by adding a new section to read: 17
Sec. 39.35.128. Participation of elected officials of political subdivisions. (a) 18
Except as provided in (b) of this section, a person who is an elected official of a 19
political subdivision of the state and who, before July 1, 2023, has neither participated 20
in the plan nor waived participation in the plan becomes a member of the plan if 21
(1) the political subdivision has elected under AS 39.35.600 - 22
39.35.650 to designate elected officials in the classifications of employees entitled to 23
participate in the plan; and 24
(2) the elected official receives compensation from the political 25
subdivision for services as an elected official in the amount of at least $2,001 a month. 26
(b) An elected official entitled to participate under this section, and who either 27
has no previous service under the system with the political subdivision or is retired 28
under the system, may file a waiver of participation in the plan with the administrator
29
within 30 days after the later of July 1, 2023, or the date that the elected official's term 30
of office begins. A waiver is irrevocable for the remainder of the elected official's 31 33-LS0153\A
SB0011A -9- SB 11
New Text Underlined [DELETED TEXT BRACKETED]
service as an elected official or employee of the political subdivision. 1
* Sec. 16. AS 39.35.160(a) is amended to read: 2
(a) Except as provided in (e) of this section, beginning [BEGINNING] 3
January 1, 1987, each peace officer or firefighter shall contribute to the plan an 4
amount equal to seven and one-half percent of the peace officer's or firefighter's 5
compensation. Except as provided in (d) and (e) of this section, beginning January 1, 6
1987, each other employee shall contribute to the plan an amount equal to six and 7
three-quarters percent of the employee's compensation. [THE CONTRIBUTIONS 8
SHALL BE DEDUCTED BY THE EMPLOYER AT THE END OF EACH 9
PAYROLL PERIOD. THE CONTRIBUTIONS SHALL BE DEDUCTED FROM 10
EMPLOYEE COMPENSATION BEFORE COMPUTATION OF APPLICABLE 11
FEDERAL TAXES, AND THE CONTRIBUTIONS SHALL BE TREATED AS 12
EMPLOYER CONTRIBUTIONS UNDER 26 U.S.C. 414(h)(2). A MEMBER MAY 13
NOT HAVE THE OPTION OF MAKING THE PAYROLL DEDUCTION 14
DIRECTLY INSTEAD OF HAVING THE CONTRIBUTION PICKED UP BY THE 15
EMPLOYER.] 16
* Sec. 17. AS 39.35.160 is amended by adding new subsections to read: 17
(e) Except as provided in (d) of this section, an employee, including a peace 18
officer or firefighter, who first participates in the plan after June 30, 2006, shall 19
contribute to the plan an amount equal to eight percent of the employee's 20
compensation. 21
(f) Contributions under (a) and (e) of this section shall be deducted by the 22
employer at the end of each payroll period. The contributions shall be deducted from 23
employee compensation before computation of applicable federal taxes, and the 24
contributions shall be treated as employer contributions under 26 U.S.C. 414(h)(2). A 25
member may not have the option of making the payroll deduction directly instead of 26
having the contribution picked up by the employer. 27
* Sec. 18. AS 39.35.400(e) is amended to read: 28
(e) A disabled employee receiving a nonoccupational disability benefit shall 29
provide the administrator, within one year after appointment to disability benefits and 30
once within each year thereafter until disability benefits are denied or cease, with 31 33-LS0153\A
SB 11 -10- SB0011A
New Text Underlined [DELETED TEXT BRACKETED]
proof that the disabled employee has applied [OF CONTINUING ELIGIBILITY] to 1
receive disability payments under the Social Security Act. If the disabled employee is 2
otherwise ineligible for a social security payment, the employee shall provide the 3
administrator with sufficient medical evidence once each year to demonstrate that 4
disability payments under the Social Security Act would be payable had the employee 5
been otherwise eligible. If the disabled employee fails to provide the administrator 6
with evidence of continuing eligibility for disability payments under the Social 7
Security Act or other medical evidence required by the administrator within 30 days 8
following each anniversary date, the disability benefits from the plan shall cease. If 9
that information is subsequently provided to the administrator, benefit payments will 10
resume beginning for the month following that in which the information is provided. 11
When disability payments under the Social Security Act cease, it is the responsibility 12
of the disabled employee to notify the administrator immediately. 13
* Sec. 19. AS 39.35.410 is amended by adding a new subsection to read: 14
(k) A person who first becomes an employee after June 30, 2006, and who is 15
appointed to disability benefits shall, within 30 days after the date disability benefits 16
begin, provide the administrator with proof that the employee has applied for 17
enrollment in a vocational rehabilitation program approved by administrator. Unless 18
the employee demonstrates cause, the benefits terminate at the end of the first month 19
in which the employee 20
(1) fails to provide the administrator with the required proof of 21
application for enrollment; 22
(2) is certified by the administrator as failing to enroll in or cooperate 23
with a vocational rehabilitation program approved under this subsection; 24
(3) fails to interview for a job; or 25
(4) fails to accept a job offered. 26
* Sec. 20. AS 39.35.535(c) is amended to read: 27
(c) A benefit recipient may elect major medical insurance coverage in 28
accordance with regulations and under the following conditions: 29
(1) a person who first became a member before July 1, 2006, or the 30
surviving spouse of the person, other than a disabled member or a disabled member 31 33-LS0153\A
SB0011A -11- SB 11
New Text Underlined [DELETED TEXT BRACKETED]
who is appointed to normal retirement, must pay an amount equal to the full monthly 1
group premium for retiree major medical insurance coverage if the person is 2
(A) younger than 60 years of age and has less than 3
(i) 25 years of credited service as a peace officer under 4
AS 39.35.360 and 39.35.370; or 5
(ii) 30 years of credited service under AS 39.35.360 and 6
39.35.370 that is not service as a peace officer; or 7
(B) of any age and has less than 10 years of credited service; 8
(2) a person who first became a member before July 1, 2006, or the 9
surviving spouse of the person is not required to make premium payments for retiree 10
major medical insurance coverage if the person 11
(A) is a disabled member; 12
(B) is a disabled member who is appointed to normal 13
retirement; 14
(C) is 60 years of age or older and has at least 10 years of 15
credited service; or 16
(D) has at least 17
(i) 25 years of credited service as a peace officer under 18
AS 39.35.360 and 39.35.370; or 19
(ii) 30 years of credited service under AS 39.35.360 and 20
39.35.370 not as a peace officer; 21
(3) a person who first becomes a member after June 30, 2006, or 22
the surviving spouse of the person shall, except as provided in (4) and (5) of this 23
subsection, pay an amount equal to the full monthly group premium for retiree 24
major medical insurance coverage; however, except as provided in (4) and (5) of 25
this subsection, if the member or surviving spouse is eligible for Medicare, the 26
cost of a monthly premium is a percentage of the full monthly group premium, as 27
follows: 28
(A) 30 percent if the member has 10 or more, but less than 29
15, years of service; 30
(B) 25 percent if the member has 15 or more, but less than 31 33-LS0153\A
SB 11 -12- SB0011A
New Text Underlined [DELETED TEXT BRACKETED]
20, years of service; 1
(C) 20 percent if the member has 20 or more, but less than 2
25, years of service; 3
(D) 15 percent if the member has 25 or more, but less than 4
30, years of service not as a peace officer; 5
(4) except as provided in (5) of this subsection, a person who first 6
becomes a member after June 30, 2006, or the surviving spouse of the person 7
shall pay a monthly premium that is 8
(A) 15 percent of the cost of a full monthly group premium 9
if the member has 25 or more, but less than 30, years of service as a peace 10
officer; or 11
(B) 10 percent of the cost of a full monthly group premium 12
if the member has 30 or more years of service; 13
(5) a person who first becomes a member after June 30, 2006, is 14
not required to make premium payments for retiree major medical coverage if 15
the person 16
(A) is a disabled member; or 17
(B) is a disabled member who is appointed to normal 18
retirement; 19
(6) on or after July 1, 2028, and every five years thereafter, the 20
administrator shall adjust the percentages under (3) and (4) of this subsection as 21
needed to maintain, but not to exceed, over the succeeding five years, an 22
employer normal cost rate for persons who first became members after June 30, 23
2006, and the surviving spouses of those persons that does not exceed the 24
combined total of the rates under AS 39.35.750(a), (b), (d), and (e) minus the 25
employer normal cost rate attributable to the persons who first became members 26
after June 30, 2006, for benefits under AS 39.35.095 - 39.35.530; an adjustment 27
made under this paragraph shall remain in effect for five years; in making an 28
adjustment under this paragraph, the administrator shall maintain the five 29
percent differences between the percentages in (3)(A), (B), (C), and (D) of this 30
subsection and the five percent differences between the percentages in (4)(A) and 31 33-LS0153\A
SB0011A -13- SB 11
New Text Underlined [DELETED TEXT BRACKETED]
(B) of this subsection; 1
(7) when a member is appointed to retirement, the member 2
obtains a vested right to the applicable percentage under (3) or (4) of this 3
subsection, as adjusted under (6) of this subsection, that is in effect when the 4
member is appointed to retirement; a member does not obtain a vested right to a 5
percentage under (3) or (4) of this subsection, as adjusted under (6) of this 6
subsection, before appointment to retirement. 7
* Sec. 21. AS 39.35.620(k) is amended to read: 8
(k) Termination of an employer's participation in the plan does not bar future 9
participation in the system by that employer if the employer is current with payments 10
on amounts due under AS 39.35.625. [IF A PREVIOUSLY TERMINATED 11
EMPLOYER RETURNS TO THE SYSTEM, THE EMPLOYER MAY ONLY 12
PARTICIPATE IN THE PLAN ESTABLISHED UNDER AS 39.35.700 - 39.35.990. 13
EMPLOYEES MAY BE CREDITED UNDER AS 39.35.700 - 39.35.990 ONLY 14
WITH SERVICE SUBSEQUENT TO THE DATE OF RETURN.] 15
* Sec. 22. AS 39.35.680(18) is amended to read: 16
(18) "employer" means 17
(A) the State of Alaska; 18
(B) a political subdivision or public organization of the state 19
that participates in the plan based on a resolution to participate in the plan that 20
was approved by the administrator [ON OR BEFORE JULY 1, 2006]; or 21
(C) a political subdivision or public organization of the state 22
that, as a result of consolidation or reorganization [THAT OCCURS ON OR 23
AFTER JULY 1, 2006], assumes liability under the plan of a political 24
subdivision or public organization described in (B) of this paragraph; 25
* Sec. 23. AS 39.35.700 is amended to read: 26
Sec. 39.35.700. Applicability of AS 39.35.700 - 39.35.990. The provisions of 27
AS 39.35.700 - 39.35.990 apply only to 28
(1) members first hired on or after July 1, 2006, and before the 29
effective date of this section who do not transfer to a defined benefit retirement 30
plan under AS 14.25.009 - 14.25.220 or AS 39.35.095 - 39.35.680; 31 33-LS0153\A
SB 11 -14- SB0011A
New Text Underlined [DELETED TEXT BRACKETED]
(2) public employees described in AS 39.35.720 who elect under 1
that section to become [TO MEMBERS WHO ARE EMPLOYED BY 2
EMPLOYERS THAT DO NOT PARTICIPATE IN THE DEFINED BENEFIT 3
RETIREMENT PLAN ESTABLISHED UNDER AS 39.35.095 - 39.35.680, TO 4
FORMER MEMBERS AS DEFINED IN AS 39.35.680, OR TO] members; and 5
(3) members who transferred [TRANSFER] into the defined contribution 6
retirement plan under former AS 39.35.940. 7
* Sec. 24. AS 39.35.700 is amended by adding a new subsection to read: 8
(b) A public organization as defined in AS 39.35.680 or a municipality or 9
other political subdivision of the state that participates in the plan shall also participate 10
in the defined benefit retirement plan under AS 39.35.095 - 39.35.680. 11
* Sec. 25. AS 39.35.720 is repealed and reenacted to read: 12
Sec. 39.35.720. Retirement plan election option. (a) A public employee who 13
is first hired on or after the effective date of this section may make a one-time election 14
to participate in the defined contribution retirement plan under AS 39.35.700 - 15
39.35.990 retroactive to the date of hire and may transfer to that plan employee 16
contributions, if any, and employer contributions, if any, that have been made to the 17
defined benefit retirement plan under AS 39.35.095 - 39.35.680. Before employer 18
contributions are transferred under this subsection, the administrator shall recalculate 19
them under AS 39.35.255. 20
(b) The election to participate in the defined contribution retirement plan 21
under (a) of this section must be made within 90 days after the date of hire and be 22
made in writing on a form and in the manner prescribed by the administrator. Before 23
accepting an election to participate in the defined contribution retirement plan under 24
AS 39.35.700 - 39.35.990, the administrator shall, within 20 days after the 25
administrator receives notice of the public employee's date of hire, provide the 26
employee eligible to make an election to participate in the defined contribution 27
retirement plan with 28
(1) information, including calculations to illustrate the effect of 29
moving the employee's retirement plan from the defined benefit retirement plan to the 30
defined contribution retirement plan; and 31 33-LS0153\A
SB0011A -15- SB 11
New Text Underlined [DELETED TEXT BRACKETED]
(2) other information that clearly informs the employee of the potential 1
consequences of the employee's election. 2
(c) An election made under (a) of this section to participate in the defined 3
contribution retirement plan is irrevocable. Retroactive to the date of hire, the 4
employee shall be enrolled in the defined contribution retirement plan under 5
AS 39.35.700 - 39.35.990, the employee's participation in the plan shall be governed 6
by the provisions for the defined contribution retirement plan, and the employee's 7
participation in the defined benefit retirement plan under AS 39.35.095 - 39.35.680 8
shall terminate. 9
(d) When an employee makes an election under (a) of this section, the 10
administrator shall cause the total amount of the employee's employee and employer 11
contributions, with investment earnings and losses through the final day of the 12
employee's participation in the defined benefit retirement plan, to be actuarially 13
calculated and transferred to the employee's designated account in the defined 14
contribution retirement plan. The administrator shall establish transfer procedures by 15
regulation, but the actual transfer may not be later than 30 days after the date the 16
administrator receives the employee's completed election form under (b) of this 17
section, unless the major financial markets for securities available for a transfer are 18
seriously disrupted by an unforeseen event that also causes the suspension of trading 19
on any national securities exchange in the country where the securities were issued. In 20
that event, the 30-day period may be extended by a resolution of the board. Transfers 21
are not commissionable or subject to other fees and may be in the form of securities or 22
cash as determined by the board. Securities shall be valued on the date of receipt in the 23
employee's account. 24
(e) An election made under (a) of this section by an eligible employee who is 25
married may not take effect unless the election is signed by the employee's spouse. An 26
eligible employee whose accounts are subject to a qualified domestic relations order 27
may not make an election to participate in the defined contribution retirement plan 28
under this section unless the qualified domestic relations order is amended or vacated 29
and court-certified copies of the order are received by the administrator. 30
* Sec. 26. AS 39.35.890(j) is repealed and reenacted to read:
31 33-LS0153\A
SB 11 -16- SB0011A
New Text Underlined [DELETED TEXT BRACKETED]
(j) A member who is appointed to disability benefits shall, within 30 days after 1
the date disability benefits begin, provide the administrator with proof that the member 2
has applied for enrollment in a vocational rehabilitation program approved by the 3
administrator. Unless the member demonstrates cause, the benefits terminate at the 4
end of the first month in which the member 5
(1) fails to provide the administrator with the required proof of 6
application for enrollment; 7
(2) is certified by the administrator as failing to enroll in or cooperate 8
with a vocational rehabilitation program approved under this subsection; 9
(3) fails to interview for a job; or 10
(4) fails to accept a job offered. 11
* Sec. 27. AS 14.25.012(c), 14.25.540; AS 39.35.940, and 39.35.957(b) are repealed. 12
* Sec. 28. The uncodified law of the State of Alaska is amended by adding a new section to 13
read: 14
RETIREMENT PLAN ELECTION CHOICE. (a) A teacher who was first hired after 15
June 30, 2006, and before the effective date of this section and who is a member of the 16
defined contribution plan of the teachers' retirement system under AS 14.25.310 - 14.25.590 17
may make a one-time election, within 90 days after the effective date of this section, to 18
participate in the defined benefit retirement plan under AS 14.25.009 - 14.25.220 and to 19
transfer all contributions, including employer contributions, that have been made or should be 20
made to the defined contribution retirement plan for service the member completes before the 21
effective date of the member's participation in the defined benefit retirement plan. 22
(b) A public employee who was first hired after June 30, 2006, and before the 23
effective date of this section and who is a member of the defined contribution plan of the 24
public employees' retirement system under AS 39.35.700 - 39.35.990 may make a one-time 25
election, within 90 days after the effective date of this section, to participate in the defined 26
benefit retirement plan under AS 39.35.095 - 39.35.680 and to transfer all contributions, 27
including employer contributions, that have been made or should be made to the defined 28
contribution retirement plan for any service the member completes before the effective date of 29
the member's participation in the defined benefit retirement plan. 30
* Sec. 29. The uncodified law of the State of Alaska is amended by adding a new section to 31 33-LS0153\A
SB0011A -17- SB 11
New Text Underlined [DELETED TEXT BRACKETED]
read: 1
RETIREMENT PLAN ELECTION PROCEDURE. (a) An election made under sec. 2
28 of this Act to participate in the defined benefit retirement plan under AS 14.25.009 - 3
14.25.220 or AS 39.35.095 - 39.35.680 must be made in writing on one or more forms and in 4
the manner prescribed by the administrator. Before an eligible member makes an election 5
under sec. 28 of this Act, the administrator shall provide to the member 6
(1) written notice of the member's eligibility; and 7
(2) information about potential consequences of the member's election, 8
including calculations that illustrate the effect of changing the member's retirement plan from 9
the defined contribution retirement plan to the defined benefit retirement plan. 10
(b) An election made under sec. 28 of this Act to participate in the defined benefit 11
retirement plan is irrevocable. On the effective date of the election, an eligible member who 12
makes the election shall be enrolled as a member of the defined benefit retirement plan, the 13
member's participation in the plan shall be governed by the provisions for the defined benefit 14
retirement plan, and the member's participation in the defined contribution retirement plan 15
shall terminate. The member's enrollment in the defined benefit retirement plan shall be 16
effective retroactive to the date of hire. An election made by an eligible member who is 17
married is not effective unless the election is signed by the member's spouse. 18
(c) When an eligible member makes a one-time election under sec. 28 of this Act, the 19
administrator shall cause the total amount of the member's employee and employer 20
contributions, with investment earnings and losses through the final day of the member's 21
participation as a member in the defined contribution retirement plan, to be actuarially 22
calculated and, subject to (d) of this section, transferred to the pension fund in the defined 23
benefit retirement plan. On the effective date of the member's participation in the defined 24
benefit retirement plan, the member shall be credited with service in the defined benefit 25
retirement plan that is equal to the member's service in years, including fractional years, 26
recognized for computing benefits that may be due from the defined contribution retirement 27
plan. The board shall establish transfer procedures by regulation, but the actual transfer may 28
not be later than 30 days after the date the administrator receives the member's completed 29
election forms under (a) of this section, unless the major financial markets for securities 30
available for a transfer are seriously disrupted by an unforeseen event that also causes the
31 33-LS0153\A
SB 11 -18- SB0011A
New Text Underlined [DELETED TEXT BRACKETED]
suspension of trading on any national securities exchange in the country where the securities 1
were issued. In that event, the 30-day period may be extended by a resolution of the board. 2
Transfers are not commissionable or subject to other fees and may be in the form of securities 3
or cash as determined by the board. Securities shall be valued on the date of receipt in the 4
member's account. 5
(d) If the value actuarially calculated under (c) of this section is insufficient to pay for 6
a service credit equal to the member's actual service, the administrator shall allow the member 7
to create an indebtedness up to the amount needed to eliminate the insufficiency; however, if 8
that value exceeds the amount needed to pay for a service credit equal to the member's actual 9
service, the administrator shall cause the excess to be paid to the employee as a rollover 10
transfer to either an individual employee annuity account in the Department of Administration 11
under the terms of AS 39.30.150 - 39.30.180 (State of Alaska Supplemental Annuity Plan) or, 12
if the member's employer does not participate in the State of Alaska Supplemental Annuity 13
Plan, to an eligible retirement plan as defined in AS 14.25.360(d) or AS 39.35.760(d). An 14
excess under this subsection may not be used to purchase service credit in a retirement plan 15
administered under AS 14.25 or AS 39.35. 16
(e) The provisions of this section are subject to the requirements of the Internal 17
Revenue Code and the limitations under AS 14.25.010, 14.25.320(c) and (d), 14.25.490, 18
AS 39.35.115, 39.35.678, 39.35.710(c) and (d), and 39.35.895. 19
(f) In this section, 20
(1) "administrator" means the commissioner of administration or the person 21
designated by the commissioner of administration under AS 39.35.003 for a public 22
employees' retirement plan and under AS 14.25.003 for a teachers' retirement plan; 23
(2) "board" means the Alaska Retirement Management Board established 24
under AS 37.10.210; 25
(3) "defined benefit retirement plan" means the retirement plan established 26
under 27
(A) AS 14.25.009 - 14.25.220 for a teacher; or 28
(B) AS 39.35.095 - 39.35.680 for a public employee; 29
(4) "defined contribution retirement plan" means the retirement plan 30
established under 31 33-LS0153\A
SB0011A -19- SB 11
New Text Underlined [DELETED TEXT BRACKETED]
(A) AS 14.25.310 - 14.25.590 for a teacher; or 1
(B) AS 39.35.700 - 39.35.990 for a public employee; 2
(5) "Internal Revenue Code" has the meaning given in AS 39.35.990. 3
* Sec. 30. The uncodified law of the State of Alaska is amended by adding a new section to 4
read: 5
ADOPTION OF REGULATIONS. The commi ssioner of administration shall adopt 6
regulations necessary to implement the changes made by this Act. The regulations take effect 7
under AS 44.62 (Administrative Procedure Act), but not before the effective date of the law 8
implemented by the regulation. 9
* Sec. 31. Sections 29 and 30 of this Act take effect immediately under AS 01.10.070(c). 10
* Sec. 32. Except as provided in sec. 31 of this Act, this Act takes effect July 1, 2023. 11