HB 79 — An Act relating to participation of certain peace officers and firefighters in the defined benefit and defined contribution plans of the Public Employees' Retirement System of Alaska; relating to eligibility of peace officers and firefighters for medical, disability, and death benefits; relating to liability of the Public Employees' Retirement System of Alaska; and providing for an effective date.

an excess loss 2824 insurance policy may be obtained from a life or health insurer authorized to transact 2925 business in this state under AS 21.09 or from a hospital or medical service corporation 3026 authorized to transact business in this state under AS 21.87;

3127 (5) the Department of Administration shall make available bid 28 specifications for desired insurance benefits or for administration of benefit claims and 0229 payments to (A) all insurance carriers authorized to transact business in this state 0330 under AS 21.09 and all hospital or medical service corporations authorized to transact 0431 business under AS 21.87 who are qualified to provide the desired benefits;

and (B) 05 insurance carriers authorized to transact business in this state under AS 21.09, hospital 0602 or medical service corporations authorized to transact business under AS 21.87, and 0703 third-party administrators licensed to transact business in this state and qualified to 0804 provide administrative services;

the specifications shall be made available at least once 0905 every five years;

the lowest responsible bid submitted by an insurance carrier, hospital 1006 or medical service corporation, or third-party administrator with adequate servicing 1107 facilities shall govern selection of a carrier, hospital or medical service corporation, or 1208 third-party administrator under this section or the selection of an insurance carrier or a 1309 hospital or medical service corporation to provide excess loss insurance as provided in 1410 AS 39.30.091;

1511 (6) if the aggregate of dividends payable under the group insurance 1612 policy exceeds the governmental unit's share of the premium, the excess shall be 1713 applied by the governmental unit for the sole benefit of the employees;

1814 (7) a person receiving benefits under AS 14.25.110, AS 22.25, 1915 AS 39.35, or former AS 39.37 may continue the life insurance coverage that was in 2016 effect under this section at the time of termination of employment with the state or 2117 participating governmental unit;

2218 (8) a person electing to have insurance under (7) of this subsection 2319 shall pay the cost of this insurance;

2420 (9) for each permanent part-time employee electing coverage under 2521 this section, the state shall contribute one-half the state contribution rate for permanent 2622 full-time state employees, and the permanent part-time employee shall contribute the 2723 other one-half;

2824 (10) a person receiving benefits under AS 14.25, AS 22.25, AS 39.35, 2925 or former AS 39.37 may obtain auditory, visual, and dental insurance for that person 3026 and eligible dependents under this section;

the level of coverage for persons over 65 3127 shall be the same as that available before reaching age 65 except that the benefits 28 payable shall be supplemental to any benefits provided under the federal old age, 0229 survivors, and disability insurance program;

a person electing to have insurance under 0330 this paragraph shall pay the cost of the insurance;

the commissioner of administration 0431 shall adopt regulations implementing this paragraph;

05 (11) a person receiving benefits under AS 14.25, AS 22.25, AS 39.35, 0602 or former AS 39.37 may obtain long-term care insurance for that person and eligible 0703 dependents under this section;

a person who elects insurance under this paragraph 0804 shall pay the cost of the insurance premium;

the commissioner of administration shall 0905 adopt regulations to implement this paragraph;

1006 (12) each licensee holding a current operating agreement for a vending 1107 facility under AS 23.15.010 - 23.15.210 shall be covered by the group policy that 1208 applies to governmental units other than the state.

1309 * Sec.

1410 (a) The commissioner of administration is authorized to prefund medical 1511 benefits provided by AS 14.25.168, AS 22.25.090, [AND] AS 39.35.535, and 1612 39.35.537 by establishing an irrevocable trust that is exempt from federal income tax 1713 under 26 U.S.C.

115 and subject to the applicable financial reporting, disclosure, and 1814 actuarial requirements of the Governmental Accounting Standards Board.

1915 * Sec.

2016 (b) The commissioner of administration is authorized to prefund medical 2117 benefits provided by AS 14.25.480, AS 39.30.300, AS 39.35.537, and 39.35.880 2218 [AS 39.35.880] by establishing an irrevocable trust that is exempt from federal income 2319 tax under 26 U.S.C.

115 and subject to the applicable financial reporting, disclosure, 2420 and actuarial requirements of the Governmental Accounting Standards Board.

2521 * Sec.

2622 Sec.

State of Alaska Teachers' and Public Employees' Retiree 2723 Health Reimbursement Arrangement Plan established.

The State of Alaska 2824 Teachers' and Public Employees' Retiree Health Reimbursement Arrangement Plan is 2925 established for teachers who first become members of the defined contribution plan of 3026 the teachers' retirement system under AS 14.25.310 - 14.25.590 on or after July 1, 3127 2006, and employees of the state, political subdivisions of the state, and public 28 organizations of the state who first become members [OF THE DEFINED 0229 CONTRIBUTION PLAN] of the Public Employees' Retirement System of Alaska 0330 (AS 39.35) [PUBLIC EMPLOYEES' RETIREMENT SYSTEM UNDER 0431 AS 39.35.700 - 39.35.990] on or after July 1, 2006.

05 * Sec.

0602 Sec.

A person who terminates 0703 employment before meeting the eligibility requirements of AS 14.25.470, 0804 AS 39.35.537, or 39.35.870 [OR AS 39.35.870] loses any right to the contributions 0905 made on behalf of the person to the teachers' and public employees' retiree health 1006 reimbursement arrangement trust fund.

If a person returns to employment with a 1107 participating employer by December 31 of the year in which the person reaches 65 1208 years of age, the person's account balance shall be restored in the amount recorded on 1309 the date of termination from the trust, adjusted for inflation at the rate of the Consumer 1410 Price Index for Anchorage, Alaska.

The earlier period of employment with a 1511 participating employer shall be credited toward eligibility for medical benefits.

1612 * Sec.

1713 Sec.

Persons who meet the 1814 eligibility requirements of AS 14.25.470, AS 39.35.537, or 39.35.870 [AND 1915 AS 39.35.870] are eligible for reimbursements from the individual account established 2016 for a member under the plan, except members do not have to retire directly from the 2117 system.

A person who is the dependent child of an eligible member is eligible for 2218 reimbursements if the eligible member and surviving spouse have both died so long as 2319 the person meets the definition of dependent child.

2420 * Sec.

2521 (a) The administrator may deduct the cost of monthly premiums from the 2622 individual account for retiree major medical insurance on behalf of an eligible person 2723 who elected retiree major medical insurance under AS 14.25.480, AS 39.35.537, or 2824 39.35.880 [OR AS 39.35.880].

2925 * Sec.

3026 (5) "eligible person" means a person who meets the eligibility 3127 requirements of AS 14.25.470, AS 39.35.537, or 39.35.870 [OR AS 39.35.870];

28 * Sec.

0229 Sec.

The 0330 [FOLLOWING] provisions of AS 39.35.095 - 39.35.680 [THIS CHAPTER] apply 0431 only to members 05 (1) first hired before July 1, 2006;

or 0602 (2) who are peace officers or firefighters and 0703 (A) former members of the defined contribution retirement 0804 plan under AS 39.35.700 - 39.35.990;

or 0905 (B) first hired after June 30, 2006, and have not been 1006 members of the defined contribution retirement plan under AS 39.35.700 - 1107 39.35.990 [:

1208 * Sec.

1309 (a) Subject to (e) of this section, beginning [BEGINNING] January 1, 1987, 1410 each peace officer or firefighter shall contribute to the plan an amount equal to seven 1511 and one-half percent of the peace officer's or firefighter's compensation.

Except as 1612 provided in (d) and (e) of this section, beginning January 1, 1987, each other 1713 employee shall contribute to the plan an amount equal to six and three-quarters percent 1814 of the employee's compensation.

[THE CONTRIBUTIONS SHALL BE DEDUCTED 1915 BY THE EMPLOYER AT THE END OF EACH PAYROLL PERIOD.

THE 2016 CONTRIBUTIONS SHALL BE DEDUCTED FROM EMPLOYEE 2117 COMPENSATION BEFORE COMPUTATION OF APPLICABLE FEDERAL 2218 TAXES, AND THE CONTRIBUTIONS SHALL BE TREATED AS EMPLOYER 2319 CONTRIBUTIONS UNDER 26 U.S.C.

A MEMBER MAY NOT HAVE 2420 THE OPTION OF MAKING THE PAYROLL DEDUCTION DIRECTLY INSTEAD 2521 OF HAVING THE CONTRIBUTION PICKED UP BY THE EMPLOYER.] 2622 * Sec.

2723 (e) A peace officer or firefighter who first participates in the plan after 2824 June 30, 2006, shall contribute to the plan an amount equal to eight percent of the 2925 employee's compensation.

The board may, from time to time, adjust the employee 3026 contribution under this subsection to an amount that, 3127 (1) if decreased, is not less than eight percent of the employee's 28 compensation;

and 0229 (2) if increased, is not more than 10 percent of the employee's 0330 compensation.

0431 (f) Contributions under (a) and (e) of this section shall be deducted by the 05 employer at the end of each payroll period.

The contributions shall be deducted from 0602 employee compensation before computation of applicable federal taxes, and the 0703 contributions shall be treated as employer contributions under 26 U.S.C.

A 0804 member may not have the option of making the payroll deduction directly instead of 0905 having the contribution picked up by the employer.

1006 * Sec.

AS 39.35.255(a)39.35.255(c) is amended to read:

1107 (a)(c) Except asfor requiredcontributions made by (i) of this section, an [EACH] employer shallfor 12 contribute to the system every payroll period an amountemployee calculatedwho byis applying08 a ratepeace 13officer ofor 22firefighter percentwho offirst theparticipates greaterin of the totalplan ofafter allJune base30, salaries2006, 1409 (1)if paid[IF], byafter theallocation employerof tocontributions employees,under other(b) thanof peacethis officerssection, ora 15portion firefightersof whothe first10 becameemployer memberscontributions ofremains, the planadministrator aftershall Juneapply 30,that 2006,remaining whoportion are11 16toward activepayment members of the system,past includingservice anyliability adjustmentsof tothe contributionsplan. required by 17 AS 39.35.520;

or12 18* (2)Sec. paid by the employer to employees, other than peace officers or 19 firefighters who first became members of the plan after June 30, 2006, who were 20 active members of the system during the corresponding payroll period for the fiscal 21 year ending 22 (A) June 30, 2008;

or 23 (B) June 30, 2012, if that total is less than the total under (A) of 24 this paragraph, and the employer is a municipality in which the population 25 decreased by more than 25 percent between 2000 and 2010, according to the 26 decennial census conducted by the United States Bureau of the Census.

27 * Sec.

AS 39.35.255(d)39.35.255 is amended by adding new subsections to read:

2813 (d)(i) NotwithstandingAny (a)accrued andactuarial (i)liability offor thiseligible section,employees thehired annualbefore employerJuly 291, contribution14 rate2006, may not be lesspaid thanto the rateplan sufficientonly toby allowemployers paymentwith ofemployees thewho 30participate employerin normal15 cost and the employerdefined contributionsbenefit requiredretirement underplan. AS 39.30.370 31 and AS 39.35.750.

*If Sec.the amount of the accrued actuarial liability 16 increases as a result of participation in the plan by peace officers or firefighters who 17 first participated in the plan after June 30, 2006, only employers of peace officers or 18 firefighters who first participated in the plan after June 30, 2006, must pay increased 19 contribution rates to reduce the accrued actuarial liability.

20 (j) The requirements of this section are in addition to the requirements under 21 AS 39.35.257.

22 * Sec.

AS 39.35.255(e)39.35 is amended by adding a new section to read:

0223 (e)Sec. An employer of a retired member rehired under AS 39.35.150 shall include 03 that member's base salary when calculating the contribution amount established in (a) 04 or (i) of this section.

0539.35.257. * Sec.

Employer contributions for peace officers and firefighters.

24 An employer that employs a peace officer or firefighter who first participates in the 25 plan after June 30, 2006, shall contribute monthly to the plan a per capita amount, 26 determined by the board, that 27 (1) is equal to not less than 12 percent of the total monthly 28 compensation that the employer pays to all peace officers and firefighters who first 29 became members of the plan after June 30, 2006;

and 30 (2) if increased, is increased based on an increase in the employee 31 contribution rate under AS 39.35.160(e).

* Sec.

AS 39.35.255 is amended by adding new subsections to read:

06 (i) An employer that employs a peace officer or firefighter who first 07 participates in the plan after June 30, 2006, shall contribute to the system every payroll 08 period an amount equal to the sum of 09 (1) a per capita amount that is calculated by applying a rate, 10 determined by the board, of not less than 12 percent of the total monthly compensation 11 the employer pays to all peace officers and firefighters who first became members of 12 the plan after June 30, 2006;

and 13 (2) an amount, determined by the board, that is equal to the difference 14 between the per capita amount determined under (1) of this subsection and the amount 15 calculated under (a) of this section.

16 (j) The board may from time to time increase the percentage rate determined 17 under (i)(1) of this section;

however, that increase must be based on a concurrent 18 increase, if any, in the employee contribution rate under AS 39.35.160(e).

19 * Sec.

19.

2002 Sec.

Contributions made by 2103 an employer under AS 39.35.255 and 39.35.280 must [SHALL] be separately 2204 computed for benefits provided by AS 39.35.535 and 39.35.537.

The contributions 2305 computed for benefits provided by AS 39.35.535 must [AND SHALL] be deposited 2406 in the Alaska retiree health care trust established under AS 39.30.097(a), and the 2507 contributions computed for benefits provided by AS 39.35.537 must be deposited 2608 in the teachers' and public employees' retiree health reimbursement arrangement 2709 plan trust fund established under AS 39.30.340.

2810 * Sec.

20.19.

2911 (a) Subject to AS 39.35.450, a terminated employee who first became a 3012 member before July 1, 2006, is eligible for a normal retirement benefit 3113 (1) at age 60 with at least five years of credited service;

14 (2) with at least 20 years of credited service as a peace officer or 0215 firefighter;

or 0316 (3) with at least 30 years of credited service for all other employees.

0417 * Sec.

21.20.

0518 (l) Subject to AS 39.35.450, a terminated employee who first becomes a 0619 member after June 30, 2006, is eligible for a normal retirement benefit 0720 (1) at age 60 with at least five years of credited service as a peace 0821 officer or firefighter;

or 0922 (2) at age 55 with at least 20 years of credited service as a peace 1023 officer or firefighter.

1124 * Sec.

22.21.

1225 (e) A person who retires under this section is not entitled to disability or death 1326 benefits under AS 39.35.400 - 39.35.440, a minimum benefit under AS 39.35.485, or 1427 to medical benefits under AS 39.35.535 or 39.35.537.

Service earned under this 1528 section may not be used for vesting under AS 39.35.095 - 39.35.680.

1629 * Sec.

23.22.

1730 (a) Subject to (g) of this section, once [ONCE] each year the administrator 1831 shall increase benefit payments to eligible disabled members, to persons age 60 or 19 older receiving benefits under this plan in the preceding calendar year, and to persons 2002 who have received benefits under this plan for at least five years who are not 2103 otherwise eligible for an increase under this section.

2204 * Sec.

24.23.

2305 (b) Subject to (h) of this section, the [THE] increase in benefit payments 2406 applies to total benefit payments except for the cost-of-living allowance under 2507 AS 39.35.480.

The amount of the increase is a percentage of the current benefit equal 2608 to 2709 (1) the lesser of 75 percent of the increase in the cost of living in the 2810 preceding calendar year or nine percent, for recipients who on July 1 are at least 65 2911 years old and for members receiving disability benefits;

and 3012 (2) the lesser of 50 percent of the increase in the cost of living in the 3113 preceding calendar year or six percent, for recipients who on July 1 are at least 60 but 14 less than 65 years old or for recipients who are less than 60 years old on July 1 but 0215 who have received benefits from the plan for at least five years.

0316 * Sec.

25.24.

0417 (g) A person who receives a benefit under AS 39.35.370(l) is eligible to 0518 receive an increase in benefits under this section.

0619 (h) If the board determines thatthat, thefor portion of the unfunded liability of the plan 07 that is attributable to all peace officers and firefighters who first 20 become members of 08 the plan after June 30, 2006, isthe plan has an unfunded liability 21 greater than 10 percent, the board may reduce the 09 amount of the increase under (b) of 22 this section that is payable to a peace officer or 10 firefighter who first becomes a 23 member after June 30, 2006.

At any time, the board 11 may terminate a reduction made 24 under this subsection.

1225 * Sec.

26.25.

1326 (a) Except as provided in (d) and (g) of this section, the following persons are 1427 entitled to major medical insurance coverage under this section:

1528 (1) for employees first hired before July 1, 1986, 1629 (A) an employee who is receiving a monthly benefit from the 1730 plan and who has elected coverage;

1831 (B) the spouse and dependent children of the employee 19 described in (A) of this paragraph;

2002 (C) the surviving spouse of a deceased employee who is 2103 receiving a monthly benefit from the plan and who has elected coverage;

2204 (D) the dependent children of a deceased employee who are 2305 dependent on the surviving spouse described in (C) of this paragraph;

2406 (2) for members first hired on or after July 1, 1986, 2507 (A) an employee who is receiving a monthly benefit from the 2608 plan and who has elected coverage for the employee;

2709 (B) the spouse of the employee described in (A) of this 2810 paragraph if the employee elected coverage for the spouse;

2911 (C) the dependent children of the employee described in (A) of 3012 this paragraph if the employee elected coverage for the dependent children;

3113 (D) the surviving spouse of a deceased employee who is 14 receiving a monthly benefit from the plan and who has elected coverage;

0215 (E) the dependent children of a deceased employee who are 0316 dependent on the surviving spouse described in (D) of this paragraph if the 0417 surviving spouse has elected coverage for the dependent children.

0518 * Sec.

27.26.

0619 (c) A benefit recipient who became a member before July 1, 2006, or the 0720 surviving spouse of the member may elect major medical insurance coverage in 0821 accordance with regulations and under the following conditions:

0922 (1) a person, other than a disabled member or a disabled member who 1023 is appointed to normal retirement, shall [MUST] pay an amount equal to the full 1124 monthly group premium for retiree major medical insurance coverage if the person is 1225 (A) younger than 60 years of age and has less than 1326 (i) 25 years of credited service as a peace officer under 1427 AS 39.35.360 and 39.35.370;

or 1528 (ii) 30 years of credited service under AS 39.35.360 and 1629 39.35.370 that is not service as a peace officer;

or 1730 (B) of any age and has less than 10 years of credited service;

1831 (2) a person is not required to make premium payments for retiree 19 major medical coverage if the person 2002 (A) is a disabled member;

2103 (B) is a disabled member who is appointed to normal 2204 retirement;

2305 (C) is 60 years of age or older and has at least 10 years of 2406 credited service;

or 2507 (D) has at least 2608 (i) 25 years of credited service as a peace officer under 2709 AS 39.35.360 and 39.35.370;

or 2810 (ii) 30 years of credited service under AS 39.35.360 and 2911 39.35.370 not as a peace officer.

3012 * Sec.

28.27.

3113 (g) A benefit recipient who is a peace officer or firefighter and who first 14 becomes a member after June 30, 2006, or a surviving spouse who is eligible under 0215 AS 39.35.537(b) may elect medical benefits under AS 39.35.537.

0316 * Sec.

29.28.

0417 Sec.

eligibility of peace officers or firefighters 0518 first hired after June 30, 2006;

(a) A peace 0619 officer or firefighter who became a member of the plan after June 30, 2006, receives a 0720 monthly benefit from the plan, and has elected benefits under this section is entitled to 0821 medical benefits under this section.

A member who applies for medical benefits under 0922 this section shall apply on the forms and in the manner prescribed by the 1023 administrator.

1124 (b) The member's surviving spouse is eligible to elect medical benefits if the 1225 member had retired or was eligible for retirement and medical benefits at the time of 1326 the member's death.

1427 (c) The medical benefits available to eligible persons are access to the retiree 1528 major medical insurance plan and access to the health reimbursement arrangement 1629 plan under AS 39.30.300.

Access to the retiree major medical insurance plan means 1730 that an eligible person may not be denied insurance coverage except for failure to pay 1831 the required premium.

19 (d) Retiree major medical insurance plan coverage elected by an eligible 2002 member under this section covers the eligible member, the spouse of the eligible 2103 member, and the dependent children of the eligible member.

2204 (e) Retiree major medical insurance plan coverage elected by a surviving 2305 spouse of an eligible member under this section covers the surviving spouse and the 2406 dependent children of the eligible member who are dependent on the surviving spouse.

2507 (f) Participation in the retiree major medical insurance plan is not required in 2608 order to participate in the health reimbursement arrangement plan.

2709 (g) A person eligible for medical benefits under this section is not required to 2810 participate in the health reimbursement arrangement plan in order to participate in the 2911 retiree major medical insurance plan.

3012 (h) A person who is eligible for medical benefits under this section must make 3113 the irrevocable election to participate or not participate in the retiree major medical 14 insurance plan on or before the date the person reaches 70 1/2 years of age or when the 0215 person applies for retirement and medical benefits, whichever is later.

0316 (i) Major medical insurance coverage takes effect on the first day of the month 0417 following the date of the administrator's approval of the election and stops when the 0518 person who elects coverage dies or fails to make a required premium payment.

0619 (j) The coverage for persons 65 years of age or older is the same as that 0720 available for persons under 65 years of age.

The benefits payable to those persons 65 0821 years of age or older supplement any benefits provided under the federal old age, 0922 survivors, and disability insurance program.

1023 (k) The medical and optional insurance premiums owed by the person who 1124 elects coverage may be deducted from the health reimbursement arrangement.

If the 1225 amount of the health reimbursement arrangement becomes insufficient to pay the 1326 premiums, the person who elects coverage under (a) of this section shall pay the 1427 premiums directly.

1528 (l) The cost of premiums for retiree major medical insurance coverage under 1629 this section for an eligible member or surviving spouse who is 1730 (1) not eligible for Medicare is an amount equal to the full monthly 1831 group premiums for retiree major medical insurance coverage;

19 (2) eligible for Medicare is the following percentage of the premium 2002 amounts established for retirees who are eligible for Medicare:

2103 (A) 30 percent if the member had 10 or more, but less than 15, 2204 years of service;

2305 (B) 25 percent if the member had 15 or more, but less than 20, 2406 years of service;

2507 (C) 20 percent if the member had 20 or more, but less than 25, 2608 years of service;

2709 (D) 15 percent if the member had 25 or more, but less than 30, 2810 years of service;

2911 (E) 10 percent if the member had 30 or more years of service.

3012 (m) The eligibility for retiree major medical insurance coverage for an 3113 alternate payee under a qualified domestic relations order shall be determined based 14 on the eligibility of the member to elect coverage.

The alternate payee shall pay the 0215 full monthly premium for retiree major medical insurance coverage.

0316 (n) A person who is entitled to retiree major medical insurance coverage under 0417 this section shall 0518 (1) be informed by the administrator in writing 0619 (A) that the health insurance coverage available to retired 0720 members may be different from the health insurance coverage provided to 0821 employees;

0922 (B) of time limits for selecting optional health insurance 1023 coverage and whether the election is irrevocable;

and 1124 (2) indicate in writing on a form provided by the administrator that the 1225 person has received the information required by this subsection and whether the 1326 person has chosen to receive optional health insurance coverage.

1427 (o) The monthly group premiums for retiree major medical insurance coverage 1528 under this section are established by the administrator in accordance with 1629 AS 39.30.095.

Nothing in this chapter guarantees a person who elects coverage under 1730 (a) of this section a monthly group premium rate for retiree major medical insurance 1831 coverage other than the premium in effect for the month in which the premium is due 19 for coverage for that month.

2002 (p) In this section, "health reimbursement arrangement plan" means the plan 2103 established in AS 39.30.300.

2204 * Sec.

30.29.

2305 (4) "average monthly compensation" means the result obtained by 2406 dividing the compensation earned by an employee during a considered period by the 2507 number of months, including fractional months, for which compensation was earned;

2608 an employee must have at least 115 days of credited service in the last payroll year in 2709 order for that year to be used as part of the consecutive payroll years;

the considered 2810 period consists of 2911 (A) for employees first hired before July 1, 1996, the three 3012 consecutive payroll years during the period of credited service that yield the 3113 highest average;

14 (B) for employees first hired on or after July 1, 1996, the five 0215 consecutive payroll years during the period of credited service that yield the 0316 highest average;

0417 (C) if the employee does not have the number of consecutive 0518 payroll years required by (A) or (B) of this paragraph, the actual number of 0619 months, including fractional months, that the employee worked;

0720 (D) for an employee who has made an election under 0821 AS 39.35.300(c) or 39.35.310(c), the actual number of months, including 0922 fractional months, that the employee worked;

1023 (E) for a peace officer or firefighter hired before July 1, 2006 1124 [AT ANY TIME], the three consecutive payroll years during the period of 1225 credited service that yield the highest average;

1326 (F) for a peace officer or firefighter hired after June 30, 1427 2006, the five consecutive payroll years during the period of credited 1528 service that yield the highest average;

29 * Sec.

30.

AS 39.35.680(18) is amended to read:

30 (18) "employer" means 31 (A) the State of Alaska;

(B) a political subdivision or public organization of the state 02 that participates in the plan based on a resolution to participate in the plan that 03 was approved by the administrator 04 (i) on or before July 1, 2006;

or 05 (ii) for peace officers and firefighters;

or 06 (C) a political subdivision or public organization of the state 07 that assumes liability for participation in the plan by another political 08 subdivision or public organization of the state [,] as a result of consolidation 09 or reorganization that occurs 10 (i) at any time, with respect to peace officers or 11 firefighters;

12 (ii) on or after July 1, 2006, with respect to employees 13 who are not peace officers or firefighters [ASSUMES LIABILITY 14 UNDER THE PLAN OF A POLITICAL SUBDIVISION OR PUBLIC 15 ORGANIZATION DESCRIBED IN (B) OF THIS PARAGRAPH];

AS 39.35.680(18) is amended to read:

17 (18) "employer" means 18 (A) the State of Alaska;

19 (B) a political subdivision or public organization of the state 20 that participates in the plan based on a resolution to participate in the plan that 21 was approved by the administrator 22 (i) on or before July 1, 2006;

or 23 (ii) for peace officers and firefighters;

or 24 (C) a political subdivision or public organization of the state 25 that assumes liability for participation in the plan by another political 26 subdivision or public organization of the state [,] as a result of consolidation 27 or reorganization that occurs 28 (i) at any time, with respect to peace officers or 29 firefighters;

30 (ii) on or after July 1, 2006, with respect to employees 31 who are not peace officers or firefighters [ASSUMES LIABILITY UNDER THE PLAN OF A POLITICAL SUBDIVISION OR PUBLIC 02 ORGANIZATION DESCRIBED IN (B) OF THIS PARAGRAPH];

03 * Sec.

32.

0417 (26) "normal retirement" means retirement for a member who is 0518 eligible to receive benefits under AS 39.35.370(a) or (l) or [UNDER] 39.35.385(a) or 0619 (f);

0720 * Sec.

33.32.

0821 Sec.

Except as provided in AS 39.35.095, an [AN] 0922 employee who becomes a member on or after July 1, 2006, shall participate in the plan 1023 set out in AS 39.35.700 - 39.35.990.

1124 * Sec.

34.33.

1225 (f) This section does not apply to contributions made under AS 39.35.255(i)39.35.257 13 and 26 does not require an employer who makes a contribution for an employee under 1427 AS 39.35.255(i)39.35.257 to make another contribution for that employee.

1528 * Sec.

34.

The uncodified law of the State of Alaska is amended by adding a new section to 29 read:

30 RETIREMENT PLAN ELECTION.

(a) A peace officer or firefighter who was first 31 hired after June 30, 2006, and before the effective date of this section, and who is a member of the defined contribution retirement plan of the public employees' retirement system under 02 AS 39.35.700 - 39.35.990, may, within 90 days after the effective date of this section, make a 03 one-time election to participate in the defined benefit retirement plan under AS 39.35.095 - 04 39.35.680 and to transfer all contributions that have been made or should be made to the 05 defined contribution retirement plan for service the member completes before the effective 06 date of the member's participation in the defined benefit retirement plan.

The transferred 07 contributions shall be used to purchase credited service in the defined benefit retirement plan 08 on an actuarial equivalent basis determined by the Alaska Retirement Management Board 09 established under AS 37.10.210.

10 (b) In this section, "peace officer" or "firefighter" has the meaning given in 11 AS 39.35.680.

12 * Sec.

The uncodified law of the State of Alaska is amended by adding a new section to 1613 read:

1714 RETIREMENT PLAN ELECTION.ELECTION PROCEDURE.

(a) AAn peace officer or firefighter who was first 18 hired after June 30, 2006, and before the effective date of this section, and who is a member 19 of the defined contribution retirement plan of the public employees' retirement system under 20 AS 39.35.700 - 39.35.990, may, within 90 days after the effective date of this section, make a 21 one-time election tomade participate in the defined benefit retirement plan under ASsec. 39.35.095 - 22 39.35.680 and to transfer all contributions that have been made or should be made to the 23 defined contribution retirement plan for service the member completes before the effective 24 date of the member's participation in the defined benefit retirement plan.

The15 transferred34 25of contributionsthis shallAct be used to purchaseparticipate credited service in the defined benefit retirement plan 26under onAS an39.35.095 actuarial- equivalent16 basis39.35.680 determinedmust bybe themade Alaskain Retirementwriting Managementon Boardone 27or establishedmore underforms ASand 37.10.210.in the manner prescribed by the 17 administrator.

28Before (b)accepting Inan thiselection section,to "peaceparticipate officer"in orthe "firefighter"defined hasbenefit retirement 18 plan, the meaningadministrator givenshall provide the employee who plans on making an election to 19 participate in 29the ASdefined 39.35.680.benefit retirement plan with information, including calculations to 20 illustrate the effect of moving the employee's retirement plan from the defined contribution 21 retirement plan to the defined benefit retirement plan as well as other information that informs 22 the employee of potential consequences of the employee's election.

23 (b) An election made under sec.

34 of this Act to participate in the defined benefit 24 retirement plan is irrevocable.

On the effective date of the election, an eligible employee who 25 makes the election shall be enrolled as a member of the defined benefit retirement plan, and 26 the employee's participation in the plan shall be governed by the applicable provisions of the 27 defined benefit retirement plan.

The employee's enrollment in the defined benefit retirement 28 plan is retroactive to the date of hire.

An election made by an eligible employee who is 29 married is not effective unless the election is signed by the employee's spouse.

30 (c) When an eligible employee makes a one-time election under sec.

34 of this Act, 31 the administrator shall cause the total amount of the employee's employee and employer contributions, with investment earnings and losses through the day of the employee's election 02 to participate as a member in the defined benefit retirement plan, to be actuarially calculated 03 and, subject to (e) of this section, transferred to the pension fund in the defined benefit 04 retirement plan.

On the effective date of the employee's participation in the defined benefit 05 retirement plan, the employee shall be credited with service in the defined benefit retirement 06 plan that may be purchased under an actuarial equivalent purchase formula as determined by 07 the board.

The board shall establish transfer procedures by regulation, but the actual transfer 08 may not occur later than 30 days after the date the administrator receives the employee's 09 completed forms under (a) of this section, unless the major financial markets for securities 10 available for a transfer are seriously disrupted by an unforeseen event that also causes the 11 suspension of trading on any national securities exchange in the country where the securities 12 were issued.

In that event, the 30-day period may be extended by a resolution of the board.

A 13 transfer is not commissionable or subject to other fees and may be in the form of cash or a 14 security as determined by the board.

A security shall be valued on the date of receipt in the 15 employee's account.

16 (d) When making a transfer for an eligible employee under (c) of this section, the 17 administrator shall cause an amount equal to the 18 (1) decrease in the accrued actuarial liability of the occupational death and 19 disability trust in the defined contribution retirement plan resulting from the transfer as of the 20 date of transfer, based on the most recent actuarial valuation of the occupational death and 21 disability trust, to be transferred from the occupational death and disability trust in the defined 22 contribution retirement plan to the pension fund in the defined benefit retirement plan;

and 23 (2) increase in the accrued actuarial liability of the health care trust in the 24 defined benefit retirement plan resulting from the transfer as of the date of transfer, based on 25 the actuarial assumptions set out in (g) of this section, to be transferred from the public 26 employees' retiree health reimbursement arrangement plan trust fund established under 27 AS 39.30.340 in the defined contribution retirement plan to the health care trust in the defined 28 benefit retirement plan established under AS 39.30.097(a).

29 (e) If the value actuarially calculated under (c) of this section is insufficient to pay for 30 service credit equal to the employee's actual service, the administrator shall allow the 31 employee the option of purchasing any indebtedness up to the amount needed to eliminate the insufficiency;

however, if that value exceeds the amount needed to pay for a service credit 02 equal to the employee's actual service, the administrator shall cause the excess to remain in 03 the employee's retirement plan established under AS 39.35.700 - 39.35.990.

An excess under 04 this subsection may not be used to purchase service credit in a retirement plan administered 05 under AS 39.35.

06 (f) The amount of service that can be purchased under (e) of this section is based on 07 the transferred employee's accrued actuarial liability of pension benefits in the defined benefit 08 retirement plan.

The actuarial assumptions under this section are based on the actuarial 09 assumptions set out in (g) of this section.

10 (g) Actuarial assumptions must be based on the most recent actuarial valuation of the 11 defined benefit retirement plan, except that the retirement rates are computed at 75 percent of 12 the retirement rates for peace officers and firefighters used in the most recent actuarial 13 valuation of the defined contribution retirement pension fund plus 25 percent of the retirement 14 rates for peace officers and firefighters used in the most recent actuarial valuation of the 15 defined benefit retirement plan.

16 (h) The provisions of this section are subject to the requirements of the Internal 17 Revenue Code and the limitations under AS 39.35.115, 39.35.678, 39.35.710(c) and (d), and 18 39.35.895.

19 (i) 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;

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 AS 39.35.095 - 39.35.680 for a public employee;

27 (4) "defined contribution retirement plan" means the retirement plan 28 established under AS 39.35.700 - 39.35.990 for a public employee;

29 (5) "Internal Revenue Code" has the meaning given in AS 39.35.990.

RETIREMENTADOPTION PLANOF ELECTIONREGULATIONS. PROCEDURE.

(a) AnThe electionAlaska madeRetirement underManagement sec.Board 02 may adopt regulations necessary to implement secs.

02 35 of this Act to participate in the defined benefit retirement plan under AS 39.35.095 - 03 39.35.680 must be made in writing on one or more forms and in the manner prescribed by the 04 administrator.

Before accepting an election to participate in the defined benefit retirement 05 plan, the administrator shall provide the employee who plans on making an election to 06 participate in the defined benefit retirement plan with information, including calculations to 07 illustrate the effect of moving the employee's retirement plan from the defined contribution 08 retirement plan to the defined benefit retirement plan as well as other information that informs 09 the employee of potential consequences of the employee's election.

10 (b) An election made under sec.

35 of this Act to participate in the defined benefit 11 retirement plan is irrevocable.

On the effective date of the election, an eligible employee who 12 makes the election shall be enrolled as a member of the defined benefit retirement plan, and 13 the employee's participation in the plan shall be governed by the applicable provisions of the 14 defined benefit retirement plan.

The employee's enrollment in the defined benefit retirement 15 plan is retroactive to the date of hire.

An election made by an eligible employee who is 16 married is not effective unless the election is signed by the employee's spouse.

17 (c) When an eligible employee makes a one-time election under sec.

35 of this Act, 18 the administrator shall cause the total amount of the employee's employee and employer 19 contributions, with investment earnings and losses through the day of the employee's election 20 to participate as a member in the defined benefit retirement plan, to be actuarially calculated 21 and, subject to (e) of this section, transferred to the pension fund in the defined benefit 22 retirement plan.

On the effective date of the employee's participation in the defined benefit 23 retirement plan, the employee shall be credited with service in the defined benefit retirement 24 plan that may be purchased under an actuarial equivalent purchase formula as determined by 25 the board.

The board shall establish transfer procedures by regulation, but the actual transfer 26 may not occur later than 30 days after the date the administrator receives the employee's 27 completed forms under (a) of this section, unless the major financial markets for securities 28 available for a transfer are seriously disrupted by an unforeseen event that also causes the 29 suspension of trading on any national securities exchange in the country where the securities 30 were issued.

In that event, the 30-day period may be extended by a resolution of the board.

A 31 transfer is not commissionable or subject to other fees and may be in the form of cash or a security as determined by the board.

A security shall be valued on the date of receipt in the 02 employee's account.

03 (d) When making a transfer for an eligible employee under (c) of this section, the 04 administrator shall cause an amount equal to the 05 (1) decrease in the accrued actuarial liability of the occupational death and 06 disability trust in the defined contribution retirement plan resulting from the transfer as of the 07 date of transfer, based on the most recent actuarial valuation of the occupational death and 08 disability trust, to be transferred from the occupational death and disability trust in the defined 09 contribution retirement plan to the pension fund in the defined benefit retirement plan;

and 10 (2) increase in the accrued actuarial liability of the health care trust in the 11 defined benefit retirement plan resulting from the transfer as of the date of transfer, based on 12 the actuarial assumptions set out in (g) of this section, to be transferred from the public 13 employees' retiree health reimbursement arrangement plan trust fund established under 14 AS 39.30.340 in the defined contribution retirement plan to the health care trust in the defined 15 benefit retirement plan established under AS 39.30.097(a).

16 (e) If the value actuarially calculated under (c) of this section is insufficient to pay for 17 service credit equal to the employee's actual service, the administrator shall allow the 18 employee the option of purchasing any indebtedness up to the amount needed to eliminate the 19 insufficiency;

however, if that value exceeds the amount needed to pay for a service credit 20 equal to the employee's actual service, the administrator shall cause the excess to remain in 21 the employee's retirement plan established under AS 39.35.700 - 39.35.990.

An excess under 22 this subsection may not be used to purchase service credit in a retirement plan administered 23 under AS 39.35.

24 (f) The amount of service that can be purchased under (e) of this section is based on 25 the transferred employee's accrued actuarial liability of pension benefits in the defined benefit 26 retirement plan.

The actuarial assumptions under this section are based on the actuarial 27 assumptions set out in (g) of this section.

28 (g) Actuarial assumptions must be based on the most recent actuarial valuation of the 29 defined benefit retirement plan, except that the retirement rates are computed at 75 percent of 30 the retirement rates for peace officers and firefighters used in the most recent actuarial 31 valuation of the defined contribution retirement pension fund plus 25 percent of the retirement rates for peace officers and firefighters used in the most recent actuarial valuation of the 02 defined benefit retirement plan.

03 (h) The provisions of this section are subject to the requirements of the Internal 04 Revenue Code and the limitations under AS 39.35.115, 39.35.678, 39.35.710(c) and (d), and 05 39.35.895.

06 (i) In this section, 07 (1) "administrator" means the commissioner of administration or the person 08 designated by the commissioner of administration under AS 39.35.003 for a public 09 employees' retirement plan;

10 (2) "board" means the Alaska Retirement Management Board established 11 under AS 37.10.210;

12 (3) "defined benefit retirement plan" means the retirement plan established 13 under AS 39.35.095 - 39.35.680 for a public employee;

14 (4) "defined contribution retirement plan" means the retirement plan 15 established under AS 39.35.700 - 39.35.990 for a public employee;

16 (5) "Internal Revenue Code" has the meaning given in AS 39.35.990.

17 * Sec.

37.

The uncodified law of the State of Alaska is amended by adding a new section to 18 read:

19 ADOPTION OF REGULATIONS.

(a) The Alaska Retirement Management Board 20 may adopt regulations necessary to implement secs.

Regulations adopted by 2103 the Alaska Retirement Management Board under this Act relate to the internal management of 2204 a state agency and are not subject to AS 44.62 (Administrative Procedure Act) under 2305 AS 37.10.240.

2406 (b) The commissioner of administration may adopt regulations necessary to 2507 implement secs.

4 - 3635 of this Act.

Regulations adopted by the commissioner of 2608 administration under this Act relate to the internal management of a state agency and are not 2709 subject to AS 44.62 (Administrative Procedure Act) under AS 39.30.098 and AS 39.35.005.

2810 (c) Regulations adopted under this section may not take effect before the effective 2911 date of the law being implemented by the regulation.

3012 * Sec.

37.

Section 36 of this Act takes effect immediately under AS 01.10.070(c).

13 * Sec.

Section 37 of this Act takes effect immediately under AS 01.10.070(c).

31 * Sec.

39.

3837 of this Act, this Act takes effect July 1, 2021.2020.