HomeMy WebLinkAbout05242021 City Council Work Session Packet - PERSSeward City Council
Work Session Packet
Topic: Alaska Public Employees Retirement System
(PERS)
May 24, 2021
City Council Chambers Beginning at 6:00 p.m.
TEMPORARY PROCESS FOR CITIZEN COMMENTS
AT MAY 24, 2021 CITY COUNCIL WORK SESSION
The Seward City Council will hold a Work Session on Monday, May 24, 2021. Because the City
of Seward is currently experiencing a declared public health emergency due to Coronavirus
Disease 2019 (COVID-19), alternate methods for providing comments has been created.
CITIZEN COMMENTS
1. WRITTEN comments can be emailed to clerkgcityofseward.net. Identify whether you want
your comments forwarded to council immediately, read aloud at the work session, or both.
2. TELEPHONIC comments can be made by sending an email request to
clerkgcityofseward.net. Be sure to include the phone number you wished to be called.
Questions? Call the city clerk at 224-4045.
How To Virtually ATTEND The Meeting
1. The meeting will be Live Streamed on the city's YouTube page. Log onto YouTube and type
"City of Seward Alaska" into the search bar.
2. Listen on the radio. Tune to KIBH-FM 91.7
3. Watch on television. Tune into GCI Cable Channel 9.
CITY COUNCIL WORK SESSION
Monday, May 24, 2021 at 6:00 p.m.
TOPIC: Public Employees Retirement System (PERS)
PlanOverview........................................................................... Pg. 2
Plan Comparison Chart................................................................. Pg. 4
EmployerManual........................................................................ Pg. 6
Termination Studies................................................................... Pg. 78
OF ALASX�'
Alaska's Defined Contribution Retirement (DCR) Plan
at a glance. The plan provides participants with both an
investment plan and defined benefits such as occupational
death, occupational disability, retiree medical coverage and
a Health Reimbursement Arrangement (HRA). More detailed
information is available on the Alaska Division of Retirement
and Benefits website at Alaska.gov/drb/dcrp.
Your Contribution
Employer Contribution
Vesting in Investment Account
Occupational Disability Benefits
PLANS
8% of salary (pre-tax payroll deductions)
5% of salary
100% vested in your contributions immediately. Vested
in employer contributions based on the following
schedule:
• 25% after 2 years of service
• 50% after 3 years
• 75% after 4 years
• 100% after 5 years
40% of salary; you earn service while on occupational
disability. Employer continues to make all required
contributions to your DCR account, including your 8%
employee contribution.
Disability benefits cease when you become eligible for
normal retirement; at that point, you can access your
investment account.
Occupational Death Benefits Survivor receives 40% of member's salary or 50% for
peace officers and fire fighters (P/F); you earn service
while occupational death benefits are paid to your
surviving spouse or eligible dependent children.
Employer continues to make all required contributions
to an account set up for your survivors, including your
8% employee contribution.
Death benefits cease when you would have become
eligible for normal retirement; at that point, your
survivors can access your investment account.
Retiree Medical Coverage Must retire directly from the system at Medicare -
eligible age with 10 years of service, or any age with
30 years of service or 25 years of P/F service. If you
are not eligible for Medicare, you will have to pay the
full premium until you reach Medicare eligibility. You
may use the health reimbursement arrangement
(HRA) account to pay premiums. Once the account is
exhausted, you will self -pay the premiums.
When you are eligible for Medicare, Medicare will be
your primary insurance with the retiree medical plan
being supplemental. The percentage of the premium
you or your surviving spouse will pay is:
• 10-14 years of service: 30%
• 15-19 years: 25%
• 20-24 years: 20%
• 25-29 years: 15%
• 30 years or more: 10%
Health Reimbursement 100% funded by your employer each payday. The
Arrangement employer will deposit a flat dollar amount based on
3% of the annual average salary across all PERS and
TRS employees. The HRA is accessible at Medicare age
with 10 years of service or with a service -based
retirement. Once eligible for normal retirement, you
can use this account to pay any qualified out-of-
pocket medical expenses.
DISCLAIMER: The information contained in this flyer contains o summary description of benefits for the Public Employees'
Retirement System and the AloskoCore Defined Contribution Retiree Benefit Plan. The Division of Retirement and Benefits has
mode every effort to ensure, but does not guarantee, that the information provided is accurate and up-to-date. Where
information in this flyer conflicts with the relevant Plan Document, the Plan Document controls.
3
ALASKA DIVISION OF
P RS Retirement
and Benefits
A L A S K A D I V I S I O N O F R E T I R E M E N T A N D B E N E F I T S
Public Employees' Retirement System (PERS) Plan Comparison Chart
Feature
PERS .: Plan Tier I
PERS .: Plan Tier 11
PERS .: Plan Tier III
PERS DCR Plan
613012006
Employee
Pre-tax employee contribution:
Pre-tax employee contribution:
Pre-tax employee contribution:
Pre-tax employee contribution:
Contribution
. 6.75%beginning INK: all others
• 6.75%beginning 1/1/87: all others
• 6.75%beginning 1/1/87: all others
• 8%
(%ofpay)
.75%beginning 1/1/87 police/fire
•7.5%beginning 1/1/87 police/fire
•7.5%beginning 1/1/87 police/fire
• 9.6% beginning 7/1/99: school district Alt Option
• 9.6% beginning 7/1/99: school district Alt Option
• 9.6% beginning 7/1/99: school district Alt Option
Employer
22%Cost Share
22%Cost Share
22%Cost Share
5% DCR Plan Account
Contribution
Health Reimbursement Arrangement (HRA) Contribution: Flat
(%of payroll)
dollar amount per employee based on 3%of the average annual
compensation of all employees of all employers I u the system.
Retiree Medical Plan Contribution: Act uarially date rm i ned each
fiscalyear
Occupations Death & Disability Plan Contribution : Actuarially
determined each Fecal year
For details on rates by fiscal year, please visit
Alaska.gov7drb7employer7empl oyer_ con tribution_ rates7index. htm I
Vesting
Employees vest with 5 years of service.
Employees vest with 5 years of service.
Employees vest In the pension plan with 5 years of
100%vested In employee contributions Immediately. Vested In
service and in the retiree medical plan with 10 years
employer contributions based on the following schedule:
of service.
• 25%after 2 years of service • 75%after 4 years
• 50%after 3 years • 100%after 5 years
Qualifications
After vesting, normal retirement age is 55, with early
After vesting, normal retirement age is 60, with early
After vesting, normal retirement age is 60, with early
Noneforinvestmentaccount.
for Retirement
retirement at age 50.
retirement at age 55.
retirement at age 55.
Taxes and penalties may apply If withdrawn before age 59-1/2.
Police/fire members can retire at any age after 20
Police/fire members can retire at any age after 20
Police/fire members can retire at any age after 20
See requirements for Retirement Medical Coverage.
years of police/fire service
years of police/fire service
years of police/fire service.
All other members can retire at any age after 30
All other members can retire at any age after 30
All other members can retire at any age after 30
years of membership service.
years of membership service.
years of membership service.
Early retirement reduction will be 1/2%per month or
Early retirement reduction will be 1/2%per month or
Early retirement reduction will be 1/2%per month or
6% per yearfor every year less than the required
6% per yearfor every year less than the required
6% per yearfor every year less than the required
normal retirement age.
normal retirement age.
normal retirement age.
Benefit
Benefit formula;
Benefit formula;
Benefit formulas did not change.
DCR Plan account balance plus Investment earnings.
Calculation
.Nfor first 10 years and all years of service prior
• N for first 10 years,
However,the benefit calculation is determined on
May be received In several different payment options. Payout
Formula
to July 1, 1986,
•2.25% for the next 10 years, and
the average of the high five consecutive years
options Include lump sum payments, rollovers to another
• 2.25%for the next 10 years, and
. 2.5% peryear thereafter Benefit calculation Is
salary.
qualified plan, or annuities.
•2.5%peryear thereafter Benefit calculation is
determined on the average oft he high three
The benefit calculation for police and fire members
Annuities may be taken as a lifetime annuity, joint and survivor
determined on the average ofthe high three
consecutive yea rs' salary.
is the average ofthe high three consecutive years
annuity, or for a period certain.
yea y
consecutive ars'salar
Police/Fire: 2%X 10; 2.5%overl0.
regardless of tier(effective 2002).
• Police/Fire: 2%X 10: 2.5%over 10.
Find more detailed information on the Division website at Alaska.gav/drb, or in the PERS Information Handbook.
Feature
PERS .: Plan Tier I
PERS I)B Plan Tier 11
PERS .: Plan Tier III
PERS DCR Plan
613011986
Entered after 613011986r
r rr.
Alaska
An Alaska Cost -of- Living Allowance Is payable to
An Alaska Cost -of- Living Allowance Is payable to
An Alaska Cost -of- Living Allowance Is payable to
None provided.
Cost -of -Living
benefit recipients who remain domiciled In Alaska
benefit recipients age 6b or older, or disability
benefit recipients age 6b or older, or disability
Allowance
after retirement.
benefit recipients regardless of age, who remain
benefit recipients regardless of age, who remain
(COLA)
The allowance Is $50 or10% of the base benefit,
domiciled In Alaska after retirement.
domiciled In Alaska after retirement.
whichever is greater.
The allowance Is $50 or10% of the base benefit,
The allowance Is $50 or 10% of the base benefit,
whichever Is greater.
whichever Is greater.
Post Retirement
PRPA Increases are granted on an ad hoc basis. If an
Automatic PRPA adjustments to disabled members,
Automatic PRPA adjustments to disabled members,
None provided.
Pension
ad hoc Is not granted, Tier I employees must be age
retirees age 60 and over, and those who have
retirees age 60 and over, and those who have
Adjustments
60 or over or receiving benefits for 5 years to qualify
received benefits for 5 years
received benefits for 5 years.
(PRPA)
forthe automatic PRPA. The automatic PRPA passed
(Inflation
In 1986 applies to all members regardless of hire
date.
Protection)
Retirement
After vesting, medical coverage is provided to all
After vesting, medical coverage is provided to
Sameas Tlerll. However, employees must accrue a
Access to medical coverage at Medicare -eligible age with 10
Medical
benefit recipients and their eligible dependents
disabllitants, regardless of age, and benefit recipients
minimum ofl0 years ofcredited servii to have
years of service or at any age with 25 years of service for peace
Coverage
The retirement system pays the AlaskaCare retiree
age 60 and over, or:
system -paid coverage at age 60.
officers and firefighters orwith 30 years of service for all others.
medical plan premium.
•Police/fire members with 25 years of police/fire
Employees with less than 10 years service must pay
Must retire directly from the system. If not eligible for Medicare,
service
the full premiums as long as they wish to continue
the member must pay the full premium.
• All other members with 30 years of membership
medical coverage.
May use health reimbursement arrangement (HRA) account to
service
100%vested with 10 years of credited service
pay premiums. Once the HRA Is exhausted, the member
se lf-pays premiums.
This coverage Includes eligible dependents.
The retirement system pays the Alaska Care retiree
`Credited service Includes all service used In the
calculation of a retirement benefit.
When eligible for Medicare, the percentage of premium paid by
medical plan premium.
the retiree or surviving spouse is:
Retirees and survivors under age 60 must pay the
• 10-14 years of service: 30% • 25-29 years: 15%
full premium cost If they desire coverage.
• 15-19 years: 25% • 30 years or more: 10%
• 20-24 years: 20%
Disability
Nonoccupatlonal disability benefits are calculated as
Nonoccupatlonal disability benefits are calculated as
Nonoccupatlonal disability benefits are calculated as
Must be a total and presumably permanent disability whose
Benefits
a normal retirement.
a normal retirement.
a normal retirement.
cause Is directly related to performance of duties of the job or
Occupational disability provides 40%ofthe gross
Occupational disability provides 40%ofthe gross
Occupational disability provides 40%ofthe gross
an on the job Injury. Benefit is 40% of salary, earns service while
monthly compensation.
monthly compensation.
monthly compensation.
on occupational disability.
Different occupational disability formula available
Employer continues to make all required contributions as Ifthe
before 711176.
member were working, plus the member's required
contributions tothe DAR account, without deduction from the
ember's disability payment.
Disability benefits cease when the member becomes eligible for
normal retirement at Medicare -eligible age and 10 years of
service OF at any age with 25 years of service for peace officers
and firefighters orwith 30 years of service for all others. Medical
suran ce Is available to members receiving disability when
ember Is eligible fora normal retirement.
PERS Tier Fix —i-t.indd(Rev. 1/20) GAN blica—ADisOlay—i-tAPERS Ti i iv b rtkad
PUBLIC EMPLOYEES' RETIREMENT SYSTEM
EMPLOY:
M A N U
ALASKA DIVISION OF
Retirement
PERS
.and Benefits
STATE
ALASKA DIVISION OF
PER Retirement
PUBLIC EMPLOYEESRETIREMENT SYSTEM
andBenefits
Contents
I. Overview of the PERS........................................................1
Division of Retirement and Benefits - Who to Contact ....................................... I
Reporting Contact — Finance Section........................................................ 1
PERS Payroll Processing.................................................................. 1
DRB Layoff Resource Center Contacts and Information .......................................... 1
Division of Retirement and Benefits......................................................... 1
Employer Confirmations for Auditors....................................................... 2
Financial Education, Advice, and Deferred Compensation Catch-up Services ......................... 2
Retirement Counseling Services............................................................ 3
AlaskaCare Health Plans..................................................................3
ReportDeath.........................................................................3
Benefits Contact — Regional Counselor...................................................... 3
Plan Summaries....................................................................... 4
Defined Benefit Retirement Plan........................................................... 4
Defined Contribution Retirement Plan ...................................................... 4
Statutes and Regulations................................................................ 5
Administration of the PERS.............................................................. 5
Alaska Retirement Management Board (ARMB)................................................ 5
ARMBContact.........................................................................5
State of Alaska Audit.................................................................... 6
What are the functions of the Audit Unit? .................................................... 6
How can an employer prepare for an audit? ................................................... 6
AuditGoals...........................................................................6
II. Participation Agreements....................................................7
Designation of Covered Members........................................................ 7
Elected Official PERS Participation........................................................ 7
Employers That Included Elected Officials in Participation Agreements Prior to June 6, 2007 ............ 7
Employers That Included Elected Officials in Participation Agreements On or After June 6, 2007 .......... 8
Probationary Periods Before Enrollment ..................................................
8
Part -Time and Seasonal Members........................................................
8
Amendment Process...................................................................
8
Process and Cost of Removing Members From Coverage ...................................
9
Employers That Began Participation in the System On or Before June 30, 2006 ........................
9
Employers That Began Participation in the System On or After July 1, 2006 .........................
10
Supplemental Benefit System Annuity Plan Participation ...................................
10
Participation Requirements..............................................................
10
Termination of Participation.............................................................
11
Employers That Began Participation in the System On or Before June 30, 2006 .......................
11
Employers That Began Participation in the System On or After July 1, 2006 .........................
12
8
Table of Contents
III. Payment of Contributions for eReporting..................................... 13
Requirements for Timely Reporting.......................................................13
LateReporting........................................................................13
Technical Difficulties...................................................................13
Consequences to the DCR Member and Employer for Late Reporting .............................. 13
Effect of Enrolling DCR Members in Error..................................................13
Refer to eReporting Manual for Other Questions...........................................14
IV. Employer Responsibility for Member Plan Education ........................... 15
Paid for Through Employer Contributions..................................................15
Importance of Initial Seminars for DCR Members...........................................15
Importance of Work Release Time for Seminar Attendance..................................15
Importance of Field Visits................................................................15
Assistance for Field Visits — What the Counselor Needs ......................................... 16
V. Beneficiary Designations................................................... 17
DBProcess............................................................................77
DCRProcess..........................................................................18
SBS-AP Process........................................................................18
DCPProcess..........................................................................18
Employer is Not the Agent or Designee of the Plan Administrator .............................18
VI. The Defined Contribution Retirement Plan Member ........................... 19
Enrollment...........................................................................19
Enrollment of New Employees for Human Resource Staff .......................................
19
Hiring a PERS DCR Retired Member .......................................................
20
Classification.........................................................................20
Elected Officials.......................................................................20
Occupation Code.....................................................................20
No Claimed Additional Service...........................................................21
Calls to Active Military Duty While Employed in the PERS....................................21
Service Accrual......................................................................22
Simultaneous PERS and TRS Credit........................................................23
Vesting..............................................................................23
Effects of LWOP and Reporting Process .....................................................
23
Workers' Compensation Procedures....................................................
24
Occupational Disability................................................................
24
Occupational Death...................................................................25
Non -Occupational Death..............................................................
26
Divorce or Dissolution.................................................................26
WhereTo Get Help....................................................................26
Terminations.........................................................................
27
9
Table of Contents
Distribution Elections..................................................................
27
Waiver of 60-day Waiting Period Due to Financial Hardship .....................................
28
Alaska Deferred Compensation Plan ....................................................
28
Who is eligible to be in the plan?..........................................................
28
What is a Deferred Compensation Plan? .....................................................
28
What type of plan is the DCP and when may a person join the plan? ...............................
28
What is the Roth 457(b) option?..........................................................
29
Special Catch -Up Provisions of the DCP....................................................
29
Leave Cash -Ins or Taking DCP from Final Check ..............................................
29
DCP Hardship Withdrawals..............................................................29
Required Minimum Distribution..........................................................30
Retirement............................................................................31
Bona Fide Termination..................................................................31
Effects of PERS on Social Security Benefits.................................................37
Windfall Elimination Provision...........................................................
32
Governmental Pension Offset.............................................................
32
Retired Member Medical Benefits.......................................................
32
Health Reimbursement Arrangement.......................................................
33
Optional Health and Life Plans............................................................
33
Medicare............................................................................33
VII. The Defined Benefit Retirement Plan Member (Tiers I, II, and III) ................35
Enrollment...........................................................................35
Employees Not Covered Under the PERS DB Plan .............................................
35
Hiring a PERS DB Retired Member........................................................
35
Classification.........................................................................36
Elected Officials.......................................................................36
OccupationCode......................................................................37
Claimed Additional Service.............................................................
38
Temporary Service.....................................................................39
Prior Active Military Service..............................................................
40
Workers' Compensation and Leave Without Pay ..............................................
42
Calls to Active Military Duty While Employed in PERS.......................................
42
Service Accrual.......................................................................
44
Special School District Alternate Option (SB9)................................................
44
Understanding Leave of Absence and Furlough ...............................................
44
Simultaneous PERS and TRS Credit........................................................45
Vesting..............................................................................46
Effects of LWOP and Reporting Process .....................................................
46
Workers' Compensation Procedures....................................................
47
10
Table of Contents
Disability............................................................................. 47
Occupational Disability Benefits...........................................................
48
Non -Occupational Disability Benefits.......................................................
49
Death................................................................................51
Occupational Death Before Retirement......................................................
51
Non -Occupational Death Before Retirement ..................................................
51
Death Benefits for Retired Members........................................................
52
Beneficiary Designation.................................................................52
ReportDeath........................................................................52
Divorce or Dissolution.................................................................53
WhereTo Get Help....................................................................53
Terminations.........................................................................54
Bona Fide Termination.................................................................
54
Refunds..............................................................................55
Terminated Members..................................................................56
Taxes...............................................................................56
Retirement...........................................................................56
Minimum Requirements for Age -Based Retirement ............................................
57
Minimum Requirements for Service -Based Retirement ..........................................
57
Benefit Calculation.....................................................................57
Checklist for Pre -Retirement Planning......................................................
58
Conditional Service Benefit.............................................................
58
Public Service Benefit..................................................................58
A to P Conversion.....................................................................59
Effects of PERS on Social Security Benefits ................................................
59
Windfall Elimination Provision...........................................................
59
Governmental Pension Offset.............................................................
59
Retired Member Medical Benefits.......................................................
60
Medical Coverage at Retirement...........................................................
60
Optional Health and Life Plans............................................................
60
Medicare............................................................................61
Voluntary Savings Plan.................................................................62
VIII. Miscellaneous...........................................................63
Compensation........................................................................63
Leave Run Outs.......................................................................63
Verifications of Service.................................................................64
Records Retention....................................................................64
Make -Whole Agreements and Grievance Settlements ..................................... 64
is
1. Overview of the PERS
Welcome to the State of Alaska Public Employees' Retirement System (PERS) Employer Manual. This manual is intended
to be your resource guide for any questions regarding the PERS, and to identify who to contact for additional questions.
Division of Retirement and Benefits - Who to Contact . . . . . . . . . . . . .
Reporting Contact - Finance Section
Alaska.gov/drb/employer
• Payroll reporting
• Payroll payment
• Employer contribution rates
• Late fees
• Employer on -behalf
• eReporting questions
You can find each employer's payroll processing point of contact with the Division of Retirement and Benefits (Division
or DRB) at Alaska.gov/drb/employer/ereporting/employer-ereporting-contacts.htmi
PERS Payroll Processing
• Section group phone number: (800) 821-2251, follow instructions:
Press 0 for operator.
Request transfer to Finance/Active Payroll Processing Section.
• Email address: doa.drb.activepayroll@alaska.gov
• Group fax number: (907) 465-3363
• Send Summary Reports to: doa.drb.employerpayroll@alaska.gov
DRB Layoff Resource Center Contacts and Information
Alaska.gov/drb/pdf/layoff contactsheet.pdf
Division of Retirement and Benefits
If you are unable to find the information you need at Alaska.gov/drb, please write, call, or email us. When contacting
the Division, please address your request to the appropriate section or unit.
• Benefit Processing: doa.drb.retirementprocessing@alaska.gov
• Counseling & Education: doa.drb.retirement@alasha.gov
• Active Payroll: doa.drb.activepayroll@alaska.gov
• Accounting: doa.drb.accountants@alaska.gov
• Member Service Center (MSC): doa.drb.mscc@alaska.gov
• Audit: doa.drb.accountants@alaska.gov
1. Overview of the PERS: Division of Retirement and Benefits - Who to Contact
Office Hours of Operation:
Monday through Friday, 8 a.m. to 5 p.m.
(Alaska time)
(800) 821-2251 (toll -free)
(907) 465-4460 (in Juneau)
Employer Confirmations for Auditors
Mailing Address:
Department of Administration
Division of Retirement and Benefits
P.O. Box 110203
Juneau, AK 99801-0203
Email the Finance Section Accounting Unit at doa.drb.accountants@alaska.gov to request an employer confirmation.
Confirmation request must be either on employer letterhead or be requested by an authorized employer representative.
Such requests must provide the following minimum information:
• Employer name and number
• Time period for which confirmation is requested (typically the employer's fiscal year)
• Name and email address for the auditor to whom the confirmation should be sent
• Anyone else who should be cc'd when the confirmation is sent to the auditor
Employer confirmations only provide information about the contributions made during the year. Other information,
such as contribution rates or plan funded status, can be found online at the below links:
• Actuarial Valuations (plan funding status): Alaska.gov/drb/retirement/vatuations_portat
• PERS Comprehensive Annual Financial Reports (CAFR): Alaska.gov/drb/resources/cafrPortat
• Employer Contribution Rates: Alaska.gov/drb/employer/employer_contribution_rates/index
• Financial Statements: Alaska.gov/drb/resources/financia[Statements
• Governmental Accounting Standards Board (GASB) Support Documents:
Alaska.gov/drb/employer/resources/gasb
Financial Education, Advice, and Deferred Compensation Catch-up Services
Empower Retirement Services
301 W. Northern Lights Blvd, Suite 406
Anchorage, AK 99503
(800) 526-0560 (outside Anchorage)
(907) 276-1500 (in Anchorage)
• Investment Advice: advisedassetsgroup@retirementpartner.com
• Financial Education or Investment Advice: (800) 232-0859 or akdrb.empower- retirement.com
• Deferred Compensation Catch-up: Anchorage-empower-office@empower-retirement.com
13
1. Overview of the PERS: Division of Retirement and Benefits - Who to Contact
Retirement Counseling Services
Retirement Counseling: doa.drb.retirement@alaska.gov
For appointments with counselors in Juneau or Anchorage, go online to schedule an in -person appointment or a
teleconference appointment anywhere: Alaska.gov/drb/reps/makeAppointment
For information regarding regional counselor visits to your area, please check Alaska.gov/drb/reps/travel.
Appointments can be made in field areas by contacting your regional counselor.
AloskoCore Health Plans
AlaskaCare.gov
Contact information: Alaska Care.gov/contact
Phone Hours of Operation:
Monday through Friday, 7 a.m. to 6 p.m. (Alaska Time)
(855) 784-8646 (toll -free)
Report a Death
Information and form: Alaska.gov/drb/death
(800) 821-2251 (toll -free)
(907) 465-4460 (in Juneau)
Benefits Contact - Regional Counselor
Alaska.gov/drb/reps
The link above will take you to the Regional Counselor Index, where you can:
• Schedule appointments
• Find your counselor
• Register for seminars
• Print seminar materials
• Review the counselor travel schedule
Regional counselors assist employers with:
• Eligibility and Entitlement
• Member Classification
• Participation Agreements and Amendments
• Retirement Education
14
I. Overview of the PERS: Plan Summaries
PlanSummaries ..............................................
The following summaries provide a brief overview of the PERS system, including both the Defined Benefit (DB) and
Defined Contribution Retirement (DCR) plans. Throughout this manual, a "member" is one who participates in
and is eligible for coverage under the PERS system.
Defined Benefit Retirement Plan
The purpose of the Alaska Public Employees' Retirement System (PERS) is to attract qualified public employees by
offering a variety of benefits to members and their survivors. These benefits, when combined with other income, are
designed to provide members with the basis for financial security during the member's retirement years.
The original plan established in 1961 is a Defined Benefit (DB) plan.
Employees who first entered the PERS prior to July 1, 2006 are members of the PERS DB plan.
Members are those who first entered the PERS:
• Before July 1, 1986, are in Tier I
• On or after July 1, 1986, but before July 1, 1996, are in Tier II
• On or after July 1, 1996, but before July 1, 2006, are in Tier III
Both the member and their employer make contributions to the retirement system during the member's employment to
cover the cost of the member's retirement benefit.
The benefits under this plan are defined in Alaska Statute, and the pension is based on a formula. Included with the
monthly pension are medical benefits also paid by the retirement system and optional benefits the member can elect at
retirement. The plan also offers disability and death benefits.
Defined Contribution Retirement Plan
The second plan, established on July 1, 2006, is a Defined Contribution Retirement (DCR) plan.
Members are those who first entered the PERS:
• On or after July 1, 2006, are a DCR plan member
• Non -vested members who elected to convert to the DCR plan
• DB members working for a DCR plan -only employer
• Former members as defined in AS Sec.39.35.680 (20)
The DCR plan is a comprehensive plan that includes benefits for occupational death, occupational disability, and retiree
health care in addition to the defined contribution retirement income benefit. Members can elect to participate in the
State of Alaska's retiree major medical insurance plan. Additional health benefits include a health reimbursement
arrangement account (HRA), funded entirely by employer contributions. The State of Alaska retirement systems provide
comprehensive benefits under the AlaskaCare Retiree Benefit Plan for DCR plan retirees and family. The health plan
includes the medical plan, the dental plan, the vision plan, and audio plan. The PERS DCR plan offers voluntary
Long -Term Care (LTC) coverage for retired plan participants and their spouses. The LTC plan provides a range of health
and social services for people who, because of chronic condition(s), need help with the basic activities of daily living.
Retired participants may choose between three levels of coverage, a plan with no cost of living indexing, with a 5%
simple index or one with a 5% compounded per year index. The plan is intended to be a qualified long-term care plan
W
1. Overview of the PERS: Statutes and Regulations
under section 7702(B) of the Internal Revenue Code of 1986 as amended. Terms and conditions may change when
necessary to maintain plan qualification. Written notices of any changes will be provided to participants as soon as
possible.
Statutes and Regulations
Alaska.gov/drb/pers/employee/resources/statsRegs.htmi
NOTE: For detailed information regarding the PERS, please refer to Alasha Statute 39.35 and Alasha Administrative
Code 2 AAC.35. This manual is only a summary. The PERS statutes and regulations will prevail whenever there is a
difference in interpretation between this manual and the statutes or regulations.
• All State of Alaska Statutes: www.akleg.gov/basis/statutes.asp
• All State of Alaska Regulations: www.akleg.gov/basis/aac.asp
Administration of the PERS • ........... .
The Division Director serves as the Administrator of the PERS by appointment of the Commissioner of Administration.
The Administrator oversees the day-to-day operation of the system.
The Alaska Retirement Management Board (ARMB) assumed fiduciary responsibility for the assets of the state's
retirement systems as of October 1, 2005.
Alaska Retirement Management Board (ARMB)
Treasury.dor.alaska.gov/armb/
• Meeting minutes archive:
treasury.dor.alaska.gov/armb/Meetings-and-Minutes/Meetings-and-Minutes-Archive.aspx
• Upcoming meetings: treasury.dor.alaska.gov/armb/Meetings-and-Minutes.aspx
As of October 1, 2005, the systems and plans for which the ARMB manages and invests funds are:
• Public Employees' Retirement System (PERS)
• Teachers' Retirement System (TRS)
• Judicial Retirement System (JRS)
• National Guard/Naval Militia Retirement System (NGNMRS)
• Alaska Supplemental Annuity Plan (SBS-AP)
• Alaska Deferred Compensation Plan (DCP)
• Alaska Defined Contribution Retirement Plan (DCR)
ARMB Contact
Alysia Jones, ARMB Liaison Officer
P.O. Box 110405
Juneau, AK 99811-0405
(907) 465-3749 • Fax: (907) 465-2389
Dor.trs.armb@alaska.gov
ire
I. Overview of the PERS: State ofAlosko Audit
The board consists of nine trustees and is staffed by the Department of Revenue, Treasury Division. The board appoints
an Investment Advisory Council (IAC) composed of three members who possess experience and expertise in financial
investments and management of investment portfolios. The ARMB also contracts with an external consulting firm for
assistance with asset allocation, strategy, performance measurement, general consulting purposes and with a
consulting firm for assistance with investing the real estate portfolio.
State of Alaska Audit
The Division's Audit Unit performs compliance audits of the State's political subdivisions participating in the State's
retirement plans. The Audit Unit also houses the position of the State Social Security Administrator (SSSA). The SSSA is
a State of Alaska position, mandated by the federal government, to oversee state and local government implementation
of Sections 210 and 218 of the Social Security Act (voluntary and mandatory Social Security and Medicare withholding).
What ore the functions of the Audit Unit?
For the retirement systems, auditors confirm, on a test basis, that political subdivision participation in the retirement
systems comply with the statutes, regulations, contracts, and policies of the system.
How con on employer prepare for on audit?
Employer audits begin with an information request. Auditors review and analyze the information provided and select
items for testing. Auditors provide the list to the employer and request the employer send the files via a secure State
drop box (desk audits), or that files be ready for review when the auditors arrive for onsite fieldwork.
Employers can prepare for audits by responding timely to audit information requests and having requested information
sent to or be ready for auditors when they arrive for fieldwork. Auditors perform as many audits as possible in a
location to make the most of their time and travel cost and often have limited time for onsite fieldwork.
Auditors do not audit for Social Security and Medicare compliance. As the SSSA, auditors maintain and update the
State's Section 218 Social Security Agreement and mediate and resolve issues between state and local governments and
the Social Security Administration (SSA) or the Internal Revenue Service (IRS). By reviewing Social Security and
Medicare withholding during system audits, auditors work to ensure all political subdivisions are compliant with SSA
and IRS policies and regulations.
Audit Goals
Division auditors review accuracy and compliance with laws and regulations of the systems, and are responsible for
assisting in evaluating, analyzing, and making recommendations for the correction of the systems.
Auditors identify system noncompliance matters and recommend employers to correct all errors. The goal of the Audit
Unit is to help employers become and stay compliant.
17
II. Participation Agreements
Each employer in the PERS has a participation agreement on file with the Division. The participation agreement
identifies the date of the employer's entry into the PERS, members by group or type eligible to participate, and current
or past -service recognition. You should maintain a copy of your original participation agreement and all amendments
to the agreement in your files. Contact your Regional Counselor with questions regarding your participation agreement
or amendments to the agreement.
Designation of Covered Members
You may designate departments, groups, or other classifications of members eligible to participate in the system. It is
possible to include or exclude certain groups of members from coverage, if desired. If the inclusion or exclusion is not
contained in the original participation agreement, an amendment must be submitted and approved by the
Administrator of the plan.
If you decide not to cover a department, group, or other classification of members, all members of that group will be
removed from the plan as of the effective date of the amendment. An employer is not allowed to exclude only certain
members of a group from plan coverage while allowing others in the group to continue to participate.
For example, you may not exclude only elected officials who are elected after a certain date but continue to cover
existing elected officials. Nor may you exclude specific members; you must exclude the entire department, group, or
other classification. For example, if you have a job class series of Police Officer I, II, and III positions, you may not
exclude just the Police Officer I positions from participation in the PERS. You would be required to exclude the entire
job class series.
If a singular position exists, for example the Chief of Police, you may choose to exclude this position from participation
in the PERS.
Elected Official PERS Participation
Employers That Included Elected Officials in Participation Agreements Prior to
June 6, 2007
If the employer included elected officials in their participation agreement prior to June 6, 2007, enrollment of newly
elected officials is dependent upon the tier of benefits under which the new officer is eligible.
Defined Benefit Elected Officials (PERS Tiers I, II, III)
Newly elected officials who are already members of the PERS defined benefit plans (first entered the PERS prior to July
1, 2006) can be enrolled in PERS as long as they are compensated for their services. Defined Benefit elected officials
with a participating employer who included elected officials prior to June 6, 2007 do not have to meet the $2,001
monthly compensation requirement to remain in PERS.
Elected Official Participation/Waiver
A compensated elected official of a PERS-covered employer has the opportunity to participate in the PERS. After being
elected, they must decide to either waive membership rights or become a contributing member of the PERS. Under
Alaska Statute 39.35.125, Participation of Elected Officials, the employer must enroll the elected official in the PERS
unless they waive PERS membership by signing a written waiver, which is filed with the Division.
If the elected official is currently employed as a full-time PERS or TRS member, or they are retired, please direct the
elected official to contact the Division to find out if this participation will benefit them. The Elected Official Participation/
Waiver form for PERS DB plan members is located at: Alaska.gov/drb/pdf/forms/02-1832.pdf
18
II. Participation Agreements: Probationary Periods Before Enrollment
Defined Contribution Elected Officials (PERS DCR)
Newly elected officials who have not previously been members of the PERS or who are DCR PERS members must be
compensated at a rate of $2,001 per month to be eligible for PERS participation.
Elected Official Participation/Waiver
A compensated elected official of a PERS-covered employer that participates in the DCR plan has the opportunity to
participate in the PERS DCR plan. Within 30 days after their term of office begins, the elected official must decide to
either waiver membership rights or become a contributing member of the PERS DCR plan. Under Alaska Statute
39.35.725, Participation of Elected Officials, the employer must enroll the elected official in the PERS DCR plan unless:
• the covered employer has not designated elected officials under AS 39.35.957 as a classification of employees
entitled to participate in the plan, or
• the employee waives PERS DCR plan membership by signing a written waiver which is filed with the Division. To
be eligible to waive participation in the PERS DCR plan, the elected official must have had no previous
employment under the system with this political subdivision or have retired under the system.
If the elected official is currently employed as a full-time PERS or TRS member, or they are retired, please direct the
elected official to contact the Division to find out if this participation will benefit them. The Elected Official Participation/
Waiver form for PERS DCR plan members is located at: Alaska.gov/drb/pdf/forms/dcr006.pdf
Employers That Included Elected Officials in Participation Agreements On or After
June 6, 2007
If the employer did not include elected officials in their participation agreement prior to June 6, 2007, amended their
agreement to add elected officials on or after June 6, 2007, or is presently amending their participation agreement to
include elected officials, all elected officials, both DB and DCR, must be compensated at the rate of $2,001 per month
to be eligible for PERS participation.
Probationary Periods Before Enrollment
Some employers require members to serve a probationary period before they are eligible to enroll in the PERS. This
requirement is identified in the employer's participation agreement.
Please be aware that if you require a probationary period before enrolling the member in the PERS, the service period is
not PERS-eligible and cannot be claimed. In addition, it does not meet the definition of full-time temporary
employment and the member may not claim it for credit in the system. There are no probationary periods identified in
PERS statutes or regulations. Unless a probationary period is identified in the employer's participation agreement, all
eligible PERS employees should be reported to the system.
Part -Time and Seasonal Members
Part-time and seasonal members are eligible to participate in the PERS and should be reported to the system. The only
exception to this is if you have amended your participation agreement to exclude these position types.
Amendment Process
• Contact Regional Counselor
• Participation Amendment forms submitted
• Resolution passed by governing body • Approval by the Plan Administrator
19
H. Participation Agreements: Process and Cost of Removing Members From Coverage
The employer may request that its participation agreement be amended. The request may be made only after adoption of
a resolution by the legislative body of the political subdivision and approval of the resolution by the person authorized
to approve the resolution, or, in the case of a public organization, after adoption of a resolution by the governing body
of that public organization. A certified copy of the resolution will be filed with the PERS Administrator.
The resolution must state the effective date of the amendment, identify which members by group or type that will be
included or excluded, and the name and title of the person authorized to sign the agreement on behalf of the governing
body. The provisions stated in the resolution must match the provisions outlined in the participation agreement. Any
discrepancy between the participation agreement and the resolution will result in a delay in acceptance of the
agreement until a revised agreement or resolution is received by the PERS.
The amendment to the participation agreement must be submitted on the required amendment form. Be sure to
complete and submit two amendment forms with original signatures. When approved, one original of the amendment
will be returned to you for your records.
The effective date of amended coverage is designated in the amendment. It must be the first of a month and must be
prospective. The amendment must also be numbered.
Process and Cost of Removing Members From Coverage . . . . . . . . . .
There is a process and differing costs to remove members from coverage depending upon when the employer began
participation in the PERS.
Employers That Began Participation in the System On or Before June 30, 2006
• Contact Regional Counselor
• Resolution passed by the governing body
• Termination study completed
• Amendment to participation agreement submitted
If you are considering excluding coverage of a department, group, or other classification of members, you must contact
Buck Global, LLC to have a termination study done. This study will tell you what your one-time termination cost is.
This cost represents the amount necessary to fully fund the costs to the plan for members who become vested through
this process and for other changes in actuarial assumptions, like earlier than expected retirement, that arise because of
the act of termination from coverage. Benefits due to terminated members must be funded by the employer and the
employer must either pay the amount in a lump sum within 60 days of termination or enter into a payment plan that is
acceptable to the PERS Administrator.
In addition to this cost, you will continue to make contributions toward the unfunded liability each pay period by the
amount determined by applying the past -service rate times the salary of the individuals you are removing. The current
past -service rate is 18.23%. This rate will change with each new fiscal year.
• Each member whose coverage is terminated is considered fully vested in the accrued retirement benefits effective
the date of termination.
• Each member affected by termination has a choice of taking a refund of their contributions or receiving a vested
benefit in the PERS. The member has 60 days to submit their decision in writing to the administrator of the plan.
• If the member elects to receive a refund, they will forfeit all service with the terminating employer and the service
cannot be reinstated at a later date.
20
ii. Participation Agreements: Supplemental Benefit System Annuity Pion Participation
If, upon review of the termination study, it is decided to move forward with separation from the PERS, written notice
requesting termination of participation from the PERS must be provided in the form of a resolution approved by the
governing body. The termination date must provide at least 90 days' notice from the date the resolution is submitted to
the Division. An amendment must be submitted to the PERS coinciding with the language contained in the resolution.
The PERS will require two signed originals of the amendment and one signed original of the approved resolution.
Employers That Began Participation in the System On or After July 1, 2006
• Contact Regional Counselor
• Resolution passed by the governing body
• Termination cost assessed
• Amendment to participation agreement submitted
If you are considering excluding coverage of a department, group, or other classification of members, the Plan
Administrator will assess a termination cost that is determined to be actuarially required to fully fund the costs to the
plan for members whose coverage is terminated. This cost includes the employer's share of retiree health benefits,
occupational death and disability benefits and continuing lifetime pension benefits elected by qualifying peace officers
or firefighters.
The termination cost is borne by the employer. Benefits due to terminated members must be funded by the employer
and the employer must either pay the amount in a lump sum within 60 days of termination or enter into a payment
plan that is acceptable to the PERS Administrator.
• Each member whose coverage is terminated is considered fully vested in the employer contributions and in their
own contributions effective the date of termination.
• If the member is later employed with a participating employer, all service earned during the employment period
with the terminated employer is credited for purposes of determining vesting in employer contributions and
eligibility for medical benefits.
Supplemental Benefit System Annuity Plan Participation
In order to participate in the Supplemental Benefit System Annuity Plan (SBS-AP), a political subdivision or public
organization employer must belong to the PERS. In addition, employees of the employer must meet eligibility
requirements for participating in the Federal Social Security system. However, employees of an employer cannot belong
to both the SBS-AP and Social Security at the same time. If a class of employee working for the employer participates in
Social Security, this class of employees must drop participation in Social Security prior to being eligible to participate
in the SBS-AP. If an employer has a Social Security section 218 participation agreement, that employer will not be able
to withdraw from Social Security participation employees who are covered by this agreement.
Participation Requirements
Participation requirements are outlined in the Alaska Statutes, starting with Sec. 39.30.150.
Alaska Statute Sec. 39.30.170(b) details the administrative steps required in order for an employer to become a member
of the SBS-AP. If an employer qualifies for SBS-AP participation, it could join the SBS-AP by resolution of the
subdivision's governing board or counsel. A participation agreement would then need to be signed by the subdivision's
chief administrator. The SBS-AP is only available to newly created state entities or newly created political subdivisions
or public organizations.
Q
H. Participation Agreements: Termination of Participation
For more information or prior to beginning the process of joining the SBS-AP, please contact the Division at
(907) 465-4460 or (800) 821-2251 or by email at doa.drb.mscc@alasha.gov.
Termination of Participation
Employers That Began Participation in the System On or Before June 30, 2006
• Contact Regional Counselor
• Resolution passed by the governing body
• Termination study completed
• Termination cost paid within 60 days or payment plan entered into
The employer may request that its participation agreement be terminated. The employer must give the Plan
Administrator 90 days notice prior to termination. The request may be made only after adoption of a resolution by the
legislative body of the political subdivision and approval of the resolution by the person required by law to approve the
resolution, or, in the case of a public organization, after adoption of a resolution by the governing body of that public
organization. A certified copy of the resolution will be filed with the PERS Administrator.
If you are considering terminating participation, you must contact Buck Global, LLC to have a termination study done.
This study will tell you what your one-time termination cost is. This cost represents the amount necessary to fully fund
the costs to the plan for members who become vested through this process and for other changes in actuarial
assumptions, such as earlier -than -expected retirement, that arise because of the act of termination from coverage.
Benefits due to terminated members must be funded by the employer and the employer must either pay the amount in
a lump sum within 60 days of termination or enter into a payment plan that is acceptable to the PERS Administrator.
Termination studies are valid only up to the termination date identified in the study. Non -utilization of the study from
within the prescribed period of time will result in an invalid study where another study must be requested if the
employer is to proceed with termination.
Termination of participation by an employer does not prohibit future participation by the same employer as long as the
cost of the prior termination has been paid in full.
Termination of participation can involuntarily occur if the employer fails to make its mandatory contributions to the
PERS within the established time limits. Should this occur, an extension of the payment of contributions may be
granted. If at the end of the extension period the employer is still in default, their participation in the plan will be
terminated. Notice of termination will be sent to the employer.
• All current or deferred members of a terminated employer are considered fully vested in the accrued retirement
benefits effective the date of termination, providing they have not received a refund of their contributions.
• Each member affected by termination of participation has a choice of taking a refund of their contributions or
receiving a vested benefit in the PERS. The member has 60 days to submit their decision in writing to the
administrator of the plan.
• If the member elects to receive a refund, they will forfeit all service with the terminating employer and the service
cannot be reinstated at a later date.
PWJ
II. Participation Agreements: Termination of Participation
Employers That Began Participation in the System On or After July 1, 2006
• Contact Regional Counselor
• Resolution passed by the governing body
• Termination cost assessed
The employer may request that its participation agreement be amended. The request may be made only after adoption
of a resolution by the legislative body of the political subdivision and approval of the resolution by the person
authorized to approve the resolution, or, in the case of a public organization, after adoption of a resolution by the
governing body of that public organization. A certified copy of the resolution will be filed with the PERS
Administrator.
The Plan Administrator will assess a termination cost that is determined to be actuarially required to fully fund the
costs to the plan for members whose coverage is terminated. This cost includes the employer's share of retiree health
benefits, occupational death and disability benefits and continuing lifetime pension benefits elected by qualifying peace
officers or firefighters. The termination cost is borne by the employer. Benefits due to terminated members must be
funded by the employer and the employer must either pay the amount in a lump sum within 60 days of termination or
enter into a payment plan that is acceptable to the PERS Administrator.
Termination of participation by an employer does not prohibit future participation by the same employer as long as the
cost of the prior termination has been paid in full.
Involuntary termination of participation can also occur if the employer fails to make its mandatory contributions to the
PERS within the established time limits. Should this occur, an extension of the payment of contributions may be
granted. If at the end of the extension period the employer is still in default, their participation in the plan will be
terminated. Notice of termination will be sent to the employer.
• Each member whose coverage is terminated is considered fully vested in the employer contributions and in their
own contributions effective the date of termination.
• If the member is later employed with a participating employer, all service earned during the employment period
with the terminated employer is credited for purposes of determining vesting in employer contributions and
eligibility for medical benefits.
23
III. Payment of Contributions for eReporting
Requirements for Timely Reporting
Employer and member contributions should be transmitted to the plan for deposit in the retirement fund within 15
days following the close of each pay period.
• General reporting information and instructions for new users:
Alaska.gov/drb/employer/ereporting/instructions.htmi
• The State of Alaska Login ID form will allow human resources or payroll employees access to our reporting
systems "eReporting" and "Employer Access." Find the form at: Alaska.gov/drb/pdf/forms/gen012-state.pdf.
• The Political Subdivision login ID form will allow human resources or payroll employees access to our reporting
systems "eReporting" and "Employer Access." Find the form at: Alaska.gov/drb/pdf/forms/genOl2-poli-sub.pdf.
If the contributions are not submitted within 15 days of the close of each payroll period, interest will be assessed on
the outstanding contributions at one and one-half times the most recent actuarially determined rate, which is currently
8.00%; therefore, the annual fee assessed on late contributions is currently 12.00%.
Late Reporting
• All payrolls, including the funding, are due to be transmitted to the plan no later than 15 days after the payroll
issue date.
• An email reminder will be sent to the payroll contact once a payroll is considered late
• 30 days late: A certified letter will be sent to the payroll contact with a courtesy copy to the Administrator
• 60 days late: A certified letter will be sent to the Administrator.
Employers who have not paid their contributions to the plan may be terminated from participation in the plan.
If you have any questions regarding the reporting requirements, please contact your Division payroll processing point
of contact listed in the Reporting Contacts section of this manual or send an email to doa.drb.activepayroll@alaska.gov.
Technical Difficulties
If you experience any technical difficulties, first contact your programmers directly for system errors. Then, if technical
difficulties are still occurring, please report errors via email to your Division payroll contact. Additional information
such as screen prints and error messages are most appreciated and will assist us in quickly resolving any issues. Please
include your employer number and name as well as a phone number for you and/or your programmers when emailing
this correspondence. You may contact your Division payroll processing point of contact listed in the Reporting
Contacts section of this manual if you are unsure of the nature of the errors.
Consequences to the DCR Member and Employer for Late Reporting
The DCR member's account balance is comprised of contributions and investment gains and losses. If the contributions
are reported late, the member may suffer substantial financial losses with market fluctuations and the employer may be
assessed interest for late payment.
Effect of Enrolling DCR Members in Error
The employer is responsible for administrative fees, investment fees, and investment losses charged to accounts
resulting from contribution adjustments because the employer enrolled a member in the DCR plan in error.
24
III. Payment of Contributions for eReporting: Refer to eReporting Manual for Other Questions
Refer to eReporting Manual for Other Questions
This web -based application provides employers who participate in the PERS an electronic method for reporting
required information. This application allows employers to report required information for both DB and DCR members
as defined by Alaska Statutes and Regulations.
• eReporting User's Guide: Alaska.gov/drb/employer/ereporting/user_guide.htmi
• New reporting instructions will be provided when you are onboarded to the new employer reporting system.
PI&i
IV. Employer Responsibility for Member
Plan Education
Paid for Through Employer Contributions
Funding to provide information and education to members of the PERS is included in the employer contribution rate
This includes both DB and DCR members.
It is important that members of the PERS receive education and counseling on their retirement benefits as soon as they
enter the plan. This education should continue throughout their employment to ensure they have the tools they need to
appropriately prepare for retirement.
Members should be encouraged to take advantage of additional savings plans the employer may offer, such as 401 tax
sheltered annuity plans or 457(b) deferred compensation plans.
Importance of Initial Seminars for DCR Members
When a DCR member retires, they will pay themselves in retirement based on the money accumulated in their
accounts. With this in mind, it is important that plan participants understand the investment options available to them
and the suite of services offered through Reality Investing Advisory Services.
Plan members should be encouraged to attend the various retirement seminars presented by both the Division and
Empower Retirement Services. These seminars will provide them with valuable information on DCR plan entitlements
and financial education on their retirement accounts.
Importance of Work Release Time for Seminar Attendance . . . . . . . . .
As an employer, part of the full benefit package that you offer members is a retirement system. The Division strives to
educate your members on this valuable benefit you provide.
Employers are encouraged to allow members time off work to attend the various educational seminars presented by the
Division and Empower Retirement Services on their retirement accounts. This can be done by implementing a liberal
leave policy or allowing a flexed work week when local seminars are offered.
Importance of Field Visits • • . • • . . . .
Regional Counselors provide regular onsite visits to areas throughout Alaska. The field visit is a valuable tool to provide
accurate and complete information to both the employer and the member. In addition, the Division offers benefits fairs
in various areas of the state on a regular basis.
Regional Counselors provide the following services to the employers:
• Training in the benefits and entitlements of the PERS
• Interpretation of PERS statutes and regulations
• Classification of members
• Process of amending participation agreements
• Assistance with audit findings
fez:
IV Employer Responsibility for Member Plan Education: Importance of Field Visits
Regional Counselors provide the following services for members:
• Individual counseling appointments
• Seminars for large groups
• Job -site visits and small group meetings
Employers can request and are encouraged to contact their Regional Counselor if they would like an onsite visit to their
location. If it is not possible for a Regional Counselor to physically visit a community, they can provide seminars, group
meetings, individual counseling via teleconference, and video conferences via the Internet.
Assistance for Field Visits - What the Counselor Needs
When a Regional Counselor is visiting sites in the field, the employer's help is required to make the visit a success. The
employer should advertise and encourage their members to attend the seminars and set up individual counseling
appointments. Where possible, the employer should allow employees time from work to attend.
It is the employer's responsibility to designate an employer contact that will coordinate the visit with the Regional
Counselor by securing a meeting space and scheduling the individual counseling appointments for members. It is
important that the employer notify all their members of the date and time of the onsite visit. This will ensure that all
members have the opportunity to meet with the retirement representative. This can be done by posting flyers in
common areas, sending emails to all members, and announcing the visit in work site publications.
27
V. Beneficiary Designations
The employer is required to provide newly hired members with the appropriate beneficiary forms for their applicable
accounts. The most current beneficiary forms can be found on the Division website.
• Beneficiary Forms Packet: Alaska.gov/drb/forms/beneficiary-forms.htm[
There are separate PERS beneficiary forms for DB and DCR members. In addition, there are beneficiary forms for the
State of Alaska's SBS-AP and Deferred Compensation (DCP) plans.
It is important that beneficiary forms are submitted timely for new members and updated on a regular basis for existing
members. In the event of a death, the member's account will be paid based on their most recent valid beneficiary
designation that the Division or its designee, Empower Retirement Services, has on file.
All married members who name someone other than their spouse as the primary beneficiary of their accounts must
have the spouse's signature on the Spousal Consent section on the form. Spouses may waive entitlement to benefits by
completing and singing the Spousal Waiver of Death Benefits form (gen054) located on the Division's website at:
Alaska.gov/drb/pdf/forms/gen054.pdf.
If more than one beneficiary is named in the primary or contingent beneficiary category, the surviving beneficiaries in
that category will share equally unless otherwise indicated.
If the primary and contingent beneficiaries die before the member does, or if no beneficiary is named, the account will
be paid based on the terms of the Plan Document or appropriate state law.
If you are married at the time of your death and you were married to the same person during part of your PERS
employment, your spouse is automatically your beneficiary, regardless of your written designation, unless:
• Your spouse consents to another beneficiary, or
• Another person (such as a former spouse) is eligible for the benefits under a qualified domestic relations order
(QDRO). That person would be entitled to the portion of the benefit that is ordered by the QDRO.
If a member fails to designate a beneficiary, or if no designated beneficiary survives the member, the administrator will
pay the death benefit:
1. to the surviving spouse or, if there is no surviving spouse,
2. to the surviving children in equal parts or, if there is none surviving,
3. to the surviving parents in equal parts or, if there is none surviving,
4. to the member's estate.
Members should use caution when designating a minor child as a beneficiary. When a minor child is designated as the
beneficiary, the death benefit will be paid to the child's parent or legal guardian. Members may want to consider
establishing a Trust for their minor child and designate the trust as the beneficiary. They should provide the name and
contact information of the Trustee on the form.
Changes to the designated beneficiary can be made by submitting a new beneficiary designation form at any time.
DBProcess ...................................................
Alaska.gov/drb/pdf/forms/gen053.pdf
The DB member will complete the Beneficiary Designation form (gen053) and submit it directly to the Division address
listed at the top of the form.
28
V Beneficiary Designations: DCR Process
DCRProcess .................................................
DCprovider.com/PDF/alaska//98214-04/98214-04_Beneficiary.pdf
The DCR member will complete either the Beneficiary Designation 401(a) Plan State of Alaska Public Employees' Tier IV
Defined Contribution Retirement Plan form (PERS Defined Contribution Retirement Plan Beneficiary Designation) and
submit it directly to Empower Retirement Services at the address listed in Section D of the form or designate
beneficiaries online at Participant.empower-retirement.com. Submitting beneficiary designations online is
Empower Retirement's preferred method. The employee must wait until their first payroll has processed with the
Division or until they have received their welcome flyer/postcard from Empower Retirement before setting up their
beneficiary designations online or submitting a hard copy form to Empower Retirement. Members can update their
beneficiaries at any time.
SBS-AP Process ...............................................
DCprovider.com/PDF/alaska//98214-03/98214-03_Beneficiary.pdf
The DB or DCR member will complete the Beneficiary Designation 401(a) Plan State of Alaska Supplemental Annuity Plan
form (Supplemental Annuity Plan Beneficiary Designation) and submit it directly to Empower Retirement Services at
the address listed in Section D of the form or designate beneficiaries online at Akdrb.gwrs.com. Members can update
their beneficiaries any time.
DCPProcess ..................................................
DCprovider.com/PDF/alaska/98214-01/98214-01_Beneficiary.pdf
If you are a State of Alaska employer or a participating employer in the Deferred Compensation Plan through the State
of Alaska, the member will complete the Beneficiary Designation Governmental 457(b) Plan State of Alaska Deferred
Compensation Plan form (Deferred Compensation Plan Beneficiary Designation) and submit it directly to Empower
Retirement Services at the address listed in Section D of the form or designate beneficiaries online at
Participant.empower-retirement.com. Submitting beneficiary designations online is Empower Retirement's
preferred method. The employee must wait until their first payroll has processed with the Division or until they have
received their welcome flyer/postcard from Empower Retirement before setting up their beneficiary designations online
or submitting a hard copy form to Empower Retirement. Members can update their beneficiaries any time.
Employer is Not the Agent or Designee of the Plan Administrator . . . .
Only beneficiary designation forms filed with the Division or directly with Empower Retirement Services are
considered valid. If your members submit forms to you and these forms are not forwarded to either the Division or to
Empower Retirement Services, whichever is appropriate, we cannot use the information provided on them. Only forms
that have been received by the Division or its designee will be used in the event of a member's death.
29
VI. The Defined Contribution Retirement
Plan Member
Enrollment...................................................
DCR plan members are:
• employees who first entered the PERS on or after July 1, 2006,
• non -vested DB members who elected to convert to the DCR plan,
• DB members working for a DCR plan -only employer, and
• former members as defined in AS Sec.39.35.680 (20).
Membership in either the DB or DCR plans, and tier status for the DB plan, is established when an employee first
begins making contributions to the PERS. Your new member may have participated in the PERS prior to their
employment with you. Before reporting new members to the system, be sure to confirm the correct plan and tier status
for them. This can be done by using the New Employee Tier Look -Up on the Division's Employer Access website at
Myrnb.alaska.gov/EmployerAccess/form/login.htmi or by contacting your Regional Counselor.
Those not covered under the PERS DCR Plan are:
• temporary (nonpermanent),
• those who work less than 15 hours per week,
• those who participate in the University of Alaska's Optional Retirement Plan (ORP),
• those who first entered PERS before July 1, 2006 and did not convert to the DCR plan,
• those excluded from the employer's participation agreement, or
• elected officials (if designated as a classification of employees who participate) who are compensated less than
$2,001 per month.
Enrollment of New Employees for Human Resource Staff
Employers must take the following steps for new employees hired into the PERS on or after July 1, 2006.
New employees hired on or after July 1, 2006 and existing employees who have elected to convert to the new plans will
be automatically enrolled in an age -based target fund managed by T. Rowe Price. As the employer, you are required to
provide the employee with a copy of the PERS Defined Contribution Retirement Plan Features and Highlights brochure and
the Empower Retirement Advisory Services brochure. You will find these brochures at:
• docs.empower-retirement.com/EE/AlaskaWR/DOCS/98214-04/Plan-Highlights-98214-04.pdf
• Alaska.gov/drb/pdf/employer/employerToo[kit/AdvisoryServicesFlyer.pdf, and
• on the Division's Employer Services/Resources/Employer Toolkit web page.
Employees who do not wish to be enrolled into Target Funds may opt out by telephone by contacting Empower
Retirement Services at (800) 232-0859 or online at Akdrb.gwrs.com.
Employees new to the PERS DCR plan must complete a beneficiary designation and submit the original to the
Division's recordkeeper, Empower Retirement Services, or make their designations online once logged into their profile.
Upon the death of the employee, payments from the employee account will be paid according to the last beneficiary
designation held by the Division's recordkeeper.
30
VI. The Defined Contribution Retirement Pion Member: Classification
Hiring a PERS DCR Retired Member
There are IRC codes that prohibit a retired member from making "in service" contributions to their retirement account
while they are receiving a distribution from that account. Employers should encourage the DCR retired member to seek
the advice of a qualified tax consultant for guidance on the IRC codes. Failure to inform the retired member of this
could result in significant financial repercussions for the retired member. Employers are encouraged to reference
the Bona Fide Termination information contained in this section for further information on "in service" distributions.
PERS DCR retired members who come back to PERS-eligible employment retain the amount of service that they had
accrued prior to retirement. Upon reemployment in the PERS, the service counts toward vesting in employer
contributions, medical eligibility, Health Reimbursement Arrangement (HRA), and for retirement eligibility. The
exception is if the retiree has taken distribution from their DCR plan account. In such a case, they will have to
complete another five years to become fully vested in the employer's contributions.
Classification.................................................
The following members are covered under the PERS and earn membership service in the PERS:
• Permanent full-time or part-time and seasonal members of the State of Alaska, and
• Permanent full-time or part-time and seasonal members of participating political subdivisions or public
organizations, unless specific member group or type, or job classifications are excluded by Alaska statutes or
participation agreements.
A full-time member is one who is occupying a permanent position that regularly requires working 30 or more hours a
week. A part-time member is one who is occupying a permanent position that regularly requires working at least 15
hours but less than 30 hours a week.
Elected Officials
Elected officials who are compensated at a minimum of $2,001 a month for their services may be covered by the PERS
DCR plan if the employer includes elected officials in their participation agreement.
An elected official can waive their participation in the PERS by filing a written waiver of coverage, PERS Elected Official
Participation/Waiver form (dcr006) within 30 days of 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 other member of the employer.
• PERS Elected Official Waiver Form: Alaska.gov/drb/pdf/forms/dcr006.pdf
Occupation Code
The occupation codes identify various member types in the PERS. The employer will be reporting the correct code for
members with each payroll processing. The most common ones used are listed below.
PERS
A
All Others
PERS
C
Masters, Mates and Pilots (State of Alaska only)
PERS
E
Elected Officials
PERS
F
Fire Fighter
PERS
M
IBU (Inland Boatmen's Union) (State of Alaska only)
PERS
P
Peace Officer
0
VI. The Defined Contribution Retirement Pion Member: No Claimed Additional Service
The following definitions will help in determining the correct occupational code for your members
"P" Peace Officer
A member occupying a position as a peace officer, chief of police, regional public safety officer, probation officer,
correctional officer or correctional superintendent. It does not include a village public safety officer.
"F" Fire Fighter
A member occupying a position as a fire fighter or a fire chief. It does not include volunteer fire fighters.
No Claimed Additional Service
With the exception of a call to active military duty, DCR members may not claim other types of service for credit in the
PERS.
Calls to Active Military Duty While Employed in the PERS . . . . . . . . . . .
Per the 1994 Uniformed Services Employment and Reemployment Rights Act (USERRA), military personnel who are
currently working for a PERS employer and called out to a period of active duty may be entitled to claim the period as
regular service credit upon their return to the employer. In most cases, the cumulative period(s) of call to active duty
cannot exceed five years. This service may be voluntary or involuntary and members must leave the military in good
standing to qualify for reemployment. If a member is called to active duty, they must notify their employer in advance,
either verbally or in writing, unless giving notice is impossible, unreasonable, or precluded by military necessity.
The member is to be granted reasonable time off prior to the beginning of the active duty period to take care of
personal affairs and to travel to the reporting site. In addition, the member is to be granted a period of rest before
returning to work. The period of time the member has to report back to work varies depending upon the length of the
active duty period. For example:
• for service of more than 180 days, members must submit an application for reemployment within 90 days of
honorable discharge from active duty,
• for service of more than 30 days but less than 181 days, members must submit an application for reemployment
within 14 days of release from service, and
• for service of less than 31 days, the time period for submitting an application is very short.
This time frame may be extended due to medical circumstances. If the member suffers a disability upon their return to
employment, the employer is required to make reasonable accommodations to return the member to active employment.
USERRA provides that members are reemployed in the job that they would have attained had they not been absent for
military service, with the same seniority, status, and pay, as well as other rights and benefits determined by seniority.
USERRA also requires that reasonable efforts (such as training or retraining) be made to enable returning service
members to refresh or upgrade their skills to help them qualify for reemployment. Administrative order 213 allows
state employees to continue health benefits when called to active duty in support of conflicts in Iraq and Afghanistan.
If you have a member who is called to active duty:
• Contact Regional Counselor
• Inform the member of right to claim service upon return to employment
• Report the leave of absence through payroll reporting per eReporting or Employer Services instructions
• Inform the member of the process to claim service upon return to employment
W
V1. The Defined Contribution Retirement Pion Member: Service Accrual
Calls to active duty must be claimed for credit in the PERS by the member once they return to employment. The
member is required to write a memo requesting to claim the period of active duty for service credit in the PERS. The
memo plus documentation verifying the release from active duty with an honorable discharge, typically a DD214, is
sent to the Division for processing.
Once claimed, the entire period of the military leave of absence (prior days and up to 90 days after discharge) is
credited as regular service in the PERS. The service counts toward vesting in the employer contributions, medical
eligibility, the Health Reimbursement Arrangement (HRA), and for retirement eligibility.
DCR members may elect to make up all or part of their contributions for the period of military leave of absence once
they have returned to the employer. The employer will make their contributions to the member's account proportionate
to what the member contributes. If the member does not elect to make up their contributions, they will not receive the
employer match to their accounts.
DCR members who participate in the State of Alaska's Supplemental Annuity Plan (SBS-AP) and/or the State of Alaska's
Deferred Compensation Plan (DCP) may elect to make up all or part of their contributions for the period of active duty
once they have returned to the employer.
Members of other tax-sheltered plans offered through their employers should contact their human resource or payroll
staff for information on how to make up missed contributions in those plans.
The allowable time frame for making up contributions is up to three times the length of the period of the military leave
of absence, not to exceed five years. Missed contributions must be made through direct payroll deductions.
Employers and members are encouraged to contact their Regional Counselor for information on calls to active military
service.
For questions about USERRA contact:
• USERRA: Federal Register 20 CFR Part 1002
DOL.gov/vets
• ESGR: Employer Support of the Guard and Reserves is a Department of Defense agency established to gain and
maintain active support from all public and private employers.
(800) 336-4590 (toll -free)
ESGR.mil
Service Accrual ...............................................
A year of service is the equivalent of 52 weeks of permanent full-time PERS employment, which may consist of a
combination of permanent full-time or permanent part-time membership service.
A permanent full-time PERS member earns a day of service credit for each day they are actively employed in a
PERS-covered (eligible) position. This includes holidays or regularly scheduled days off (RDO), as long as members are
in pay status the day before and the day after the holiday or RDO.
A PERS permanent part-time member, one working at least 15 hours but less than 30 hours a week, receives
proportionate credit for the number of hours they work compared to a full-time member. A total of 1,560 hours must
be earned to receive a year of service credit. However, service accrued for a stated period of part-time service may not
exceed the full-time equivalent.
A permanent full-time or part-time seasonal member earns service credit for the period of time they are actually
working. Seasonal leave without pay periods do not earn PERS service credit.
33
V1. The Defined Contribution Retirement Pion Member: Service Accrual
Simultaneous PERS and TRS Credit
Members working in both the PERS DCR plan and the TRS DCR plan at the same time may receive partial service
credit under both systems. To be eligible, they must be employed at least half-time in both systems concurrently and
making the required contributions.
The total PERS DCR and TRS DCR service credit that a member may earn during a school year (July 1 through June 30
of the following year) may not exceed one year.
Vesting
DCR members are immediately and fully vested in their own contributions and related earnings beginning with their
first contribution. They become vested in the employer contributions based on years of service in the PERS.
• After 2 full years of service - 25% vested
• After 3 full years of service - 50% vested
• After 4 full years of service - 75% vested
• After 5 full years of service - 100% vested
Effects of LWOP and Reporting Process
For a full-time member, a leave of absence without pay (LWOP) that does not exceed 10 accumulated days in any calendar
year is not considered an interruption or break in service. However, if the leave of absence exceeds 10 accumulated
days, whether taken consecutively or through intermittent hours scattered throughout the calendar year, their service
credit for that year will be reduced by the equivalent number of days they were on leave of absence without pay.
For example, a full-time member scheduled to work a 40-hour work week (8 hours a day) could accumulate up to 80
hours of LWOP each calendar year and still receive a full year of service credit. However, once the accumulated
LWOP exceeds 80 hours in the calendar year, the entire period of LWOP will not be credited PERS service, including
the 80 hours.
Continuous periods of LWOP for full-time members should be reported to the PERS with each payroll processing.
Currently, scattered LWOP for full-time members is not reported to the PERS; however, this reporting option may
become available in the future. The employer will be required to verify all hours of LWOP for full-time members when
completing the Verification of Service form (02-1883). If an employee disagrees with the employer's verification of
salaries or service, he/she will be referred to the employer to resolve the discrepancy.
• Verification of Service form (02-1883): Alaska.gov/drb/pdf/forms/02-1883.pdf
Instructions for completing the Verification of Service form (02-1883) are:
1. SECTION L Personal Data (self-explanatory)
2. SECTION IL Service Verification
a. Verify the type of service rendered: Full-time (FT), part-time (PT) (15-30 hours per week), or leave of absence
without pay (LWOP). In cases where workers' compensation and paid leave are combined, only the hours that
the employee is on paid leave are creditable; the remainder is LWOP.
b. Verify the number of hours worked for PT employees only. PT hours must be reported on a calendar year basis
(January 1 through December 31).
34
VI. The Defined Contribution Retirement Pion Member: Workers' Compensation Procedures
c. Verify the Occupational Code: P = Peace Officer, F = Firefighter, E = Elected Official, M = Inland Boatmen's
Union of the Pacific (IBU), D = PERS Alternate Option, C = Master, Mates and Pilots (MMP), or A = All other.
d. Verify the actual service of LWOP beginning and ending dates. Sequential service of LWOP segments may not
begin or end on the day of another segment.
EXAMPLE: Correct: FT 8/19/2006 through 5/31/2007; LWOP 6/1/2007 through 8/31/2007
Incorrect: FT 8/19/2006 through 5/31/2007; LWOP 5/31/2007 through 8/31/2007
e. Do not include casual, emergency, nonpermanent employment or temporary employees, contracted employees,
part-time employees who work less than 15 hours per week.
3. SECTION III. Leave of Absence Without Pay (LWOP)
LWOP that exceeds 10 days per year is not creditable in the PERS. Often, LWOP is take a few hours or days at a
time but adds up to more than 10 days during the year. Please verify the total number of hours of LWOP taken by
the employee during each payroll year and enter the number of hours required per day for full-time employment.
If a LWOP segment has already been verified in Section II, do not list the total hours under this section.
Part-time members receive credit in the PERS based on the number of hours worked and the 10-day rule is not
applicable.
Workers' Compensation Procedures
If you have a member on a period of workers' compensation (WKC) LWOP, the LWOP time should be reported through
the payroll process.
The period of WKC LWOP cannot be claimed for credit in the Defined Contribution Plan. With the exception of a call
to active military duty, DCR members may not claim other types of service for credit in the PERS.
Occupational Disability
A member that is injured and becomes totally and presumably permanently disabled because of a physical or mental
condition caused by an injury or hazard that happens while performing their job may be eligible to receive a monthly
occupational disability benefit from the PERS up to the date the member becomes eligible for normal retirement
benefits.
The cost for providing occupational disability benefits to members is borne by the employer and is included in the
employer contribution rates.
If the member has already met the requirements for a normal retirement based on age or years of service, they are not
eligible to receive occupational disability benefit. Those on disability benefits convert to a regular retirement benefit
once they meet the age or years of service requirements.
Receiving an occupational disability benefit is not automatic. There is an application process, medical certification
requirements, and the disability must be approved by the administrator of the plan.
The member must file an application for the occupational disability benefit with the Division within 90 days after
termination of their employment. Members can file the disability application while they are still working.
The monthly occupational disability benefit will be equal to 40% of their gross monthly compensation immediately
before they terminated employment due to the disability. Members receiving occupational disability benefits continue
to earn PERS service credit while they are receiving the occupational disability benefits. No medical insurance is
provided until the member is eligible for a normal retirement.
MO
VI. The Defined Contribution Retirement Pion Member: Occupational Death
The member is immediately vested in the employer contributions once they are appointed to occupational disability
regardless of the total years of service. The employer continues to make all required employer contributions on the
member's behalf as if the member were still working. These include HRA contributions and the member's required
contributions to an account established for the member in the Occupational Death and Disability Trust. Members
cannot elect a refund of their member account balance or elect a distribution option of the account while they are
receiving occupational disability benefits.
Disability benefits cease when the member becomes eligible for normal retirement with 10 years of service and
Medicare -eligible age, or at any age with 25 years of peace officer or firefighter service, or at any age with 30 years of
service for all others.
When a member converts to normal retirement, they have access to their account balance and can elect when and how
to take distribution on their DCR account. There are various distribution options available, which include lump -sum
payments, annuities, and rollovers to other qualified pre-tax plans.
NOTE: When a peace officer or firefighter becomes eligible for a normal retirement, the member may choose between
a continuing lifetime pension benefit based on high salaries and years of service, or access to their account balance.
Medical insurance is available to members who have reached normal retirement eligibility
Occupational Death
If a member dies due to an occupational reason, the survivor will receive 40% of the member's gross monthly salary at
the time of death as an all other participant at the time of death, or 50% of the member's gross monthly salary as a
peace officer or fire fighter. Survivors include spouse and dependent children. Survivors who are receiving monthly
benefits are not eligible for medical benefits until the member would have met the eligibility requirements for normal
retirement benefits had they lived.
The employer continues to make the employer and member contributions into the Occupational Death and Disability
Trust for the survivor and the Health Reimbursement Arrangement (HRA) account until the participant would have
reached normal retirement eligibility. Survivors cannot elect a refund of the member's account balance or elect a
distribution option of the account while they are receiving occupational death benefits.
Occupational death benefits cease beginning the last day of the month when the member would have become eligible
for normal retirement:
• with 10 years of service and Medicare -eligible age,
• at any age with 25 years of peace officer or firefighter service, or
• at any age with 30 years of service for all others.
When the member would have converted to normal retirement, the survivor has access to the member's account
balance and the contributions paid to the Occupational Death and Disability Trust account on their behalf. The
survivor will elect when and how to take distribution on the DCR account. Various distribution options are available,
including lump -sum payments, annuities, and rollovers to other qualified pre-tax plans. The surviving spouse also will
be eligible to elect retiree medical benefits at that time. Once eligible for medical benefits, the surviving spouse will
receive a premium subsidy based on the member's accrued years of service at the time the member would have been
eligible for Medicare, had they lived.
No medical insurance is provided until the member would have been eligible for retirement and medical
benefits.
[c%
V1. The Defined Contribution Retirement Pion Member: Non -Occupational Death
Non -Occupational Death
When a member dies from non -occupational causes before retiring, the spouse or other eligible beneficiary is entitled
to the member's contributions, the vested portion of the employer contributions, plus investment earnings. They elect
when and how to take distribution on the DCR account. Various distribution options are available, including lump -sum
payments, annuities, and rollovers to other qualified pre-tax plans. Beneficiaries will not be able to elect a joint and
survivor annuity.
If the member dies after distribution payments from their retirement account have begun, the beneficiary will receive
further payments only to the extent provided with the form of payment chosen at the time the member began annuity
payments, if any.
Divorce or Dissolution
Retirement accounts are marital assets and if there is a divorce or dissolution during any period of a member's PERS
employment, the member is required to submit court certified copies of the divorce or dissolution documents and the
property settlement to the Division. These documents will be placed in their permanent record with the Division.
If the documents stipulate or contain an order by the judge entitling the former spouse to a portion of an account, a
Qualified Domestic Relations Order (QDRO) must also be submitted.
If the documents indicate there was an agreement about the division of retirement benefits, but no separate agreement
is included in the documents, the member must provide a court -certified copy of the separate agreement or the
magistrate or judge's notes from the court hearing.
If the documents are silent on the retirement plans, the account will be considered free from attachment. All DCR
member divorce/dissolution documents should be forwarded to Empower Retirement Services for review of attachment.
Where To Get Help
All the legal requirements involving a member's benefits must be resolved before any amount can be paid. No funds
will be disbursed from any accounts until all issues have been resolved —even if the responsibility to file the necessary
documents rest with the former spouse. The Division has a booklet available containing useful information regarding
how a member's benefits may be affected by divorce. The booklet also includes sample language that may help in
drafting QDROs. The booklet is available on request.
In Alaska, the court may include the retirement benefits and plans earned by both spouses as marital assets available
for division. The Division does not provide valuation calculation services. If calculations are needed, an independent
actuary or CPA must be retained. However, the Division can provide benefit information as needed for calculations. If
account details are to be sent other than directly to the member, the member must sign a release authorizing another
person access to their account.
Different methods of valuation are used to determine the value of a marital asset. When the spouses agree, courts
usually accept what they say about the value of an asset. Absent an agreement, third -party experts, including
accountants and pension valuators, may be retained by the parties or by the courts to determine the value of marital
assets.
Third parties may be authorized to request information regarding a member's retirement accounts and other benefits.
Retirement benefits, which vary greatly, may potentially include accumulated employee leave time. In some cases,
information regarding an active employee's benefits must be relayed directly through the employer.
37
V1. The Defined Contribution Retirement Pion Member: Terminations
Ending a marriage is considered a "status change" event. A member must contact their human resources office to advise
them of:
• a change in marital status,
• any address changes,
• inquire about changing or updating beneficiaries, and
• any necessary changes to their health insurance coverage.
A change in status is reported to the Division through payroll reporting.
Whether the marriage ended in divorce or dissolution distinguishes the types of documents required. In Alaska and
other applicable states, the documentation is specific:
• court -certified copies of the Decree of Divorce, Findings of Facts and Conclusions of Law, Property Settlement, and
any other attachments or court documents that may address the PERS account, or
• court -certified copies of the Decree of Dissolution, Petition for Dissolution, and any other attachments or court
documents that may address the PERS account.
In Alaska, court -certified copies are usually distinguished from photocopies by either a raised, embossed or blue -ink
seal of the court. Members should contact the Alaska Trial Court to obtain certified copies of divorce documents:
Courts.alaska.gov.
Members should note, an agreement regarding the PERS is not effective until the Decree and Order are filed with the
Plan Administrator and the parties receive notice it is accepted. If divorce documents are filed with the member's
human resource office, please remind them to submit their court documents to the Division if they have not done so
already.
A member's divorce documents must be reviewed to determine if any interest in their PERS benefit was awarded to the
former spouse, before they may access their account or be appointed to retirement.
If a prior spouse is deceased, the Division requires a copy of the death certificate for the member's file.
Terminations.................................................
It is the employer's responsibility to report terminations of employment timely to the PERS. The termination action
should be reported as soon as possible after the member's last day of work. The termination date is a member's last day
on the job.
Distribution Elections
When a member terminates employment, they elect when and how to take distribution on their DCR account. There
are various distribution options available, including lump -sum payments, annuities, periodic payments, and rollovers
to other qualified pre-tax plans.
The refundable amount to a terminated member includes:
• the member's mandatory contributions,
• the vested portion of employer contributions, and
• investment gains and losses.
38
V1. The Defined Contribution Retirement Pion Member: Alaska Deferred Compensation Pion
Members must be terminated from employment for at least 60 days before distribution can occur. They must complete
and submit the Empower Retirement Services Transfer/Rollover Contribution 401(a) 98214-05 Plan form or the Separation
from Employment Withdrawal Request 401(a) 98214-05 Plan form to commence distribution. The forms are available on
the Empower Retirement Services website at Akdrb.gwrs.com or by calling toll -free at (800) 232-0859.
Terminated members who are married may not receive a refund of their member contribution account (if balance is
greater than $5,000) unless their spouse gives written consent. Terminated members who are divorced may not receive
a refund of their member contribution account unless they can show that their former spouse was not granted an
entitlement to the account.
If a QDRO has been filed awarding the former spouse a monthly benefit, the court would have to amend the QDRO to
allow for a refund of the member's contribution account as a lump -sum pay out.
All accrued service in the PERS remains in the account and should the member return to work for a PERS employer in
the future, the service will be reinstated for eligibility in the retiree major medical plan and the Health Reimbursement
Arrangement (HRA). The member's service accrual for vesting in employer contributions will restart at zero.
Waiver of 60-day Waiting Period Due to Financial Hardship
This request form is only available to a terminated employee. The waiver must be accompanied by a Distribution
Request form. The amount allowed to be paid earlier than the 60-day period is limited to the amount related to the
actual hardship and not the entire account balance.
The eligibility for payment of an account of a terminated employee may take place with the approval of the Plan
Administrator earlier than the 60 days subsequent to termination of employment due to an immediate and heavy
financial need. Please see the Waiver of 60-day Waiting Period Due to Financial Hardship form (sbs005) for valid reasons to
waive the 60-day waiting period.
Alaska Deferred Compensation Plan
Who is eligible to be in the plan?
Any permanent employee, long-term nonpermanent employee, or elected official of the State of Alaska.
What is a Deferred Compensation Plan?
The State of Alaska 457(b) Deferred Compensation plan (DCP) allows participants to voluntarily set aside a portion of
their income before it is taxed. The amount set aside, plus any change in value (interest, gains and losses), is payable to
them or their beneficiary at a future date. Upon becoming eligible to participate in the plan, participants can elect to
defer their income on a pre-tax basis. By doing so, participants are agreeing to reduce their salary by an agreed upon
amount. This amount may not exceed certain requirements. There is also a post -tax Roth 457(b) option.
There is a maximum amount of compensation a participant can defer. The regular contribution limit for those under age
50 is $19,500 in 2020. Participants are allowed to contribute an additional $6,500 in the years they turn age 50 or greater
for an annual maximum of $26,000 in 2020. This represents the annual allowable of $19,500, plus the additional $6,500.
What type of plan is the DCP and when may a person join the plan?
The DCP is an eligible deferred compensation plan under Internal Revenue Code section 457(b). Participants may join
any time after they are eligible and complete the necessary enrollment forms. Participants can also enroll directly
online on Empower Retirement Services website at Akdrb.gwrs.com.
39
V1. The Defined Contribution Retirement Pion Member: Alaska Deferred Compensation Pion
What is the Roth 457(b) option?
The Roth 457(b) option for governmental deferred compensation plans was authorized by Congress effective January 1,
2011. A Roth 457(b) is not a Roth IRA. Neither is a Roth 457(b) a separate plan; it is simply a way for participants to
control the taxation of their deferred wages when they are disbursed in the future. This option allows participants to
elect after-tax salary deferrals into a Roth option. Roth elective deferrals are accounted for separately from pre-tax
contributions made to the plan. Distributions from the Roth 457(b) are tax-free if the contributions have been in the
Roth elective deferral account for at least 5 years and the participant is at least 59-1/2 years of age.
Participants can contribute to both the pre-tax and Roth 457(b) post -tax at the same time. However, Roth 457(b)
contributions count towards the IRS limitations on deferred compensation contributions. Roth 457(b) contributions
can either replace or complement traditional pre-tax contributions subject to the IRS limits of $19,500 per year (2020)
plus an additional $6,500 in 2020 if the participant is age 50 or older at the end of the year. Contributions to a Roth
457(b) have no effect on contributions to a Roth IRA.
The Division is responsible for the overall administration of this plan. To contact the Division's DCP specialist, call
(800) 821-2251 toll -free or (907) 465-4460 in Juneau, or by email at doa.drb.dcp@alasha.gov.
Special Catch -Up Provisions of the DCP
The catch-up provision is available to participants no more than three years prior to their eligibility for a normal
retirement (either by age or years of service). It allows making up prior deferred compensation contributions that were
less than their allowable maximum in years since January 1, 1979.
If members are interested in knowing their total available catch-up balance or have any other questions regarding the
catch-up provision, please email Empower Retirement Services at anchorage empower office@empower-retirement.com or
call Empower at (800) 526-0560 outside the Anchorage area or (907) 276-1500 in Anchorage.
Leave Cash -Ins or Taking DCP from Final Check
Employees can request a leave cash -in to their DCP account or, if leaving state service, can request to have a final
deferred compensation contribution taken on their final payroll check. Please direct all State of Alaska employees
interested in leave cash -ins or making a final contribution at termination to the Division's DCP Specialist at
doa.drb.dcp@alasha.gov or call (800) 821-2251 toll -free or (907) 465-4460 in Juneau.
Employees with a participating political subdivision in the State's DCP should contact Empower Retirement Services in
the Anchorage office at anchorage—empower—office@empower-retirement.com or call Empower at (800) 526-0560 outside
the Anchorage area or (907) 276-1500 in Anchorage.
DCP Hardship Withdrawals
There are strict provisions for hardship withdrawals. They can be requested from Empower Retirement Services, but
members must prove they are experiencing an unforeseen and extreme financial emergency and provide evidence
demonstrating that they have exhausted all other reasonable alternatives. This includes stopping their deferrals and
cashing out the maximum allowable annual/personal leave.
An unforeseeable emergency which results in a severe financial hardship can result from any of the following
developments:
an illness or accident of the participant, the participant's spouse, or the participants dependent,
40
VI. The Defined Contribution Retirement Pion Member: Alaska Deferred Compensation Pion
• the loss of the participant's property due to a casualty, including the need to rebuild a home following damage to a
home not otherwise covered by homeowner's insurance (such as a natural disaster), or
• similar extraordinary and unforeseeable circumstances arising as a result of events beyond the participant's or
beneficiary's control.
All hardship withdrawals are subject to the applicable requirement of the Internal Revenue Code and regulations.
It takes an average of one to two months to obtain all the necessary information for a hardship withdrawal. Payments
are usually issued within two weeks from the date the withdrawal is approved by the plan.
In the event of an unforeseeable emergency which is beyond the control of the participant and which causes extreme
financial hardship, a participant may request Empower Retirement Services to distribute all or a portion of the
participant's DCP account. Such requests shall be made by completing and submitting all required forms for this
purpose. The participant must, prior to his/her application, cease deferring compensation in accordance with
Paragraph F Article III. If the application for the payment is approved by Empower Retirement Services, payments shall
be effective as soon as possible after the date specified in the participant's application or the date of approval by
Empower Retirements Services, if later.
The withdrawal shall be limited to an amount sufficient only to meet the emergency and shall in no event exceed the
value of the participant's DCP account. Any money remaining in the account shall be distributed in accordance with
the provisions of this plan.
The method of distribution of any allowed withdrawal shall be determined by Empower Retirement Services. For more
information, contact Empower Retirement Services at (800) 232-0859.
Required Minimum Distribution
Required minimum distribution is the minimum amount participants must withdraw from their account each year
after they are no longer employed. Participants usually must start taking withdrawals from their Deferred
Compensation 457 (b) account when they reach age 72 (70-1/2 if they reached that age before January 1, 2020).
Withdrawals will be included as taxable income, except any part that was previously taxed (the basis) or that can be
received tax-free (such as qualified distributions from designated Roth accounts).
Rules for participants are as follows:
• Participants must begin taking minimum distributions by their required beginning date. The required beginning
date is April 1 of the calendar year following the later of:
the calendar year in which the participant reaches age 72, or
the calendar year in which the participant retires from the employer sponsoring their plan, unless the plan
specifies otherwise.
• If the participant elects to defer their first distribution to April 1 of the calendar year following the calendar year in
which they turn age 72 or retire, they will be required to take two payments that year: one by April 1 following the
year in which they turned age 72 or retired and one by December 31 of that same year. The participant must take a
minimum distribution by December 31 of every calendar year thereafter.
Participants should be directed to contact Empower Retirement Services at Akdrb.gwrs.com or toll -free at
(800) 232-0859 for assistance with their required minimum distributions.
is
VI. The Defined Contribution Retirement Pion Member: Retirement
Retirement ...................................................
Normal retirement is the age set for Medicare eligibility at the time the member retires. A retired member in the DCR
plan is a person who has elected to participate in the retiree major medical insurance plan.
Bona Fide Termination
Separation of employment is a requirement of eligibility to receive retirement benefits. Both the Alaska statutes
governing the retirement plans and the Internal Revenue Service (IRS) —which allows contributions to the retirement
plans to be made on a pre-tax basis —require a bona fide separation of employment before any disbursement of
retirement funds can occur.
A bona fide separation of employment is a total separation of the employer -employee relationship. Reduction of hours
worked, a change in status from full-time to part-time, from permanent to non -permanent, or to a fee -for -service
arrangement do not meet the separation requirement.
Members and their employers cannot have a prearrangement to return to work prior to separating from service
to retire.
The retirement systems require a break in service before a member can return to work with the same employer. If a
member reemploys with the same employer before the required break period has elapsed, the member's retirement will
be reviewed to determine if a valid separation occurred. If a prearrangement for reemployment is discovered, the
member's separation of employment will be invalid and all retirement benefits, including retiree medical claims,
must be repaid to the retirement system.
The requirements for bona fide termination apply to both PERS/TRS DB and DCR plans. If a member intends to
withdraw retirement funds or participate in the DCR retiree medical plan, there can be no prearrangement for
reemployment with the same employer prior to termination of employment. If a PERS/TRS DCR member terminates
employment and withdraws their funds or participates in the medical plan, they must fulfill the required break in
service before reemploying with the same employer.
If no prearrangement is evident, but the member returns to the same employer without fulfilling the required break in
service period, the member's benefit will be coded as an early distribution and an additional 10910 tax penalty will be
applied by the IRS on benefits received.
• If a member is under age 62 at retirement, they are required to have a 6-month break in service before returning
to work for the same employer.
• If a member is age 62 or older at retirement, they are required to have a 60-day break in service before returning
to work for the same employer.
Again, no prearrangement for reemployment can occur prior to the member's retirement. Please see Alaska.gov/drb
for consequences for violations.
Effects of PERS on Social Security Benefits
Not all PERS employers participate in Social Security. If you need information on whether you participate in Social
Security, contact the State Social Security Administrator in the Division's Audit Unit.
Employees of employers who do not participate in Social Security may have their Social Security benefit reduced. Two
laws affect Social Security benefit entitlement: the Windfall Elimination Provision and the Government Pension Offset.
EK
V1. The Defined Contribution Retirement Pion Member: Retired Member Medical Benefits
Windfall Elimination Provision
The Windfall Elimination Provision affects people who have earned a pension from the PERS and did not pay Social
Security taxes during their PERS employment, but who also worked at other jobs where they paid Social Security taxes
long enough to qualify for retirement benefits. If a member is subject to the Windfall Elimination Provision, a different
formula is used to calculate their Social Security retirement benefits to prevent a windfall in benefits.
The Windfall Elimination Provision does not apply if the member first became eligible to retire prior to 1985, or if they
have 30 years of "substantial" earnings during their Social Security -covered employment.
Governmental Pension Offset
The Governmental Pension Offset affects the Social Security benefits members may be eligible to receive as a spouse or
widow(er). Under the offset provisions, some or all of the Social Security spouse's or widow(er)'s benefit may be offset
by the member's PERS pension if they did not pay Social Security taxes during their PERS employment.
For information on these federal provisions, employers and members are encouraged to contact the Social Security
Administration toll -free at (800) 772-1213 or visit the Social Security Administration website at SSA.gov and request
Publication No. 05-10045 for the Windfall Elimination Provision or Publication No. 05-10007 for the Governmental
Pension Offset.
Retired Member Medical Benefits
DCR members may have access to a retiree medical plan when they retire. To access their medical benefits plan, the
member must:
• retire directly from the plan, and
• have been active at least 12 months prior to separation, and
• have at least 30 years of service as a teacher or "all other" member, or
• have at least 25 years as a peace officer or firefighter, or
• have at least 10 years of service and be eligible for Medicare.
If the DCR retired member has not yet reached Medicare -eligible age, they must pay the full premium for the medical
benefits plan to receive coverage. Once the retired member reaches Medicare -eligible age, they will pay a percentage of
the monthly premium based on years of service, as follows:
• 10 percent with 30 or more years of service
• 15 percent with 25 to 29 years of service
• 20 percent with 20 to 24 years of service
• 25 percent with 15 to 19 years of service
• 30 percent with 10 to 14 years of service
The Defined Contribution Retiree AlaskaCare Health Plan is supplemental to Medicare. Eligible members are not
required to enroll in the medical plan. However, they must make an election to participate or not by age 70-1/2 years
old, either during an annual open enrollment period or upon application for retirement benefits, whichever is later.
Members should be directed to contact the Division for assistance with enrolling in the Medical plan.
The DCR retired member medical benefits plan is available to employers and members online at the Division website.
43
V1. The Defined Contribution Retirement Pion Member: Retired Member Medical Benefits
Health Reimbursement Arrangement
The employer is responsible for making contributions to the Health Reimbursement Arrangement (HRA). The
contribution amount is based on the average salary of all PERS and TRS members in the DCR plans and is calculated as
a flat monthly dollar amount. This amount is deposited into a separate account for each member while they are
employed in the PERS.
The balance in the HRA account consists of the employer contributions and any interest that has accrued.
DCR retired members will have access to this account when they meet one of the following requirements:
• 30 years of service as a teacher or all -other employee, or
• 25 years of service as a peace officer or firefighter, or
• at least 10 years of service and are eligible for Medicare.
Members do not have to retire directly from the system to access their HRA.
The money in the HRA can be used to pay for medical expenses for the retired member and their eligible dependents,
or it can be used to pay premiums for supplemental medical coverage plans.
If the member terminates employment prior to accruing at least 10 years of service, they will not have access to the
HRA. Should they come back to employment with a PERS employer, the HRA is reinstated, with interest added for the
period of time they were not contributing to the PERS.
Optional Health and Life Plans
DCR retired members may elect to pay a premium for additional health and life coverage as follows:
• Dental -Vision -Audio (DVA) coverage for self, spouse, and eligible dependent children,
• Long -Term Care (LTC) coverage for self and spouse, and
• Select Life Insurance (if participating in the state -sponsored Select Life Insurance Plan at retirement).
Retired members must pay the monthly premiums for as long as they desire coverage.
Members seeking more information regarding the optional health plans should contact the Division's health plan
administration section or refer to the Defined Contribution Retiree AlaskaCare Health Plan Booklet.
• Defined Contribution Retiree AlaskaCare Health Plan Booklet: Alaska Care.gov/retiree2/
For more information regarding the optional LTC plans, including enrollment restrictions, refer to the State of Alaska
Long -Term Care Booklet.
• State of Alaska Long -Term Care Booklet: Alaska Ca re.gov/retiree/publications/booklets.htmI
• Retiree Health Care Premiums: AlaskaCare.gov/retiree/information/premiums.htmI
Members should contact their Regional Counselor for more information on the retired member's medical coverage,
DVA, and LTC, and the requirements to continue Select Life Insurance.
Medicare
Members should contact Medicare about three months before their 65th birthday to sign up for Medicare. They can
sign up with Medicare even if they do not plan to retire at age 65. Members who are still working and covered by an
employer -sponsored health insurance plan may be able to defer enrollment in Medicare. However, if members do not
44
VI. The Defined Contribution Retirement Pion Member: Retired Member Medical Benefits
enroll in Medicare, the estimated amount Medicare would have paid will be deducted from the claim before any
benefits available under the DCR Health Plan are processed by the Plan. Employers should encourage their members to
contact Medicare to ensure they comply with the current requirements. The State of Alaska Medicare Information
Office can also offer one-on-one counseling to Medicare beneficiaries and their families, seminars for those new to
Medicare, and other resources at (800) 478-6065 in Alaska or (907) 269-3680 in Anchorage.
There are several parts to Medicare and there are time limit requirements to enroll timely to avoid penalty at a later date.
For more information regarding Medicare benefits, employers and members should contact the local Medicare office,
call the toll -free number at (800) 772-1213, or visit the Medicare website at Medicare.gov.
Retired Member AlaskaCare Benefits Are Supplemental to Medicare
When a retired member turns 65, Medicare becomes the primary health plan and the retired member's AlaskaCare
plan becomes a supplemental plan. For services covered by both plans, the claims are paid first by Medicare and then
by AlaskaCare.
When the DCR plan is secondary, the medical plan shall apply the allowable expense, reduced by the amount paid by
the primary plan for those expenses. This will be done before benefits, such as deductible and coinsurance, under the
medical plan are determined. When the medical plan is secondary the combined payment calculated after coordination
of benefits, may be less than 100010 of the allowable expenses. For retired members who have not enrolled in Medicare
at age 65, the AlaskaCare Plan will estimate what Medicare would have paid.
Members seeking more information on coordination between Medicare and the AlaskaCare Retiree Health Plan please
contact the Division's third -party claims administrator (TPA), Aetna, toll -free at (855) 784-8646.
Additional information is available from the federal Medicare website at Medicare.gov. If members have questions
about Medicare, have them contact the nearest Social Security office, call toll -free at (800) 772-1213 or visit the Social
Security website at SSA.gov.
The State of Alaska Medicare Information Office can also offer one-on-one counseling to Medicare beneficiaries and
their families, seminars for those new to Medicare, and other resources. Call toll -free at (800) 478-6065 in Alaska or
(907) 269-3680 in Anchorage.
W
V11. The Defined Benefit Retirement Plan
Member (Tiers I, 11, and III)
Enrollment...................................................
Members who first entered the PERS:
• before July 1, 1986, are in Tier I,
• on or after July 1, 1986, but before July 1, 1996, are in Tier II,
• on or after July 1, 1996, but before July 1, 2006 are in Tier III.
Membership in either the DB or DCR plans, and tier status for the DB plan, is established when an employee first
begins making contributions to the PERS. Your new member may have participated in the PERS prior to their
employment with you. Before reporting new members to the system, be sure to confirm the correct plan and tier status
for them. This can be done by using the New Employee Tier Look -Up on the Division's Employer Access website at
Myrnb.alaska.gov/EmployerAccess/form/login.htmi or by contacting your Regional Counselor.
Employees Not Covered Under the PERS DB Plon
• Temporary (nonpermanent)
• Those who work less than 15 hours per week
• Those who participate in the University of Alaska's Optional Retirement Plan (ORP)
• Those who first entered PERS on or after July 1, 2006
• Former members
• Persons compensated on a contractual or fee basis
• Casual or emergency workers
• Those excluded from the employer's participation agreement
Please contact your Regional Counselor if you have further questions on excluded or non -covered positions.
Hiring o PERS DB Retired Member
Retired members may come back to work in the PERS under the Standard Option, however, their retirement benefit
must be stopped. To avoid an overpayment of benefits it is important to:
• contact a Regional Counselor,
• provide the member with appropriate form, and
• provide the member with COBRA information, if applicable.
Alaska Statute 39.35.150 prohibits a member from working in a PERS-covered position while receiving PERS retirement
benefits. If a member returns to work in a PERS-covered position, their retirement benefit will be suspended until they
terminate employment. PERS contributions will be deducted from their paycheck and they will accrue PERS service.
It is important that retirees who have returned to work in a PERS-covered position be reported as back to work to avoid
benefit overpayment. Members are required to pay back any retirement benefits they receive while simultaneously
earning PERS credit. This amount must be paid in full before they retire again.
t
V11. The Defined Benefit Retirement Pion Member (Tiers 1, 11, and 111): Classification
A PERS retired member who comes back to PERS-eligible employment must complete the PERS Standard Option —
Reemployed Retiree form (pers018). It is the member's responsibility to submit this form to the Division.
• PERS Standard Option —Reemployed Retiree form: Alaska.gov/drb/pdf/forms/pers018.pdf
When a retired member becomes reemployed in a PERS position, their pension check is suspended for the period of
reemployment. If medical coverage with the employer is not available, the retired member may continue the AlaskaCare
Retiree Health Plan using COBRA coverage. If medical coverage with the employer is available, the AlaskaCare Retiree
Health Plan is suspended during the period of reemployment. If the employer medical coverage is not effective
immediately upon reemployment, the member may need to be advised of COBRA coverage. The Division will provide
the member with the form and information when we are notified of the member's return to work.
If the retired member participated in the AlaskaCare Dental -Vision -Audio (DVA) program while retired, they have a
choice to suspend the coverage during the period of reemployment, or to self -pay the premiums of the plan while they
are reemployed.
If the retired member participated in the Long -Term Care (LTC) program while retired, they must self -pay the
premiums of the plan during the period of reemployment to continue the coverage. Failure to self -pay the premiums
will result in permanent loss of coverage.
Failure to inform the Division of a return to work could result in significant financial repercussions for a retired
member.
Classification.................................................
The following members are covered under the PERS and earn membership service in the PERS:
• permanent full-time or part-time and seasonal members of the State of Alaska, and
• permanent full-time or part-time and seasonal members of participating political subdivisions or public
organizations, unless specific member group or type, or job classifications are excluded by Alaska Statutes or
participation agreements.
A full-time member is one who is occupying a permanent position that regularly requires working 30 or more hours a
week. A part-time member is one who is occupying a permanent position that regularly requires working at least 15
hours but less than 30 hours a week. When reporting an employee's status to the PERS, PERS statutes apply regardless
of any contrary designation by employers.
Elected Officials
Elected officials who are compensated for their services may be covered by the PERS DB plan providing the employer
includes elected officials in their participation agreement. Please see Section II, Elected Officials Hired After June 7, 2007,
for more details.
A compensated elected official of a PERS-covered employer has the opportunity to participate in the PERS. After they
are elected, they must decide to either waive membership rights or become a contributing member of the PERS. Under
Alaska Statute 39.35.125, Participation of Elected Officials, the employer must enroll elected officials in the PERS unless
they waive PERS membership by signing a written waiver filed with the Division. If the elected official is currently
employed as a full-time PERS or TRS member, or is retired, please direct them to contact the Division to find out if this
participation will benefit them.
47
V11. The Defined Benefit Retirement Pion Member (Tiers 1, 11, and 111): Classification
An elected official can waive participation in the PERS by filing a written waiver of coverage, PERS Elected Official
Participation/Waiver form (02-1832). An elected official cannot receive credited service while the waiver is in effect.
• PERS Elected Official Waiver Form: Alaska.gov/drb/pdf/forms/02-1832.pdf
An elected official who has waived coverage can choose to have future service covered by revoking the waiver.
IMPORTANT NOTE: There are special provisions for elected public officials who are concurrently employed in the
TRS DB plan. Please contact your Regional Counselor for more information on this provision.
Occupation Code
The occupation code identifies the various member types in the PERS. The employer is to report the correct code for
members with each payroll processing. The occupation code for each individual identifies to our system what
contribution rate is to be used —both the employee mandatory rate and the employer matching rate. The most common
codes used are listed below:
PERS
A
All Others
PERS
C
Masters, Mates and Pilots (State of Alaska only)
PERS
D
Special School District
PERS
E
Elected Officials
PERS
F
Fire Fighter
PERS
M
IBU (Inland Boatmen's Union) (State of Alaska only)
PERS
P
Peace Officer
PERS
W
Rehired Retirees (All except hired in a police/fire position) (not State of Alaska or Municipality)
PERS
x
Alternate Elected Officials
PERS
Y
Retired Retirees in "I"' or "F" positions (ONLY for State of Alaska or Municipality)
The following definitions will help in determining the correct occupational code for your members.
Employee Status Codes
The following status codes are now available:
• F = Full-time (normally scheduled to work 30 or more hours a week)
• P = Part-time (normally scheduled to work 15 hours a week, but less than 30 hours a week) part-time payroll
records must have hours reported on each payroll submitted
• W = Workers' compensation (must have hours for what the employer pays employee on each payroll)
Always remember, if in doubt, contact your PERS payroll contact.
The following definitions will help in determining the correct occupational code for your members.
"D" Special School District Alternate Option (SB9)
A non -certified member of a school district first hired after July 1, 1999 may elect to pay a higher contribution rate to
receive a full year of service credit in the PERS. Service is credited using the teacher's definition of a school year. This
option is available for full-time and part-time members who are scheduled to work less than a full year, typically
10-month members. Eligible employees are those who are employed by a school district, regional educational
48
V11. The Defined Benefit Retirement Pion Member (Tiers 1, 11, and 111): Claimed Additional Service
attendance area, special education service agency, Alaska vocational technical center, or a state boarding school covered
under the PERS. If a timely election is not received, noncertificated service will be entered based on the actual dates of
service.
To receive a full year of service credit, the full-time member must work a minimum of 172 days each school year. To
receive .5 years of service credit, the part-time member must work a minimum of 172 days each school year. This
option may or may not benefit part-time members depending upon the number of scheduled work hours each day.
Part-time members cannot receive more than .5 of a day of credit for each day worked.
To be eligible to participate in the alternate option, the 10-month member must elect it within 90 days of entering the
plan. Once enrolled, the member will continue to participate in the alternate option, even if they change school
districts.
If the member's work schedule changes from 10 months to 12 months, they can revoke the election of the alternate
option only between July 1 and September 30 of the following school year. Likewise, if the member changes from 12
months to 10 months, they can elect the alternate option only between July 1 and September 30 of the following school
year. Changing from part-time to full-time or vice versa does not allow the opportunity to revoke or enroll in the
alternate option. Contact your Regional Counselor for more information on the alternate option.
"P" Peace Officer
A member occupying a position as a peace officer, chief of police, regional public safety officer, probation officer,
correctional officer or correctional superintendent. It does not include a village safety officer.
7" Fire Fighter
A member occupying a position as a fire fighter or a fire chief. It does not include volunteer fire fighters.
"X" Alternate Elected Officials
An elected public official that is retired under the TRS and working in the PERS.
Claimed Additional Service
Members of the PERS may be eligible to claim other types of service for credit in the system. Claimed service may serve
to increase the amount of the member's pension check upon the final calculation of their retirement benefit but is rarely
used to determine vesting or retirement eligibility.
The process to claim the service and the cost for the service differs depending on the type of service the member is
claiming. Typically, the member completes a claim form and submits that form to the employer where the service was
performed. The employer will verify the type of service and the specific dates of the service.
The most common types of service claimed for credit include:
• Full-time temporary service with a PERS employer
• Active military service prior to PERS entry
• Active military service served while an active PERS member
• Leave without pay due to Workers' Compensation
49
Vil. The Defined Benefit Retirement Pion Member (Tiers 1, 11, and 111): Claimed Additional Service
Temporary Service
What is Temporary Service Credit?
PERS members may receive additional service credit for full-time temporary work with a PERS employer. Temporary
service may be used to:
• increase the amount of your final retirement benefit, and/or,
• meet either the 20 or 30-year service retirement requirement.
The cost of each of these options is a different and separate amount. Electing to purchase temporary service, however,
does not change a member's retirement tier. The membership date remains the same.
Members may receive PERS credit for their full-time temporary service with a PERS employer, however, temporary
employment with the State of Alaska before January 1, 1961 or a political subdivision before it joined the PERS is not
creditable. Since retirement benefits calculations are based on total service and salaries, this may potentially increase
benefits by claiming this additional service.
The cost to claim temporary service is based on a member's age when they become vested and their vesting year salary
(annualized). When members file their temporary service claim, the cost will be calculated and they will become
indebted to the system.
If the cost of their temporary service exceeds the value of the additional benefit, the service will not be used in the
calculation of the benefit.
Seven percent interest will begin accruing on the indebtedness balance on:
• July 1, 1981, or one year after the member's initial vesting date, whichever is later, if the service is claimed no more
than one year after vesting,
• the member's vesting date if they vested after June 30, 1980 and the service occurred before they vested and it is
claimed more than one year after vesting,
• one year after completing the service, if the member were vested on the last day of their temporary employment
and the service is claimed no more than one year after it was completed, or
• on the date the member completed the temporary service, if they were vested on the last day of their temporary
employment and the service is claimed more than one year after it was completed.
Members may decide to make payments on their indebtedness balance, or they may decide to pay the indebtedness by
taking a lifetime reduction to their retirement benefit. Seven percent interest compounded semi-annually will continue
to accrue on the balance until it is completely paid, or they retire, whichever occurs first.
If at retirement there is an outstanding balance due, members can:
• elect a lifetime actuarial reduction which will reduce their retirement benefit, or
• receive a refund of the principal and interest paid on the indebtedness, if any, and forfeit the claimed service if the
related temporary service does not result in an increased retirement benefit
To claim full-time temporary service, members need to complete the PERS Temporary Service Verification/Claim form
(02-1882) and submit it to their employer for verification. When the verification is completed, the form can be filed
with the PERS. Claims will then be processed in 30-60 days.
The verification/claim and other forms are available at Alaska.gov/drb, by calling the Member Service Center at
(800) 821-2251 toll -free or (907) 465-4460 in Juneau, or by email at doa.drb.mscc@alaska.gov.
61V
Vil. The Defined Benefit Retirement Pion Member (Tiers 1, 11, and 111): Claimed Additional Service
Retiring Earlier
If members are planning or retiring at any age with 30 years of service or 20 years with police/fire service, temporary
service may also be claimed to be used towards retirement eligibility.
Temporary service used to meet the service requirements for retirement can only be claimed at the time you retire. The
cost for the service is based on the present value, including health insurance cost, of the additional benefits you will
receive by retiring early. Estimates of the cost can be obtained from your regional counselor approximately 12 months
prior to the member's desired retirement date.
The cost to claim temporary service for retirement eligibility must be paid in full prior to retirement
Prior Active Military Service
How to Receive Credit for Your Military Service When You Are Vested
Members must be vested in the PERS and can claim up to five years of active military service served prior to PERS
entry for credit in the system. The cost is based on the vesting year salary times a percentage for each year claimed.
Interest begins to accrue one year after vesting date and accrues until the indebtedness is paid in full, or the date of
retirement, whichever comes first. This claimed service will not count toward vesting and retirement eligibility.
Members may be eligible to receive up to five years of PERS credit for active military service in the U.S. Armed Forces,
if they are vested and were honorably discharged. PERS retirees, deferred vested members, and surviving spouses of
members who had served in the armed forces may also be eligible to receive this credit.
Members first hired under the PERS after June 30, 1986, are not eligible for PERS military credit if they are retired from
regular military service and eligible for a federal benefit for the same service. Retired National Guard and Reserve Unit
members may be eligible to claim active military service even though they are eligible to receive a federal retirement
benefit for the same service.
Military credit does not count towards retirement eligibility, however, it is used in the calculation of your monthly
benefits.
Military service also includes active service as:
1. a foreign service officer, foreign service reserve officer, or limited foreign service reserve officer with the U.S.
Department of State in Vietnam, Cambodia or Laos from August 4, 1964, through November 7, 1975, and
2. a member of the U.S. Merchant Marines from December 1941, through September 30, 1945.
Members may claim their military service by:
• completing side one of the Application for Military Service Credit form (02-1895), and
• attaching the required military documentation.
The application and other forms are available on the Division website at Alaska.gov/drb, by calling the Member
Service Center at (800) 821-2251 toll -free or (907) 465-4460 in Juneau, or by email at doa.drb.mscc@alaska.gov.
After an application is received and accepted, an indebtedness will be established and members may begin making
payment.
The Cost
The cost for claiming military service (indebtedness) will depend on when members are first eligible (date first vested)
to claim it.
AI
Vil. The Defined Benefit Retirement Pion Member (Tiers 1, 11, and 111): Claimed Additional Service
• Members first eligible after December 31, 1986, will be charged 8.5% of their annualized vesting year salary for
each year claimed.
• Members first eligible before January 1, 1987, will be charged 6010 of their 1976 salary or their annualized vesting
year salary, whichever is later, for each year claimed.
Interest on an indebtedness for the previously mentioned active military service under (1) and (2) begins accruing on
July 1, 1987 or one year following the member's vesting date, whichever is later. For other military service, interest
begins accruing on July 1, 1997 or one year following vesting, whichever is later. Seven percent interest will continue to
accrue until the indebtedness is completely paid or you retire, whichever occurs first.
The total military credit that may be claimed in the PERS and TRS is five years for those persons who have served in
both systems.
If a member is employed by a PERS employer on the date that they are called to active military duty and they return to
a PERS employment within 90-days following discharge, the member is not required to pay contributions for that
period of military service. Members are required to contact the Division to claim this time.
PLEASE NOTE: Call to active duty does not count towards the five-year limit of claimed military service.
Military Service Credit for Medical Benefit Eligibility
House Bill 116 (HB116) was passed by the Alaska Legislature on April 18, 2014 and signed into law by Governor
Parnell on July 11, 2014. This bill provides additional benefits under AS 39.35.340 to peace officers and firefighters who
previously served in the military and are members of the PERS DB plan.
Prior to HB 116, qualifying members could purchase up to 5 years of military service credit only to increase their
retirement benefit. However, under HB 116, qualifying members may now also claim up to 5 years of military service
in order to qualify for premium free retiree medical benefits. Claimed military service may not be used to satisfy the
credited service requirements for normal retirement.
Members eligible to claim military service for purposes of receiving premium -free retiree medical benefits must:
• be a member of the PERS DB,
• occupy a position as a peace officer, chief of police, regional public safety officer, correctional officer, correctional
superintendent, firefighter, fire chief or probation officer, and
• not be receiving, or eligible to receive, a federal retirement benefit for the same military service being claimed.
HB 116 allows peace officers and firefighters in the PERS DB to use claimed service to meet the 25-year service
requirement necessary to obtain premium -free retiree medical benefits. Claimed military service must be active duty
service in the armed forces of the United States for which the member received an honorable discharge. (Members
called to active duty directly from PERS employment who return to employment within 90 days of discharge receive
PERS service credit. This is not considered "claimed military service" but actual PERS membership service.)
The cost to claim military service to meet the 25-year service credit requirement to obtain premium free retiree medical
benefits is separate from the cost to claim military service to increase a retirement benefit. Members must file a separate
request to claim military service for purposes of obtaining premium free retiree medical coverage. Total claimed
military service may not exceed 5 years. The cost for the claim will be calculated at the time the member retires.
Members may pay all or part of the cost prior to appointment to retirement. Any balance due can be paid for in the
form of an actuarially determined reduction to the member's retirement benefit thereby allowing the member to pay to
cost over his/her lifetime after retirement.
6%
V11. The Defined Benefit Retirement Pion Member (Tiers 1, 11, and 111): Coils to Active Military Duty While Employed in PERS
While the legislation was effective immediately upon signature by the Governor, there is no provision for retroactive
application. An employee cannot claim military service for either an increased pension benefit or for premium free
retiree medical benefits if the employee is entitled to receive retirement form the United States government for the same
service.
Members can claim only that amount of military service needed to meet the 25-year eligibility for obtaining premium
free retiree medical benefits. The maximum number of years that may be claimed is 5. Eligible members will apply on
the Application for Peace Officer/Firefighter Military Service Credit for Medical Benefit Eligibility form (02-1897), available on
the PERS Purchasing Service Credit webpage at Alaska.gov/drb/pers/employee/service/purchasingcredit.htmi.
Estimates of the cost can be obtained in the year the member is retiring. Estimates will typically be provided within 10
days of the member requesting the cost estimate. Members must complete an application form and must provide a
copy of their DD214 showing the dates of military service being claimed and an honorable discharge.
Workers' Compensation and Leave Without Pay
Periods of Workers' Compensation (WKC) leave without pay (LWOP) occurring after June 12, 1987 are eligible to be
claimed for credit in the PERS. If a member had a leave of absence that exceeded 10 days while they were receiving
WKC benefits, they may claim the service by completing a Workers' Compensation and LWOP Claim and Verification form
(pers008) available on the Division website at Alaska.gov/drb, by calling the Member Service Center at
(800) 821-2251 toll -free or (907) 465-4460 in Juneau, or by email at doa.drb.mscc@alaska.gov.
An indebtedness will be established for the contributions that the member would have made had they remained an active
employee during the period of LWOP for WKC, less an amount equal to contributions that would have been made for
the first 10 days of LWOR Interest will begin to accrue on the day they return to work or terminate employment.
Other types of claimed service include:
• Alaska Bureau of Indian Affairs
• Territorial service
• Village Public Safety Officer service
• Rural Public Safety Officer service
• Temporary Legislative service prior to July 1, 1979
Contact your Regional Counselor for information on these types of service and for specific instructions on how to claim
service for credit in the system.
Calls to Active Military Duty While Employed in PERS
Per the 1994 Uniformed Services Employment and Reemployment Rights Act (USERRA), military personnel who are
currently working for a PERS employer and called out to a period of active duty may be entitled to claim the period as
regular service credit upon their return to the employer. This service may be voluntary or involuntary and you must
leave the military in good standing to qualify for reemployment. If you are called to active duty, you must notify your
employer in advance, either verbally or in writing unless giving notice is impossible, unreasonable, or precluded by
military necessity.
The member is to be granted reasonable time off prior to the beginning of the active duty period to take care of
personal affairs and to travel to the reporting site. In addition, the member is to be granted a period of rest before
returning to work. The period of time the member has to report back to work varies depending upon the length of the
active duty period.
53
V11. The Defined Benefit Retirement Pion Member (Tiers 1, 11, and 111): Coils to Active Military Duty While Employed in PERS
For example:
• for service of more than 180 days, members must submit an application for reemployment within 90 days of
honorable discharge from active duty,
• for service of more than 30 days but less than 181 days, members must submit an application for reemployment
within 14 days of release from service, and
• for service of less than 31 days, the time period for submitting an application is very short.
USERRA provides that members are reemployed in the job that they would have attained had they not been absent for
military service, with the same seniority, status, and pay, as well as other rights and benefits determined by seniority.
USERRA also requires that reasonable efforts (such as training or retraining) be made to enable returning service
members to refresh or upgrade their skills to help them qualify for reemployment. Administrative order 213 allows
state employees to continue health benefits when called to active duty in support of conflicts in Iraq and Afghanistan.
This time frame may be extended due to medical circumstances. If the member suffers a disability upon their return to
employment, the employer is required to make reasonable accommodations to return the member to active
employment.
If you have a member who is called to active duty, you should:
• Contact your Regional Counselor
• Inform the member of their right to claim service upon return to employment
• Report the leave of absence through payroll reporting per eReporting or Employer Services instructions
• Inform the member of the process to claim service upon return to employment
Calls to active duty must be claimed for credit in the PERS by the member once they return to employment. The
member is required to write a memo requesting to claim the period of active duty for service credit in PERS. The memo
plus documentation verifying the release from active duty with an honorable discharge, typically a DD214, is sent to
Retirement and Benefits for processing.
PLEASE NOTE: A call to active duty does not count towards the five-year limit of claimed military service.
Once claimed, the entire period of the military leave of absence is credited as regular service in the PERS. There are no
member contributions required for this period of service. The claimed military leave of absence period will count
toward vesting and retirement eligibility.
PERS members that participate in the State of Alaska's Supplemental Annuity Plan (SBS-AP) and or the State of Alaska's
Deferred Compensation Plan (DCP) may elect to make up all or part of their contributions for the period of active duty
once they have returned to the employer.
Members of other tax-sheltered plans offered through their employers should contact their human resource or payroll
staff for information on how to make up missed contributions in those plans.
The allowable time frame for making up the contributions is up to three times the length of the period of the military
leave of absence, not to exceed five years. Missed contributions must be made through direct payroll deductions.
Employers and members are encouraged to contact their Regional Counselor for information on calls to active military
service.
54
VII. The Defined Benefit Retirement Pion Member (Tiers 1, 11, and 111): Service Accrual
For questions about USERRA, contact:
• USERRA: Federal Register 20 CFR Part 1002
DOL.gov/vets
• ESGR: Employer Support of the Guard and Reserves is a Department of Defense agency established to gain and
maintain active support from all public and private employers.
(800) 336-4590 (toll -free)
ESGR.mil
Service Accrual
A PERS permanent full-time member earns one day of service credit for each day they are actively employed in a
PERS-covered (eligible) position. This includes holidays or regularly scheduled days off (RDO), as long as the member
is in pay status the day before and the day after the holiday or RDO.
A PERS permanent part-time member (those who work at least 15 hours per week but less than 30 hours per week)
receives proportionate credit for the number of hours they work compared to a full-time member. A total of 1,560 hours
must be earned to receive one full year of service credit. However, service accrued for a stated period of part-time
service may not exceed the full-time equivalent.
A permanent full-time or part-time seasonal member earns service credit for the period of time they are actually
working. Seasonal leave without pay periods do not earn PERS service credit.
The PERS issues member benefit statements once each year. The statement includes the member's total service accrual
as of the date of the statement as well as an accounting of all the contributions, indebtedness payments made, and
interest earned for the year.
Employers report the member's service, salaries and contributions to the PERS each pay period. If a member believes
their service is in error, they will be directed to contact their employer first. If the employer agrees that there has been
an error in reporting, they can correct the error on their next payroll processing or, if they are not able to make the
correction that way, the employer can contact the Division for assistance.
Special School District Alternate Option (SB9)
During the 1999 Legislative session, a law was passed (Senate Bill 9) allowing PERS members who work less than 12
months in a school year to earn a full year of credited employment service. This means eligible employees covered
under PERS may work a minimum of 172 days and still earn a full year's worth of credited service.
A non -certified member of a school district first hired after July 1, 1999 may elect to pay a higher contribution rate to
receive a full year of service credit in the PERS. Service is credited using the teacher's definition of a school year. This
option is available for full-time and part-time members who are scheduled to work less than a full year, typically
10-month members. See the Occupation Codes section on page 38 for more information regarding Alternate Option
employment.
Understanding Leave of Absence and Furlough
Working a Reduced Work Week
Whether members work a reduced work day or work fewer days in the week, if they are regularly scheduled to work 30
or more hours a week, they will continue to accrue service as a full-time member, However, if they are in the DB plan,
this reduction to their work may have an impact on the Average Monthly Salary (AMS) used to calculate their
6si.
VII. The Defined Benefit Retirement Pion Member (Tiers 1, 11, and 111): Service Accrual
retirement benefit. For Tiers I and II and peace officers/fire fighters, the AMS is based on the three high consecutive
salaries. (All tiers must work at least 115 days in the last year of employment for that year's salary to be considered one
of the high salaries.)
Taking a Leave of Absence or Furlough From Your Position
A leave of absence with pay authorized by the employer is not considered an interruption in service. If the member is a
permanent part-time employee, the credited service granted is proportionate to that which would have been earned as
a full-time employee.
For a full-time member, a leave of absence without pay (LWOP) that does not exceed 10 accumulated days in any
calendar year is not considered an interruption or break in service. However, if the leave of absence exceeds 10
accumulated days, whether taken consecutively or through intermittent hours scattered throughout the calendar year,
the service credit for that year will be reduced by the equivalent number of days the member was on leave of absence
without pay.
A part-time member has their service calculated on actual hours in pay status; therefore, any reduction in hours paid
would reduce the service credit earned.
Members are unable to claim this service unless the LWOP was because the member was unable to work due to an
on-the-job injury or occupational illness for which they received benefits under the provisions of workers'
compensation, or if the LWOP was due to a call to active duty service in the armed forces.
LWOP While Receiving Workers' Compensation
If the member did have LWOP that exceeded 10 days while they were receiving workers' compensation (WKC) benefits,
they may claim the service by completing the Workers' Compensation Claim and Verification form (pers008). For
assistance with this form, direct members to contact the Pre -Retirement Services Unit by phone at (907) 465-5700 or
by email at doa.drb.preretirement@alaska.gov. An indebtedness will be established for the contributions that the member
would have made had they remained an active employee during the period of leave of absence without pay for WKC,
less an amount equal to contributions that would have been made for the first 10 days of leave of absence without pay.
Interest will begin to accrue on the day they member returns to work or terminate employment.
• Workers' Compensation Claim and Verification form (pers008): Alaska.gov/drb/pdf/forms/pers008.pdf
Leave of Absence for a Call to Active Duty
If the member is voluntarily or involuntarily called to active duty in the armed forces of the United States while in the
employ of the employer and returns to work with the employer within 90 days after the date of discharge from the
military service, they are not required to make retroactive contributions to receive credited service for the period of
leave of absence. The member must have been discharged in good standing in order to claim the service. To claim the
service, please have the member submit a written request, along with a copy of their discharge papers or a copy of the
active duty orders showing the date of release, to the Division.
Simultaneous PERS and TRS Credit
Members working in both the PERS DB plan and the TRS DB plan at the same time may receive partial credit under
both systems. To be eligible, they must be employed concurrently at least half-time in both systems and making the
required contributions.
The total PERS DB and TRS DB credit that a member may earn during a school year (July 1 through June 30 of the
following year) may not exceed one year.
6fl-
V11. The Defined Benefit Retirement Pion Member (Tiers 1, 11, and 111): Service Accrual
Vesting
To vest in the PERS requires five years of accrued paid -up service. Once a member is vested, they are entitled to a
lifetime defined retirement benefit based on their salary and service in the system. Vesting also allows members to
claim some types of service in the PERS and expands their death and disability benefits to include non -occupational
causes.
If there has been a refund of any prior service and an indebtedness was established prior to July 1, 2010, that service
cannot be used in calculating a vesting date until the indebtedness for the refund is paid in full. If a member has over
five years of service, but indebtedness exists for all or part of that service, the member's vesting date will be the date the
refund is paid or the date the member has accumulated additional service equal to five years, whichever occurs first.
Members cannot reinstate previously refunded service after July 1, 2010.
Once members are vested, they may terminate employment and still received a monthly retirement benefit when they
reach retirement age. However, members must leave their contributions in the PERS to stay vested. Vested members
who have terminated PERS employment and reach normal retirement age will not receive a larger monthly benefit by
waiting until they are older to retire.
CAUTION: If a member requests a refund of their PERS contributions and interest, they will not be eligible for PERS
retirement benefits.
Effects of LWOP and Reporting Process
When status events are not reported to the Division, vesting dates and retirement eligibility dates are miscalculated
resulting in serious consequences to the member.
For a full-time member, LWOP that does not exceed 10 accumulated days in any calendar year is not considered an
interruption or break in service. However, if the leave of absence exceeds 10 accumulated days, whether taken
consecutively or through intermittent hours scattered throughout the calendar year, their service credit for that year
will be reduced by the equivalent number of days they were on leave of absence without pay, including the 10 days.
For example; a full-time member scheduled to work a 40-hour work week (eight hours a day) could accumulate up to
80 hours of LWOP each calendar year and still receive a full year of service credit. However, once the accumulated
LWOP exceeds 80 hours in the calendar year, the entire period of LWOP will not be credited PERS service.
Continuous periods of LWOP for full-time members should be reported to the PERS with each payroll processing. The
employer will be required to verify all hours of LWOP for full-time members when completing the Verification of Service
form (02-1883). If an employee disagrees with the employer's verification of salaries or service, he/she will be referred
to the employer to resolve the discrepancy.
• Verification of Service form (02-1883): Alaska.gov/drb/pdf/forms/02-1883.pdf
Instructions for completing the Verification of Service form (02-1883) are:
1. SECTION I. Personal Data
2. SECTION IL Service Verification
a. Verify the type of service rendered: Full-time (FT), part-time (PT) (15-30 hours per week), or leave of absence
without pay (LWOP). In cases where workers' compensation and paid leave are combined, only the hours that
the employee is on paid leave are creditable; the remainder is LWOP.
b. Verify the number of hours worked for PT employees only. PT hours must be reported on a calendar year basis
(January 1 through December 31).
57
V11. The Defined Benefit Retirement Pion Member (Tiers 1, 11, and 111): Workers' Compensation Procedures
c. Verify the Occupational Code: P = Peace Officer, F = Firefighter, E = Elected Official, M =Inland Boatmen's
Union of the Pacific (IBU), D = PERS Alternate Option, C = Master, Mates and Pilots (MMP), or A = All other.
d. Verify the actual service of LWOP beginning and ending dates. Sequential service of LWOP segments may not
begin or end on the day of another segment.
EXAMPLE: Correct: FT 8/19/2006 through 5/31/2007; LWOP 6/1/2007 through 8/31/2007
Incorrect: FT 8/19/2006 through 5/31/2007; LWOP 5/31/2007 through 8/31/2007
e. Do not include casual, emergency, nonpermanent employment or temporary employees, contracted employees,
part-time employees who work less than 15 hours per week.
3. SECTION III. Leave of Absence Without Pay (LWOP)
LWOP that exceeds 10 days per year is not creditable in the PERS. Often, LWOP is take a few hours or days at a
time but adds up to more than 10 days during the year. Please verify the total number of hours of LWOP taken by
the employee during each payroll year and enter the number of hours required per day for full-time employment.
If a LWOP segment has already been verified in Section II, do not list the total hours under this section.
Part-time members receive credit in the PERS based on the number of hours worked and the 10-day rule is not applicable.
Workers' Compensation Procedures
If you have a member on a period of WKC LWOP, the LWOP time should be reported through the payroll process.
Should the member elect to claim the period of WKC LWOP, they will submit the Workers' Compensation and LWOP
Claim and Verification form (pers008) to the employer for completion. The member will need to complete the top
portion of the form, sign, date and submit to the employer for verification. The employer completes the lower portion of
the form certifying that the employee was unable to work due to:
• an on-the-job injury, or an occupational illness, and
• received benefits under AS 23.30.
• Workers' Compensation and LWOP Claim and Verification form: Alaska.gov/drb/pdf/forms/pers008.pdf
The employer will verify the date the WKC began and ended for each calendar year, the hourly rate of pay, the
scheduled hours per week, and the hours the member was on WKC for each segment. The time the employer is
verifying for the WKC claim is the period of time the member was paid by the WKC carrier and no contributions were
paid to the system.
Disability.....................................................
If a member becomes totally and presumably permanently disabled from performing their duties or the duties of a
comparable position for which the employer makes available and for which they are qualified by training or education,
they may be eligible to receive a monthly disability benefit from the PERS.
The cost for providing disability benefits to members is borne by the employer and is included in the employer
contribution rates. Employers should attempt accommodations or placement in a comparable job before terminating a
member because of disability.
If the member has already met the requirements for a normal retirement based on age or years of service, they are not
eligible to receive a disability benefit. Those on disability benefits revert to a regular retirement benefit once they meet
the age or years of service requirement.
58
V11. The Defined Benefit Retirement Pion Member (Tiers 1, 11, and 111): Disability
Members who are age -eligible to retire early may apply simultaneously for early retirement and disability benefits. If the
disability is later approved, they will be appointed to a disability benefit retroactive to the first of the month following
termination of employment due to the disability and benefits will be adjusted accordingly. If the disability is denied,
the member will remain on early retirement
Receiving a disability benefit is not automatic. Members do not have to be terminated from employment to apply for
benefits. There is an application process, medical certification requirements, and the disability must be approved by the
administrator of the plan.
CAUTION: A member may choose to receive a refund of their accumulated member contributions in a lump sum,
rather than apply for a disability retirement benefit. However, if they do refund their contributions instead of
applying for a disability retirement, they are no longer eligible for that benefit or any future PERS retirement benefit
or associated system -paid medical insurance benefits.
There are two types of PERS disability benefits: occupational and non -occupational.
Members should contact the Regional Counselor for more information on disability benefit requirements
Occupational Disability Benefits
A member that is injured and becomes totally and presumably permanently disabled because of a physical or mental
condition caused by an injury or hazard that happens while performing their job may be eligible for an occupational
disability benefit. Disability benefits are intended to provide a means of economic survival if a member must terminate
their PERS employment because of a disability. Disability benefits provide a monthly benefit payment and major
medical insurance and are not intended to supplement income should the member recover from their disability and
return to work.
There are no minimum service requirements for occupational disability benefits. Members are eligible for benefits the
first day on the job if they are hurt or injured. All members are eligible for occupational disability regardless of tier
level. In addition, the disabling condition must be permanent and prevent the member from performing the usual
duties of their job or any other comparable job the employer makes available for which they are qualified by training or
experience.
Members should be directed to contact the Division and request a disability packet. Disability applications must be
received by the Division or postmarked within 90 days after termination of their employment. Members can file the
disability application while they are still working. If the member misses the 90-day deadline, contact the Division for
assistance. It can take approximately six to eight weeks to process an application. It can take longer if the member does
not provide adequate medical documentation or other required information to support the application. It is the
member's responsibility to provide complete information to the Division so a determination can be made.
Members must provide physician statements and complete medical records along with an employer's statement of
disability to the Division. A consulting physician, who will make a recommendation to the PERS Administrator, then
reviews the completed file. The Administrator will then make a final determination and notify the member. If a
member is denied disability benefits, they can appeal to the Department of Administration Office of Administrative
Hearings.
Once the member's disability application is approved, they will begin receiving monthly benefits. Benefits accrue from
the first day of the month following termination of employment and are paid at the end of the month. If appointment to
disability is delayed to allow time for the PERS Administrator to obtain and review records, retroactive payment will be
made.
59
V11. The Defined Benefit Retirement Pion Member (Tiers 1, 11, and 111): Disability
The monthly disability benefit will be equal to 40% of their gross monthly compensation immediately before they
terminated employment due to the disability. If the member was hired and first enrolled in the PERS before July 1,
1976, the benefit amount will depend on when they were first enrolled in PERS and whether they are classified as a
"peace officer/fire fighter" or an "all other" member. If they are a peace officer or fire fighter, or were first hired before
July 1, 1976, please have the member contact the Division for further information.
A peace officer or fire fighter receiving occupational disability benefits can elect the higher of their occupational
disability benefit or their normal retirement benefit upon reaching normal retirement age or service eligibility,
whichever is first.
Members continue to accrue PERS service while receiving occupational disability benefits. When the member becomes
eligible for a normal benefit, the disability benefit will cease and they will be appointed to a normal retirement. The
monthly benefit will be based on the member's total PERS service and average monthly compensation.
Normal retirement eligibility is determined as follows:
• Tier I members, age 55 or 30 years of paid -up service
• Tier II and III members, age 60 or 30 years of paid -up service
• Tier I peace officer or firefighter, age 55 or 20 years of paid -up service
• Tier II and III peace officer or firefighter, age 60 or 20 years of paid -up service
NOTE: Tier II and III peace officers and firefighters must have 25 years of paid -up service to be eligible for the
system -paid medical coverage at normal retirement. Occupationally disabled peace officers and firefighters with less
than 25 years of paid -up service who are appointed to a normal retirement can apply for system -paid medical
premiums at the time of retirement. The member must provide medical documentation with the application for
system -paid premiums that will be reviewed by the Division's consulting physicians to determine if the member is
presumable permanently disabled and there is an occupational cause. Once the determination is made, the member
will be notified, and if approved, system -paid premiums will be retroactive to the retirement appointment date. If
denied, the member has the option to continue paying premiums or discontinue the coverage.
Non -Occupational Disability Benefits
Non -occupational disability benefits may be paid to a vested PERS member who becomes totally and permanently
disabled because of a physical or mental condition that is unrelated to their employment.
Disability benefits provide a means of partial income replacement if a member must terminate their PERS employment
because of a disability. Disability benefits provide a monthly benefit payment and major medical insurance and are not
intended to supplement a member's income should they recover from their disability and return to work.
Receiving a disability benefit is not automatic. Members do not have to be terminated from employment to apply for
benefits. There is an application process, medical certification requirements, and the disability must be approved by the
administrator of the plan.
To qualify, a member must be vested, meaning they must have at least five years of paid -up PERS membership service.
They must also be totally and permanently disabled and unable to perform the usual duties of their job, or the duties of
another job the employer makes available for which they are qualified by training or experience.
Members should be directed to contact the Division and request a disability packet. Disability applications must be
received by the Division or postmarked within 90 days after termination of their employment. Members can file the
disability application while they are still working. If they have missed the 90-day deadline, contact the Division for
60
V11. The Defined Benefit Retirement Pion Member (Tiers 1, 11, and 111): Disability
assistance. It can take approximately six to eight weeks to process an application. It can take longer if the member does
not provide adequate medical documentation or other required information to support the application. It is the
member's responsibility to provide complete information to the Division so a determination can be made.
Members must provide physician statements and complete medical records along with an employer's statement of
disability to the Division. A consulting physician, who will make a recommendation to the PERS Administrator, then
reviews the completed file. The Administrator will then make a final determination and notify the member. If a
member is denied disability benefits, they can appeal to the Department of Administration Office of Administrative
Hearings.
Once the member's disability application is approved, they will begin receiving monthly benefits. Benefits accrue from
the first day of the month following termination of employment and are paid at the end of the month. If appointment to
disability is delayed, to allow time for the PERS Administrator to obtain and review records, retroactive payment will
be made.
Members do not earn PERS service while they are receiving non -occupational disability benefits; however, family
medical coverage is provided.
When the member becomes eligible for a normal benefit, the disability benefit will cease and they will be appointed to
a normal retirement. The monthly benefit will be based on the member's total PERS service at the time they terminate
employment because of the disability and average monthly compensation.
The monthly disability benefit will be calculated based on the member's average monthly salary and total PERS service
at the time they terminate employment because of the disability. The benefit is calculated the same as a normal
retirement benefit. If there is any unpaid indebtedness for any of the member's PERS service at the time they are
appointed to nonoccupational disability, that service will not be included in their disability benefit calculation unless
they pay the indebtedness in full. If they do not pay the indebtedness at the time they are appointed, but elect to pay it
later, their nonoccupational disability benefit will recalculate to include the additional paid -up service. Their benefit
will be increased on the first of the month following the date their indebtedness is paid. The benefit increase will not
be paid retroactively.
Major medical coverage is available for the member, spouse, and dependent children at no cost to the member as long
as they are receiving disability benefits. Dependent children up to age 19 are covered and may be included up to age 23
if enrolled full-time in an accredited college or university. The medical coverage will continue once the disability benefit
converts to a normal retirement. There are also optional insurance coverages for dental -vision -audio (DVA) and
long-term care (LTC) insurance, which members can elect and pay premiums for. Members must elect optional
coverages when they are appointed to disability benefits or they will not have the opportunity to elect them at any
future time, including when the disability benefit converts to a normal retirement.
Normal retirement eligibility is determined as follows:
• Tier I members, age 55 or 30 years of paid -up service
• Tier II and III members, age 60 or 30 years of paid -up service
• Tier I peace officer or firefighter, age 55 or 20 years of paid -up service
• Tier II and III peace officer or firefighter, age 60 or 20 years of paid -up service
NOTE: Tier II and III peace officers and firefighters must have 25 years of paid -up service to be eligible for the
system -paid medical coverage at normal retirement. Peace officers and firefighters with less than 25 years of paid -up
service who are appointed to a normal retirement can elect to pay the premiums of the medical coverage until they
reach age eligibility for the system -paid medical coverage.
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V11. The Defined Benefit Retirement Pion Member (Tiers 1, 11, and 111): Death
Death.......................................................
When a member dies before they have retired, there may be death benefits payable to their survivors. Survivors include
spouses and, in some cases, dependent children.
There are two types of PERS death benefits: occupational and non -occupational.
Members or survivors should contact their Regional Counselor for more information on death benefits.
Occupational Death Before Retirement
When a member dies from job related causes before retirement or while receiving occupational disability benefits, the
spouse or other eligible beneficiary is entitled to a death benefit. The member does not have to be vested to qualify for
occupational death benefits.
The spouse is automatically the designated beneficiary if they were married during part of the member's employment
unless, in the case of the spouse, the Division received a Spousal Waiver of Death Benefits form (gen054). If there is no
surviving spouse and the member has dependent children, the monthly survivor's pension will be divided equally
among those children.
The monthly survivor's pension is equal to 40% of the member's gross salary at the time of death or end of employment
due to occupational disability.
For a peace officer or firefighter, the monthly survivor's pension is the greater of 50% of the gross salary or 75% of the
normal retirement benefit they would have earned when they retired.
At the member's normal retirement date (by age or service) the benefit changes. The benefit will then be paid as if the
member had worked until normal retirement.
Normal retirement eligibility is determined as follows:
• Tier I members, age 55 or 30 years of paid -up service
• Tier II and III members, age 60 or 30 years of paid -up service
• Tier I peace officer or firefighter, age 55 or 20 years of paid -up service
• Tier II and III peace officer or firefighter, age 60 or 20 years of paid -up service
Non -Occupational Death Before Retirement
When a member dies from non -occupational causes before retiring, the spouse or other eligible beneficiary is entitled
to a death benefit as described below.
Non -vested Member Death Benefits
For members with less than one year of PERS service, the death benefit is:
• the balance of their contribution account, including mandatory contributions, voluntary contributions,
indebtedness principal and interest payments, and interest credited to the account.
For members with at least one year of PERS service, but not yet vested, the death benefit is:
1. the balance of the employee contribution account, which includes mandatory contributions, indebtedness
principal and interest payments, supplemental contributions, and interest credited to the account,
2. a lump sum payment of $1,000, and
3. $100 times the number of years of PERS membership service at the time of death.
62
V11. The Defined Benefit Retirement Pion Member (Tiers 1, 11, and 111): Death
Vested Member Death Benefits
For a member vested in PERS, the death benefit is:
Spouse Beneficiary
Either the non -vested member death benefits for members with at least one year of service, or a monthly 50% joint and
survivor benefit based on the member's average monthly compensation and years of PERS credited service at the time
of death.
The spouse must have been married to the member for at least one year to be eligible to receive the 50% joint and
survivor benefit. If the death is accidental or occupational, this one-year requirement does not apply.
Non -Spouse Beneficiary
If someone other than the spouse is the designated beneficiary, that person will receive the non -vested member death
benefits for members with at least one year of service.
Death Benefits for Retired Members
When a member dies after they have retired, the beneficiary is entitled to the benefit check for the month in which the
member dies, if not already paid to the member. However, a check payable to a deceased member must be returned to
the Division and reissued in the beneficiary's name. It is illegal to cash a deceased member's check.
If the member selected a joint and survivor option at retirement, then the beneficiary will start receiving that benefit.
If a member did not select a joint and survivor option, then the beneficiary will receive the balance remaining in the
employee contribution account, if any.
Beneficiary Designation
Remember: Payment of PERS death benefits is based on the last designation received by the PERS.
An up-to-date Beneficiary Designation form (gen053) should always be on file with the PERS. If no beneficiary is
designated, or if the beneficiary is deceased, the benefits will be paid:
1. to the surviving spouse or, if there is none,
2. in equal parts to the surviving children or, if there are none,
3. in equal parts to the surviving parents or, if there are none,
4. to the member's estate.
Report a Death
To report the death of a member or surviving spouse of the Public Employees' Retirement System (PERS), Teachers'
Retirement System (TRS), Judicial Retirement System (JRS), or Elected Public Officers' Retirement System (EPORS),
please have the following information ready:
• Name of the deceased
• Date of birth
• Name and contact information for the surviving spouse
• A contact name and phone number or email address
Complete the Death Notification form (gen055) and email it to: doa.drb.survivorbenefits@alaska.gov.
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V11. The Defined Benefit Retirement Pion Member (Tiers 1, 11, and 111): Divorce or Dissolution
You may also report a death by calling the Member Service Center at (800) 821-2251 toll -free or (907) 465-4460 in
Juneau, or by email at doa.drb.mscc@alasha.gov.
What to expect:
• Information about any benefits payable and any forms required for payment will be mailed to beneficiaries within
5 business days of a report of death. Please allow 5-7 additional days for mailing.
• The Division must receive a certified copy of the death certificate before any benefits can be paid.
• Due to confidentially requirements, only beneficiaries will receive information on benefits payable. An exception
can be the executor of the estate. Executors should be prepared to provide:
— Acceptance of Duties by Personal Representative
Letters of Testamentary by Court
Please note: Depending on the age and tier of the deceased member, system -paid medical coverage may end, even if a
survivor option was elected.
Divorce or Dissolution
Retirement accounts are marital assets and if there is a divorce or dissolution during any period of a member's PERS
employment, the member is required to submit court certified copies of the divorce or dissolution documents and the
property settlement to the Division. These documents will be placed in their permanent record with the Division.
If the documents stipulate or contain an order by the judge entitling the former spouse to a portion of an account, a
Qualified Domestic Relations Order (QDRO) must be filed as well.
If the documents indicate there was an agreement about the division of retirement benefits, but no separate agreement
is included in the documents, the member must provide a court certified copy of the separate agreement or the
magistrate or judge's notes from the court hearing.
If the documents are silent on the retirement plans, the account will be considered free from attachment
Where To Get Help
All the legal requirements involving a member's benefits must be resolved before any amount can be paid. No funds
will be disbursed from any accounts until all issues have been resolved —even if the responsibility to file the necessary
documents rest with the former spouse. The Division has a booklet available containing useful information regarding
how a member's benefits may be affected by divorce. The booklet also includes sample language that may help in
drafting QDROs. The booklet is available on request.
In Alaska, the court may include the retirement benefits and plans earned by both spouses as marital assets available
for division. The Division does not provide valuation calculation services. If calculations are needed, an independent
actuary or CPA must be retained. However, the Division can provide benefit information as needed for calculations. If
account details are to be sent other than directly to the member, the member must sign a release authorizing another
person access to their account.
Different methods of valuation are used to determine the value of a marital asset. When the spouses agree, courts usually
accept what they say about the value of an asset. Absent an agreement, third -party experts, including accountants and
pension valuators, may be retained by the parties or by the courts to determine the value of marital assets.
Third parties may be authorized to request information regarding a member's retirement accounts and other benefits
64
V11. The Defined Benefit Retirement Pion Member (Tiers 1, 11, and 111): Terminations
Retirement benefits, which vary greatly, may potentially include accumulated employee leave time. In some cases,
information regarding an active employee's benefits must be relayed directly through the employer.
Ending a marriage is considered a "status change" event. A member must contact their human resources office to advise
them of:
• a change in marital status,
• any address changes,
• inquiries about changing or updating beneficiaries, and
• any necessary changes to their health insurance coverage.
A change in status is reported to the Division through payroll reporting.
Whether the marriage ended in divorce or dissolution distinguishes the types of documents required. In Alaska and
other applicable states, the documentation is specific:
• Court -certified copies of the Decree of Divorce, Findings of Facts and Conclusions of Law, Property Settlement,
and any other attachments or court documents that may address the PERS account, or
• Court -certified copies of the Decree of Dissolution, Petition for Dissolution, and any other attachments or court
documents that may address the PERS account.
In Alaska, court -certified copies are usually distinguished from photocopies by either a raised, embossed or blue -ink
seal of the court. Members should contact the Alaska Trial Court to obtain certified copies of divorce documents:
Courts.alaska.gov.
Members should note, an agreement regarding the PERS is not effective until the Decree and Order are filed with the
Plan Administrator and the parties receive notice it is accepted. If divorce documents are filed with the member's human
resource office, please remind them to submit their court documents to the Division if they have not done so already.
A member's divorce documents must be reviewed to determine if any interest in their PERS benefit was awarded to the
former spouse, before they may access their account or be appointed to retirement.
If a prior spouse is deceased, the Division requires a copy of the death certificate for the member's file.
Terminations.................................................
It is the employer's responsibility to report terminations of employment timely to the PERS. The termination action
should be reported as soon as possible after the member's last day of work and include the final salary that was earned.
Bona Fide Termination
Separation of employment is a requirement of eligibility to receive retirement benefits. Both the Alaska statutes
governing the retirement plans and the Internal Revenue Service (IRS) —which allows contributions to the retirement
plans to be made on a pre-tax basis —require a bona fide separation of employment before any disbursement of
retirement funds can occur.
A bona fide separation of employment is a total separation of the employer -employee relationship. Reduction of hours
worked, a change in status from full-time to part-time, from permanent to non -permanent, or to a fee -for -service
arrangement do not meet the separation requirement.
Members and their employers cannot have a prearrangement to return to work prior to separating from service
to retire.
65
V11. The Defined Benefit Retirement Pion Member (Tiers 1, 11, and 111): Refunds
The retirement systems require a break in service before a member can return to work with the same employer. If a
member reemploys with the same employer before the required break period has elapsed, the member's retirement will
be reviewed to determine if a valid separation occurred. If a prearrangement for reemployment is discovered, the
member's separation of employment will be invalid and all retirement benefits, including retiree medical claims,
must be repaid to the retirement system.
The requirements for bona fide termination apply to both PERS/TRS DB and DCR plans. If a member intends to
withdraw retirement funds or participate in the DCR retiree medical plan, there can be no prearrangement for
reemployment with the same employer prior to termination of employment. If a PERS/TRS DCR member terminates
employment and withdraws their funds or participates in the medical plan, they must fulfill the required break in
service before reemploying with the same employer.
If no prearrangement is evident, but the member returns to the same employer without fulfilling the required break in
service period, the member's benefit will be coded as an early distribution and an additional 10910 tax penalty will be
applied by the IRS on benefits received.
• If a member is under age 62 at retirement, they are required to have a 6-month break in service before returning
to work for the same employer.
• If a member is age 62 or older at retirement, they are required to have a 60-day break in service before returning
to work for the same employer.
Again, no prearrangement for reemployment can occur prior to the member's retirement. Please see Alaska.gov/drb
for consequences for violations.
Refunds.....................................................
When a member terminates employment, they may request a refund of their account by completing the Refund Election
form (gen008). The form is available on the Division's website.
• PERS Defined Benefit Refund Election form: Alaska.gov/drb/pdf/forms/gen008.pdf
If a member refunds their PERS account, they forfeit all retirement benefits, including tier status, future pension,
and medical coverage.
The refundable amount to a terminated member includes:
• Member mandatory contributions,
• Any indebtedness principal and interest payments, and
• Interest earned on the contributions
Members must be terminated from employment for at least 60 days before a refund will be issued.
There are two ways to receive a refund payment:
• A one-time payment
• A direct rollover
Members may rollover their refund only into a qualifying plan. Please advise the member to read the Refund Election
form instructions on their choices for payment or rollover. Members may want to speak to a tax advisor before making
a decision. The Division does not give tax advice.
66
V11. The Defined Benefit Retirement Pion Member (Tiers 1, 11, and 111): Terminated Members
A refund of contributions does not include the employer contributions that have been made or the investment income
earned.
Terminated members who are married may not receive a refund of their member contribution account (if balance is
greater than $5,000) unless their spouse gives written consent. Terminated members who are divorced may not receive
a refund of their member contribution account unless they can show that their former spouse was not granted an
entitlement to the account. The member will need to send court -certified copies of the divorce decree and property
settlement to the Division if they have not already done so.
If a qualified domestic relations order (QDRO) has been filed awarding the former spouse a monthly benefit, the court
would have to amend the QDRO to allow for a refund of the member's contribution account as a lump -sum pay out.
Terminated Members
If no application for benefits or for refund has been filed with the administrator by July 1 following the date on which
an inactive member —except an employee on LWOP or layoff status —would attain age 75, or, if no application for
benefits or for refund has been filed with the administrator within the 50 years following the most recent date on
which the employee was an active member, benefits or refunds may not be paid under AS 39.35.095 — 39.35.680 and
the member's records may be destroyed.
Taxes........................................................
If the member's contributions have already been taxed, no more taxes or penalties will be taken from them. This
includes indebtedness payments which may have been made with after-tax dollars.
Contributions which have already had taxes paid on them may not be rolled over into an Individual Retirement
Arrangement (IRA).
The federal government may charge a penalty when untaxed PERS and TRS contributions and interest are refunded in
one lump -sum before age 59-1/2.
The PERS and TRS must withhold 20 percent federal income tax on all untaxed, lump -sum accounts directly refunded
to members. The 20 percent tax does NOT apply to PERS or TRS refunds that are rolled DIRECTLY into an IRA or
other qualified plans.
The following have NOT been taxed at the time of contribution:
• PERS members' mandatory employee contributions made after December 31, 1986 and all interest earned on those
employee contribution accounts.
Please direct questions about taxes to the IRS or a tax expert. The Division cannot give tax advice.
Retirement ...................................................
Providing the member is vested in the system, they are first eligible to retire based on either age or years of service
requirements. Three things must happen for a member to retire: they must be eligible to retire, they must terminate
their employment, and they must submit a completed retirement application to the Division postmarked no later than
the last day of the month prior to when benefits are to begin. The Division recommends applications be submitted 60
days in advance of retirement to enable timely payment of benefits. If the Division does not receive applications by this
requested time, eligibility reporting to the health carrier may be delayed.
67
V11. The Defined Benefit Retirement Pion Member (Tiers 1, 11, and 111): Retirement
Retirements are always effective the first day of the month. If a member works any day in the month they intend to
retire, they are not eligible to retire until the first day of the following month.
For example, to retire May 1, the completed retirement application should be submitted to the Division in March. The
last day a retirement application can be accepted for a May 1 retirement is if it is postmarked or received no later than
April 30.
Minimum Requirements for Age -Based Retirement
• Vested (5 years of credited service) and age 55 for normal retirement or age 50 for early retirement if member first
entered the PERS before July 1, 1986 (Tier I), or
• Vested (5 years of credited service) and age 60 for normal retirement or age 55 for early retirement if member first
entered the PERS on or after July 1, 1986 (Tier II or Tier III).
• Two paid -up years of PERS service if the member is vested in the TRS.
Under early retirement, the monthly pension check is actuarially reduced based on the member's age at the time of
retirement. The reduction is six percent for each full year (or .5 percent for each month) prior to the normal age
requirement. The early retirement reduction is effective for the lifetime of the pension benefit.
Minimum Requirements for Service -Based Retirement
• 20 paid -up years of PERS service as a peace officer or fire fighter, or
• 30 paid -up years of PERS service as an all -others member.
Members retiring based on years of service are encouraged to have their service verified by the employer before
terminating employment to ensure they have the required amount of service. This is important if they are terminating
right on the date of reaching the 20 or 30 years, if they have part-time or seasonal employment, or if they have periods
of leave without pay during their employment. Members should not leave employment until they are absolutely certain
they are eligible to retire. It is the member's responsibility to be sure they are eligible for retirement before they
terminate employment.
Military credit for service prior to PERS entry may not be used to satisfy the 20 or 30 years needed to retire.
Temporary credit may be used to satisfy the 20 or 30 years needed to retire under certain circumstances.
Refunded service that has not been fully repaid will not count towards retirement eligibility.
Employers and members are encouraged to contact their Regional Counselor for more information on retirement
eligibility.
Benefit Calculation
The pension benefit calculation is dependent on the member's years of service as well as their Average Monthly Salary
(AMS). The salary history during the member's PERS employment is reviewed to determine which consecutive set of
salary years will be used for the calculation of their AMS. Once determined, the total salary is divided by the number
of months and partial months they worked to determine the monthly average.
To include the last year's salary as one of their high years, members must have worked at least 115 days of creditable
service during that year. If the member terminates employment before working 115 days in their last year of
employment, their last year's salary will not be included in their AMS.
Employers and members are encouraged to contact their Regional Counselor for more information on retirement eligibility
68
V11. The Defined Benefit Retirement Pion Member (Tiers 1, 11, and 111): Conditional Service Benefit
Checklist for Pre -Retirement Planning
Members should be encouraged to:
• contact the Member Service Center (MSC) and request an estimate of benefits and retirement application packet at
least 120 days before the member's prospective date of retirement,
• arrange for a counseling appointment, and
• fill out their packet and mail it to the Division at least 60 days before their retirement effective date.
Conditional Service Benefit
Members may be eligible for a conditional service benefit from the PERS if:
• they are vested in the TRS in either the DB plan or the DCR plan,
• are eligible for a TRS retirement benefit, and
• have at least two paid -up years of PERS membership service.
Conditional service benefits, when both plans are DB plans, are calculated based on the highest salaries the member
earns in either system. For example, if the TRS salary is higher than the PERS salary, the TRS salary will be used to
calculate the PERS conditional benefit amount.
Conditional service benefits, when the vested TRS plan is a DCR plan, are calculated using only the PERS salaries. Due
to the defined contribution plans having no average salary definition, the salaries earned in the conditional service plan
will be used for calculation. No defined contribution salaries will be used.
For deferred members who elected to have their service reinstated prior to July 1, 2010, conditional service benefits will
not be paid unless the reinstatement indebtedness is paid in full.
Also eligible for a conditional service benefit from the PERS are members who were first hired as a legislative member:
• Before May 30, 1987, who have at least 60 days of paid -up service during each of five legislative sessions, or
• After May 29, 1987, who have at least 80 days of paid -up service during each of five legislative sessions.
Contact your Regional Counselor for more information on conditional service benefits.
Public Service Benefit
If a member has service in both the PERS and the TRS Defined Benefit plans and is not vested in either one, they may
be able to combine their PERS and TRS service under the public service benefit provision in the PERS. They must have
a minimum of two years in the PERS, and when combined with the TRS service, must have a total of five or more years
to be eligible. There is a cost that is borne by the member for this benefit.
Exception: A member of the PERS DB plan employed by an employer who only participates in the PERS DCR plan will
accrue DCR benefits in addition to their PERS DB plan benefits.
Members should be encouraged to contact their Regional Counselor or the Division's Member Service Center toll -free at
(800) 821-2251 or in Juneau at (907) 465-4460, or by email at doa.drb.mscc@alasha.gov for more information.
69
V11. The Defined Benefit Retirement Pion Member (Tiers 1, 11, and 111): A to P Conversion
A to P Conversion
When an employee in the plan who was employed as a dispatcher in a state trooper office, police or fire department, or
correctional facility (other than as a correctional officer or correctional superintendent), applies for appointment to
retirement, the employee may convert the credited service for that position to credited service as a peace officer by
claiming the service as peace officer service. An employee who has converted credited service to peace officer service
under this subsection shall be treated as a peace officer for purposes of AS 39.35.095 — 39.35.680.
When the member claims this credited service as peace officer service, an indebtedness of the member to the plan shall
be established. The indebtedness is equal to the full actuarial cost of the conversion of the credited service to treatment
as a peace officer service. Any outstanding indebtedness that exist at the time the member is appointed to retirement
shall require an actuarial adjustment to the benefits payable based upon the conversion of the credited service.
For further information, please contact the Division
Effects of PERS on Social Security Benefits
Not all PERS employers participate in Social Security. If you need information on whether you participate in Social
Security, contact the State Social Security Administrator in the Division's Audit Unit.
A PERS pension benefit may reduce the benefit amount a member is entitled to under Social Security if the member did
not pay Social Security taxes during their PERS employment. If the member pays into Social Security during their
PERS employment, their Social Security benefits will not be reduced. Not all PERS employers participate in Social
Security.
For members who did not pay Social Security taxes while working for the State of Alaska or a local government or
school district, there are two laws that may reduce their Social Security benefits: the Windfall Elimination Provision
and the Government Pension Offset.
Windfall Elimination Provision
The Windfall Elimination Provision affects people who have earned a pension from the PERS and did not pay Social
Security taxes during their PERS employment, but who also worked at other jobs where they paid Social Security taxes
long enough to qualify for retirement benefits. If a member is subject to the Windfall Elimination Provision, a different
formula is used to calculate their Social Security retirement benefits to prevent a windfall in benefits.
The Windfall Elimination Provision does not apply if the member first became eligible to retire prior to 1985, or if they
have 30 years of "substantial" earnings during their Social Security -covered employment.
Governmental Pension Offset
The Governmental Pension Offset affects the Social Security benefits members may be eligible to receive as a spouse or
widow(er). Under the offset provisions, some or all of the Social Security spouse's or widow(er)'s benefit may be offset
by the member's PERS pension if they did not pay Social Security taxes during their PERS employment.
For information on these federal provisions, employers and members are encouraged to contact the Social Security
office and request Publication No. 05-10045 for the Windfall Elimination Provision or Publication No. 05-10007 for the
Governmental Pension Offset. Contact the Social Security Administration toll -free at (800) 772-1213 or visit the Social
Security Administration website at SSA.gov.
70
Vil. The Defined Benefit Retirement Pion Member (Tiers 1, 11, and 111): Retired Member Medical Benefits
Retired Member Medical Benefits
Along with a monthly pension check, retirement benefits may include a major medical plan for retired members,
disabled members, and survivors who are receiving a monthly PERS benefit. The retiree medical plan is a different plan
than the coverage that you provide as an employer.
Medical Coverage at Retirement
The following benefit recipients, their spouse and eligible dependent children will be covered by the system -paid
AlaskaCare Retiree Health Plan when they start receiving monthly benefits:
• All members regardless of date of hire if they are receiving PERS disability benefits.
• Members who retire after 30 years of membership service (25 years if a peace officer or fire fighter), and their
survivors.
• Members who first entered the PERS before July 1, 1986 (Tier I), and their survivors.
• Members who first entered the PERS on or after July 1, 1986, but before July 1, 1996 (Tier II), and their survivors if
they are at least age 60.
• Members who first entered the PERS on or after July 1, 1996 (Tier III) and their survivors if they are at least age 60
and have at least 10 years of credited service.
Credited service includes all service claimed in the system as long as that service is used in the final calculation
of the retired member's pension check.
Retiree medical coverage ends when the retired member or survivor dies or is no longer eligible to receive monthly
benefits.
Retired members who do not qualify for the system -paid medical coverage may purchase medical coverage for
themselves, spouse, and eligible dependent children. These members will pay the monthly premium for as long as they
want the coverage.
The retiree AlaskaCare plan covers major medical services and prescription drugs. There are limited preventative
services covered under the plan. For more information regarding the medical plan including a current description of
the benefits, please refer to the AlaskaCare Retiree Health Insurance Information Booklet.
• AlaskaCare Retiree Health Insurance Information Booklet: AlaskaCare.gov/retiree/publications/bookiets.htmI
Optional Health and Life Plans
PERS benefit recipients may elect to pay a premium for additional health and life coverage as follows:
• Dental -Vision -Audio (DVA) coverage for self, spouse, and eligible dependent children,
• Long -Term Care (LTC) coverage for self and spouse, and
• Select Life Insurance (if participating in the State -sponsored Select Life Insurance Plan at time of retirement).
Benefit recipients must pay the monthly premium for as long as they desire coverage.
For more information regarding the optional health plans, including enrollment restrictions, please refer to the
AlaskaCare Retiree Health Insurance Information Booklet.
• AlaskaCare Retiree Health Insurance Information Booklet: AlaskaCare.gov/retiree/publications/booklets.htmI
rfl
Vil. The Defined Benefit Retirement Pion Member (Tiers 1, 11, and 111): Retired Member Medical Benefits
Members seeking more information regarding the optional LTC plans, including enrollment restrictions, please refer to
the State of Alaska Long -Term Care Booklet.
• State of Alaska Long -Term Care Booklet: Alaska Ca re.gov/retiree/publications/booklets.htmI
The premium amounts for the retiree medical coverage, DVA and LTC, and the Select Life Insurance will be deducted
from the retired members monthly pension check. If the amount of the pension check is less than the total of the
premiums due, the benefit recipient must pay the premiums directly to the claims administrator.
Contact your Regional Counselor for more information on the retiree medical coverage, DVA and LTC, and the
requirements to continue Select Life Insurance.
Medicare
The AlaskaCare Retiree health plan was created by statute to provide health coverage to eligible retirees and their
dependents in 1975. Alaska Statute Sec. 39.35.535(b) requires that the retiree health plan become supplemental to
federal old -age benefits available at age 65. This statute has been in effect since 1975. The AlaskaCare Retiree Health
Insurance Information Booklet section titled, "Effects of Medicare" states: "If you do not enroll in Medicare coverage, the
estimated amount Medicare would have paid will be deducted from your claim before processing by this plan."
Members should contact Medicare about three months before their 65th birthday to sign up for Medicare. They can
sign up with Medicare even if they do not plan to retire at age 65. Members who are still working and covered by an
employer -sponsored health insurance plan may be able to defer enrollment in Medicare. Employers should encourage
their members to contact Medicare to ensure they comply with the current requirements.
There are several parts to Medicare and there are time limit requirements to enroll timely to avoid penalty at a later
date.
For more information regarding Medicare benefits, employers and members should contact the local Medicare office, or
call the toll -free number (800) 772-1213, or visit the Medicare website at Medicare.gov.
Retired Member AlaskaCare Benefits Supplemental to Medicare
When a retired member turns 65, Medicare becomes the primary health plan and the retired member's AlaskaCare
plan becomes a supplemental plan. For services covered by both plans, the claims are paid first by Medicare and then
by AlaskaCare. Most people are eligible for premium -free Part A. Social Security will send you a letter if you are not
eligible for Part A. Members must provide a copy of that letter to the AlaskaCare health claims administrator and
AlaskaCare will continue to pay as their primary plan for Part A services. If a retired member does not enroll in
Medicare at age 65, AlaskaCare will estimate what Medicare would have paid and deduct that amount before paying
expenses, regardless of any other insurance which you may have. Members will have a larger part of the bill to pay.
Remember: Everyone is eligible to enroll in Medicare Part B and should do so at age 65 to avoid paying for uncovered
expenses.
AlaskaCare coordination may provide up to 100% of covered expenses, less any deductible that has not been met. For
retired members who have not enrolled in Medicare at age 65, the AlaskaCare plan will estimate what Medicare would
have paid and deduct that amount before paying medical expenses.
• Medicare and the AlaskaCare Retiree Health Plan: AlaskaCare.gov/retiree/medicare
Members seeking more information on coordination between Medicare and the AlaskaCare Retiree Health Plan should
contact the Division's Member Service Center at (800) 821-2251 toll -free or (907) 465-4460 in Juneau, or by email at
doa.drb.mscc@alaska.gov.
VA
V11. The Defined Benefit Retirement Pion Member (Tiers 1, 11, and 111): Voluntary Savings Pion
More Information
Additional information is available from the federal Medicare website at Medicare.gov. If members have questions
about Medicare, have them contact the nearest Social Security office or call toll -free, (800) 772-1213 or visit the Social
Security website at SSA.gov.
The State of Alaska Medicare Information Office can also offer one-on-one counseling to Medicare beneficiaries and
their families, seminars for those new to Medicare, and other resources. Call toll -free at (800) 478-6065 in Alaska or
(907) 269-3680 in Anchorage.
Voluntary Savings Plan
The Voluntary Savings Plan (VSP) is a separate post -tax account available to all DB members of the PERS
Enrollment or changes in participation in the plan can occur at any time and will take effect the first of the month
following receipt of the enrollment or change form. Members can terminate their enrollment at any time. Termination
will take effect the first of the following month following receipt of the form to discontinue.
Members can contribute a minimum of $5.00 and up to a maximum of 5% of their gross salary to the plan. The VSP
provides an opportunity for employees of the PERS to invest their money in an account that will accrue 4.5% interest
until the funds are disbursed to the employee in the form of a lump sum payment, life annuity, or installments over a
designated period of time. Active employees can access their VSP account if experiencing a financial need. Employees
can submit a payment request to the Division stating their financial need and receive either full payment of their
account balance, including interest earned, or they can request a portion of their account to be distributed. If the
employee is requesting a partial distribution, interest will be paid first then any remaining portion of the request will
be paid from the post -tax contributions made.
Although the post -tax contributions that are made to a VSP account would not be taxed when payment is made, the
interest that accrues on voluntary contributions is considered income and is taxable upon payment of the account.
For more information, members should contact their Regional Counselor.
For information regarding setting up this payroll deduction, employers should contact their PERS e-Reporting contact.
• Voluntary Savings Plan brochure and forms: Alaska.gov/drb/pers/employee/plan/voluntarySavingsP[an.htmi
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V111. Miscellaneous
Compensation ................................................
Member salaries in the PERS are based on 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. Salaries must be reported by payroll year even if the
employer payroll year differs.
PERS salaries include payment for services provided to the employer such as:
• hours worked,
• overtime, and
• on -call and standby pay, not always what was paid.
PERS salaries do not include:
• payment for travel or per diem,
• uniform or tool allowance,
• payment for leave cash -ins,
• terminal leave payouts,
• payments representing an employer expense,
• severance pay or other separation bonuses,
• workers' compensation,
• retirement or welfare benefits, or
• cost -of -living differentials.
Leave Run Outs ...............................................
To receive PERS service credit, members must be in pay status the regularly scheduled day before and the regularly
scheduled day after the period of leave. Members are required to physically return to work after periods of paid leave to
receive credit for the leave period in the PERS. Members cannot receive service credit, even if a return to work occurs,
if the position the member occupied has been filled and the member effectively terminated employment the date leave
began. The Division will investigate potential sham transactions.
Employers are responsible for correctly reporting member termination dates. If a member is on leave and terminates
employment, the employer should back up the termination date to the last day the member actually worked.
This is in accordance with 2 AAC 08.110. Separation and Terminal Leave:
1. Payment for unused personal leave shall be allowed upon separation from service. The payment equals the cash
value of the employee's personal leave balance at the time of separation from state service.
2. Employees who go on personal leave and subsequently give notice of resignation, or who do not return to work,
will be considered to have separated on the last day worked. No additional leave will accrue after the last day
worked.
3. Any exception to the policy stated in (b) of this section requires the prior written approval of the Commissioner of
Administration.
For further information on leave run outs, please review the Alaska Administrative Manual or contact the Employee
Call Center at (907) 465-3009 or by email at Employeecallcenter@alasha.gov.
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Vlll. Miscellaneous: Verifications of Service
Verifications of Service
The employer may receive a request to verify periods of employment in the PERS for their past or current members.
The verification request can be made by the Division or the member. It is most often requested by the Division at the
time of retirement or when an anomaly is found with a member's service records. The member most often requests the
verification if they are retiring based on years of service in the system.
Members are encouraged to periodically review their service history as shown on their annual statements or in Member
Services online to ensure it has been correctly reported to the PERS. If any discrepancies are noted, members should
contact the employer they were serving with at the time for more information. If an error has occurred, employers will
have to take action to correct service with the PERS. To correct service with your current employees, you will need to
send the correction with your payroll report to the Division. To correct service with past employees, employers must
send in a verification of the member's service on the approved forms.
• Verification of Salary and Service (02-1883): Alaska.gov/drb/pdf/forms/02-1883.pdf
• Verification of Part-time Hours and Salaries (pers022): Alaska.gov/drb/pdf/forms/pers022.pdf
Instructions for completing the verifications of service are provided on the forms. If you require any assistance with
completing the verification of salary and service forms, please contact your Regional Counselor.
If a member elected the Alternate Service Option under Alaska Statute 39.35.300 or 39.35.310, to correct service
performed as a non -certificated employee of a school district, the Alaska Vocational Technical Center or a state
boarding school, please verify service using the following form:
• Alternate Option Verification of Service (pers021): Alaska.gov/drb/pdf/forms/pers02l.pdf
It is important that the employer provide complete accurate information on salary and service for members. The
information verified by the employer will be used to determine retirement eligibility and other retirement benefits.
Records Retention
As part of the employer's participation agreement, it is the responsibility of the employer to verify service and salaries
and to keep accurate records for each member. PERS is a 20- to 30-year retirement system and when a member retires,
the employer may be asked to verify salary and service dates that occurred up to 30 or more years in the past.
Information that may be requested from the Division includes: hire and termination dates, salaries, member
occupational codes, part-time or full-time status, elected official waivers, part-time hours worked, payroll reporting,
calendar year salaries, seasonal leave and return dates, and all periods of leave without pay.
Make -Whole Agreements and Grievance Settlements . . . . . . . . . . . . .
• Contact your Regional Counselor
• Provide a tentative copy of agreement to the Division for approval of awards to member's retirement accounts
• Submit final agreement for service corrections
When the employer is entering into a make -whole agreement or a grievance settlement with a current or former
member, the Division must approve any terms and conditions that affect the member's retirement accounts. This
requirement is to ensure that the award is in compliance with the PERS statutes and regulations.
VAR
re
ALASKA
(907) 465-4460
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Termination Studies
This flyer is intended to provide general information to employers regarding terminating
groups, departments or job classes from participation in the Public Employees'
Retirement System (PERS) and when a termination study is required. Alaska Statutes
governing termination studies are 39.35.615-625.
Determining If A Study Is Needed
AS 39.35.615 allows an employer to amend its
participation agreement with the PERS to add or delete
covered groups. When an employer excludes a
department, group or other classification of employees, a
termination study is required unless the department)
group or other classification has requested to be
removed, such as union employees requesting to
participate in a union retirement plan instead of PERS.
The Division of Retirement and Benefits (Division) will
request information from the employer in order to clarify
which category the exclusion comprises. This
information can include organizational charts,
department rosters, job classifications, employee union
membership or minutes of meetings of the governing
body.
The basis for the termination study is a determination if
a covered employee's rights to benefits or retirement
behavior will change due to the employer's actions.
Excluding departments, groups or other classifications of
employees from participation automatically vests both
defined benefit and defined contribution employees in a
right to retirement benefits that have not yet been
funded. It will also cause the employee to draw
retirement benefits at the earliest available retirement
date rather than the system average of 2 years after
retirement eligibility. The funding of the retirement
benefit is based on the average expected retirement date;
drawing retirement earlier than expected creates a
shortfall in employer funding of the benefit.
If the employees being excluded comprise a department,
group or classification, a termination study will be
required. Some examples:
Reduction in force, no termination study. The City
of X is reducing maintenance workers from 5 to 4.
of Retireme� 4'1
The job classification of maintenance worker still exists
with 4 remaining members so the job classification has
not been excluded. The City of X has a Maintenance
Department, and there are 4 remaining members in
the Department so the Department has not been
excluded. All maintenance workers are in the same
union, and there are still remaining members in the
union so a group has not been excluded. No
termination is required.
• Reduction in force, termination study required. The
City of Y is eliminating its Maintenance Department
and contracting with an independent contractor to
perform this work. The Maintenance Department
employees are being removed from PERS participation
involuntarily and a termination study is now required.
• Reduction in force, termination study required. The
City of Z has a Maintenance Department that includes
custodial, equipment and fleet maintenance. The City
of Z determines to contract with an independent
contractor for custodial services. All custodians for The
City of Z will no longer be employed. The custodians
represent a unique job classification with the City of Z
so a termination study is now required.
• Reduction in force, termination study required. The
City of Z in the above example determines to employ
as many laid off custodians as it can by filling
vacancies in other Departments. A termination study is
still required, however, employees that remain in the
employ of City Z will be not be included in the study
as their vesting rights and retirement behavior will not
change.
• Sale of an entity. City A determines to sell its hospital
to a private company. All hospital employees will
retain employment with the new company. A termina-
tion study will be required as City A has removed a
78
department of its organization from participation in
the PERS. The employees remain employed, but are
now ineligible to continue in the PERS.
Removal of a one -of position. City B determines to
remove its Fire Chief from PERS participation. The
Fire Chief position is the only Fire Chief position the
City has and represents a job classification. A
termination study is required.
Once it is determined a termination study is needed, the
Division will refer the member to the plan actuary for
the necessary calculations. Under AS 39.35.625,
employers requesting a termination study are responsible
for payment to the plan actuary to calculate the
termination costs. When the study is completed, a copy
is sent to both the Division and the employer.
If the employer chooses to continue with excluding a
department, group or classification, the employer works
with the Division Regional Counselor to amend the
participation agreement. The Division is available to
review draft amendments and resolutions prior to
adoption by the governing body to ensure acceptance by
the Division. Once the amendments are received and
accepted by the Division, the affected employees are
notified in writing by the Division of their rights under
AS 39.35.615 and the requirement to determine, within
60 days after the date of determination, whether to
refund contributions or accept the vested benefit.
Termination costs for employees who elect a refund are
voided. For the remaining termination cost, the
employer may set up a mutually agreed upon payment
plan with the Division to pay the final costs to terminate
coverage.
Salary Floor Effects
Employers need to be aware that while a termination
study may not be needed when staff reductions are
made, total salaries reported to the system may fall
below the 2008 established salary floor. Employers are
required to make contributions to the PERS based on
actual salary or the salary floor amount, whichever is
greater.
Continuing Contributions Required
When a termination of a department, group or
classification has occurred, AS 39.35.625 requires
employers to pay continuing contributions to the plan
each payroll period until the past service liability of the
plan is extinguished. The contributions will be the
greater of the total base salaries paid:
1) During the payroll period to employees in positions
for which coverage has been terminated;
2) At the time of termination to employees in positions
for which coverage has been terminate; or
3) During the corresponding payroll period for the
fiscal year ending June 30, 2008, to employees in
positions for which coverage has been terminated.
Salaries used to calculate continuing contributions
become part of the total employer salary base paid to the
plan when determining salary floor affects.
The information contained in this flyer is a summary description of benefits policies or procedures for the Public Employees' Retirement System.
The Division of Retirement and Benefits has made every effort to ensure, but does not guarantee, that the information provided is accurate and up
to date. Where this flyer conflicts with the relevant statutes, the statutes control. (2015)
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