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HOUSE BILL NO. 378
IN THE LEGISLATURE OF THE STATE OF ALASKA
THIRTY-FOURTH LEGISLATURE - SECOND SESSION
BY THE HOUSE FINANCE COMMITTEE
Introduced: 3/12/26
Referred: Finance
A BILL
FOR AN ACT ENTITLED
"An Act relating to the Public Employees' Retirement System of Alaska and the 1
teachers' retirement system; and providing for an effective date." 2
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 3
* Section 1. AS 14.25.009 is amended to read: 4
Sec. 14.25.009. Applicability of AS 14.25.009 - 14.25.220. The provisions of 5
AS 14.25.009 - 14.25.220 apply only to members first hired before July 1, 2006, and 6
teachers who are also members of the public employees' defined benefit 7
retirement plan under AS 39.35.095 - 39.35.680 who do not elect under 8
AS 14.25.540 to participate in the defined contribution retirement plan under 9
AS 14.25.310 - 14.25.590. 10
* Sec. 2. AS 14.25.065(b) is amended to read: 11
(b) The contributions of employers under AS 14.25.070 must be transmitted to 12
the plan for deposit in the retirement fund and the Alaska retiree health care trust at the 13
close of each pay period. If the contributions are not submitted within the prescribed 14
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time limit, interest must be assessed on the outstanding contributions for a period not 1
to exceed six months at a rate equal to [ONE AND ONE-HALF TIMES] the most 2
recent actuarially determined rate of earnings for the plan from the date that 3
contributions were originally due. Amounts due from an employer and interest as 4
prescribed in this section may be claimed by the administrator from any agency of the 5
state or political subdivision that has in its possession funds of the employer or that is 6
authorized to disburse funds to the employer that are not restricted by statute or 7
appropriation to a specific purpose. The amount claimed shall be certified by the 8
administrator as sufficient to pay the contributions and interest due from the employer. 9
The amount claimed shall be submitted to the administrator for deposit in the 10
retirement fund and the Alaska retiree health care trust. 11
* Sec. 3. AS 14.25.070(a) is amended to read: 12
(a) Each employer shall contribute to the system every payroll period the 13
lesser of 14
(1) an amount calculated by applying a rate of 12.56 percent to the 15
total of all base salaries paid by the employer to active members of the system and to 16
members who are retired from the plan and reemployed under AS 14.20.136, 17
including any adjustments to contributions required by AS 14.25.173(a); or 18
(2) an amount adopted by the board under AS 37.10.220. 19
* Sec. 4. AS 14.25.310 is amended to read: 20
Sec. 14.25.310. Applicability of AS 14.25.310 - 14.25.590. The provisions of 21
AS 14.25.310 - 14.25.590 apply only to teachers who first become members on or 22
after July 1, 2006, to members who are employed by employers that do not participate 23
in the defined benefit retirement plan established under AS 14.25.009 - 14.25.220, to 24
teachers who are also members of the defined benefit retirement plan under 25
AS 39.35.095 - 39.35.680 and elect to participate in this plan [TO FORMER 26
MEMBERS UNDER AS 14.25.220], or to members who transfer into the defined 27
contribution retirement plan under AS 14.25.540. 28
* Sec. 5. AS 14.25.330(a) is amended to read: 29
(a) A teacher who first becomes a member on or after July 1, 2006, and who 30
is not also a member of the defined benefit retirement plan under AS 39.35.095 - 31
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39.35.680 shall participate in the system [PLAN] as a member of the defined 1
contribution retirement plan. 2
* Sec. 6. AS 14.25.470 is amended by adding a new subsection to read: 3
(h) Notwithstanding (a) and (g) of this section, a disabled employee who is 4
eligible to obtain a disability benefit under AS 14.25.483 or 14.25.485 is eligible to 5
obtain retiree major medical insurance benefits under AS 14.25.480. 6
* Sec. 7. AS 14.25.480(g) is amended to read: 7
(g) Except as provided under (l) of this section, the [THE] cost of 8
premiums for retiree major medical insurance coverage for an eligible member or 9
surviving spouse who is 10
(1) not eligible for Medicare is an amount equal to the full monthly 11
group premiums for retiree major medical insurance coverage; 12
(2) eligible for Medicare is the following percentage of the premium 13
amounts established for retirees who are eligible for Medicare: 14
(A) 30 percent if the member had 10 or more, but less than 15, 15
years of service; 16
(B) 25 percent if the member had 15 or more, but less than 20, 17
years of service; 18
(C) 20 percent if the member had 20 or more, but less than 25, 19
years of service; 20
(D) 15 percent if the member had 25 or more, but less than 30, 21
years of service; 22
(E) 10 percent if the member had 30 or more years of service. 23
* Sec. 8. AS 14.25.480 is amended by adding a new subsection to read: 24
(l) An eligible member or surviving spouse who receives a disability benefit as 25
provided under AS 14.25.483 or 14.25.485 and is not eligible for Medicare is not 26
required to pay a premium for retiree major medical insurance coverage. 27
* Sec. 9. AS 14.25 is amended by adding a new section to read: 28
Sec. 14.25.483. Nonoccupational disability benefits. (a) A member who has 29
10 or more years of credited service is eligible for a nonoccupational disability benefit 30
if the member's employment is terminated because of a total and apparently permanent 31
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disability caused by a nonoccupational injury or illness, and the disability occurs 1
before the member's normal retirement age. 2
(b) The monthly amount of a nonoccupational disability benefit is 40 percent 3
of the disabled member's gross monthly compensation for the last full month the 4
member was employed before termination because of disability. 5
(c) While a member is receiving a nonoccupational disability benefit, the 6
employer shall contribute monthly 7
(1) to the member's individual account under AS 14.25.340; and 8
(2) to the trust account as provided under AS 14.25.350(e) in an 9
amount calculated by using the member's gross compensation as determined under (b) 10
of this section, without a deduction for a disability benefit. 11
(d) A member receiving a nonoccupational disability benefit may not elect 12
distribution under AS 14.25.410 of all or a portion of the member's individual account. 13
(e) A nonoccupational disability benefit terminates the last day of the month in 14
which the member 15
(1) dies; 16
(2) reaches normal retirement age; or 17
(3) is no longer totally and permanently disabled. 18
(f) When a member reaches normal retirement age, the member's retirement 19
eligibility and benefits shall be determined as if the member was an active member of 20
the plan while receiving the nonoccupational disability benefit. In this subsection, 21
"active member" has the meaning given in AS 14.25.220. 22
* Sec. 10. AS 39.35.120(b) is amended to read: 23
(b) Inclusion in the plan is a condition of employment for an employee except 24
as otherwise provided for 25
(1) an elected official; 26
(2) [REPEALED 27
(3)] an employee of the university who participates in a university 28
retirement program under AS 14.40.661 - 14.40.799; 29
(3) an employee who is a member of a defined contribution 30
retirement plan under AS 14.25.310 - 14.25.590 or AS 39.35.700 - 39.35.990. 31
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* Sec. 11. AS 39.35.255(a) is amended to read: 1
(a) Each employer, except as provided in (h) of this section, shall contribute to 2
the system every payroll period the lesser of 3
(1) an amount calculated by applying a rate of 22 percent of the greater 4
of 5
(A) the total of all base salaries [(1)] paid by the employer to 6
employees who are active members of the system, including any adjustments 7
to contributions required by AS 39.35.520; or 8
(B) an amount calculated by applying a rate of 75 percent 9
of the annual average total of all base salaries [(2)] paid by the employer 10
over the immediately preceding five fiscal years to employees who were 11
active members of the system during that [THE CORRESPONDING 12
PAYROLL] period, as determined by the board; or 13
(2) an amount adopted by the board under AS 37.10.220 [FOR 14
THE FISCAL YEAR ENDING 15
(A) JUNE 30, 2008; OR 16
(B) JUNE 30, 2012, IF THAT TOTAL IS LESS THAN THE 17
TOTAL UNDER (A) OF THIS PARAGRAPH, AND THE EMPLOYER IS A 18
MUNICIPALITY IN WHICH THE POPULATION DECREASED BY 19
MORE THAN 25 PERCENT BETWEEN 2000 AND 2010, ACCORDING 20
TO THE DECENNIAL CENSUS CONDUCTED BY THE UNITED STATES 21
BUREAU OF THE CENSUS]. 22
* Sec. 12. AS 39.35.300 is amended by adding a new subsection to read: 23
(f) Notwithstanding AS 39.35.330 and (b) of this section, a seasonal employee 24
shall receive one year of credited service for each period of 12 consecutive months in 25
which the employee works not less than 1,560 hours. In this subsection, "seasonal 26
employee" does not include a temporary employee of the legislature. 27
* Sec. 13. AS 39.35.610(a) is amended to read: 28
(a) The contributions of an employer and the contributions of its employees 29
shall be transmitted to the administrator as soon as practicable after the close of the 30
payroll period for which the contributions are made. Subject to (c) of this section, if an 31
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employer is delinquent in transferring the contributions for more than 15 days, interest 1
shall be assessed on the outstanding contributions for a period not to exceed six 2
months at a rate equal to [ONE AND ONE-HALF TIMES] the most recent 3
actuarially determined rate of earnings for the retirement plan from the date that the 4
contributions were originally due. 5
* Sec. 14. AS 39.35.680(22) is amended to read: 6
(22) "member" or "employee" 7
(A) means a person eligible to participate in the plan and who 8
is covered by the plan; 9
(B) includes 10
(i) an active member; 11
(ii) an inactive member; 12
(iii) a vested member; 13
(iv) a deferred vested member; 14
(v) a nonvested member; 15
(vi) a disabled member; 16
(vii) a retired member; 17
(viii) an elected public officer under AS 39.35.381; 18
(C) does not include 19
(i) former members; 20
(ii) persons compensated on a contractual or fee basis; 21
(iii) casual or emergency workers or nonpermanent 22
employees as defined in AS 39.25.200; 23
(iv) persons covered by the Alaska Teachers' 24
Retirement System except as provided under AS 14.25.009, 25
AS 39.35.131 and 39.35.381, or persons covered by a university 26
retirement program; 27
(v) employees of the division of marine transportation 28
engaged in operating the state ferry system who are covered by a union 29
or group retirement system to which the state makes contributions; 30
(vi) justices of the supreme court or judges of the court 31
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of appeals or of the superior or district courts of Alaska; 1
(vii) the administrative director of the Alaska Court 2
System appointed under art. IV, sec. 16 of the state constitution unless 3
the director becomes a member under AS 39.35.158; 4
(viii) members of the elected public officers' retirement 5
system (former AS 39.37); and 6
(ix) contractual employees of the legislative branch of 7
state government under AS 24.10.060(f); 8
(D) may include employees of the division of marine 9
transportation excluded under (C)(v) of this paragraph if [PROVIDED THAT] 10
(i) the State of Alaska formally agrees to their inclusion 11
through the process of collective bargaining; and 12
(ii) no collective bargaining agreement has the effect of 13
obligating contributions made by the state under AS 39.30.150 in the 14
event the state resumes participation in the federal social security 15
system; 16
* Sec. 15. AS 39.35.870 is amended by adding a new subsection to read: 17
(h) Notwithstanding (a) and (g) of this section, a disabled employee who is 18
eligible to obtain a disability benefit under AS 39.35.888 or 39.35.890 is eligible to 19
obtain retiree major medical insurance benefits under AS 39.35.880. 20
* Sec. 16. AS 39.35.880(g) is amended to read: 21
(g) Except as provided under (l) of this section, the [THE] cost of 22
premiums for retiree major medical insurance coverage for an eligible member or 23
surviving spouse who is 24
(1) not eligible for Medicare is an amount equal to the full monthly 25
group premiums for retiree major medical insurance coverage; 26
(2) eligible for Medicare is the following percentage of the premium 27
amounts established for retirees who are eligible for Medicare: 28
(A) 30 percent if the member had 10 or more, but less than 15, 29
years of service; 30
(B) 25 percent if the member had 15 or more, but less than 20, 31
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years of service; 1
(C) 20 percent if the member had 20 or more, but less than 25, 2
years of service; 3
(D) 15 percent if the member had 25 or more, but less than 30, 4
years of service; 5
(E) 10 percent if the member had 30 or more years of service. 6
* Sec. 17. AS 39.35.880 is amended by adding a new subsection to read: 7
(l) An eligible member or surviving spouse who receives a disability benefit as 8
provided under AS 39.35.888, 39.35.890, or 39.35.891 and is not eligible for Medicare 9
is not required to pay a premium for retiree major medical insurance coverage. 10
* Sec. 18. AS 39.35 is amended by adding a new section to read: 11
Sec. 39.35.888. Nonoccupational disability benefits. (a) A member who has 12
10 or more years of credited service is eligible for a nonoccupational disability benefit 13
if the member's employment is terminated because of a total and apparently permanent 14
disability caused by a nonoccupational injury or illness, and the disability occurs 15
before the member's normal retirement age. 16
(b) The monthly amount of a nonoccupational disability benefit is 40 percent 17
of the disabled member's gross compensation for the last full month the member was 18
employed. 19
(c) While a member is receiving a nonoccupational disability benefit, the 20
employer shall contribute monthly 21
(1) to the member's individual account under AS 39.35.730; and 22
(2) to the trust account as provided under AS 39.35.750(e) in an 23
amount calculated by using the member's monthly compensation for the last full 24
month the member was employed before termination because of disability. 25
(d) A member receiving a nonoccupational disability benefit may not elect 26
distribution under AS 39.35.810 of all or a portion of the member's individual account. 27
(e) A nonoccupational disability benefit terminates the last day of the month in 28
which the employee 29
(1) dies; 30
(2) reaches normal retirement age; or 31
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(3) is no longer totally and permanently disabled. 1
(f) When a member reaches normal retirement age, the member's retirement 2
eligibility and benefits shall be determined as if the employee was an active member 3
of the plan while receiving the nonoccupational disability benefit. In this subsection, 4
"active member" has the meaning given in AS 39.35.680. 5
* Sec. 19. The uncodified law of the State of Alaska is amended by adding a new section to 6
read: 7
TRANSITION: RETIREMENT PLAN ELECTION. A teacher who became a member 8
of the defined contribution retirement plan under AS 14.25.310 - 14.25.590 after June 30, 9
2006, and before the effective date of this Act, and who, on the effective date of this Act, is a 10
member employed by an employer in that defined contribution retirement plan and is also a 11
member of the defined benefit retirement plan under AS 39.35.095 - 39.35.680 may, within 12
180 days after the effective date of this Act, make a one-time election to participate in the 13
defined benefit retirement plan under AS 14.25.009 - 14.25.220 and to transfer all 14
contributions that have been made or should be made to the defined contribution retirement 15
plan for service the member completes before the effective date of the member's participation 16
in the defined benefit retirement plan. The transferred contributions shall be used to purchase 17
credited service in the defined benefit retirement plan under AS 14.25.009 - 14.25.220 on an 18
actuarial equivalent basis determined by the Alaska Retirement Management Board 19
established under AS 37.10.210. The provisions of AS 14.25.044 apply to an election made 20
under this subsection. 21
* Sec. 20. This Act takes effect July 1, 2026. 22