All Roll Calls
Yes: 36 • No: 42
AlaskaHB 7834th Legislature - First Session (2025)HouseWALLET
RETIREMENT SYSTEMS; DEFINED BENEFIT OPT.
Sponsored By: HOUSE FINANCE
Became Law
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Bill Overview
Analyzed Economic Effects
24 provisions identified: 8 benefits, 3 costs, 13 mixed.
Earlier retiree medical for workers
The law lowers the service needed to get retiree medical. Starting July 1, 2026, peace officers and firefighters qualify with 20 years. Other employees qualify with 25 years. You can also qualify at normal retirement age with at least 10 years of service. Peace officers and firefighters may count up to five extra credited years toward medical eligibility. If you use credited military service years, you must prove they qualify and pay the required indebtedness tied to those years.
One-time switch from DC to DB
If you joined the DC plan after June 30, 2006 and before July 1, 2026, you get limited chances to move to the DB plan. If you are working in the DC plan on July 1, 2026, you can elect DB before January 1, 2027. If you were not working on July 1, 2026 and you are rehired after that date, you have 180 days after rehire to elect DB. You generally cannot have taken a full DC distribution before rehire unless you directly roll it back within 180 days. Your DC balance is transferred to buy DB service credit; spousal consent applies if you are married.
Special PERS retirement waives other benefits
If you retire under AS 39.35.381, you do not get disability or death benefits under AS 39.35.400–.440, the minimum benefit in AS 39.35.485, or medical benefits under AS 39.35.535 or .537. Service earned under AS 39.35.381 also does not count toward vesting. This is a tradeoff that removes important protections for that retirement path.
New contribution rates and payroll rules
Members who first participate after June 30, 2006 pay 8% of base pay by default; the board can set the rate between 8% and 12%. If that cohort’s funding falls below 90%, the board must raise the member rate only if employer contributions rise by the same amount. Employers pay the smaller of 12.56% of payroll or a board rate of at least 12% that covers actuarial costs; legislative funds can reduce required employer payments. Member contributions are picked up pre‑tax under federal rules, and you cannot take them as cash. Late employer contributions owe interest, and mistaken employer payments must be refunded within one year of the administrator’s finding.
Retirement ages and formula for post‑2006 teachers
If you first joined after June 30, 2006, you are vested after five years. You can get normal retirement at age 60 with 5+ years, or after 30 years of service at any age. Early retirement is available at age 50 or 55 when you meet the statute’s service tests. Your monthly pension uses your five‑year average salary and pays 2% per year for the first 10 years, 2.25% for years 11–20, and 2.5% after 20. For averaging, pre‑2006 members use three highest years; post‑2006 use five (or fewer if less than five). Base pay above the federal 401(a)(17) cap is excluded for hires on or after July 1, 1996.
Choose teachers DB when in two jobs
If you are in the teachers’ plan and also work in a PERS‑covered job, you may elect to be only in the teachers’ DB plan. You must direct the PERS employer to send required employer and employee contributions to the teachers’ plan and make any required extra payments. You must also notify the teachers’ plan administrator in writing.
Extra monthly COLA for pre‑2006 teachers
If you first joined before July 1, 2006, live in Alaska, and are 65 or older or on disability, you get an extra monthly allowance. The amount equals 10% of your basic benefit, with a minimum of $50 per month. This is paid in addition to any other annual increases.
State can buy group health coverage
The Department of Administration may buy group health insurance for state workers and certain retirees or survivors covered by the listed statutes. Coverage depends on procurement rules, participation rules, and plan terms.
Sub-trust to fund post-2006 members
The administrator deposits part of employer contributions into a sub‑trust for members who first joined after June 30, 2006. Combined with medical funding, these deposits must cover that group’s normal and past service costs. If required amounts are under 12% of base salaries, the plan adds the difference to the sub‑trust.
Premium rules for pre-2006 retirees
Beginning July 1, 2026, many who first joined before July 1, 2006 must pay the full monthly retiree medical premium unless they meet an age or service exemption. You must pay if you are under 60 and lack 25 years as a peace officer or 30 years as a non‑peace officer. You must also pay at any age with less than 10 years of service. Disabled members, disabled members appointed to normal retirement, those age 60 or older with at least 10 years, and those with at least 25 years as a peace officer or 30 years as a non‑peace officer do not have to pay.
Higher interest on late employer payments
Starting July 1, 2026, if an employer is more than 15 days late sending required plan contributions, interest applies from the due date at the plan’s actuarial earnings rate. This increases what late employers owe.
Post-2006 retirees: medical and HRA rules
If you first joined after June 30, 2006, you can elect retiree major medical and an HRA when you retire. You are eligible with 25 years of service, or at Medicare age with at least 10 years, or at age 50 with 20 years as a peace officer or firefighter. If you are not Medicare‑eligible, you pay the full monthly premium. If you are Medicare‑eligible, you pay 30% for 10–14 years, 25% for 15–19, 20% for 20–24, 15% for 25–29, and 10% for 30+ years; alternate payees pay the full premium. You must make an irrevocable election by the later of applying for retirement or reaching age 70 1/2; coverage starts the first day of the month after approval. HRA funds can pay premiums. Post‑2006 members cannot use the older AS 39.35.535 coverage and must elect under AS 39.35.537 or the TRS post‑2006 section.
New pension choices for public employees
Beginning July 1, 2026, the DC plan applies only to people hired after June 30, 2006 and before July 1, 2026 who are not in a DB plan, and to certain transferees who do not elect DB. If you fall in that window and are not in DB, you are in DC. From July 1, 2026, active DB members hired before July 1, 2026 who are not vested can elect DC instead; DC replaces DB coverage. If you first chose DC and later join DB, you are classified as a post‑2006 member.
New pension choices for teachers hired 2006–2026
Teachers who first joined after June 30, 2006 and before July 1, 2026 are in the defined contribution plan unless they choose the defined benefit plan. Active DB members hired before July 1, 2026 who are not vested can switch to the DC plan; switching replaces DB coverage. Teachers in a university retirement program or who stay in the DC track are not covered by the teachers’ DB plan. If you first chose DC and later enter the DB plan, the law treats you as a post‑2006 member, so post‑2006 rules apply.
PERS retirement ages and pay rules
For members who first joined after June 30, 2006, you qualify for normal retirement at age 60 with 5+ years, or with 30 years of service. Peace officers and firefighters can retire earlier: age 55 with 20 years, or age 50 with 25 years. Starting July 1, 2026, average pay uses the three best consecutive years for hires before July 1, 1996 (and certain peace officers/firefighters), and five best consecutive years for later hires; the last year counts only if you had at least 115 credited days. If you have temporary credited service, you can make a one‑time written choice to count it for eligibility or only for benefit amount; the choice is final.
Rules for service credit and purchases
If you elect to be covered only by the teachers’ plan, you cannot earn public employees’ plan credit for the same work. If you first joined before July 1, 2006 and earned public employees’ plan credit for qualifying service, you may move that service into the teachers’ plan by claiming it and paying required retroactive contributions; you cannot get duplicate retro credit. You may also buy credited service through an irrevocable salary‑reduction program. Employer‑paid amounts are treated as employer contributions for tax purposes.
Yearly increases and new COLA limits
Benefits rise once a year. If you are 65 or older or on disability, your increase is the smaller of 75% of the CPI change or 9%. If you are 60–64, or under 60 and have received benefits for 5+ years, your increase is the smaller of 50% of the CPI change or 6%. If you first joined after June 30, 2006 and do not meet Permanent Fund Dividend eligibility as of July 1, 2025, your increase is cut in half. If the board finds the post‑2006 group funded under 90%, it must reduce that group’s increase and can end the cut later.
More employers must join DB plan
Starting July 1, 2026, more public bodies count as employers in the retirement plan, including entities that join by approved resolution or assume liabilities. Employers that participate in the plan must also participate in the DB plan. An employer in the DC plan must also join the DB plan. This expands DB coverage for workers and increases pension obligations for participating employers.
Stronger pension funding and board powers
The retirement board sets investment and funding policies to keep unfunded liability under 10%. It must offer DC investment options, set interest and surcharges, get annual actuarial valuations, and amortize past service costs over a closed 25‑year term. The board keeps separate sub‑trust accounting for post‑2006 members. It can adjust annual benefit increases for post‑2006 members and change contribution rates within legal limits.
Who can enroll in retiree medical
The law clarifies who can get retiree major medical by hire date. For PERS, rules list which retirees, spouses, dependents, and certain survivors can be covered based on when you were first hired and your election. For TRS, similar hire‑date rules apply and depend on the coverage you elected.
Refunds for mistaken employer contributions
If the administrator finds an employer paid into the plan by mistake, they must return that money within one year of that finding. This rule starts July 1, 2026.
Agencies can write rules to implement
The Alaska Retirement Management Board and the commissioner of administration can adopt rules to carry out this law. These are internal management rules and are not subject to the state’s usual rule‑making act. The rules cannot take effect before the law’s effective date.
Separate funding for retiree medical
Employers must compute the retiree medical part of contributions separately and deposit that money into the Alaska retiree health care trust. This applies to TRS contributions and, starting July 1, 2026, to PERS contributions. This helps secure funding for retiree medical, and adds a required accounting step for employers.
Two education statutes are repealed
On July 1, 2026, AS 14.25.012(c) and AS 14.25.061 are repealed. The text provided does not list replacement benefits or funding.
Sponsors & Cosponsors
Sponsor
HOUSE FINANCE
Affiliation unavailable
Cosponsors
There are no cosponsors for this bill.
Roll Call Votes
House vote • 5/12/2025
EFFECTIVE DATE(S) FAILED Y21 N19
Yes: 21 • No: 19
House vote • 5/10/2025
AM NO 15 FAILED Y15 N23 E2
Yes: 15 • No: 23
Actions Timeline
(S) -- Testimony <Invitation Only> --
4/24/2026Senate(S) FINANCE at 09:00 AM SENATE FINANCE 532
4/24/2026Senate(S) Minutes (SFIN)
4/16/2026Senate(S) Heard & Held
4/16/2026Senate(S) FINANCE at 09:00 AM SENATE FINANCE 532
4/16/2026SenateAudio/Video
4/16/2026House(S) Heard & Held -- Please Note Time Change --
4/9/2026Senate(S) FINANCE at 01:30 PM SENATE FINANCE 532
4/9/2026SenateAudio/Video
4/9/2026House(S) Heard & Held
3/26/2026Senate(S) FINANCE at 09:00 AM SENATE FINANCE 532
3/26/2026SenateAudio/Video
3/26/2026House(S) Heard & Held -- Please Note Time Change --
3/12/2026Senate(S) FINANCE at 01:30 PM SENATE FINANCE 532
3/12/2026SenateAudio/Video
3/12/2026House(S) Heard & Held -- Please Note Time Change --
3/11/2026Senate(S) FINANCE at 01:30 PM SENATE FINANCE 532
3/11/2026Senate(S) Heard & Held -- Testimony <Invitation Only> --
3/11/2026Senate(S) FINANCE at 09:00 AM SENATE FINANCE 532
3/11/2026SenateAudio/Video
3/11/2026HouseAudio/Video
3/11/2026House(S) Heard & Held -- Please Note Time Change --
3/9/2026Senate(S) FINANCE at 01:30 PM SENATE FINANCE 532
3/9/2026SenateVideo
3/9/2026House(S) Heard & Held -- Please Note Time Change --
3/2/2026Senate
Bill Text
SCS CSHB 78(L&C)
2/2/2026
CSHB 78(FIN) am(efd fld)
5/10/2025
CSHB 78(FIN)
5/9/2025
HB 78
1/31/2025