All Roll Calls
Yes: 33 • No: 27
AlaskaHB 7834th Legislature - Second Session (2026)HouseWALLET
RETIREMENT SYSTEMS; DEFINED BENEFIT OPT.
Sponsored By: HOUSE FINANCE
Became Law
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Bill Overview
Analyzed Economic Effects
18 provisions identified: 4 benefits, 0 costs, 14 mixed.
Easier access to retiree health coverage
You can get retiree medical benefits when you retire with 25 years of service (used to be 30). You can also qualify at normal retirement age with at least 10 years of service if you were active for the 12 months before you apply.
One-time switch from DC to pension by 2028
Teachers and public employees in a DC plan after June 30, 2006 and before July 1, 2027 can make a one-time election to join the pension (DB) plan. The election must be made before January 1, 2028. Your DC account value, with gains or losses to the election date, moves into the DB fund within 60 days, with no commissions or fees. Transfers can be in cash or securities, and markets must be open unless the board delays due to a major market shutdown. Service credit is set using the amount transferred, and actuarial rules include a blended retirement rate. Related death, disability, and health trust liabilities are moved based on actuarial valuations. Public employers can opt out of offering DB benefits between January 1 and June 30, 2027. If your employer opts out, public employees cannot make this switch.
Rules for reemployed teachers after 2027
If you first joined after June 30, 2006, were not employed on July 1, 2027, and return to work after that date, you get one irrevocable chance to join the DB plan. You must elect within 180 days, and your spouse must sign if you are married. Your DC balance (including allowed rollovers) buys DB service, and enrollment is backdated to your hire date. If before rehire you cashed out your entire DC account, or you rolled it over and did not make a direct rollover back into your DC account within 180 days of rehire, you are placed in the DB plan and cannot stay in DC.
What members pay into the pension
Most members pay 8.65% of base pay each year. Members who first joined after June 30, 2006 pay 8% minimum; the board can change this rate but not below 8%, and must pair any increase with an equal employer increase if funding for this group drops under 90%. Required contributions are taken each payroll before federal taxes and are treated as employer contributions for tax purposes.
Retiree medical for post‑2006 members
If you first joined after June 30, 2006, retire, get a monthly benefit, and elect coverage, you can get retiree major medical and an HRA. If you are not on Medicare, you pay the full monthly premium. If you are on Medicare, your share is 30% with 10–14 years of service, 25% with 15–19, 20% with 20–24, 15% with 25–29, and 10% with 30 or more. You must make an irrevocable election by the later of age 70½ or when you apply for retirement. The law also clarifies who qualifies for retiree major medical by hire date and lets the state buy group coverage under the updated statute list.
Choosing between pension and savings plans
If you first join after June 30, 2006 and before July 1, 2027 and do not choose a pension (defined benefit), you are in the defined contribution (savings) plan. A non‑vested pension member may switch to the savings plan, but the choice must be in writing, is final, and a spouse must sign if married; it starts the first day of the month after the administrator gets your forms. If you were first hired in that same date window and are reemployed after July 1, 2027, you get one chance within 180 days to elect the pension plan, with spouse signature and rollover rules on any prior DC balance. When you move your DB contributions into the DC plan, your employer adds 88% of the transferred amount, subject to IRS limits (the payment may be delayed to the next limitation year). Your DC account earns interest each year at a board‑set rate and is used first to pay your retirement benefits; you may buy needed service credit if the transfer is short, or receive any excess as a rollover. Employer or payroll‑reduction payments for purchased service reduce your outstanding service‑purchase debt when received.
Your pension contributions and triggers
If you first participate after June 30, 2006, you must pay 8% of your pay into the plan. The board can change the rate but cannot lower it below 8%. If the share of the plan for post‑2006 members would fall below 90% funded, the board must raise both employee and employer rates by the same amount; it may lower them only when that share is above 90%. The board also has authority to change how much post‑2006 benefits increase over time.
On-time employer pay and health deposits
Employers must send retirement and retiree health contributions at the end of each pay period. Late payments owe interest at the plan’s actuarial earnings rate from the original due date. Employer amounts for retiree medical benefits must be calculated separately and deposited into the Alaska retiree health care trust.
Buy missing service credit or rollover
If your DC transfer is too small to cover all your service time, you can buy the rest. Any unpaid amount becomes a debt that earns interest until you pay it off or retire, and benefits are adjusted if you still owe at retirement. If the transfer is more than needed, the extra must roll to the State Supplemental Annuity Plan or another eligible plan. You cannot use the extra to buy more DB service. Pre‑2006 members can claim older work only by paying required retro contributions. You may move qualifying AS 39.35 service into the teachers’ plan, but you must pay the retro contributions. You can also elect a salary‑reduction arrangement so your employer pays for all or part of a service purchase pre‑tax; this election is irrevocable and must list payroll periods and amounts.
Choose teachers’ pension for two jobs
If you are in the teachers’ DB plan and also work in a PERS job, you may elect DB‑only coverage under the teachers’ plan. You must tell your PERS employer in writing to send both employer and your employee contributions to the teachers’ plan, and notify the DB plan administrator. While you are DB‑only, time you work in a PERS position does not count for PERS benefits.
HRA funding and account rules
The administrator sets up a trust to hold HRA assets. Employers must contribute 3% of the system‑wide average salary for each HRA member, and 4% if the member is a peace officer or firefighter. If you leave before meeting medical eligibility, you lose employer HRA contributions; if you return by December 31 of the year you turn 65, your account is restored and adjusted for Anchorage CPI. Eligible members can use HRA funds for reimbursements; a child can use them only if both the member and the surviving spouse have died and the child meets the dependent test. The administrator may deduct retiree medical premiums from your HRA. The law also allows the state to create tax‑exempt trusts to prefund retiree medical benefits.
Annual raises to retiree checks
If you first joined before July 1, 2006, live in the state, and are 65+ or on disability, you get a monthly cost‑of‑living boost equal to 10% of your basic benefit. If you first joined after June 30, 2006 and do not meet the state dividend eligibility test, your annual increase is cut to half the normal percentage. If post‑2006 liabilities fall below 90% funded, the board must reduce increases for that group and may end the reduction later. The law also shortens the wait for an annual increase for some recipients, from eight years of prior receipt to five years.
Your pension formula and retirement age
If you first joined after June 30, 2006, you get normal retirement at age 60 with at least 5 years of service, or with 30 years of service. Early retirement ages are updated in law to apply at age 50 for some groups and age 55 for others who meet the service rules. Your pension uses a tiered formula: 2.0% a year for your first 10 years, 2.25% for years 11–20, and 2.5% after 20, times your five‑year average salary, paid monthly (you must clear any system debt). Average salary uses your top 3 years if you joined on or before June 30, 2006, and your top 5 years if you joined after that; for many other employees after June 30, 1996, five consecutive high‑pay years also apply. Base pay over the federal 401(a)(17) cap does not count if you were first hired on or after July 1, 1996. Post‑2006 members vest after 5 years of membership service.
Plan powers and who may join
The state may amend or end the plan, but cannot cut benefits already earned except as allowed by the Alaska Constitution and federal tax law. If the plan ends, account rules stay in place until everyone is paid; leftover assets go back to the employer after liabilities are met. The law also broadens which public entities count as employers and removes an old 2006 date limit. People who started in DC and later elect DB are treated as post‑2006 members for rules that use that date.
Stronger funding rules for public pensions
The retirement board must set investment policies, keep unfunded liability below 10%, do yearly valuations, and pay off past debt over 25 years. Employers pay by formulas: in some cases the smaller of 12.56% of pay or a board rate of at least 12%; in others a flat 22% of a set salary base; and for post‑2006 defined benefits, the smaller of 22.5% of certain salaries or a board rate of at least 12%. Employers must at least cover normal cost and required contributions; the legislature can appropriate money to lower what employers owe. Late employer payments owe interest at the plan’s actuarial earnings rate, and mistaken payments are refunded within one year of the administrator’s finding. The law creates sub‑trusts to fund post‑2006 members and requires extra deposits to reach at least 12% of base pay when needed; it also moves money between death, disability, and health trusts when DC accounts move into the pension and uses blended DB/DC retirement rates in valuations. Employers that take part in the DC plan must also join the pension plan.
Tax deferral on service credit purchases for public workers
If your employer pays for your service credit through a salary reduction program, those payments count as employer contributions under federal tax rules. You do not include those amounts in your taxable income until you get a refund or retirement payments.
Lower employer pension costs and refunds for mistakes
The law reduces an employer’s required pension contribution when the legislature puts in money for that purpose. If the plan administrator finds an employer paid by mistake, the plan must return that money within one year of that finding.
Who is in the teachers’ pension
Teachers who are eligible for the teachers’ DB plan and not in the DC plan are covered by the DB rules. You are not in the DB plan if you are in a qualifying university plan, you first joined after June 30, 2006 but before July 1, 2027 and stayed in DC, or you previously chose the DC plan and did not elect DB.
Sponsors & Cosponsors
Sponsor
HOUSE FINANCE
Affiliation unavailable
Cosponsors
There are no cosponsors for this bill.
Roll Call Votes
House vote • 4/29/2026
EFFECTIVE DATE(S) FAILED Y21 N19
Yes: 21 • No: 19
Senate vote • 4/28/2026
PASSED Y12 N8
Yes: 12 • No: 8
Actions Timeline
(H) MANIFEST ERROR(S)
4/30/2026House(H) DUE BACK FROM GOVERNOR 5/18/2026
4/30/2026House(H) 4:30 P.M. 4/30/26 TRANSMITTED TO GOVERNOR
4/30/2026House(H) ENGROSSED
4/29/2026House(H) VERSION: SCS CSHB 78(FIN) AM S(EFD FLD H)
4/29/2026House(H) ...CHANGES TITLE OF LEGISLATION
4/29/2026House(H) EFFECTIVE DATE(S) FAILED Y21 N19
4/29/2026House(H) CONCUR AM OF (S) Y21 N19
4/29/2026House(H) SUSTAINED RULING OF CHAIR Y19 N19 A2
4/29/2026House(H) TECHNICAL TITLE CHANGE
4/29/2026House(H) CONCUR MESSAGE READ AND TAKEN UP
4/29/2026House(S) VERSION: SCS CSHB 78(FIN) AM S
4/28/2026Senate(S) TRANSMITTED TO (H) AS AMENDED
4/28/2026Senate(S) EFFECTIVE DATE(S) ADOPTED Y20 N-
4/28/2026Senate(S) PASSED ON RECONSIDERATION Y12 N8
4/28/2026Senate(S) RECON SAME DAY VOTE Y15 N5 - IN 3RD RDG
4/28/2026Senate(S) EFFECTIVE DATE(S) ADOPTED Y20 N-
4/28/2026Senate(S) PASSED Y12 N8
4/28/2026Senate(S) AUTOMATICALLY IN THIRD READING
4/28/2026Senate(S) AM NO 10 ADOPTED UC
4/28/2026Senate(S) AM NO 9 NOT OFFERED
4/28/2026Senate(S) AM NO 8 ADOPTED Y11 N9
4/28/2026Senate(S) AM NO 7 ADOPTED UC
4/28/2026Senate(S) AM NO 6 NOT OFFERED
4/28/2026Senate(S) AM NO 5 ADOPTED Y11 N9
4/28/2026Senate
Bill Text
Enrolled HB 78
4/29/2026
SCS CSHB 78(FIN) am S(efd fld H)
4/29/2026
SCS CSHB 78(FIN) am S
4/28/2026
SCS CSHB 78(FIN)
4/27/2026
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