Major public retirement systems in Alaska include the Alaska Public Employees Retirement System (PERS) and the Alaska Teachers Retirement System (TRS). Alaska PERS provides benefits for state employees and employees of political subdivisions, while Alaska TRS provides benefits for certified public school teachers, other designated employees of school districts, the state university, and the department of education.
Legislation approved in 2005 transferred the responsibility for asset management from the Alaska State Pension Investment Board to the Alaska Retirement Management Board. This legislation also closed both plans to new members hired after June 30, 2006. Employees hired after this date participate only in a defined contribution plan.
AS 37.10.210 establishes the Alaska Retirement Management Board. According to the statute:
(a) The Alaska Retirement Management Board is established in the Department of Revenue. The board's primary mission is to serve as the trustee of the assets of the state's retirement systems, the State of Alaska Supplemental Annuity Plan, and the deferred compensation program for state employees, and the Alaska retiree health care trusts established under AS 39.30.097. Consistent with standards of prudence, the board has the fiduciary obligation to manage and invest these assets in a manner that is sufficient to meet the liabilities and pension obligations of the systems, plan, program, and trusts. The board may, with the approval of the commissioner of revenue and upon agreement with the responsible fiduciary, manage and invest other state funds so long as the activity does not interfere with the board's primary mission. In making investments, the board shall exercise the powers and duties of a fiduciary of a state fund under AS 37.10.071.
According to AS 37.10.210, the Board consists of:
Two members, consisting of the commissioner of administration and the commissioner of revenue;
Seven trustees appointed by the governor who meet the eligibility requirements for an Alaska permanent fund dividend and who are professionally credentialed or have recognized competence in investment management, finance, banking, economics, accounting, pension administration, or actuarial analysis.
|Alaska Retirement Management Board
Per the U.S. Census, in FY 2015, employer contributions to Alaska state and local government pension plans were 20.0 percent of all state and local government direct general spending.
Alaska statewide retirement systems (PERS and TRS) received in FY 15 a one-time contribution of $3.0 billion from state budget surplus monies to reduce the plans’ unfunded liability. These amounts were equal to 232 percent and 528 percent of the required employer contributions for PERS and TRS, respectively.
Membership in employee retirement systems of the State or its political subdivisions shall constitute a contractual relationship. Accrued benefits of these systems shall not be diminished or impaired. See Municipality of Anchorage v. Gallion, 944 P.2d 436 (Alaska 1997)(ordinance permitting municipality to avoid contributions to underfunded police and firefighter retirement system if funds necessary to pay system's actuarial liability were available from total assets of system, impaired vested rights of members of fully funded plans to have the actuarial soundness of their plans evaluated and maintained separately from that of underfunded plan, and thus violated constitutional provision prohibiting impairment of accrued benefits of state employee retirement systems), but see Alford v. State, Dept. of Admin., Div. of Retirement and Benefits, 195 P.3d 118 (Alaska 2008)(recapturing early retirement benefits for retirees who returned to public service, and then retired again, according to statutes in effect when employees took their first retirement that required that subsequent retirement benefits of early retirees who were reemployed be reduced by the actuarial equivalent of early retirement payments previously received, did not unconstitutionally violate anti diminution provision; employees were receiving benefits under version of PERS statutes in effect when they took their first retirement, they still enjoyed a net increase over what they would have received under new version of the statutes, and Alaska Constitution did not give employees the right to mix and match a statutory provision from one era with that of another). (AK CONST., Article XII, §7) Source: Robert Klausner, Esq., State Constitutional Protections for Public Sector Retirement Benefits