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CS FOR SENATE BILL NO. 21(L&C)
IN THE LEGISLATURE OF THE STATE OF ALASKA
THIRTY-FOURTH LEGISLATURE - FIRST SESSION
BY THE SENATE LABOR AND COMMERCE COMMITTEE
Offered: 4/9/25
Referred: Finance
Sponsor(s): SENATORS WIELECHOWSKI, Gray-Jackson
A BILL
FOR AN ACT ENTITLED
"An Act establishing the Alaska Work and Save Program in the Department of 1
Revenue; relating to the duties of the commissioner of labor and workforce 2
development; and providing for an effective date." 3
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 4
* Section 1. AS 43.23.130(a) is amended to read: 5
(a) Notwithstanding AS 43.23.200, the Department of Revenue shall prepare 6
the electronic Alaska permanent fund dividend application to allow an applicant who 7
files electronically to direct that money be subtracted from the dividend payment and 8
contributed to the applicant's Alaska Work and Save Program participant
9
account (AS 44.25.400 - 44.25.490), the crime victim compensation fund 10
(AS 18.67.162), the peace officer and firefighter survivors' fund, or one or more of the 11
educational organizations, community foundations, or charitable organizations that 12
appear on the contribution list contained in the application. A contribution to an 13
Alaska Work and Save Program participant account, the crime victim 14 34-LS0254\I
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compensation fund, the peace officer and firefighter survivors' fund or to an 1
organization may be $25, $50, $75, $100, or more, in increments of $50, up to the 2
total amount of the permanent fund dividend that the applicant is entitled to receive. If 3
the total amount of contributions elected by an applicant exceeds the amount of the 4
permanent fund dividend that the applicant is entitled to receive, contributions shall be 5
deducted from the dividend in the order of priority elected by the applicant on the 6
application until the entire amount of the dividend that the applicant is entitled to 7
receive is allocated for contribution. The electronic dividend application form must 8
include notice that seven percent of the money contributed will be used for 9
administrative costs incurred in implementing this section, and money from the 10
dividend fund will not be used for that purpose. 11
* Sec. 2. AS 43.23.130(b) is amended to read: 12
(b) The department shall list each educational organization, community 13
foundation, or charitable organization eligible under (c) and (d) of this section, each 14
university campus that applies under (l) of this section, the Alaska Work and Save 15
Program, the crime victim compensation fund, and the peace officer and firefighter 16
survivors' fund on the contribution list. The department shall maintain an electronic 17
database for the contribution list that is accessible to the public and that permits 18
searches by organization or fund name, geographic location, and type. The department 19
shall provide a statement of the contributions made by an individual that is suitable for 20
federal income tax purposes to each individual who elects to contribute under (a) of 21
this section. 22
* Sec. 3. AS 43.23.130(m) is amended to read: 23
(m) In addition to the application fee in (f) of this section, the department shall 24
withhold a coordination fee from each organization, foundation, or university campus 25
that receives contributions under this section in the immediately preceding dividend 26
year. The coordination fee for an organization, foundation, or university campus that 27
receives contributions under this section shall be seven percent of the amount of 28
contributions reported by the department under (j) of this section for the organization, 29
foundation, or university campus for the immediately preceding dividend year. The 30
coordination fee shall be separately accounted for under AS 37.05.142 and shall be 31 34-LS0254\I
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accounted for separately from the application fee collected under (f) of this section. 1
The annual estimated balance in the account maintained under AS 37.05.142 for 2
coordination fees collected under this subsection may be appropriated for costs of 3
administering this section. The department may not withhold a coordination fee for 4
contributions to an Alaska Work and Save Program participant account, the crime 5
victim compensation fund or the peace officer and firefighter survivors' fund. 6
* Sec. 4. AS 44.25 is amended by adding new sections to read: 7
Article 5. Alaska Work and Save Program. 8
Sec. 44.25.400. Alaska Work and Save Program. (a) The Alaska Work and 9
Save Program is established in the Department of Revenue. The commissioner of 10
revenue or the commissioner's designee shall administer the program. 11
(b) An employer that does not offer a qualified retirement plan shall facilitate 12
participation of the employer's employees in the program. 13
(c) Under the program, 14
(1) an eligible employee is automatically enrolled in the program at the 15
default contribution rate established by the administrator; 16
(2) an eligible employee's contribution rate increases at the default rate 17
established by the administrator; 18
(3) an eligible employee may 19
(A) opt out of the program or a contribution rate increase; 20
(B) make contributions at a rate different than the default rate 21
established by the administrator; 22
(C) increase contributions at a rate different than the default 23
rate established by the administrator; 24
(4) any person who earns compensation in this state is eligible to 25
voluntarily enroll in the program. 26
(d) The state, the program, and the administrator 27
(1) may not guarantee a specific rate of return or interest for a 28
contribution; 29
(2) are not liable for any loss incurred by a participant as a result of 30
participating in the program; 31 34-LS0254\I
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(3) have no proprietary interest in contributions to, or earnings on 1
amounts contributed to, participant accounts. 2
(e) Nothing in AS 44.25.400 - 44.25.490 prohibits an employer from 3
establishing an alternative retirement plan for the employer's employees. 4
Sec. 44.25.410. Purpose of program. The administrator is the trustee of all 5
contributions and earnings on amounts contributed to participant accounts. The 6
administrator's primary mission is to 7
(1) develop a retirement program for employees in this state who are 8
not offered a qualified retirement plan by an employer; 9
(2) conduct a market and legal analysis of the program; and 10
(3) facilitate the investment of funds contributed to participant 11
accounts. 12
Sec. 44.25.420. Powers and duties of the administrator. (a) The 13
administrator shall 14
(1) develop and administer the program; 15
(2) adopt regulations to implement AS 44.25.400 - 44.25.490; 16
(3) establish a process for enrollment in the program, including 17
automatic employee enrollment and a process for an employee to opt out of the 18
program; 19
(4) direct the investment of funds contributed to participant accounts 20
and professionally manage participant accounts, consistent with 21
(A) investment restrictions established by the administrator; 22
and 23
(B) standards of prudence; 24
(5) provide a range of investment options and establish the rules by 25
which a participant may direct the participant's investments among those options; 26
(6) obtain an external performance review to evaluate the investment 27
policies of the program and include the results in the report provided under (7) of this 28
subsection; 29
(7) by the first day of each regular legislative session, report to the 30
governor and legislature on the financial condition of the program and any civil 31 34-LS0254\I
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penalties issued under the program; 1
(8) develop an annual operating budget; 2
(9) in accordance with Internal Revenue Code limits, set a minimum, 3
maximum, and default contribution rate and set a default rate for contribution 4
increases; 5
(10) allow a participant to adjust the rate of contributions to the 6
participant's account and the rate of increases to the contribution rate; 7
(11) establish a process to allow a participant to make contributions, in 8
addition to the participant's contributions through payroll deduction, to the 9
participant's account, including contributions from the participant's permanent fund 10
dividend; 11
(12) establish a process to allow a participant to withdraw funds from a 12
program account; 13
(13) deposit a contribution to the program directly in a participant 14
account; 15
(14) maintain separate records and accounting for each participant 16
account; 17
(15) provide program and account status reports to participants at least 18
once a year; 19
(16) allow participants to maintain a program account regardless of 20
employer; 21
(17) keep fees assessed to defray program administration costs low; 22
(18) disclose to employees, employers, and program participants 23
(A) the benefits and risks of contributing to the program; 24
(B) instructions on contributing to the program and changing 25
contribution rates; 26
(C) the process to opt out of the program; 27
(D) the process to withdraw funds from a participant account; 28
(E) how to obtain additional program information; 29
(F) that the program is not an employer-sponsored retirement 30
plan; 31 34-LS0254\I
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(G) that financial advisors are best positioned to provide 1
financial advice and that employers are not liable for employee financial 2
decisions under AS 44.25.400 - 44.25.490; 3
(H) that the state, the program, and the administrator do not 4
guarantee participant accounts or a rate of return; 5
(I) how an employee may file a complaint against an employer 6
who fails to facilitate employee participation in the program. 7
(b) The administrator may 8
(1) contract for services necessary to execute the administrator's 9
powers and duties; 10
(2) employ outside investment advisors to review investment policies; 11
(3) establish and collect fees to defray program administration costs; 12
(4) consider and purchase pooled private insurance for the program; 13
(5) develop and conduct outreach about the program and retirement 14
savings; 15
(6) request that the commissioner of labor and workforce development 16
investigate an employer under AS 44.25.440; 17
(7) when prudent or necessary to do so for the benefit of the program, 18
enter into agreements, including contracts, memoranda of understanding, partnerships, 19
or other arrangements, with other governmental entities, including other states, or 20
agencies or instrumentalities of other states, that maintain or are establishing 21
retirement savings programs compatible with or similar to the program; 22
(8) change the default contribution rate and default rate for 23
contribution increases; 24
(9) use private sector partnerships to administer and invest 25
contributions to the program; 26
(10) access information held by, and enter into service agreements 27
with, other departments and agencies of the state. 28
Sec. 44.25.430. Confidentiality of information. (a) Individual account 29
information for participant accounts, including an account holder's name, address, 30
telephone number, personal identification information, contributions, earnings, and 31 34-LS0254\I
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account balance, is confidential and not subject to disclosure as a public record. 1
(b) Notwithstanding (a) of this section, individual account information may be 2
disclosed 3
(1) to the extent necessary to administer the program in a manner 4
consistent with the tax laws of the state and the Internal Revenue Code; or 5
(2) if the account holder expressly agrees to the disclosure, in writing. 6
Sec. 44.25.440. Complaints. (a) An employee may file a complaint with the 7
commissioner of labor and workforce development alleging that an employer subject 8
to AS 44.25.400 - 44.25.490 failed to facilitate employee participation in the program. 9
(b) The commissioner of labor and workforce development may, upon 10
receiving an employee complaint or upon request of the administrator, investigate an 11
employer. If the commissioner determines that the employer was required but failed to 12
facilitate employee participation in the program for six months, the commissioner may 13
impose a civil penalty on the employer. 14
(c) The commissioner of labor and workforce development may impose on an 15
employer a civil penalty of up to $100 for each employee of the employer who is 16
eligible to participate in the program but for whom the employer does not facilitate 17
participation in the program. The commissioner may not impose penalties under this 18
section on a single employer that exceed $5,000 in a calendar year. 19
(d) The commissioner of labor and workforce development shall notify the 20
administrator when an employer has failed to facilitate employee participation in the 21
program and when the commissioner imposes a civil penalty on an employer. 22
(e) The administrator may notify an employer that has failed to facilitate 23
employee participation in the program that the employer may be subject to a civil 24
penalty for failure to comply with program requirements. 25
Sec. 44.25.490. Definitions. In AS 44.25.400 - 44.25.490, 26
(1) "administrator" means the commissioner of revenue or the 27
commissioner's designee; 28
(2) "employee" has the meaning given in AS 23.30.395; 29
(3) "employer" means a person or business that has employed one or 30
more other persons in the state for not less than one year and does not provide a
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qualified retirement plan to employees; 1
(4) "program" means the Alaska Work and Save Program; 2
(5) "qualified retirement plan" includes a plan qualified under 26 3
U.S.C. 401(a) or (k), 403(a) or (b), 408(k) or (p), or 457(b) (Internal Revenue Code). 4
* Sec. 5. This Act takes effect January 1, 2026. 5