SB 88 — An Act relating to the Public Employees' Retirement System of Alaska and the teachers' retirement system; providing certain employees an opportunity to choose between the defined benefit and defined contribution plans of the Public Employees' Retirement System of Alaska and the teachers' retirement system; and providing for an effective date.

The board shall adopt regulations establishing transfer procedures.

The transfer may not occur later than 60 days after the date the administrator receives the teacher's election, unless the major financial markets for securities available for a transfer are seriously disrupted by an unforeseen event that also causes the suspension of trading on any national securities exchange in the country where the securities were issued.

In that event, the 60-day period may be extended by a resolution of the board.

A 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 teacher's account.

(e) When making a transfer under (d) of this section, or for a reemployed teacher entering the plan under AS 14.25.040(h), the administrator shall transfer an amount equal to the decrease in the accrued actuarial liability of the death and disability trust in the plan established under 14.25.310 - 14.25.590 resulting from the transfer as of the date of transfer, based on the most recent actuarial valuation of the death and disability trust, from the death and disability trust in the plan established under 14.25.310 - 14.25.590 to the retirement fund in the plan under AS 14.25.009 - 14.25.220.

(f) If the value actuarially calculated under (d) of this section is insufficient to pay for service credit equal to the teacher's actual service time, the administrator shall allow the teacher the option of purchasing service credit in an amount up to the amount needed to eliminate the insufficiency;

however, if that value exceeds the amount needed to pay for service credit equal to the teacher's actual service, the administrator shall cause the excess to remain in the teacher's individual account in the plan under AS 14.25.310 - 14.25.590.

The excess may not be used to purchase additional service credit in the plan under AS 14.25.009 - 14.25.220.

When a reemployed teacher enters the plan under AS 14.25.040(h), the administrator shall allow the teacher to pay for a period of service credit up to the teacher's actual service.

When a teacher elects to purchase service credit under this section and does not immediately pay for the service credit purchased, an indebtedness is established.

Interest as prescribed by regulation accrues on a teacher's indebtedness.

Indebtedness SB0088B -5- CSSB 88(L&C) New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\D that exists at the time the teacher is appointed to retirement necessitates an actuarial adjustment to the benefits payable due to service in the defined contribution retirement plan.

(g) Actuarial assumptions about the plan under AS 14.25.009 - 14.25.220 must be based on the most recent actuarial valuation of the plan, except that the retirement rates are computed at 25 percent of the retirement rates used in the most recent actuarial valuation of the retirement fund plus 75 percent of the retirement rates used in the most recent actuarial valuation of the plan under AS 14.25.310 - 14.25.590.

(h) The provisions of this section are subject to the requirements of the Internal Revenue Code and the limitations under AS 14.25.010, 14.25.181, 14.25.320(c) and (d), and 14.25.490.

* Sec.

5.

6.4.

7.5.

(a) Except as provided in (c)and (e) of this section, beginning January 1, 1991, each member shall contribute to the plan an amount equal to 8.65 percent of the CSSB 88(L&C) -6- SB0088B New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\D member's base salary accrued from July 1 to the following June 30.

[THE SB 88 -2- SB0088A New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\B EMPLOYER SHALL DEDUCT THE CONTRIBUTION FROM THE MEMBER'S SALARY AT THE END OF EACH PAYROLL PERIOD, AND THE CONTRIBUTION SHALL BE CREDITED BY THE PLAN TO THE MEMBER CONTRIBUTION ACCOUNT.

8.6.

and (2) if increased, is not more than 1210 percent of the member's base salary.

(g) The board may increase the member contribution rate under (e) of this section if the board determines that the portion of the liability of the plan that is attributable to all members who first became members of the plan after June 30, 2006, is funded below 90 percent.

Before increasing the member contribution rate under (e) SB0088B -7- CSSB 88(L&C) New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\D of this section, the board shall determine an amount sufficient to address the plan's past service liability attributable to all members who first became members of the plan after June 30, 2006.

An increase to the member contribution rate may raise not more than 50 percent of the amount sufficient to address the plan's past service liability attributable to all members who first became members of the plan after June 30, 2006.

The board may decrease the rate under (e) of this section if the board determines that the portion of the liability of the plan that is attributable to all members who first became members of the plan after June 30, 2006, is funded above 90 percent.

9.7.

AS 14.25.065(b) is amended to read:

(b) The contributions of employers under AS 14.25.070 must be transmitted to the plan for deposit in the retirement fund and the Alaska retiree health care trust at the close of each pay period.

If the contributions are not submitted within the prescribed time limit, interest must be assessed on the outstanding contributions at [ONE AND ONE-HALF TIMES] the most recent actuarially determined rate of earnings for the plan from the date that contributions were originally due.

Amounts due from an employer and interest as prescribed in this section may be claimed by the administrator from any agency of the state or political subdivision that has in its possession funds of the employer or that is authorized to disburse funds to the employer that are not restricted by statute or appropriation to a specific purpose.

The amount claimed shall be certified by the administrator as sufficient to pay the contributions and interest due from the employer.

The amount claimed shall be submitted to the administrator for deposit in the retirement fund and the Alaska retiree health care trust.

* Sec.

10.

(a) EachExcept as provided in (i) of this section, each[EACH] employer shall contribute to the system every payroll period the lesser of (1) an amount calculated by applying a rate of 12.56 percent to the total of all base salaries paid by the employeremployer, toincluding activeany membersadjustments ofto thecontributions systemrequired andby AS 14.25.173(a), to membersSB0088A who-3- areSB retired88 fromNew theText planUnderlined and[DELETED reemployedTEXT underBRACKETED] AS33-LS0505\B 14.20.136,(1) includingactive anymembers adjustmentsof tothe contributionssystem requiredwho byfirst ASbecame 14.25.173(a);members of the plan before July 1, 2006;

orand (2) an[TO] amountmembers calculatedwho byfirst applyingbecame amembers rate established by the CSSB 88(L&C) -8- SB0088B New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\D board under AS 37.10.220 to the total of all base salaries paid by the employerplan tobefore activeJuly members1, of2006, the system and to members who are retired from the plan and reemployed under AS 14.20.136,14.20.136 including[, anyINCLUDING adjustmentsANY toADJUSTMENTS contributionsTO requiredCONTRIBUTIONS byREQUIRED BY AS 14.25.173(a);14.25.173(a)].

the rate must be at least 12 percent and be sufficient to pay the actuarially determined employer normal cost, all contributions required under AS 14.25.350 and AS 39.30.370, and past service cost for members of the system.

11.8.

AS 14.25.07014.25.070(d) is amended by adding a new subsection to read:

(d) Notwithstanding (a) and (i) Ifof this section, the legislatureannual appropriatesemployer fundscontribution forrate may not be less than the purposerate ofsufficient decreasingto anallow employer'spayment contribution,of the employer'semployer contributionnormal undercost (a)and ofthe thisemployer sectioncontributions shallrequired decreaseunder byAS that14.25.350 amount.and AS 39.30.370.

12.9.

AS 14.25.075(a)14.25.070 is amended by adding new subsections to read:

(a)(i) An employeeemployer whothat isemploys eligiblea tomember purchasewho creditedfirst serviceparticipates underin ASthe 14.25.047plan orafter 14.25.048,June a30, member2006, whoshall iscontribute eligible to purchasethe creditedsystem serviceevery underpayroll formerperiod ASan 14.25.061amount orequal underto ASthe 14.25.048,greater 14.25.050,of 14.25.060,(1) [14.25.061,] 14.25.100, or 14.25.107, or a teacherper whocapita isamount eligiblecalculated toby purchaseapplying crediteda servicerate, underdetermined ASby 14.20.345,the ASboard, 14.25.044,of 14.25.050not [ASless 14.25.050],than or12 14.25.105,percent in lieu of makingthe paymentstotal directlymonthly tobase salaries the plan,employer maypays elect to haveall themembers member'swho employerfirst makebecame paymentsmembers asof providedthe inplan thisafter section.June 30, 2006;

or (2) a per capita amount, determined by the board, that is equal to the amount calculated under (a) of this section expressed on a per capita basis.

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

however, the increase must be based on a concurrent increase, if any, in the member contribution rate under AS 14.25.050(e).

13.10.

AS 14.25.075(a) is amended to read:

(a) An employee who is eligible to purchase credited service under AS 14.25.047 or 14.25.048, a member who is eligible to purchase credited service under former AS 14.25.061 or under AS 14.25.048, 14.25.050, 14.25.060, [14.25.061,] 14.25.100, or 14.25.107, or a teacher who is eligible to purchase credited service under AS 14.20.345, AS 14.25.050, or 14.25.105, in lieu of making payments directly to the plan, may elect to have the member's employer make payments as provided in this section.

SB 88 -4- SB0088A New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\B * Sec.

11.

(2) the member shall make an irrevocable election under this subsection to purchase credited service as permitted in former AS 14.25.061 or in AS 14.20.345, AS 14.25.044,14.25.047, 14.25.047 [AS 14.25.047], 14.25.048, 14.25.050, 14.25.060, [14.25.061,] 14.25.100, 14.25.105, or 14.25.107 before the member's SB0088B -9- CSSB 88(L&C) New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\D termination of employment;

14.12.

(i) On satisfaction of the eligibility requirements of former AS 14.25.061 or of AS 14.20.345, AS 14.25.044,14.25.047, 14.25.047 [AS 14.25.047], 14.25.048, 14.25.050, 14.25.060, [14.25.061,] 14.25.100, 14.25.105, or 14.25.107, the requirements of this section, and the administrative filing requirements specified by the administrator, the plan shall adjust SB0088A -5- SB 88 New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\B the member's credited service history and add any additional service credits acquired.

15.13.

AS 14.25 is amended by adding a new section to read:

Sec.

14.25.086.

Contributions for member who first became a member after June 30, 2006.

Contributions made by an employer under AS 14.25.070 and 14.25.085 for a member who first became a member after June 30, 2006, other than contributions separately computed for medical benefits under AS 14.25.087, and the member's contribution account must be deposited in a sub-trust of the retirement fund established by the board.

* Sec.

16.

Contributions made by an employer under AS 14.25.070 and 14.25.085 must [SHALL] be separately CSSB 88(L&C) -10- SB0088B New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\D computed for benefits provided by AS 14.25.168,14.25.168 14.25.171, and AS14.25.171. 39.30.400.

The contributions computed for benefits provided underby (1) AS 14.25.168 must [AND SHALL] be deposited in the Alaska retiree health care trust established under AS 39.30.097(a);39.30.097(a), and the contributions computed for benefits provided by AS 14.25.171 must be deposited in the teachers' and public employees' retiree health reimbursement arrangement plan trust fund established under AS 39.30.340.

(2) AS 14.25.171 must be deposited in the Alaska retiree health care trust established under AS 39.30.097(b);

and (3) AS 39.30.400 must be deposited in the teachers' and public employees' retiree health reimbursement arrangement plan trust fund established under AS 39.30.340.

17.14.

(a) Subject to AS 14.25.167, (1) a member who first became a member of the plan before July 1, 2006, is eligible for a normal retirement benefit if the member (A)(1) [(1)] was first hired before July 1, 1975, has attained the age of 55 years, and has at least 15 years of credited service, the last five of which have been membership service, or is otherwise vested in the plan;

(B)(2) [(2)] has attained the age of 60 years and has at least eight yearsaers of membership service;

(C)(3) [(3)] has attained the age of 60 years, has at least five yearsyearo ofsf membership service, and has Alaska BIA service which, when added to the membership service, will equal at least eight years;

(D)(4) [(4)] has at least 25 years of credited service, the last five of which have been membership service;

(E)(5) [(5)] has at least 20 years of membership service;

(F)(6) [(6)] has at least 20 years of combined membership service and Alaska BIA service, the last five of which have been membership service;

or (G)(7) [(7)] has, for each of 20 school years, (i)(A) [(A)] at least one-half year of membership service as a part-time teacher;

(ii)(B) [(B)] one full year of membership service as a full-full-time SB0088B -11- CSSB 88(L&C) New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\D time teacher;

or (iii)SB [(C)]88 -6- SB0088A New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\B (C) any combination of service qualified under this subparagraph;paragraph.

(2) a member who first became a member of the plan after June 30, 2006, is eligible for a normal retirement benefit if the member (A) has attained the age of 60 years and has at least five years of membership service;

or (B) has at least 30 years of membership service [PARAGRAPH].

15.

AS 14.25.110(d) is amended to read:

(d) The monthly amount of a retirement benefit for a member who first became a member of the plan before July 1, 2006, and who has paid the full amount of any indebtedness is one-twelfth of the member's average base salary during any three school years of membership service multiplied by (1) two percent of the years of credited service earned before June 30, 1990, including credited fractional years, and the years of credited service through a total of 20 years;

plus (2) two and one-half percent of the years of credited service earned after June 30, 1990, that are more than 20 years of total credited service.

* Sec.

16.

AS 14.25.110 is amended by adding new subsections to read:

(n) Subject to AS 14.25.167, a member who first became a member of the plan after June 30, 2006, is eligible for a normal retirement benefit if the member (1) has attained the age of 60 years and has at least five yera of membership service;

or (2) has at least 30 years of membership service.

(o) The monthly amount of a retirement benefit for a member who first became a member of the plan after June 30, 2006, and who has paid the full amount of any indebtedness is one-twelfth of the member's average base salary during any five school years of membership service multiplied by (1) two percent of the years of credited service through a total of 10 years;

plus (2) two and one-quarter percent of the years over 10 years of total credited service through 20 years;

plus (3) two and one-half percent of the years of credited service that are more than 20 years of total credited service.

* Sec.

17.

AS 14.25.130(a) is amended to read:

(a) A member who first became a member of the plan before July 1, 2006, and who has five or more years of membership service is eligible for a disability pension if, after July 1, 1966, and before the member's normal retirement date, the SB0088A -7- SB 88 New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\B member's employment is terminated because of a permanent disability as defined in AS 14.25.220.

* Sec.

AS 14.25.110(b)14.25 is amended by adding new sections to read:

(b)Sec. Subject to AS 14.25.167, a member is eligible for an early retirement benefit upon completing the service requirements in (a)(1)(A) [(a)(1)] of this section and attaining the age of 50 years or upon completing the service requirements in (a)(1)(B) or (C) [(a)(2) OR (3)] of this section and attaining the age of 55 years.

14.25.131.

Nonoccupational disability benefits.

(a) A member who first became a member of the plan after June 30, 2006, is eligible for a nonoccupational disability benefit if the member's employment is terminated because of a total and apparently permanent nonoccupational disability, as defined in AS 14.25.220, before the member's normal retirement date and after five or more years of membership service.

A member is not entitled to a nonoccupational disability benefit under this section unless the member files an application for the benefit with the administrator within 90 days after the member terminated employment.

The board may waive a filing deadline if there are extraordinary circumstances that resulted in the inability to meet the deadline.

The board may delegate the authority to waive a filing deadline under this subsection to the administrator.

(b) The nonoccupational disability benefits accrue beginning the first day of the month following termination of employment as a result of the disability and are payable the last day of the month.

If a final determination granting the benefit is not made in time to pay the benefit when due, a retroactive payment shall be made to cover the period of deferment.

The last payment shall be for the first month in which the disabled member (1) dies;

(2) recovers from disability;

(3) fails to meet the requirements under (e) of this section or under AS 14.25.133;

or (4) reaches normal retirement age.

(c) If the disabled member becomes ineligible to receive nonoccupational disability benefits, the member is entitled to receive a normal or early retirement benefit if the member would have been eligible for the benefit had employment continued during the period of disability.

However, the period of disability does not constitute membership service.

(d) The monthly amount of the nonoccupational disability benefit shall be SB 88 -8- SB0088A New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\B determined in accordance with AS 14.25.110(o), considering the member's membership service and base salary before termination of employment.

(e) A disabled member receiving a nonoccupational disability benefit shall provide the administrator, one year after appointment to disability benefits and once each year thereafter until disability benefits cease, proof of continuing eligibility to receive disability payments under the Social Security Act.

If the disabled member is otherwise ineligible for a social security payment, the member shall provide the administrator with sufficient medical evidence once each year to demonstrate that disability payments under the Social Security Act would be payable had the member been otherwise eligible.

If the disabled member fails to provide the administrator with evidence of continuing eligibility for disability payments under the Social Security Act or other medical evidence required by the administrator within 30 days following each anniversary date, the disability benefits from the plan shall cease.

If that information is subsequently provided to the administrator, benefit payments shall resume beginning for the month following that in which the information is provided.

When disability payments under the Social Security Act cease, it is the responsibility of the disabled member to notify the administrator immediately.

(f) A disabled member's nonoccupational disability benefit terminates when the member first attains eligibility for normal retirement.

At that time, the member's retirement benefit shall be calculated under AS 14.25.110(o).

Sec.

14.25.132.

Occupational disability benefits.

(a) A member who first became a member of the plan after June 30, 2006, is eligible for an occupational disability benefit if employment is terminated because of a total and apparently permanent occupational disability, as defined in AS 14.25.220, before the member's normal retirement date.

(b) The occupational disability benefits accrue beginning the first day of the month following termination of employment as a result of the disability and are payable the last day of the month.

If a final determination granting the benefit is not made in time to pay the benefit when due, a retroactive payment shall be made to cover the period of deferment.

The last payment shall be for the first month in which the disabled member SB0088A -9- SB 88 New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\B (1) dies;

(2) recovers from disability;

(3) fails to meet the requirements under (f) of this section or under AS 14.25.133;

or (4) reaches normal retirement age.

(c) If the disabled member becomes ineligible to receive occupational disability benefits before the normal retirement date, the disabled member shall then be entitled to receive an early retirement benefit if the member would have been eligible for the benefit had employment continued during the period of disability.

The period of disability constitutes membership service.

(d) The monthly amount of an occupational disability benefit is 40 percent of the disabled member's base salary at the time of termination due to disability, divided by 12.

(e) A member is not entitled to an occupational disability benefit unless the member files an application for it with the administrator within 90 days of the date of terminating employment.

If the member is unable to meet a filing requirement of this subsection, it may be waived by the commissioner if there are extraordinary circumstances that resulted in the member's inability to meet the filing requirement.

(f) A disabled member receiving an occupational disability benefit shall undergo a medical examination as often as the administrator considers advisable but not more frequently than once each year.

The administrator shall determine the place of the examination and engage the physician or physicians.

If, in the judgment of the administrator, the examination indicates that the retired member is no longer incapacitated because of a total and apparently permanent occupational disability, the administrator may not issue further disability benefits to the member.

(g) A disabled member's occupational disability benefit terminates when the disabled member first attains eligibility for normal retirement.

At that time, the member's retirement benefit shall be calculated under AS 14.25.110(o).

Sec.

14.25.133.

Reemployment of disabled members.

A member who first became a member of the plan after June 30, 2006, appointed to disability benefits under AS 14.25.131 or 14.25.132 shall apply to the division of vocational SB 88 -10- SB0088A New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\B rehabilitation within 30 days of the date disability benefits commence.

The member shall be enrolled in a rehabilitation program if the member meets the eligibility requirements of the division of vocational rehabilitation.

Unless the member demonstrates cause, benefits shall terminate at the end of the first month in which a disabled member (1) fails to report to the division of vocational rehabilitation;

(2) is certified by the division of vocational rehabilitation as failing to cooperate in a vocational rehabilitation program;

(3) fails to interview for a job;

or (4) fails to accept a position offered.

Sec.

14.25.134.

Death after occupational disability.

(a) Upon the death of a disabled member who is receiving or is entitled to receive an occupational disability benefit, the administrator shall pay the surviving spouse a surviving spouse's pension, equal to 40 percent of the member's base salary at the terminaiton of employment because of occupational disability, divided by 12.

If there is no surviving spouse, the administrator shall pay the survivor's pension in equal parts to the dependent children of the member.

On the date the normal retirement of the member would have occurred if the member had lived, the administrator shall adjust the monthly payments to equal the monthly amount of the normal retirement benefit to which the member, had the member lived and continued employment until the member's normal retirement date, would have been entitled with an average base salary as existed at death and the membership service to which the member would have been entitled.

If the death of a member occurs from occupational causes but no surviving spouse or dependent children exist at the time of the death, or if the member designates as beneficiary under AS 14.25.166 someone other than the surviving spouse or dependent children, the administrator shall pay the member's designated beneficiary those benefits available to a beneficiary under AS 14.25.156(c) and may not pay an occupational death benefit to the surviving spouse or dependent children.

(b) The first payment of the surviving spouse's pension or of a dependent child's pension shall accrue from the first day of the month following the member's death and is payable the last day of the month.

The last payment shall be made for the SB0088A -11- SB 88 New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\B last month in which there is an eligible surviving spouse or child.

AS 14.25.110(d) is amended to read:

(d) The monthly amount of a retirement benefit (1) for a member who first became a member of the plan before July 1, 2006, and who has paid the full amount of any indebtedness is one-twelfth of the member's average base salary during any three school years of membership service multiplied by (A) [(1)] two percent of the years of credited service earned before June 30, 1990, including credited fractional years, and the years of credited service through a total of 20 years;

plus (B) [(2)] two and one-half percent of the years of credited service earned after June 30, 1990, that are more than 20 years of total credited service;

(2) for a member who first became a member of the plan after June 30, 2006, and who has paid the full amount of any indebtedness is one- twelfth of the member's average base salary during any five school years of membership service multiplied by (A) two percent of the years of credited service through a CSSB 88(L&C) -12- SB0088B New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\D total of 10 years;

plus (B) two and one-quarter percent of the years over 10 years of total credited service through 20 years;

plus (C) two and one-half percent of the years of credited service that are more than 20 years of total credited service.

* Sec.

20.

21.20.

22.21.

(b) Subject to (g) and (h) of this section, the [THE] increase in benefit payments applies to total benefit payments except for the cost-of-living allowance under AS 14.25.142.

SB0088B -13- CSSB 88(L&C) New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\D * Sec.

22.

AS 14.25.143(e) is amended to read:

(e) When computing a death benefit under AS 14.25.155 - 14.25.160 [AS 14.25.155, 14.25.157, OR 14.25.160] or a survivor's benefit under AS 14.25.162, 14.25.164, or 14.25.167, adjustments granted to the deceased member or survivor SB 88 -12- SB0088A New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\B under this section shall be included in the computation.

* Sec.

AS 14.25.143 is amended by adding a new subsectionssubsection to read:

(g) SubjectIf tothe (h)board determines that the portion of thisunfunded section,liability of the amountplan ofthat anis increaseattributable forto all members who first became members of the plan after June 30, 2006, andis dogreater notthan meet10 percent, the eligibilityboard requirementsmay forreduce athe permanentamount fundof dividendthe inincrease effectunder on(b) Julyof 1,this 2024,section underthat AS 43.23.005(a) is equalpayable to one-halfa ofmember thewho applicablefirst percentagebecame undera (b)member ofafter thisJune section.30, 2006.

(h) If the board determines that the portion of the liability of the plan that is attributable to all members who first became members of the plan after June 30, 2006, is funded below 90 percent, the board may reduce the amount of the increase determined under (b) or (g) of this section that is payable to a member who first became a member after June 30, 2006.

AS 14.25.155 is amended to read:

Sec.

14.25.155.

Nonoccupational death benefits;

members first hired before July 1, 2006.

(a) If the death of a member who first became a member of the plan before July 1, 2006, occurs after completing less than one year of membership service and the proximate cause of death is not a bodily injury sustained or hazard undergone while in the performance and within the scope of the member's duties of employment, the member's designated beneficiary shall be paid the balance of the member contribution account.

(b) If the death of a member who first became a member of the plan before July 1, 2006, occurs after completing at least one year of membership service but before becoming a vested member, and the proximate cause of death is not a bodily injury sustained or hazard undergone while in the performance and within the scope of the member's duties of employment, the lump-sum death benefit described in AS 14.25.160(b) and (c) shall be paid to the designated beneficiary of the member.

(c) If the death of a vested member or deferred vested member, who first became a member of the plan before July 1, 2006, occurs and the proximate cause of death is not a bodily injury sustained or hazard undergone while in the performance and within the scope of the member's duties of employment, the surviving spouse may elect to receive either the benefits described in (b) of this section or a 50 percent joint and survivor option as provided under AS 14.25.167(a)(2) based on credited service to the date of the member's termination.

If no spouse survives a vested or deferred vested member, or if a person other than the spouse is designated as beneficiary in accordance with AS 14.25.166, the administrator shall pay the designated beneficiary SB0088A -13- SB 88 New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\B the benefits described in AS 14.25.160(b) and (c).

Benefits accrue from the first day of the month following the member's death and are payable the last day of the month.

(d) Benefits are not payable under this section if benefits are payable under AS 14.25.156 - 14.25.162 [AS 14.25.157, 14.25.160, 14.25.162], 14.25.164, or 14.25.167.

* Sec.

25.

AS 14.25 is amended by adding a new section to read:

Sec.

14.25.156.

Nonoccupational death benefits;

members first hired after June 30, 2006.

(a) If the death of a member who first became a member of the plan after June 30, 2006, occurs from nonoccupational causes after completing less than one year of membership service, the member's designated beneficiary shall be paid the balance of the member contribution account.

If the death of a member occurs from nonoccupational causes after completing at least one year but less than five years of membership service, a death benefit shall be paid to the member's designated beneficiary.

The amount of the death benefit shall be the amount set out in (c) of this section.

(b) If the death of a vested member or deferred vested member, who first became a member of the plan after June 30, 2006, occurs from nonoccupational causes and the member designated no person other than the surviving spouse as beneficiary to receive nonoccupational death benefits, the surviving spouse may elect to receive either the amounts set out in (c) of this section or a 50 percent joint and survivor option based on credited service to the date of the member's death or termination.

Benefits accrue from the first day of the month following the member's death and are payable the last day of the month.

(c) If, under AS 14.25.166, a vested or deferred vested member, who first became a member of the plan after June 30, 2006, designates as beneficiary to receive nonoccupational benefits someone other than the surviving spouse to whom the member has been married for at least one year, the administrator shall pay the designated beneficiary (1) the balance of the deceased member's member contribution account;

and (2) a lump-sum death benefit;

the amount of the lump-sum death SB 88 -14- SB0088A New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\B benefit is $100 times the years of membership service of the deceased member plus $1,000.

* Sec.

26.

AS 14.25.157(a) is amended to read:

(a) If (1) the death of a member who first became a member of the plan before July 1, 2006, occurs before the member first attains eligibility for normal retirement, and (2) the proximate cause of death is a bodily injury sustained or hazard undergone while in the performance and within the scope of the member's duties of employment, and (3) the injury or hazard is not the proximate result of wilful negligence on the part of the member, the administrator shall pay a monthly survivor's pension equal to 40 percent of the member's base salary at the time of termination of employment, divided by 12, to the member's surviving spouse.

If there is no surviving spouse, the administrator shall pay the monthly survivor's pension in equal parts to the dependent children of the member.

On the date the normal retirement of the member would have occurred if the member had lived, monthly payments must equal the monthly amount of the normal retirement benefit to which the member, had the member lived and continued employment until the member's normal retirement date, would have been entitled with an average base salary as existed at the member's death and the credited service to which the member would have been entitled.

If the member does not have a spouse or dependent children at the time of death or if the member designates as beneficiary under AS 14.25.166 someone other than the surviving spouse or dependent children, the administrator shall pay the member's designated beneficiary those benefits available to a beneficiary under AS 14.25.160(b) and (c) and may not pay a benefit to the surviving spouse or dependent children.

* Sec.

27.

AS 14.25.157(c) is amended to read:

(c) Benefits are not payable under this section if benefits are payable under AS 14.25.155, 14.25.156, 14.25.158 - 14.25.162 [14.25.160, 14.25.162], 14.25.164, or 14.25.167.

* Sec.

28.

AS 14.25.157(d) is amended to read:

(d) If the [A MEMBER'S] death of a member who first became a member of the plan before July 1, 2006, is caused by an act of assault, assassination, or terrorism directly related to the person's status as a member, whether the act occurs on SB0088A -15- SB 88 New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\B or off the member's job site, the death shall be considered to have occurred in the performance of and within the scope of the member's duties for purposes of (a)(2) of this section.

If the expressed or apparent motive and intent of the perpetrator of the harm inflicted on [UPON] the member was due to the performance of the member's job duties or employment as a member, the death shall be considered to be directly related to the member's status as a member.

A member's job duties are those performed within the course and scope of the member's employment with an employer.

* Sec.

29.

AS 14.25 is amended by adding a new section to read:

Sec.

14.25.158.

Occupational death benefit;

members first hired after June 30, 2006.

(a) If the death of a member who first became a member of the plan after June 30, 2006, occurs before the member's retirement and before the member's normal retirement date, the proximate cause of death is a bodily injury sustained or a hazard undergone while in the performance and within the scope of the member's duties, and the injury or hazard is not the proximate result of wilful negligence of the member, a monthly survivor's pension shall be paid to the surviving spouse.

If there is no surviving spouse or if the spouse later dies, the monthly survivor's pension shall be paid in equal parts to the dependent children of the member.

On the date the normal retirement of the member would have occurred if the member had lived, monthly payments shall equal the monthly amount of the normal retirement benefit to which the member, had the member lived and continued employment until the member's normal retirement date, would have been entitled with an average base salary as existed at death and the credited service to which the member would have been entitled.

(b) The first payment of the surviving spouse's pension or of a dependent child's pension shall be made for the month following the month in which the member dies and payment shall cease to be made beginning with the month in which there is no surviving spouse or no dependent child.

(c) If the death of a member occurs from occupational causes but no surviving spouse or dependent children exist at the time of the death or if the member designates as beneficiary under AS 14.25.166 someone other than the surviving spouse or SB 88 -16- SB0088A New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\B dependent children, the member's designated beneficiary is entitled to receive those benefits available to a beneficiary under AS 14.25.156(c) and an occupational death benefit may not be paid to the surviving spouse or dependent children.

(d) The monthly survivor's pension in (a) of this section for survivors of members is 40 percent of the member's base salary when the member dies.

(e) If a member's death is caused by an act of assault, assassination, or terrorism directly related to the person's status as a member, whether the act occurs on or off the member's job site, the death shall be considered to have occurred in the performance of and within the scope of the member's duties for purposes of (a) of this section.

If the expressed or apparent motive and intent of the perpetrator of the harm inflicted on the member was due to the performance of the member's job duties or employment, the death shall be considered to be directly related to the member's status as a member.

A member's job duties are those performed within the course and scope of the person's employment with an employer.

* Sec.

30.

AS 14.25.162(b) is amended to read:

(b) A survivor's allowance is payable under this section as follows:

(1) an allowance of 10 percent of the member's base salary immediately before the member's death, retirement, or disability shall be paid for each dependent child;

if there are four or more dependent children, the total amount paid to those children is 40 percent of the member's base salary before the member's death, retirement, or disability, paid in equal amounts to each child;

the allowance shall be recomputed for the month in which the number of dependent children is less than four and the benefits shall be decreased accordingly;

the adoption of a dependent child does not terminate the survivor's allowance payable under this section;

(2) an allowance of 35 percent of the member's base salary shall be paid to the member's surviving spouse as long as there is an eligible dependent child, as determined under (b)(1) of this section, for whom the surviving spouse is legally responsible;

if there is no surviving spouse, an allowance of 10 percent of the member's base salary shall be paid to each court-appointed guardian, not to exceed one allowance for each child or for each group of children who havethe same guardian or joint guardians;

SB0088A -17- SB 88 New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\B (3) when no further benefits are payable under this section, the difference between the amount that would have been paid under AS 14.25.160 and any payments made to the member, spouse, guardian, or dependent children under this section shall be paid to those beneficiaries described in AS 14.25.166;

(4) benefits are not payable under this section if benefits are payable under AS 14.25.155 - 14.25.158 [AS 14.25.155, 14.25.157], 14.25.164, or 14.25.167.

* Sec.

31.

AS 14.25.164(b) is amended to read:

(b) A spouse's pension is payable under this section as follows:

(1) a spouse's pension is equal to 50 percent of the retirement benefit that the deceased member was receiving;

if the member was not receiving a retirement benefit, the spouse's pension is equal to 50 percent of the amount the member would have received, based on the member's average base salary and credited service to the date of the member's death and assuming that the member would have been eligible for a normal retirement benefit as of that date;

(2) in the event of the death of a member's spouse who is receiving a spouse's pension, the difference between the amount that would have been paid under AS 14.25.160 and any payments made to the member, spouse, guardian, or dependent children shall be paid to those beneficiaries described in AS 14.25.166;

(3) benefits are not payable under this section if benefits are payable under AS 14.25.155 - 14.25.158 [AS 14.25.155, 14.25.157], 14.25.162, or 14.25.167.

* Sec.

32.

AS 14.25.167(a) is amended to read:

(a) Benefits payable under this section are in place of benefits payable under AS 14.25.110, 14.25.125, 14.25.155 - 14.25.162 [14.25.155, 14.25.157, 14.25.160, 14.25.162], or 14.25.164.

Upon filing an application for retirement with the administrator, or when a disabled member becomes eligible for normal retirement under AS 14.25.130(e), the member shall designate the person who is the member's spouse at the time of appointment to retirement as the contingent beneficiary.

However, if the designation of the spouse is revoked under (c) of this section, the member may designate a dependent approved by the administrator as the contingent beneficiary or may take normal or early retirement under AS 14.25.110 or 14.25.125.

The administrator shall pay benefits under the option elected by the member.

The SB 88 -18- SB0088A New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\B member may elect an option that provides that (1) the member is entitled to receive a reduced benefit payable for life, and, after the member's death, the contingent beneficiary is entitled to receive payments in the amount of 75 percent of the reduced benefit for life;

(2) the member is entitled to receive a reduced benefit payable for life, and, after the member's death, the contingent beneficiary is entitled to receive payments in the amount of 50 percent of the reduced benefit for life;

or (3) the member is entitled to receive a reduced benefit payable during the joint lifetime of the member and the contingent beneficiary, and, after the death of either the member or the contingent beneficiary, the survivor is entitled to receive payments in the amount of 66-2/3 percent of the reduced benefit for life.

* Sec.

33.

AS 14.25.167(e) is amended to read:

(e) If either the member or contingent beneficiary dies before the member is appointed to retirement, the election becomes inoperative.

Once the member is appointed to retirement, the election is irrevocable, even if the retired member is reemployed.

Any additional retirement benefit to which the reemployed member may become entitled shall [WILL] be paid in accordance with the initial election made under this section, unless the contingent beneficiary is deceased.

If the contingent beneficiary is deceased, the benefits earned during the period of reemployment are subject to AS 14.25.110, or this section if another contingent beneficiary was designated during the period of reemployment.

All other benefits earned during previous periods of employment are subject to the election at the time the member was appointed to retirement.

If death occurs during the period of reemployment and the proximate cause of death is not a bodily injury sustained or hazard undergone while in the performance and within the scope of the member's duties of employment, those benefits earned while reemployed are subject to AS 14.25.155(c) or 14.25.156.

All other benefits earned during previous periods of employment are subject to the election at the time the member was appointed to retirement.

If death occurs during the period of reemployment and the proximate cause of death is a bodily injury sustained or hazard undergone while in the performance and within the scope of the member's duties of employment and the injury or hazard is not the proximate result of wilful SB0088A -19- SB 88 New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\B negligence on the part of the member, all benefits earned during all periods of employment are subject to AS 14.25.157 or 14.25.158.

* Sec.

34.

CSSB 88(L&C) -14- SB0088B New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\D (D) the surviving spouse of a deceased teacher who is receiving a monthly benefit from the plan and who has elected coverage;

25.35.

AS 14.25.169 is amended to read:

Sec.

14.25.169.

Duplicate benefits.

If payments from this retirement plan are due to a teacher or to the teacher's spouse under more than one provision of this plan, the teacher or spouse shall elect under which provision and which benefit the teacher or spouse wishes to receive and no payments may be made under any other provision.

SB 88 -20- SB0088A New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\B However, benefits under AS 14.25.155 - 14.25.162 [AS 14.25.155, 14.25.157, 14.25.160, 14.25.162], 14.25.164, and 14.25.167 shall be paid in addition to those benefits or that service credit a person is entitled to receive because of the person's own membership in the retirement plan.

A teacher may not receive (1) duplicate credit under this plan for the same period of service, (2) more than one year of service credit in the course of a school year, or (3) a benefit while accruing service credit under this plan, except as provided in this section.

* Sec.

36.

(a) AAn teacheremployee who first became a member of the plan after June 30, 2006, receives a monthly benefit from the plan, retired directly from the plan, and has elected benefits under this section is entitled to medical benefits under this section.

A member is eligible to retire from the plan if the member has been an active member for at least 12 months before application for retirement and the member (1) has at least 30 years of service;

or (2) reaches the age set for Medicare eligibility and has at least 10 years of service.

SB0088B -15- CSSB 88(L&C) New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\D (f) Participation in the retiree major medical insurance plan is not required in order to participate in the health reimbursement arrangement plan.

(g) A person eligible for medical benefits under this section is not required to SB0088A -21- SB 88 New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\B participate in the health reimbursement arrangement plan in order to participate in the retiree major medical insurance plan.

CSSB 88(L&C) -16- SB0088B New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\D (C) 20 percent if the member had 20 or more, but less than 25, years of service;

(D) 15 percent if the member had 25 or more, but less than 30, SB 88 -22- SB0088A New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\B years of service;

26.37.

SB0088B -17- CSSB 88(L&C) New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\D (5) "average base salary" means, (A) for a teacher who first became a member before July 1, 2006, the result obtained by dividing the sum of the member's three highest SB0088A -23- SB 88 New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\B years' base salary by three, or if a member does not have threearstheears base salary, then by dividing the sum of all base salaries by the number of years of base salary;

(B) for a teacher who first became a member after June 30, 2006, the result obtained by dividing the sum of the member's five highest consecutive years' base salary by five, or if a member does not have five years' base salary, then by dividing the sum of all base salaries by the number of years of base salary;

27.38.

AS 14.25.220(6) is amended to read:

(6) "base salary" (A) means the total remuneration payable under contract for a full year of membership service, including addenda to the contract and, for a member who elects to participate solely in this plan under AS 14.25.040(f), remuneration paid by the public employees' retirement plan employer, but, for a member first hired on or after July 1, 1996, does not include CSSB 88(L&C) -18- SB0088B New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\D remuneration in excess of the limitations set out in 26 U.S.C.

401(a)(17);

(B) has the same meaning as "compensation" under AS 39.35.680(9) when applied to a state legislator who elects membership under AS 14.25.040(b);

* Sec.

28.

or (iv)SB [(D)]88 12-24- SB0088A New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\B (iv) [(D)]12 school years of part-time membership service or 12 school years in each of which the member earned either part-time or full-time membership service;

29.39.

AS 14.25.220 is amended by adding a new paragraphparagraphs to read:

(48) "first"nonoccupational becamedisability" means a memberphysical afteror Junemental 30,condition 2006"that, includesin the judgment of the administrator, presumably permanently prevents a member whofrom electedsatisfactorily underperforming formerthe ASmember's 14.25.540usual toduties participatefor inan employer or the definedduties contributionof retirementanother planposition underor ASjob 14.25.310that -an 14.25.590employer makes available and whofor electswhich tothe participatemember inis thequalified definedby benefittraining retirementor planeducation, undernot ASincluding 14.25.009a -condition 14.25.220.resulting from a cause that the board, in its regulations, has excluded;

(49) "occupational disability" means a physical or mental condition that, in the judgment of the administrator, presumably permanently prevents a member from satisfactorily performing the member's usual duties for an employer or the duties of another comparable position or job that an employer makes available and for which the member is qualified by training or education;

however, the proximate cause of the condition must be a bodily injury sustained, or a hazard undergone, while in the performance and within the scope of the member's duties and not the proximate result of the wilful negligence of the member.

30.40.

The provisions of AS 14.25.310 - 14.25.590 apply only to (1) teachers who first become members [ON OR] after June 30, 2006, and before July 1, 2024, and who aredo eligiblenot, butbefore doNovember not1, 2024, elect to participate in a defined benefit retirement plan under AS 14.25.009 - 14.25.220 or AS 39.35.095 - 39.35.680;

and SB0088B -19- CSSB 88(L&C) New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\D (2) teachers [JULY 1, 2006, TO MEMBERS WHO ARE EMPLOYED BY EMPLOYERS THAT DO NOT PARTICIPATE IN THE DEFINED BENEFIT RETIREMENT PLAN ESTABLISHED UNDER AS 14.25.009 - 14.25.220, TO FORMER MEMBERS UNDER AS 14.25.220, OR TO MEMBERS] whoSB0088A transferred-25- [TRANSFER]SB into88 theNew definedText contributionUnderlined retirement[DELETED planTEXT underBRACKETED] former33-LS0505\B ASwho 14.25.540transferred and[TRANSFER] dointo not elect to participate in the defined benefitcontribution retirement plan under former AS 14.25.00914.25.540. - 14.25.220.

31.41.

32.42.

(a) A teacher who first becomes a member [ON OR] after June 30, 2006, and before July 1, 2024, and who does notnot, before November 1, 2024, elect to participate in a defined benefit retirement plan under AS 14.25.009 - 14.25.220 or AS 39.35.095 - 39.35.680 is [JULY 1, 2006,2006,] SHALLshall PARTICIPATEparticipate INin THEthe PLANplan AS]as a member of the defined contribution retirement plan.

33.43.

AS 14.25.350 is amended by adding a new subsection to read:

(f) This section does not apply to contributions made under AS 14.25.070(i) and does not require an employer that makes a contribution for a member under AS 14.25.070(i) to make another contribution for that member.

* Sec.

44.

34.45.

35.46.

7, Constitution of the State of Alaska, and the Internal Revenue Code, the [THE] state may [, IN ITS DISCRETION,] terminate the CSSB 88(L&C) -20- SB0088B New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\D plan in whole or part [AT ANY TIME] without liability for the termination.

If the plan SB 88 -26- SB0088A New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\B is terminated, all investments at the time of termination remain in force until all individual accounts have been completely distributed under the plan.

36.47.

37.48.

and SB0088B(D) -21-AS CSSB39.45.010 88(L&C)- New39.45.060 Text(public Underlinedemployees' [DELETEDdeferred TEXTSB0088A BRACKETED]-27- 33-LS0505\DSB (D)88 ASNew 39.45.010Text -Underlined 39.45.060[DELETED (publicTEXT employees'BRACKETED] deferred33-LS0505\B compensation program);

(C) an appropriate monthly employer contribution rate under AS 14.25.07014.25.070(i) and AS 39.35.255;39.35.255(j);

and (D) appropriate adjustments, if any, under AS 14.25.050(e) and AS 39.35.160(e);39.35.160(e) and (f);

CSSB 88(L&C) -22- SB0088B New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\D (10) contract for an independent audit of the state's actuary not less SB 88 -28- SB0088A New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\B than once every four years;

(11) contract for an independent audit of the state's performaperformnce nce consultant not less than once every four years;

and (17) establishdetermine onethe oramount more sub-trusts of the pensionmonthly fund to hold employer contributions,contributions employee contributions, assets, and earnings attributable to members of the defined benefit retirement plan under AS 14.25.00914.25.070(i) -and 14.25.220 or the defined benefit retirement plan under AS 39.35.09539.35.255(j). - 39.35.680 who first became members of the respective plan after June 30, 2006;

and (18) account for and track employer contributions, employee SB0088B -23- CSSB 88(L&C) New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\D contributions, assets, and earnings in each trust fund or sub-trust attributable to members who first became members after June 30, 2006, of the defined benefit retirement plan under AS 14.25.009 - 14.25.220 and members who first became members after June 30, 2006, of the defined benefit retirement plan under AS 39.35.095 - 39.35.680;

employer contributions that exceed those assigned to members who first became members after June 30, 2006, of the defined benefit retirement plan under AS 14.25.009 - 14.25.220 and members who first became members after June 30, 2006, of the defined benefit retirement plan under AS 39.35.095 - 39.35.680 shall be transferred or retained in trusts or sub-trusts with liability allocated toward employer normal costs for members who became members of the respective defined benefit retirement plan before July 1, 2024, past service costs, the State of Alaska Teachers' and Publicployees' Retiree Health Reimbursement Arrangement Plan under AS 39.30.300 - 39.30.495, and employer contributions under AS 14.25.350 and AS 39.35.750.

38.49.

SB0088A -29- SB 88 New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\B (3) contract for other services necessary to execute the board's powers and duties;

(6) adjust contribution rates under AS 14.25.050(e) and AS 39.35.160(e).39.35.160(e) and (f).

39.50.

CSSB 88(L&C) -24- SB0088B New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\D (a) The Department of Administration may obtain a policy or policies of group insurance covering state employees, persons entitled to coverage under AS 14.25.168, 14.25.171, 14.25.480, AS 22.25.090, AS 39.35.535, 39.35.537, 39.35.880, or former AS 39.37.145, employees of other participating governmental units, or persons entitled to coverage under AS 23.15.136, subject to the following conditions:

and SB 88 -30- SB0088A New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\B (C) the commissioner of administration approves the participation in writing;

SB0088B -25- CSSB 88(L&C) New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\D (5) the Department of Administration shall make available bid specifications for desired insurance benefits or for administration of benefit claims and payments to (A) all insurance carriers authorized to transact business in this state under AS 21.09 and all hospital or medical service corporations authorized to transact business under AS 21.87 who are qualified to provide the desired benefits;

(7) a person receiving benefits under AS 14.25.110, AS 22.25, SB0088A -31- SB 88 New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\B AS 39.35, or former AS 39.37 may continue the life insurance coverage that was in effect under this section at the time of termination of employment with the state or participating governmental unit;

the level of coverage for persons over 65 CSSB 88(L&C) -26- SB0088B New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\D shall be the same as that available before reaching age 65 except that the benefits payable shall be supplemental to any benefits provided under the federal old age, survivors, and disability insurance program;

40.51.

AS 39.30.097(a) is amended to read:

(a) The commissioner of administration is authorized to prefund medical benefits provided by AS 14.25.168, 14.25.171, AS 22.25.090, [AND] AS 39.35.535, and 39.35.537 by establishing an irrevocable trust that is exempt from federal income tax under 26 U.S.C.

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

SB 88 -32- SB0088A New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\B * Sec.

52.

41.53.

The State of Alaska Teachers' and Public Employees' Retiree Health Reimbursement Arrangement Plan is establishedestablishedfor for (1) teachers who first become members of the [DEFINED CONTRIBUTION PLAN OF THE]THE ] teachers' retirement system under AS 14.25.009 - 14.25.590 [AS 14.25.310 - 14.25.590 ON OR] after June 30,30 2006 [JULY 1,1], 2006],2006, and teachersemployees of the state, political subdivisions of the state, and public organizations of the state who electedfirst underbecome formermembers AS[OF 14.25.540THE toDEFINED participateCONTRIBUTION inPLAN] of the planPublic underEmployees' Retirement System of Alaska (AS 39.35) [PUBLIC EMPLOYEES' RETIREMENT SYSTEM UNDER AS 14.25.31039.35.700 - 14.25.590;39.35.990 ON OR] after June 30 [JULY 1], 2006.

and (2) employees of the state, political subdivisions of the state, and SB0088B -27- CSSB 88(L&C) New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\D public organizations of the state who first become members [OF THE DEFINED CONTRIBUTION PLAN] of the Public Employees' Retirement System of Alaska (AS 39.35) [PUBLIC EMPLOYEES' RETIREMENT SYSTEM UNDER AS 39.35.700 - 39.35.990 ON OR] after June 30, 2006, and employees of the state, political subdivisions of the state, and public organizations of the state who elected under former AS 39.35.940 to participate in the plan established under AS 39.35.700 - 39.35.990 [JULY 1, 2006].

42.54.

SB0088A -33- SB 88 New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\B * Sec.

43.55.

44.56.

(a) The administrator may deduct the cost of monthly premiums from the individual account for retiree major medical insurance on behalf of an eligible person who elected retiree major medical insurance under AS 14.25.171, 14.25.480, CSSB 88(L&C) -28- SB0088B New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\D AS 39.35.537, or 39.35.880 [AS 14.25.480 OR AS 39.35.880].

45.57.

46.58.

47.59.

After [, AND, SB 88 -34- SB0088A New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\B AFTER] all plan liabilities are satisfied, excess assets of the plan revert to the employer.

48.60.

49.61.

50.62.

AS 39.30.495(6) is amended to read:

(6) "employer" has the meaning given in AS 14.25.220 for employers SB0088B -29- CSSB 88(L&C) New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\D of teachers in the defined benefit retirement plan established in AS 14.25.009 - 14.25.220, has the meaning given in AS 14.25.590 for employers of teachers in the defined contribution plan established in AS 14.25.310 - 14.25.590, has the meaning given in AS 39.35.680 for employers of public employees in the defined benefit retirement plan established in AS 39.35.095 - 39.35.680, and has the meaning given in AS 39.35.990 for employers of public employees in the defined contribution plan established in AS 39.35.700 - 39.35.990;

* Sec.

51.

AS 39.30.495(9) is amended to read:

(9) "member" means a member of the State of Alaska Teachers' and Public Employees' Retiree Health Reimbursement Arrangement Plan established in AS 39.30.300 - 39.30.495 [DEFINED CONTRIBUTION PLAN OF THE TEACHERS' RETIREMENT SYSTEM IN AS 14.25.310 - 14.25.590 OR A MEMBER OF THE PUBLIC EMPLOYEES' RETIREMENT SYSTEM IN AS 39.35.700 - 39.35.990];

* Sec.

52.

The [FOLLOWING] provisions of AS 39.35.095 - 39.35.680 [THIS CHAPTER] apply only to members first hired (1) before July 1, 2006,2006; who have not elected under former AS 39.35.940 to participate in the defined contribution retirement plan under AS 39.35.700 - 39.35.990;

53.63.

AS 39.35.095 is amended by adding a new subsection to read:

(b) An employee who became a member after June 30, 2006, and before July 1, 2024, is subject to AS 39.35.095 - 39.35.680 if the employee (1) is not employed by an employer on July 1, 2024;

(2) is reemployed by an employer after July 1, 2024;

and (3) has, before the date of reemployment, received CSSB 88(L&C) -30- SB0088B New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\D (A) a distribution, other than a rollover distribution, of the entire balance in the member's individual account in the defined contribution retirement plan;

or (B) a rollover distribution of the entire balance in the member's individual account in the defined contribution retirement plan and has not within 120 days of reemployment had all or part of a direct rollover distribution from an eligible retirement plan owned by the member paid directly into the member's individual account.

* Sec.

54.

AS 39.35.100(b) is amended to read:

(b) An individual account shall be maintained for each employee to record the amount of the employee's mandatory contributions collected under AS 39.35.160 [AS 39.35.160(a)].

As of the last day of each calendar year and of each fiscal year, this account shall be credited with interest by applying the prescribed rate of interest, as determined by the board, to the balance in the account as of that date.

When the employee is appointed to retirement, the amount held in the individual account shall be used first to fully finance the benefits paid.

Once this account has been exhausted, the plan shall fully finance the benefits paid that were not financed by the employee's individual account.

* Sec.

55.

AS 39.35 is amended by adding a new section to article 3 to read:

Sec.

39.35.159.

Election of defined benefit retirement plan by reemployed employees.

(a) An employee may make a one-time election to participate in the plan under AS 39.35.095 - 39.35.680 if the employee (1) was first hired after June 30, 2006, and before July 1, 2024;

(2) is not employed by an employer on July 1, 2024;

(3) is reemployed by an employer after July 1, 2024;

and (4) before the date of reemployment, (A) has not received a distribution of the entire balance in the employee's individual account under the defined contribution retirement plan established in AS 39.35.700 - 39.35.990;

or (B) has received a rollover distribution of the entire balance in the member's individual account in the defined contribution retirement plan SB0088B -31- CSSB 88(L&C) New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\D and has within 120 days of reemployment had all or part of a direct rollover distribution from an eligible retirement plan owned by the member paid directly into the member's individual account.

(b) An election under (a) of this section may be made not more than 120 days after the date of reemployment.

A reemployed employee electing to participate under (a) of this section shall use the balance of the employee's individual account in the plan under AS 39.35.700 - 39.35.990, including any rollover contributions, to purchase credited service in the plan under AS 39.35.095 - 39.35.680.

An election made under (a) of this section must be made in writing in the manner prescribed by the administrator.

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

The administrator shall provide an employee who is eligible to make an election under (a) of this section with information about the potential consequences of the employee's election, including calculations to illustrate the effect of moving the employee's retirement plan from a defined contribution retirement plan to a defined benefit retirement plan.

(c) An election made under (a) of this section to participate in the plan under AS 39.35.095 - 39.35.680 is irrevocable.

On the effective date of the election, an eligible employee shall be enrolled as a member of the plan, and the employee's participation in the plan shall be governed by the applicable provisions of the plan.

The employee's enrollment in the plan is retroactive to the date of hire.

(d) When an eligible employee makes an election under this section, the administrator shall cause the total amount of the employee's employee and employer contributions to the plan under AS 39.35.700 - 39.35.990, with investment earnings and losses through the day of the employee's election to participate as a member in the plan under AS 39.35.095 - 39.35.680, to be actuarially calculated and, subject to (f) of this section, transferred to the pension fund in the plan under AS 39.35.095 - 39.35.680.

On the effective date of the employee's participation in the plan under AS 39.35.095 - 39.35.680, the employee shall be credited with service in the plan.

The board shall determine the cost of the employee's actual service time based on the employee's accrued actuarial liability of pension benefits in the plan, and credit the employee with service time equal to the value actuarially calculated and transferred to CSSB 88(L&C) -32- SB0088B New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\D the pension fund in the plan under AS 39.35.095 - 39.35.680.

The board shall adopt regulations establishing transfer procedures.

The transfer may not occur later than 60 days after the date the administrator receives the employee's election, unless the major financial markets for securities available for a transfer are seriously disrupted by an unforeseen event that also causes the suspension of trading on any national securities exchange in the country where the securities were issued.

In that event, the 60-day period may be extended by a resolution of the board.

A 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 employee's account.

(e) When making a transfer under (d) of this section, or for a reemployed employee entering the plan under AS 39.35.095(b), the administrator shall transfer an amount equal to the decrease in the accrued actuarial liability of the death and disability trust in the plan under AS 39.35.700 - 39.35.990 resulting from the transfer as of the date of transfer, based on the most recent actuarial valuation of the death and disability trust, from the death and disability trust in the plan under AS 39.35.700 - 39.35.990 to the pension fund in the plan under AS 39.35.095 - 39.35.680.

(f) If the value actuarially calculated under (d) of this section is insufficient to pay for service credit equal to the employee's actual service, the administrator shall allow the employee the option of purchasing service credit in an amount up to the amount needed to eliminate the insufficiency;

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

The excess may not be used to purchase additional service credit in the plan under AS 39.35.095 - 39.35.680.

When a reemployed employee enters the plan under AS 39.35.095(b), the administrator shall allow the employee to pay for a period of service credit up to the employee's actual service.

When an employee elects to purchase service credit under this section and does not immediately pay for the service credit purchased, an indebtedness is established.

Interest as prescribed by regulation accrues on an employee's indebtedness.

Indebtedness that exists at the time the employee is appointed to retirement necessitates an actuarial adjustment to the benefits payable due to service in SB0088B -33- CSSB 88(L&C) New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\D the defined contribution retirement plan.

(g) Actuarial assumptions about the plan under AS 39.35.095 - 39.35.680 must be based on the most recent actuarial valuation of the plan, except that the retirement rates are computed at 25 percent of the retirement rates used in the most recent actuarial valuation of the pension fund for the plan plus 75 percent of the retirement rates used in the most recent actuarial valuation of the plan under AS 39.35.700 - 39.35.990.

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

In this subsection, "Internal Revenue Code" has the meaning given in AS 39.35.990.

* Sec.

56.

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

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

A SB0088A -35- SB 88 New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\B MEMBER MAY NOT HAVE THE OPTION OF MAKING THE PAYROLL DEDUCTION DIRECTLY INSTEAD OF HAVING THE CONTRIBUTION PICKED UP BY THE EMPLOYER.] * Sec.

57.64.

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

The board may, from time to time, adjust the employee contribution under this subsection to an amount that, (1) if decreased, is not less than eight percent of the employee's CSSB 88(L&C) -34- SB0088B New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\D compensation;

and (2) if increased, is not more than 1210 percent of the employee's compensation.

(f) ContributionsAn underemployee (a)who first participates in the plan after June 30, 2006, and (e)is ofnot thisa sectionpeace shallofficer beor deductedfirefighter byshall contribute to the employerplan atan theamount endequal to eight percent of eachthe payrollemployee's period.compensation.

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

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

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

(g) The board may increase the employee contribution rate under (e) of this section if the board determines that the portion of the liability of the plan that is attributable to employees who first participate in the plan after June 30, 2006, is funded below 90 percent.

Before increasing the member contribution rate under (e) of this section, the board shall determine an amount sufficient to address the plan's past service liability attributable to all members who first became members of the plan after June 30, 2006.

An increase to the employee contribution rate may raise not more than 50 percent of the amount sufficient to address the plan's past service liability attributable to all members who first became members of the plan after June 30, 2006.

The board may decrease the rate under (e) of this section if the board determines that the portion of the liability of the plan that is attributable to all members who first became members of the plan after June 30, 2006, is funded above 90 percent.

58.65.

AS 39.35.165(a) is amended to read:

(a) An employee who is eligible to purchase credited service under AS 39.35.159, 39.35.310 [AS 39.35.310], 39.35.330, 39.35.340, 39.35.342, 39.35.345, 39.35.360, or 39.35.370, a member who is eligible to purchase credited service under AS 39.35.375, or an elected public official who is eligible to purchase credited service under AS 39.35.381 is an employee for purposes of this section.

An employee may, in lieu of making payments directly to the plan, elect to have the employee's employer make payments as provided in this section.

* Sec.

59.

AS 39.35.165(b) is amended to read:

(b) An employee may elect to have the employer make payments for all or any SB0088B -35- CSSB 88(L&C) New Text Underlined [DELETED TEXT BRACKETED] 33-LS0505\D portion of the amounts payable for the employee's purchase of credited service through a salary reduction program as follows:

(1) the amounts paid under a salary reduction program are in lieu of contributions by the employee making the election;

the electing employee's salary or other compensation shall be reduced by the amount paid by the employer under this subsection;

(2) the employee shall make an irrevocable election under this section to purchase credited service as permitted in AS 39.35.159, 39.35.310 [AS 39.35.310], 39.35.330, 39.35.340, 39.35.342, 39.35.345, 39.35.360, 39.35.370, 39.35.375, or 39.35.381 and before the employee's termination of employment;

the irrevocable election must specify the number of payroll periods that deductions will be made from the employee's compensation and the dollar amount of deductions for each payroll period during the specified number of payroll periods;

the deductions made under this paragraph cease upon the earlier of the member's termination of employment with the employer or the member's death;

amounts paid by an employer under (f) of this section may not be applied toward the payment of the dollar amount of the deductions representing the portion of the credited service that is being purchased by the member through payroll deduction in accordance with the member's irrevocable election under this subsection;