HB 135: "An Act establishing a Roth contribution program for the public employees' deferred compensation program; and providing for an effective date."
00 HOUSE BILL NO. 135 01 "An Act establishing a Roth contribution program for the public employees' deferred 02 compensation program; and providing for an effective date." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 39.45.050 is repealed and reenacted to read: 05 Sec. 39.45.050. Tax deferred investments. (a) The administrator of a deferred 06 compensation program under this chapter shall invest in contracts that 07 (1) allow for deferment of state and federal income tax until benefits 08 are received under the program; and 09 (2) do not provide for deferral of state and federal income tax until the 10 benefits are received under the program. 11 (b) A participating employer may designate that employee contributions 12 consist of deferred tax contributions, Roth contributions, or both. In the absence of an 13 affirmative election to make Roth contributions, an employee's contribution shall be 14 considered to consist entirely of deferred tax contributions.
01 (c) Contributions made on behalf of a participating employee for any calendar 02 year, whether deferred tax contributions or Roth contributions, shall not exceed the 03 dollar limitation set out in 26 U.S.C. 402(g) (Internal Revenue Code) in effect for the 04 calendar year, subject to the provisions of 26 U.S.C. 414(v) (Internal Revenue Code). 05 Contribution amounts in excess of the applicable dollar limits shall be distributed to 06 the participant not later than April 15 after the close of the plan year to which the 07 excess contribution relates. To the extent that a participating employee's contributions 08 are reduced or returned to comply with the limitations of the plan, and the participant 09 has allocated the contributions between deferred tax contributions and Roth 10 contributions, the amount of the reduction or return shall be taken first from deferred 11 tax contributions, to the extent of the contributions for the plan year, and, only after 12 the reduction or return of all the deferred tax contributions, from Roth contributions 13 for the plan year. 14 (d) Deferred tax contributions made on behalf of a participating employee for 15 a plan year shall be allocated to the deferred tax contribution account of the 16 participating employee, as determined by the administrator. 17 (e) Roth contributions made on behalf of a participating employee for a plan 18 year shall be allocated to the Roth contribution account of the participating employee, 19 as determined by the administrator. 20 (f) The administrator may establish additional rules and procedures governing 21 the manner and timing of elections by participating employees to make or change the 22 deferred tax contribution or Roth contribution election, as needed for compliance with 23 federal and state law and as needed for efficiency and effectiveness of plan 24 administration. 25 * Sec 2. AS 39.45.060 is amended by adding a new paragraph to read: 26 (3) "Roth contributions" mean contributions under 26 U.S.C. 402A(c) 27 (Internal Revenue Code). 28 * Sec. 3. This Act takes effect July 1, 2015.