Sec. 39.35.670. Fraud.
A person who knowingly makes a false statement, or falsifies or permits to be falsified a record of this plan, in an attempt to defraud the plan is guilty of a class A misdemeanor.
Sec. 39.35.672. Pension forfeiture.
The provisions of AS 37.10.310 apply to pension benefits under AS 39.35.095 - 39.35.680.
Sec. 39.35.675. Inclusion of cost-of-living differentials in compensation and benefits.
(a) An employee shall make contributions to the plan based on compensation including a cost-of-living differential.
(b) The amount of a cost-of-living differential may not be included in the employee's compensation for purposes of calculating benefits paid under AS 39.35.095 - 39.35.680 unless the employee has received a cost-of-living differential for at least 50 percent of the employee's credited service.
(c) When an employee receives a benefit, and if the employee's compensation for purposes of calculating the benefit does not include a cost-of-living differential, then the administrator shall refund to the employee the amount of contributions the employee made based on the differential.
(d) In this section "cost-of-living differential" means an adjustment to salary based on the cost of living in the geographic region where the employee works and includes a pay step differential under AS 39.27.020 .
Sec. 39.35.677. Special rules for treatment of qualified military service.
Notwithstanding any contrary provisions of AS 39.35.095 - 39.35.680, with respect to qualified military service, contributions shall be made and benefits and service credit shall be provided in accordance with 26 U.S.C. 414(u).
Sec. 39.35.678. Internal Revenue Code compliance.
(a) The administrator shall use forfeitures that arise for any reason, including from termination of employment or death, to reduce employer contributions. Forfeitures may not be applied to increase the benefits of any member.
(b) The administrator shall determine the amount of any benefit that is determined on the basis of actuarial tables using assumptions approved by the commissioner. The amount of benefits is not subject to employer discretion.
(c) Employee contributions paid to, and retirement benefits paid from, the plan may not exceed the annual limits on contributions and benefits, respectively, allowed by 26 U.S.C. 415. Notwithstanding any contrary provision of law, the administrator may modify a request by a member to make a contribution to a plan if the amount of the contribution would exceed the limits provided in 26 U.S.C. 415 by using the following methods:
(1) if the law requires a lump sum payment for the purchase of service credit, the administrator may establish a periodic payment plan for the member to avoid a contribution in excess of the limits under 26 U.S.C. 415(c) or (n);
(2) if a periodic payment plan under (1) of this subsection will not avoid a contribution in excess of the limits imposed by 26 U.S.C. 415(c), the administrator may either reduce the member's contribution to an amount within the limits of that section or refuse the member's contribution.
Sec. 39.35.680. Definitions.
In AS 39.35.095 - 39.35.680, unless the context otherwise requires,
(1) "active member" means an employee who is employed by an employer, is receiving compensation for seasonal, permanent full-time, or permanent part-time services, and is making contributions to the plan;
(2) "actuarial adjustment" means the adjustment necessary to obtain equality in value of the aggregate expected payments under two different forms of pension payments, considering expected mortality and interest earnings on the basis of assumptions, factors, and methods specified in regulations issued under this plan that are formally adopted by the board that clearly preclude employer discretion in the determination of the amount of any member's benefit;
(3) "administrator" means the commissioner of administration or the commissioner's designee appointed under AS 39.35.003 ;
(4) "average monthly compensation" means the result obtained by dividing the compensation earned by an employee during a considered period by the number of months, including fractional months, for which compensation was earned; an employee must have at least 115 days of credited service in the last payroll year in order for that year to be used as part of the consecutive payroll years; the considered period consists of
(A) for employees first hired before July 1, 1996, the three consecutive payroll years during the period of credited service that yield the highest average;
(B) for employees first hired on or after July 1, 1996, the five consecutive payroll years during the period of credited service that yield the highest average;
(C) if the employee does not have the number of consecutive payroll years required by (A) or (B) of this paragraph, the actual number of months, including fractional months, that the employee worked;
(D) for an employee who has made an election under AS 39.35.300 (c) or 39.35.310(c), the actual number of months, including fractional months, that the employee worked;
(E) for a peace officer or fire fighter hired at any time, the three consecutive payroll years during the period of credited service that yield the highest average;
(5) "beneficiary" means a person designated by an employee to receive benefits that may be due from the plan upon the employee's death;
(6) "board" means the Alaska Retirement Management Board;
(7) "calendar year" means the period beginning on January 1 and ending on December 31;
(8) "commissioner" means the commissioner of administration;
(9) "compensation" means the remuneration earned by an employee for personal services rendered to an employer, including employee contributions under AS 39.35.160 , cost-of-living differentials only as provided in AS 39.35.675 , payments for leave that is actually used by the employee, the amount by which the employee's wages are reduced under AS 39.30.150 (c), an amount that is contributed by the employer under a salary reduction agreement and that is not includable in the gross income of the employee under 26 U.S.C. 125 or 132(f)(4), and any amount deferred under an employer-sponsored deferred compensation plan, but does not include retirement benefits, severance pay or other separation bonuses, welfare benefits, per diem, expense allowances, workers' compensation payments, or payments for leave not used by the employee whether those leave payments are scheduled payments, lump-sum payments, donations, or cash-ins; for a member first hired on or after July 1, 1996, compensation does not include remuneration in excess of the limitations set out in 26 U.S.C. 401(a)(17) (Internal Revenue Code);
(10) "credited service" means the number of years, including fractional years, recognized for computing benefits that may be due from the plan;
(11) "deferred vested member" means an inactive member who meets the five-year credited service requirement to qualify for a retirement benefit;
(12) "dependent child" means an unmarried child of an employee, including one adopted, who is dependent upon the employee for support and who is either (A) under 19 years old or (B) under 23 years old and registered at and attending on a full-time basis an accredited educational or technical institution recognized by the Department of Education and Early Development; age restrictions set out in this paragraph do not apply to a child who is totally and permanently disabled;
(13) "disabled member" means an employee who is terminated, who has not received a refund from the plan and is receiving a disability benefit from the plan;
(14) "early retirement" means retirement for a member who is not eligible for normal retirement and who is at least 55 years old and is eligible to receive benefits under AS 39.35.370 (b) or under AS 39.35.385(b) or (f);
(15) "elected official" means a person whose compensation results from personal services rendered to an employer as an elected representative;
(16) "employee contribution account" means the total maintained by the plan of the employee's mandatory contributions, voluntary contributions, indebtedness principal, and interest contributions, interest credited to each of those accounts, and adjustments to the accounts in accordance with AS 39.35.100 ;
(17) "employee savings account" means the account maintained by the plan to record the voluntary contributions of each employee, including interest and adjustments to the account in accordance with AS 39.35.100;
(18) "employer" means
(A) the State of Alaska;
(B) a political subdivision or public organization of the state that participates in the plan based on a resolution to participate in the plan that was approved by the administrator on or before July 1, 2006; or
(C) a political subdivision or public organization of the state that, as a result of consolidation or reorganization that occurs on or after July 1, 2006, assumes liability under the plan of a political subdivision or public organization described in (B) of this paragraph;
(19) "fiscal year" means the period beginning on July 1 and ending on June 30 of the following calendar year;
(20) "former member" means an employee who is terminated and who has received a total refund of the balance of the employee contribution account or who has requested in writing a refund of the balance in the employee contribution account;
(21) "inactive member" means an employee who is terminated and who has not received a refund from the plan or an employee on leave-without-pay status or layoff status;
(22) "member" or "employee"
(A) means a person eligible to participate in the plan and who is covered by the plan;
(i) an active member;
(ii) an inactive member;
(iii) a vested member;
(iv) a deferred vested member;
(v) a nonvested member;
(vi) a disabled member;
(vii) a retired member;
(viii) an elected public officer under AS 39.35.381 ;
(C) does not include
(i) former members;
(ii) persons compensated on a contractual or fee basis;
(iii) casual or emergency workers or nonpermanent employees as defined in AS 39.25.200 ;
(iv) persons covered by the Alaska Teachers' Retirement System except as provided under AS 39.35.131 and 39.35.381, or persons covered by a university retirement program;
(v) employees of the division of marine transportation engaged in operating the state ferry system who are covered by a union or group retirement system to which the state makes contributions;
(vi) justices of the supreme court or judges of the court of appeals or of the superior or district courts of Alaska;
(vii) the administrative director of courts appointed under art. IV, sec. 16 of the state constitution unless the director becomes a member under AS 39.35.158 ;
(viii) members of the elected public officers' retirement system (former AS 39.37); and
(ix) contractual employees of the legislative branch of state government under AS 24.10.060 (f);
(D) may include employees of the division of marine transportation excluded under (C)(v) of this paragraph provided that
(i) the State of Alaska formally agrees to their inclusion through the process of collective bargaining; and
(ii) no collective bargaining agreement has the effect of obligating contributions made by the state under AS 39.30.150 in the event the state resumes participation in the federal social security system;
(23) "military service" means active duty service in the armed forces of the United States;
(24) "nonoccupational disability" means a physical or mental condition that, in the judgment of the administrator, presumably permanently prevents an employee from satisfactorily performing the employee's usual duties for an employer or the duties of another position or job that an employer makes available and for which the employee is qualified by training or education, not including a condition resulting from a cause that the board, in its regulations has excluded;
(25) "non-vested member" means an active or inactive member who does not meet the five-year credited service requirement to qualify for a retirement benefit;
(26) "normal retirement" means retirement for a member who is eligible to receive benefits under AS 39.35.370 (a) or under 39.35.385(a) or (f);
(27) "occupational disability" means a physical or mental condition that, in the judgment of the administrator, presumably permanently prevents an employee from satisfactorily performing the employee's usual duties for an employer or the duties of another comparable position or job that an employer makes available and for which the employee 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 employee's duties and not the proximate result of the wilful negligence of the employee;
(28) "past service liability" means the actuarially determined excess of the accrued liability of the plan over the value of the plan's assets, as of the date of the last actuarial valuation;
(29) "payroll year" means the period that includes the first pay period ending in January of a year through the last pay period ending in December of that year;
(30) "peace officer" or "fire fighter" means an employee occupying a position as a peace officer, chief of police, regional public safety officer, correctional officer, correctional superintendent, fire fighter, fire chief, or probation officer, but does not include a village public safety officer employed by a village public safety officer program established under AS 18.65.670 ;
(31) "pension fund" or "fund" means the fund in which the assets of the plan, including income and interest derived from the investment of money, are deposited and held;
(32) "permanent full-time" means an employee who is occupying a permanent position that regularly requires working 30 or more hours a week;
(33) "permanent part-time" means an employee who is occupying a permanent position that regularly requires working at least 15 hours but less than 30 hours a week;
(34) "plan" means the retirement plan established in AS 39.35.095 - 39.35.680;
(35) "prescribed rate of interest" means the rate of interest used for computing employer contributions, for preparing actuarial tables used by the plan and for crediting interest to employee contributions and savings accounts, and for charging interest on employee indebtedness accounts;
(36) "public organization" means an organization or entity
(A) created by the constitution or laws of the state for the purpose of administering state programs;
(B) whose officers and employees are paid by a method other than by the state payroll prepared by the Department of Administration; and
(C) whose employees are not required by law to participate in the plan;
(37) "qualified domestic relations order" means a divorce or dissolution judgment under AS 25.24, including an order approving a property settlement, that
(A) creates or recognizes the existence of an alternate payee's right to, or assigns to an alternate payee the right to, receive all or a portion of employee contribution account or the benefits payable with respect to an employee;
(B) sets out the name and last known mailing address, if any, of the employee and of each alternate payee covered by the order;
(C) sets out the amount or percentage of the employee's benefit, or of any survivor's benefit, to be paid to the alternate payee, or sets out the manner in which that amount or percentage is to be determined;
(D) sets out the number of payments or period to which the order applies;
(E) sets out the retirement plan to which the order applies;
(F) does not require any type or form of benefit or any option not otherwise provided by AS 39.35.095 - 39.35.680;
(G) does not require an increase of benefits in excess of the amount provided by AS 39.35.095 - 39.35.680, determined on the basis of actuarial value; and
(H) does not require the payment to an alternate payee of benefits that are required to be paid to another alternate payee under another order previously determined to be a qualified domestic relations order;
(38) "retired member" means an employee who is terminated, who has not received a refund from the plan and is receiving a benefit other than disability, from the plan;
(39) "retirement" means that period of time from the first day of the month following (A) the date of termination and (B) application for retirement, in which a person is appointed to receive a retirement benefit, other than occupational or nonoccupational disability benefit;
(40) "seasonal" refers to an employee who is occupying a position for less than 12 months each year where it is anticipated that the same employee will return to the position when needed and includes a temporary employee of the legislature if part of the service for the legislature during each calendar year is performed during a legislative session;
(41) "surviving spouse" means the spouse of an employee who has been married to the employee for at least one year at the time of the employee's death; the one-year marriage requirement does not apply when the employee's death was an occupational or accidental death;
(42) "system" means the Public Employees' Retirement System of Alaska;
(43) "vested member" is an active member who meets the five-year credited service requirement to qualify for a retirement benefit.
Sec. 39.35.690. [Renumbered as AS 39.35.995 ].
Repealed or Renumbered
Article 10. EMPLOYEES FIRST HIRED ON OR AFTER JULY 1, 2006
Sec. 39.35.700. Applicability of AS 39.35.700 - 39.35.990.
The provisions of AS 39.35.700 - 39.35.990 apply only to members first hired on or after July 1, 2006, to members who are employed by employers that do not participate in the defined benefit retirement plan established under AS 39.35.095 - 39.35.680, to former members as defined in AS 39.35.680 , or to members who transfer into the defined contribution retirement plan under AS 39.35.940 .
Sec. 39.35.710. Defined contribution retirement plan established; federal qualification requirements.
(a) A defined contribution retirement plan is established for employees of the state or a political subdivision or public organization of the state.
(b) The defined contribution retirement plan is a plan in which savings are accumulated in an individual retirement account for the exclusive benefit of the member or beneficiaries. The plan is established effective July 1, 2006, at which time contributions by employers and members begin.
(c) The retirement plan established by AS 39.35.700 - 39.35.990 is intended to qualify under 26 U.S.C. 401(a), 414(d), and 414(k) (Internal Revenue Code) as a qualified retirement plan established and maintained by the state for its employees, for the employees of political subdivisions, public corporations, and public organizations of the state, and for the employees of other employers whose participation is authorized by AS 39.35.700 - 39.35.990 and who participate in the plan set out in AS 39.35.700 - 39.35.990. Benefits under AS 39.35.880 are not provided by the defined contribution retirement plan.
(d) An amendment to AS 39.35.700 - 39.35.990 does not provide a person with a vested right to a benefit if the Internal Revenue Service determines that the amendment will result in disqualification of the plan under the Internal Revenue Code.
Sec. 39.35.720. Membership.
An employee who becomes a member on or after July 1, 2006, shall participate in the plan set out in AS 39.35.700 - 39.35.990.
Sec. 39.35.725. Participation of elected officials of political subdivisions.
(a) An elected official of a political subdivision of the state that participates in both the plan and the defined benefit plan of AS 39.35.095 - 39.35.680 is a member of the plan if
(1) the political subdivision covers elected officials under AS 39.35.600 - 39.35.650 and has designated elected officials under AS 39.35.957 as a classification of employees entitled to participate in the plan; and
(2) the elected official receives compensation from the political subdivision for services as an elected official in the amount of at least $2,001 a month.
(b) An elected official of a political subdivision of the state that participates in the plan but not the defined benefit plan of AS 39.35.095 - 39.35.680 is a member of the plan if
(1) the political subdivision has designated elected officials under AS 39.35.957 as a classification of employees entitled to participate in the plan; and
(2) the elected official receives compensation from the political subdivision for services as an elected official in the amount of at least $2,001 a month.
(c) An elected official entitled to participate under this section, and who either has no previous service under the system with the political subdivision or is retired under the system, may file a waiver of participation in the plan with the administrator within 30 days after the later of June 7, 2007 or the date that the elected official's term of office begins. A waiver is irrevocable for the remainder of the elected official's service as an elected official or employee of the political subdivision.
Sec. 39.35.730. Contributions by members.
(a) Each member shall contribute to the member's individual account an amount equal to eight percent of the member's compensation from July 1 to the following June 30.
(b) [Repealed, Sec. 116(a) ch 20 SLA 2007].
(c) The employer shall deduct the contribution from the member's compensation at the end of each payroll period, and the contribution shall be credited by the plan to the member's individual account. The contributions shall be deducted from the member's compensation before the computation of applicable federal taxes and shall be treated as employer contributions under 26 U.S.C. 414(h)(2). A member may not have the option of making the payroll deduction directly in cash instead of having the contribution picked up by the employer.
Sec. 39.35.740. Employment contributions mandatory.
Contributions of employees shall be made by payroll deductions. Every included employee shall be considered to consent to payroll deductions. It is of no consequence that a payroll deduction may cause the compensation paid in cash to an employee to be reduced below the minimum required by law. Payment of an employee's compensation, less payroll deductions, is a full and complete discharge and satisfaction of all claims and demands by the employee relating to remuneration of services during the period covered by the payment, except with respect to the benefits provided under the plan.
Sec. 39.35.750. Contributions by employers.
(a) An employer shall contribute to each member's individual account an amount equal to five percent of the member's compensation from July 1 to the following June 30.
(b) An employer shall also contribute an amount equal to a percentage, as adopted by the board, of each member's compensation from July 1 to the following June 30 to pay for retiree major medical insurance. This contribution shall be paid into the Alaska retiree health care trust established by the commissioner of administration under AS 39.30.097 (b) and shall be accounted for in accordance with regulations established by the commissioner.
(c) Notwithstanding (b) of this section, the employer contribution for retiree major medical insurance for fiscal year 2007 shall be 1.75 percent of each member's compensation from July 1 to the following June 30.
(d) An employer shall also make contributions to the health reimbursement arrangement plan under AS 39.30.370 .
(e) An employer shall make annual contributions to a trust account in the plan, applied as a percentage of each member's compensation from July 1 to the following June 30, in an amount determined by the board to be actuarially required to fully fund the cost of providing occupational disability and occupational death benefits under AS 39.35.700 - 39.35.990 and retirement benefits elected by disabled peace officers and fire fighters under AS 39.35.890 (h)(2). The contribution required under this subsection for peace officers and fire fighters and the contribution required under this subsection for other employees shall be separately calculated based on the actuarially calculated costs for each group of employees.
Sec. 39.35.760. Rollover contributions and distributions.
(a) An employee entering the plan may elect, at the time and in the manner prescribed by the administrator, to have 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) Rollover contributions do not count as a purchase of membership service for the purpose of determining years of service.
(c) A distributee may elect, at the time and in the manner prescribed by the administrator, to have all or part of an eligible rollover distribution paid directly to an eligible retirement plan specified by the distributee in the direct rollover.
(d) In this section,
(1) "direct rollover" means the payment of an eligible rollover distribution by the plan to an eligible retirement plan specified by a distributee who is eligible to elect a direct rollover;
(2) "distributee" means a member, or a beneficiary who is the surviving spouse of the member, or an alternate payee;
(3) "eligible retirement plan" means
(A) an individual retirement account described in 26 U.S.C. 408(d)(3)(A);
(B) an annuity plan described in 26 U.S.C. 403(a);
(C) a qualified trust described in 26 U.S.C. 401(a);
(D) an annuity plan described in 26 U.S.C. 403(b);
(E) a governmental plan described in 26 U.S.C. 457(b);
(F) an individual retirement annuity defined in 26 U.S.C. 408(b); or
(G) on or after January 1, 2008, a Roth IRA described in 26 U.S.C. 408A;
(4) "eligible rollover distribution" means a distribution of all or part of a total account to a distributee, except for
(A) a distribution that is one of a series of substantially equal installments payable not less frequently than annually over the life expectancy of the distributee or the joint and last survivor life expectancy of the distributee and the distributee's designated beneficiary, as defined in 26 U.S.C. 401(a)(9);
(B) a distribution that is one of a series of substantially equal installments payable not less frequently than annually over a specified period of 10 years or more;
(C) a distribution that is required under 26 U.S.C. 401(a)(9);
(D) the portion of any distribution that is not includable in gross income; however, a portion under this subparagraph may be transferred only to an individual retirement account or annuity described in 26 U.S.C. 408(a) or (b), to a qualified plan described in 26 U.S.C. 401(a) or 403(a), or to an annuity contract described in 26 U.S.C. 403(b), that agrees to separately account for amounts transferred, including separately accounting for the portion of the distribution that is includable in gross income and the portion of the distribution that is not includable in gross income; and
(E) other distributions that are reasonably expected to total less than $200 during a year.
Sec. 39.35.770. Transmittal of contributions; claims against funds of an employer.
(a) All contributions deducted in accordance with AS 39.35.700 - 39.35.990 shall be transmitted to the plan for deposit in the appropriate account or trusts as soon as administratively feasible, but in no event later than 15 days following the close of the payroll period.
(b) If contributions are not transmitted within the prescribed time limit, interest shall be assessed on the outstanding contributions at the rate established under AS 39.35.610 from the date that contributions were originally due. Amounts due from an employer and interest as prescribed in this subsection 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 appropriate account or trusts.
(c) Employers are responsible for administrative fees, investment fees, and investment losses charged to accounts established under AS 39.35.730 resulting from contribution adjustments due to employers enrolling members in the plan before the members are eligible for membership. Contributions made by employees shall be returned to the employer by reducing future employee contributions due. Contributions, net of fees and investment losses, made by employers shall be used to reduce future employer contributions due.
Sec. 39.35.780. Limitations on contributions and benefits.
Notwithstanding any other provisions of this plan, the annual additions to each member's individual account under this plan and under all defined contribution plans of the employer required to be aggregated with the contributions from this plan under the provisions of 26 U.S.C. 415 may not exceed, for any limitation year, the amount permitted under 26 U.S.C. 415(c) at any time. If the amount of a member's individual account contributions exceeds the limitation of 26 U.S.C. 415(c) for any limitation year, the administrator shall take any necessary remedial action to correct an excess contribution. A fixed benefit provided under this plan may not exceed, for or during a limitation year, the amount permitted under 26 U.S.C. 415(b). If a fixed benefit provided under this plan exceeds, for or during a limitation year, the amount permitted under 26 U.S.C. 415(b), the administrator shall take remedial action necessary to comply with the limits on the benefit amount in 26 U.S.C. 415(b). The provisions of 26 U.S.C. 415, and the regulations adopted under that statute, as applied to qualified plans of governmental employees are incorporated as part of the terms and conditions of the plan.
Sec. 39.35.790. Vesting.
(a) A participating member is immediately and fully vested in that member's contributions and related earnings.
(b) A member shall be fully vested in the employer contributions made on that member's behalf, and related earnings, after five years of service. A member is partially vested in the employer contributions made on that member's behalf, and the related earnings, in the ratio of
(1) 25 percent with two years of service;
(2) 50 percent with three years of service; and
(3) 75 percent with four years of service.
Sec. 39.35.800. Investment of individual accounts.
(a) The board shall provide a range of investment options and permit a participant to exercise investment control over the participant's assets in the member's individual account as provided in this section. If a participant exercises control over the assets in the individual account, the participant is not considered a fiduciary for any reason on the basis of exercising that control.
(b) A participant may direct investment of plan funds held in an account among available investment funds in accordance with rules established by the board.
(c) A participant may elect to change or transfer all or a portion of the participant's existing account balance among available investment funds not more often than once each day in accordance with the rules established by the administrator. Only the last election received by the administrator before the transmittal of contributions to the trust fund for allocation to the individual account shall be used to direct the investment of the contributions received.
(d) Except to the extent clearly set out in the terms of the investment plans offered by the employer to the employee, the employer is not liable to the participant for investment losses if the prudent investment standard has been met.
(e) The employer, administrator, state, board, or a person or entity who is otherwise a fiduciary is not liable by reason for any participant's investment loss that results from the participant's directing the investment of plan assets allocated to the participant's account.
(f) To the extent that a member's individual account has been divided as provided in a qualified domestic relations order between participants, each participant shall be treated as the holder of a separate individual account for purposes of investment yields, decisions, transfers, and time limitations imposed by this section.