Employer News | September 2015

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September | VOLUME #121

GASB 68 Update


To assist our employers in implementing the new GASB standards, the Division has created a GASB resource webpage, where you will find information related to the State of Alaska’s release of the GASB No. 68 – Allocation of the Net Pension Liability (NPL), and how the State will report their share of the NPL.

You will also find a DRAFT version of the two schedules specified in the AICPA SLGEP Pension Whitepaper Series titled, "Governmental Employer Participation in Cost-Sharing Multiple-Employer Plans: Issues Related to Information for Employer Reporting":

PERS GASB 68 for Employers
TRS GASB 68 for Employers

These are DRAFT schedules and are subject to change up until the final audit report is issued. The Division will keep you updated to any significant changes to the schedules. Please use these, but recognize that numbers are subject to change.

The State has taken the position that there is not a special funding situation, which is explained in the legal opinion on the GASB webpage. Please read the legal opinion and also provide it to your auditors.

In order to prepare the allocation of employer contributions, you will notice that each employer has two lines of information to properly report your allocation of the net pension liability (NPL), deferred inflows and outflows, and the pension expense. The first line represents your allocation based on your actual contributions. The second line represents the allocation of the net pension liability based on the additional non-employer contribution. Both lines must be added to calculate your reportable NPL, deferred inflows and outflows, and pension expense amounts.

The first set of schedules is the “Schedule of Employer Allocations”. This schedule reflects each employer’s allocation percentage. As noted above, you must combine both lines to report the proper allocation percentage.

The second set of schedules is the “Schedule of Pension Amounts by Employer”. This schedule reflects the July 1, 2014 (beginning) as well as the June 30, 2015 (ending) NPL balances to report on your financial statements. The beginning of year (like a prior period adjustment) balance is in the first column, and the end of year, June 30, 2015 NPL is in the second column.

Keep in mind that the amounts being reported are one year prior. The June 30, 2014 actuarial valuation NPL is reported as the June 30, 2015 financial statement NPL.

The June 30, 2013 actuarial valuation NPL is the July 1, 2014 beginning balance for Fiscal Year 2015.

Additional information on recording the transaction (journal entry examples) and foot note disclosures will be released next week.

If you have questions, please contact Kevin Worley so the Division can develop an FAQ for all employers.

Thank you for your patience as we continue to work through the GASB 68 process, and please check back frequently on the Division’s GASB webpage for more information.

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Defined Contribution QDRO Changes


The Division of Retirement and Benefits (Division) has contracted with Empower Retirement Services to provide divorce and dissolution document review for participants of the State of Alaska Defined Contribution Plan accounts commencing on September 8, 2015. The Defined Contribution Plan accounts include the following retirement accounts: Public Employees’ Retirement System (PERS) Tier IV, Teachers’ Retirement System (TRS) Tier III, Supplemental Annuity Plan (SBS), and the Deferred Compensation Plan (DCP).

Empower Retirement will be reviewing all Qualified Domestic Relations Orders (QDROs) for acceptance and divorce/dissolution documents for no attachment determinations on Defined Contribution Plan accounts. They will be reviewing against requirements in Alaska Statute, regulation and the plan documents as applicable. Beginning September 8, 2015, please send all divorce and dissolution documents, including draft and final QDROs on Defined Contribution Plan accounts, to Empower Retirement for review:

Regular Mail
Empower Retirement            
PO Box 173764
Denver, CO 80217-3764

Express Mail
Empower Retirement
8515 E. Orchard Road
Greenwood Village, CO 80111

Phone: (866) 360-1192, option 1
Fax: (866) 745-5766

The Division of Retirement and Benefits will continue to review divorce and dissolution documents, including QDROs, for members of the State of Alaska Defined Benefit Plans. The Defined Benefit Plan accounts include PERS Tiers I, II, and III and TRS Tiers I and II. Please send divorce and dissolution documents, including draft and final QDROS for Defined Benefits Plan accounts to:

Division of Retirement and Benefits
PO Box 110203
Juneau, AK 99801-0203
(800) 821-2251

Some participants of a Defined Contribution Plan will also be a member of a Defined Benefit Plan. Those individuals must follow the instructions above to provide divorce/dissolution documentation for review to both the Division and Empower Retirement upon divorce/dissolution. Empower Retirement and the Division require court certified copies of divorce/dissolution documents. A court certified copy is signed or stamped by the judge or other court official and has an original stamp or seal from the clerk of the court stating that the order is a certified copy.

Neither the Division nor Empower Retirement provides valuation calculation services; if valuation calculations are needed, an independent actuary or CPA must be retained. The Division can provide benefit information as needed for the calculations. To request benefit information for both Defined Benefit Plan and Defined Contribution Plan accounts upon divorce or dissolution, continue to contact the Division of Retirement and Benefits. Please allow up to 30 days for all requests for this type of information.

The Division has updated the Divorce and Dissolution Information Packet which includes sample QDROs for the Defined Benefit Plans to assist in the drafting of QDROs that are acceptable to all parties and meet all Division requirements. The packet is available on our website or upon request.

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Defined Contribution Managed Account Free Look Period

Free Look

There will be a 90-day free look period for the Managed Account portion of Reality Investing Advisory Services, offered by Advised Assets Group, LLC (AAG), a federally registered investment adviser.

This free look period begins on October 1, 2015 and ends on December 31, 2015, and is available strictly for new enrollees in the Managed Account Service.

Members can enroll in the Managed Account Service from their State of Alaska account online.

Learn more about the Managed Account Free Look Period...

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Excess Contributions

Excess Contribution

Employees are advised of excess salary limitation on the Public Employees' Retirement System and Teachers’ Retirement System defined benefit plans set by the Internal Revenue Service (IRS) for each year when reporting salaries to the plans. 26 U.S.C. 401(a)(17) defines the maximum salary requirements. The maximum for contribution reporting for 2015 is $265,000. Contributions from employee accounts must stop once the maximum salary level has been reached. Excess contributions cannot be accepted by the plans and will result in a refund to members through adjustments via the payroll process.

If an employer determines a member will likely exceed the salary limits for the year, they should inform the member. Ceasing contributions to the PERS and TRS will increase members' taxable income for the year.

The Division is currently reviewing member accounts to identify any members who may have exceeded the limits in past years. Members identified in this process will be refunded any excess contributions taken in years past with interest. The refund represents taxable income and employees will be issued a Form 1099 for the tax year in which the refund and interest are received.

You can find the salary limits for current and prior years for PERS and TRS on our website.

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