AK HB78

All public employees and teachers hired on or after July 1, 2026 will be enrolled in the defined benefit (DB) pension plan rather than the defined contribution (DC) plan that has been mandatory since 2006

Current DC plan members hired between July 1, 2006 and June 30, 2026 may make a one-time election before January 1, 2027 to transfer to the DB plan, with their DC account balances converted to DB service credits on an actuarial basis

DB plan members hired after June 30, 2006 will have different benefit terms than pre-2006 members: 8% employee contribution rate (adjustable between 8-12%), average salary based on 5 highest years instead of 3, normal retirement at age 60 with 5 years service or 30 years service, and medical benefits requiring 25 years service or Medicare age with 10 years service

The Alaska Retirement Management Board must establish sub-trusts to separately track contributions, assets, and liabilities for post-2006 DB members and adopt policies to prevent unfunded liabilities exceeding 10%

Employer contribution rates are capped at the lesser of current statutory rates (12.56% for teachers, 22% for public employees) or a board-established rate of at least 12% sufficient to cover normal costs and past service liabilities amortized over 25 years