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SB 148: "An Act relating to a defined contribution retirement plan for state employees."

00SENATE BILL NO. 148 01 "An Act relating to a defined contribution retirement plan for state employees." 02 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 03 * Section 1. AS 39 is amended by adding a new chapter to read: 04 CHAPTER 38. DEFINED CONTRIBUTION RETIREMENT PLAN. 05 ARTICLE 1. PLAN ESTABLISHED. 06  Sec. 39.38.010. PLAN ESTABLISHED. The Alaska State Pension 07 Investment Board shall establish a defined contribution retirement plan for state 08 employees first hired on or after January 1, 1996, in which retirement and death 09 benefits are provided through the purchase of annuity contracts or other benefit 10 contracts, either fixed, variable, or a combination of fixed and variable. 11  Sec. 39.38.020. DUTIES OF THE BOARD. The board shall 12  (1) provide for the administration of the plan, including procedures for 13 resolving complaints from participating employees; 14  (2) establish policies for the proper operation of the plan and carry on

01 other activities necessary to implement this chapter; 02  (3) designate at least four investment options for employees; the board 03 shall select the companies or other entities to which payment of the contributions 04 required by this chapter may be made, after considering the 05  (A) nature and extent of the rights and benefits that the 06 contracts will provide to employees who participate and to their beneficiaries; 07  (B) relation of the contractual rights and benefits to the 08 contributions to be made under this chapter; 09  (C) suitability of the contractual rights and benefits to the needs 10 and interests of participating employees and to the interest of the employer in 11 the employment and retention of employees; and 12  (D) ability of the designated company or other entity to provide 13 rights and benefits under the contracts; 14  (4) take other actions required to ensure that the plan qualifies under 15 the Internal Revenue Code as a qualified plan or nonqualified plan or both. 16  Sec. 39.38.030. DIRECTOR AND STAFF. (a) The board may appoint a 17 director of the plan or may request that the administrator of the public employees' 18 retirement system serve as director. A director appointed by the board is a member 19 of the partially exempt service and serves at the pleasure of the board. 20  (b) If the board appoints a director, the director may employ additional staff 21 as necessary. The staff, other than the director, are members of the classified service. 22  Sec. 39.38.040. REGULATIONS. The board may adopt regulations to 23 implement this chapter under the procedures set out in AS 37.10.240. 24 ARTICLE 2. PARTICIPATION. 25  Sec. 39.38.100. PARTICIPATION. (a) An employee of the state first hired 26 on or after January 1, 1996, shall be included in the plan upon commencement of 27 employment with the state. Unless the employee has elected to participate in the 28 optional university retirement program, or was first hired before January 1, 1996, an 29 employee of a political subdivision, including a school district, regional educational 30 attendance area, and the University of Alaska, or a public organization that becomes 31 an employer shall be included in the plan on the effective date of the employer's

01 participation or the date of the employee's commencement of employment with the 02 employer, whichever is later. 03  (b) Inclusion in the plan is a condition of employment for an employee first 04 hired on or after January 1, 1996, except as otherwise provided for an elected official 05 and for an employee of the university who has elected to participate in the optional 06 university retirement program. 07  Sec. 39.38.110. ADMINISTRATIVE DIRECTOR OF COURTS. (a) An 08 administrative director of the Alaska Court System first hired on or after January 1, 09 1996, is a member of the plan. 10  (b) An administrative director who was hired before January 1, 1996, and who 11 withdraws from the judicial retirement system under AS 22.25.012 on or after 12 January 1, 1996, may participate in the plan. 13  Sec. 39.38.120. PARTICIPATION OF ELECTED OFFICIALS. (a) Service 14 as an elected official with an employer constitutes employment as a member in the 15 plan as long as the elected official has not filed a written waiver of coverage with the 16 director. Unless revoked, a waiver under this subsection waives coverage of future 17 employment as an elected official, regardless of any change of employer. An elected 18 official may file a waiver under this subsection at any time after election to office, 19 including the period before taking the oath of office. An elected official may revoke 20 a waiver under this subsection by filing a written revocation with the director. A 21 revocation under this subsection operates prospectively only, and the elected official 22 may not participate in the plan for service as an elected official while the waiver was 23 in effect. There is no limit on the number of times an elected official may file a 24 waiver or revocation under this subsection. 25  (b) An elected official included in the plan and that person's employer are 26 liable for contributions whenever that person is an elected official unless a waiver of 27 coverage under (a) of this section is in effect. 28 ARTICLE 3. CONTRIBUTIONS, RIGHTS, AND BENEFITS. 29  Sec. 39.38.200. EMPLOYMENT CONTRIBUTIONS MANDATORY. 30 Contributions of employees shall be made by payroll deductions. Every included 31 employee is considered to consent to payroll deductions. It is of no consequence that

01 a payroll deduction may cause the compensation paid in cash to an employee to be 02 reduced below the minimum required by law. Payment of an employee's 03 compensation, less payroll deductions, is a full and complete discharge and satisfaction 04 of all claims and demands by the employee relating to remuneration of services during 05 the period covered by the payment. 06  Sec. 39.38.210. CONTRIBUTIONS. (a) The state shall contribute on behalf 07 of each employee participating in the plan an amount equal to 7.5 percent of the 08 employee's compensation payable at the end of each payroll period. 09  (b) An employee participating in the plan shall contribute to the plan an 10 amount equal to 7.5 percent of the employee's compensation. The contributions shall 11 be deducted by the employer at the end of each payroll period. The contributions shall 12 be deducted from employee compensation before computation of applicable federal 13 taxes, and the contributions shall be treated as employer contributions under 26 U.S.C. 14 414(h)(2) (Internal Revenue Code). 15  (c) The director of the plan shall pay the contributions required by this section 16 to the company or companies selected by the employee for the benefit of the 17 employee. 18  Sec. 39.38.220. BENEFITS. Payment of benefits to participants of the plan 19 is the responsibility of the company or companies designated by the board and is not 20 the responsibility of the board or the state. The benefits are payable to participants or 21 beneficiaries of participants in accordance with the terms of the annuity contract or 22 contracts and benefit contractor contracts. 23  Sec. 39.38.230. RIGHTS UNDER QUALIFIED DOMESTIC RELATIONS 24 ORDER. A former spouse shall be treated as a spouse or surviving spouse to the 25 extent required by a qualified domestic relations order. Rights under the order do not 26 take effect until the order is filed with the director. 27  Sec. 39.38.240. SAFEGUARD OF EMPLOYEE FUNDS HELD BY THE 28 PLAN. Employee contributions and other amounts held in the plan are exempt from 29 Alaska state and local taxes. Amounts held on behalf of, or payable to, any employee 30 or other person who is or may become eligible for benefits under the plan are not 31 subject to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, or

01 charge of any kind, either voluntary or involuntary, before being received by the 02 person entitled to the amount under the terms of the plan. An attempt to anticipate, 03 alienate, sell, transfer, assign, pledge, encumber, charge, or otherwise dispose of a right 04 to amounts held under the plan is void. However, an employee's right to receive 05 benefits may be assigned under a qualified domestic relations order. 06  Sec. 39.38.250. EXEMPTION OF EMPLOYEE FUNDS AND BENEFITS. 07 Employee contributions and other amounts held in the plan and retirement benefits 08 payable under the plan are exempt from levy to enforce the collection of a debt as 09 provided in AS 09.38 (exemptions). 10 ARTICLE 4. POLITICAL SUBDIVISIONS AND PUBLIC ORGANIZATIONS. 11  Sec. 39.38.300. REQUEST TO PARTICIPATE. (a) A municipality or other 12 political subdivision of the state may request to become an employer in the plan. The 13 request shall be made after adoption of a resolution by the legislative body of the 14 political subdivision and after approval of the resolution by the person required by law 15 to approve it. A certified copy of the resolution shall be filed with the director. If the 16 director approves the request for participation, the political subdivision is an employer 17 of the plan. 18  (b) A public organization may request to become an employer in the plan. 19 The request shall be made after adoption of a resolution by the governing body of the 20 public organization. A certified copy of the resolution shall be filed with the director. 21 If the director approves the request for participation, the public organization is an 22 employer of the plan. 23  Sec. 39.38.310. PARTICIPATION. (a) The effective date of participation in 24 the plan by a political subdivision or public organization is the first day of any month 25 acceptable to the governing body of the political subdivision or public organization and 26 to the board. 27  (b) The political subdivision or public organization shall designate the 28 departments, groups, or other classifications of employees eligible to participate in the 29 plan, and shall agree to make the contributions that are required by this chapter. 30  (c) The eligible employees of a participating political subdivision or public 31 organization are bound by the provisions of this plan and are entitled to the benefits

01 provided under it. 02  Sec. 39.38.320. CONTRIBUTIONS AND TERMINATION OF 03 PARTICIPATION FOR NONPAYMENT. (a) The contributions of an employer that 04 is a participating political subdivision or public organization and the contributions of 05 its employees shall be transmitted to the director as soon as practicable after the close 06 of the payroll period for which the contributions are made. If the employer is 07 delinquent in transferring the contributions for more than 15 days, interest and other 08 penalties shall be assessed on the outstanding contributions at the rate and in the 09 amount established by the board. 10  (b) If the contributions are not transmitted to the director within the 15 days, 11 the director may grant an extension. If the political subdivision or public organization 12 is in default at the end of the extension, participation in the plan is terminated, and the 13 employer shall be sent notice of termination. 14  (c) Termination of an employer's participation in the plan does not bar future 15 participation in the plan by that employer. 16  Sec. 39.38.330. EFFECT OF AMENDMENT OF AGREEMENT. (a) A 17 political subdivision or public organization may request that its participation agreement 18 be amended. The request may be made only after adoption of a resolution by the 19 legislative body of the political subdivision and approval of the resolution by the 20 person required by law to approve the resolution, or, in the case of a public organi- 21 zation, after adoption of a resolution by the governing body of that public organization. A 22 certified copy of the resolution shall be filed with the director. 23  (b) Termination of coverage of a department, group, or other classification of 24 employees does not bar future coverage of that department, group, or classification. 25 ARTICLE 5. GENERAL PROVISIONS. 26  Sec. 39.38.450. NONGUARANTEE OF EMPLOYMENT. This chapter is not 27 a contract of employment between an employer and an employee, nor does it confer 28 a right of an employee to be continued in the employment of an employer, nor is it a 29 limitation of the right of an employer to discharge an employee with or without cause. 30  Sec. 39.38.460. FRAUD. A person who knowingly makes a false statement, 31 or knowingly falsifies or permits to be falsified a record of the plan, in an attempt to

01 defraud the plan, is guilty of a Class A misdemeanor. 02  Sec. 39.38.990. DEFINITIONS. In this chapter, 03  (1) "board" means the Alaska State Pension Investment Board 04 established under AS 37.10.210; 05  (2) "compensation" means the total remuneration earned by an 06 employee for personal services rendered to an employer, and 07  (A) includes employee contributions under AS 39.38.210, 08 payments for leave that is actually used by the employee, the amount by which 09 the employee's wages are reduced under AS 39.30.150(c), and any amount 10 deferred under an employer-sponsored deferred compensation plan; but 11  (B) does not include cost-of-living differentials, retirement 12 benefits, severance pay or other separation bonuses, welfare benefits, per diem, 13 expense allowances, workers' compensation payments, incentive cash awards, 14 or payments for leave not used by the employee whether those leave payments 15 are scheduled payments, lump-sum payments, donations, or cash-ins; 16  (3) "director" means the director of the defined contribution retirement 17 plan under AS 39.38.030; 18  (4) "elected official" means a person whose compensation results from 19 personal services rendered to an employer as an elected representative; 20  (5) "employer" means the State of Alaska or a political subdivision or 21 public organization of the state that participates in the plan; 22  (6) "member" or "employee" means a person who is eligible to 23 participate in the plan and who is covered by the plan; and 24  (A) includes an 25  (i) employee who is employed by an employer, is 26 receiving compensation for services, is making contributions to the plan, 27 and is not excluded under (B) of this paragraph; and 28  (ii) elected official, if the elected official has chosen to 29 participate under AS 39.38.120; but 30  (B) does not include 31  (i) former members;

01  (ii) persons compensated on a contractual or fee basis; 02  (iii) casual or emergency workers or nonpermanent 03 employees as defined in AS 39.25.200; 04  (iv) members of the Alaska teachers' retirement system 05 under AS 14.25, the judicial retirement system under AS 22.25, the 06 public employees' retirement system under AS 39.35, the elected public 07 officers' retirement system under former AS 39.37, or the optional 08 university retirement program; 09  (v) employees of the division of marine transportation 10 engaged in operating the state ferry system who are covered by a union 11 or group retirement system to which the state makes contributions; and 12  (vi) the administrative director of courts appointed under 13 art. IV, sec. 16 of the state constitution first hired before January 1, 14 1996, unless the director becomes a member under AS 39.38.110(b); 15  (C) may include employees of the division of marine 16 transportation excluded under (B)(v) of this paragraph if 17  (i) the State of Alaska formally agrees to their inclusion 18 through the process of collective bargaining; and 19  (ii) no collective bargaining agreement has the effect of 20 obligating contributions made by the state under AS 39.30.150 in the 21 event the state resumes participation in the federal social security 22 system; 23  (7) "plan" means the defined contribution retirement plan established 24 under this chapter; 25  (8) "public organization" means an organization or entity 26  (A) created by the constitution or laws of the state for the 27 purpose of administering state programs; 28  (B) whose officers and employees are paid by a method other 29 than by the state payroll prepared by the Department of Administration; and 30  (C) whose employees are not required by law to participate in 31 the plan;

01  (9) "qualified domestic relations order" has the meaning given in 02 AS 39.35.680. 03 * Sec. 2. AS 14.25.040(a) is amended to read: 04  (a) A [UNLESS A TEACHER OR MEMBER HAS ELECTED TO 05 PARTICIPATE IN THE OPTIONAL UNIVERSITY RETIREMENT PROGRAM 06 UNDER AS 14.40.661 - 14.40.799, A] teacher or member contracting for service with 07 a participating employer is subject to this chapter unless the 08  (1) employer has elected to participate in the defined contribution 09 retirement plan as provided in (e) of this section; or 10  (2) teacher or member has elected to participate in the optional 11 university retirement program under AS 14.40.661 - 14.40.799. 12 * Sec. 3. AS 14.25.040(c) is amended to read: 13  (c) A state legislator is not entitled to elect membership under (b) of this 14 section if the state legislator is covered for the same period of service under the public 15 employees' retirement system (AS 39.35) or the defined contribution retirement 16 system (AS 39.38). An election of membership under (b) of this section is retroactive 17 to the date the state legislator took the oath of office. A state legislator may not 18 receive membership credit under (b) of this section for legislative service performed 19 before the legislative session during which the state legislator elected membership 20 under (b) of this section. In order to continue in membership service under (b) of this 21 section, the state legislator must earn at least 0.3 years of membership service under 22 other sections of this chapter during each five-year period. 23 * Sec. 4. AS 14.25.040 is amended by adding a new subsection to read: 24  (e) A public school district may elect to participate in the defined contribution 25 retirement system under AS 39.38 for teachers first hired on or after January 1, 1996. 26 Employment that is covered by AS 39.38 may not be considered to be credited service 27 under this chapter. A public school district that elects to be covered by AS 39.38 for 28 teachers who are not members of this system may not later elect to return to coverage 29 under this system. 30 * Sec. 5. AS 14.25.220(16) is amended to read: 31  (16) "employer" means a public school district, the Board of Regents

01 of the University of Alaska, the Department of Education, the National Education 02 Association of Alaska, the Regional Resource Centers, or the state legislature with 03 respect to a state legislator who elects membership under AS 14.25.040(b) that has 04 not elected to participate in the defined contribution retirement system under 05 AS 39.38; 06 * Sec. 6. AS 14.25.220(21) is amended to read: 07  (21) "membership service" means 08  (A) full or part-time service as a teacher in a public school in 09 the Territory or State of Alaska, or both, under the supervision and control of 10 the Territorial Board of Education or the Department of Education or the 11 school board of a city, regional educational attendance area, or borough school 12 district so long as the person is not participating in the defined contribution 13 retirement system under AS 39.38 for that service; 14  (B) full-time or part-time teaching at the University of Alaska 15 or a full-time administrative position at the University of Alaska that requires 16 academic standing and that has been approved for inclusion in the system by 17 the director so long as the person is not participating in the defined 18 contribution retirement system under AS 39.38 for that service; 19  (C) any period during which the teacher receives a disability 20 benefit under this system or is on an approved sabbatical leave granted in 21 accordance with AS 14.20.310; 22  (D) continuous service as a state legislator when performed by 23 a state legislator who elects membership under AS 14.25.040(b), subject to the 24 requirements of AS 14.25.040(c); 25  (E) full-time or part-time service as an employee of the Special 26 Education Service Agency, subject to the requirements of AS 14.25.047 so long 27 as the person is not participating in the defined contribution retirement 28 system under AS 39.38 for that service; or 29  (F) full-time or part-time service as an Alaska Native language 30 or culture expert, subject to the requirements of AS 14.25.048 so long as the 31 person is not participating in the defined contribution retirement system

01 under AS 39.38 for that service; 02 * Sec. 7. AS 22.25.012(a) is amended to read: 03  (a) An administrative director of the Alaska Court System appointed under 04 art. IV, sec. 16 of the state constitution is entitled to retirement benefits under 05  (1) this chapter, if the administrative director was first appointed 06 before January 1, 1996, on the terms and conditions applicable to a superior court 07 judge appointed after July 1, 1978, except that an administrative director may receive 08 retirement benefits only with service as administrative director for 10 or more years; 09 or 10  (2) AS 39.38 if the administrative director was first appointed on 11 or after January 1, 1996. 12 * Sec. 8. AS 22.25.012(c) is amended to read: 13  (c) An administrative director first hired before January 1, 1996, who 14 withdraws from the judicial retirement system under (b) of this section is eligible for 15 membership in the public employees' retirement system (AS 39.35) and shall receive 16 credited service in that system for service rendered as administrative director. To be 17 eligible for membership in the public employees' retirement system under this 18 subsection, the administrative director must contribute to the public employees' 19 retirement system 20  (1) the amount that would have been contributed if the administrative 21 director had been a member during the period of the membership in the judicial 22 retirement system; and 23  (2) any contributions for service as administrative director refunded 24 from the public employees' retirement system at the time the administrative director 25 became a member of the judicial retirement system. 26 * Sec. 9. AS 37.10.390(2) is amended to read: 27  (2) "retirement systems" means the teachers' retirement system, the 28 judicial retirement system, the Alaska National Guard and Alaska Naval Militia 29 retirement system, the defined contribution retirement plan, and the public 30 employees' retirement system. 31 * Sec. 10. AS 39.25.120(c) is amended by adding a new paragraph to read:

01  (24) director of the defined contribution retirement plan. 02 * Sec. 11. AS 39.35.120 is amended to read: 03  Sec. 39.35.120. COMMENCEMENT OF PARTICIPATION. (a) An 04 employee of the state who was first hired before January 1, 1996, shall be included 05 in this system upon commencement of employment with the state, or on January 1, 06 1961, whichever is later. Unless an employee has elected to participate in the optional 07 university retirement program under AS 14.40.661 - 14.40.799, an employee of a 08 political subdivision or public organization that becomes an employer who was first 09 hired before January 1, 1996, shall be included in the system on the effective date 10 of the employer's participation or the date of the employee's commencement of 11 employment with the employer, whichever is later. 12  (b) Inclusion in the system is a condition of employment for an employee who 13 was first hired before January 1, 1996, except as otherwise provided for an elected 14 official and for an employee of the university who has elected to participate in the 15 optional university retirement program under AS 14.40.661 - 14.40.799. 16 * Sec. 12. AS 39.35.158 is amended to read: 17  Sec. 39.35.158. ADMINISTRATIVE DIRECTOR OF COURTS. An 18 administrative director of the Alaska court system first hired before January 1, 1996, 19 who withdraws from the judicial retirement system under AS 22.25.012 is eligible for 20 membership in the system and shall receive credited service in the system for service 21 rendered as administrative director. To be eligible for membership in the system under 22 this subsection, the administrative director must contribute to the system 23  (1) the amount the director would have contributed if the director had 24 been a member during the director's period of membership in the judicial retirement 25 system; and 26  (2) any contributions for services as administrative director refunded 27 by the system at the time the director became a member of the judicial retirement 28 system. 29 * Sec. 13. AS 39.35.550 is amended to read: 30  Sec. 39.35.550. REQUEST BY POLITICAL SUBDIVISION TO 31 PARTICIPATE AND ADOPTION OF RESOLUTION. A municipality or other

01 political subdivision of the state may, before January 1, 1996, request to become an 02 employer in this system. The request shall be made after adoption of a resolution by 03 the legislative body of the political subdivision and after approval of the resolution by 04 the person required by law to approve the resolution. A certified copy of the 05 resolution shall be filed with the administrator. If the administrator approves the 06 request for participation, the political subdivision is an employer of the system. 07 * Sec. 14. AS 39.35.560 is amended to read: 08  Sec. 39.35.560. REQUEST BY PUBLIC ORGANIZATION TO 09 PARTICIPATE AND ADOPTION OF RESOLUTION. A public organization may, 10 before January 1, 1996, request to become an employer in this system. The request 11 shall be made after adoption of a resolution by the governing body of the public 12 organization. A certified copy of the resolution shall be filed with the administrator. 13 If the administrator approves the request for participation, the public organization is 14 an employer of the system. 15 * Sec. 15. AS 39.35.680(21) is amended to read: 16  (21) "member" or "employee" 17  (A) means a person eligible to participate in the system who 18 was first hired before January 1, 1996, and who is covered by the system; 19  (B) includes 20  (i) active member; 21  (ii) inactive member; 22  (iii) vested member; 23  (iv) deferred vested member; 24  (v) non-vested member; 25  (vi) disabled member; 26  (vii) retired member; 27  (viii) an elected public officer under AS 39.35.381; 28  (C) does not include 29  (i) former members; 30  (ii) persons compensated on a contractual or fee basis; 31  (iii) casual or emergency workers or nonpermanent

01 employees as defined in AS 39.25.200; 02  (iv) persons covered by the Alaska Teachers' Retirement 03 System except as provided under AS 39.35.131 and 39.35.381, persons 04 covered by the defined contribution retirement plan, or persons 05 covered by the optional university retirement program; 06  (v) employees of the division of marine transportation 07 engaged in operating the state ferry system who are covered by a union 08 or group retirement system to which the state makes contributions; 09  (vi) justices of the supreme court or judges of the court 10 of appeals or of the superior or district courts of Alaska; 11  (vii) the administrative director of courts appointed 12 under art. IV, sec. 16 of the state constitution unless the director 13 becomes a member under AS 39.35.158; and 14  (viii) members of the elected public officers' retirement 15 system (former AS 39.37); 16  (D) may include employees of the division of marine 17 transportation excluded under (C)(v) of this paragraph provided that 18  (i) the State of Alaska formally agrees to their inclusion 19 through the process of collective bargaining; and 20  (ii) no collective bargaining agreement has the effect of 21 obligating contributions made by the state under AS 39.30.150 in the 22 event the state resumes participation in the federal social security 23 system; 24 * Sec. 16. Section 7, ch. 26, SLA 1986, as amended by sec. 7, ch. 104, SLA 1989, is 25 further amended to read: 26  Sec. 7. INDEBTEDNESS ON REEMPLOYMENT. If a participant in the 27 retirement incentive program is reemployed as a member of the Public Employees' 28 Retirement System under AS 39.35, the optional university retirement program under 29 AS 14.40.661 - 14.40.799, the defined contribution retirement plan under 30 AS 39.38, or the Teachers' Retirement System under AS 14.25 after appointment to 31 retirement under the program, the participant loses the incentive credit received under

01 sec. 5 (c) of this Act and is indebted to the system. The amount of the indebtedness 02 is equal to 110 percent of the amount the participant received as a result of 03 participation in the program for which the participant was not otherwise entitled, in- 04 cluding the cost of health insurance. The participant is entitled to a credit to be applied 05 against the reemployment indebtedness in the amount the participant has paid under sec. 5 (d) 06 of this Act. Interest accrues on the indebtedness at the rate established by regulation from the 07 date of reemployment until the member is appointed to retirement and accepts an actuarial ad- 08 justment to the member's future benefits or until the amount is paid in full. 09 * Sec. 17. Section 9(a), ch. 89, SLA 1989, as amended by sec. 6, ch. 18. SLA 1990, is 10 amended to read: 11  (a) If a participant in the retirement incentive program is reemployed as a 12 member of the public employees' retirement system under AS 39.35, [OR] the teachers' 13 retirement system under AS 14.25, or the defined contribution retirement plan 14 under AS 39.38, after appointment to retirement under the retirement incentive 15 program, the participant loses the incentive credit received under sec. 2(g) of this Act 16 and is indebted to the system. The amount of the indebtedness is equal to 110 percent 17 of the amount the participant received as a result of participation in the program to 18 which the participant was not otherwise entitled, including the cost of health insurance. 19 The participant is entitled to a credit to be applied against the reemployment 20 indebtedness in the amount the participant has paid under sec. 2(e), (f), and (i) of this 21 Act. Interest accrues on the indebtedness at the rate established by regulation from the 22 date of reemployment until the member is appointed to retirement and accepts an 23 actuarial adjustment to the member's future benefits or until the amount is paid in full. 24 * Sec. 18. Notwithstanding AS 39.38.020(3), enacted by sec. 1 of this Act, until January 1, 25 1997, the Alaska State Pension Investment Board may provide fewer than four investment 26 options for employees. The board shall use its best efforts to provide investment options to 27 employees in a timely manner.