Employer News | Quarterly Newsletter | Winter 2023

• BEARS—Coming Spring 2024
• Employee Retirement Plan Election—New Employee Onboarding Process
• 2022 PERS & TRS Annual Comprehensive Financial Reports and Financial Statements Available Online
• Employer Compliance and Audit Responses
• Full-time, Part-time, or Seasonal Positions
• Social Security Administration Establishing National Native American Office
• IRS Pension Plan Limitations for Calendar Year 2023
• Public Employee Retirement Membership Eligibility for Elected Officials in the State of Alaska

BEARS—Coming Spring 2024

Beginning in the spring of 2024, you will have a much easier set of tools to use to report service and compensation in the new BEARS (Benefits and Retirement System) Employer Services Portal. This portal will support consistent processes, enhanced accuracy, and security for our participating employers. The effect of these updated features will be increased efficiency in work management for both Division staff and you, the employer.

If you haven’t already, please complete the BEARS Employer Reporting Tool survey to help the Division gather information regarding your payroll cycles and how you will be reporting in the new BEARS system. Please respond as this will help ease the transition to BEARS for all of us.

What’s Ahead in 2023

• In the summer of 2023, the Division will be asking employers to participate in early testing of the new reporting file format. More information will be provided as we get closer to that time.
• To assist employers in transitioning to the new BEARS system, the Division will provide training beginning in the fall of 2023. We’ll keep you posted on how to access BEARS training and support.

Thank you for your patience as we implement these important changes. We know you’ll like this new, easier process!

If you have any questions regarding the BEARS implementation and the new Employer Services Portal, please contact the Division through the dedicated email set up for that purpose: DRB.BEARS.Communication@alaska.gov.

Employee Retirement Plan Election—New Employee Onboarding Process

In the wake of the Alaska Supreme Court decision (Metcalfe v. State, 484 P.3d 93 (Alaska 2021)), the Division is developing a process to ensure that new hires are enrolled in the correct retirement plan upon employment. Employees who previously worked in a position contributing to the Defined Benefit (DB) plan and refunded their contributions, are now eligible to re-enter the DB plan when they return to Public Employees’ Retirement System (PERS) / Teachers’ Retirement System (TRS) employment. Former DB employees must be given the option to return to their previous tier or choose the Defined Contribution Retirement (DCR) Plan when they re-hire.

The Division is developing a “Member Election of Participation” form that must be provided to all employees at the time of hire into a PERS or TRS-eligible position. It is the employer's responsibility to ensure this form is provided to the member at the time of hire and returned to the Division within 30 days from the date of hire. The purpose of this change is to streamline the payroll reporting process and prevent unnecessary account corrections and backouts of contributions.

Please note that not all PERS and TRS employees will be eligible to be enrolled in the DB plan. The Defined Benefit election only applies to former Defined Benefit members who were hired in a State of Alaska PERS- or TRS-eligible position prior to July 1, 2006. An employee who was never enrolled in a State of Alaska PERS or TRS-eligible position with any employer on or before June 30, 2006, will not be eligible to enroll in the Defined Benefit plan.

Due to system limitations, an employer cannot confirm in the “Employer Access Portal”  which employees are eligible to choose between the DB and the DCR plans. This is the reason for the new onboarding process in which all newly hired and rehired employees will need to fill out the “Member Election of Participation” form at the time of hire.

The Division realizes this process has been challenging for you and your employees. We apologize for the delays and will continue to seek solutions to make this process as smooth as possible for you as the employer and for your employees.

STAY TUNED—More information regarding the new “Member Election of Participation” form will be coming soon! Until then, please feel free to reach out to your Division payroll contact at the time of hire to determine plan eligibility. 

2022 PERS & TRS Annual Comprehensive Financial Reports and Financial Statements Available Online

The 2022 Annual Comprehensive Financial Reports and Audited Financial Statements for the PERS and TRS are available online. To request hard copies, please email doa.drb.accountants@alaska.gov.

PERS Publications

• PERS Annual Comprehensive Financial Report
• Financial Statements

TRS Publications

• TRS Annual Comprehensive Financial Report
• Financial Statements

Employer Compliance and Audit Responses

Under the State of Alaska Statute 39.30.340, the Division of Retirement and Benefits (DRB) manages Alaska's retirement systems and health benefit plans. As provided in the Alaska Statutes, the duties of the DRB includes managing the plans, reporting plan status, and recommending the policy.

To manage the plans, report plan status, and recommend policy in accordance with 39.30.340, the DRB auditors regularly perform audits of the Political Subdivisions (employers) to enhance compliance with the retirement system or plan system. The purpose of the routine audit is to confirm that the employers are compliant with the plan statutes. Employers are required to take appropriate action recommended by the Division auditors and DRB management.

When audit findings are noted in the report, the employers will be required to take the following actions:

1. Responding to the Audit Findings.
   The employers are required to provide a timely written response to the audit findings and recommendations. The response signifies management's plan for correcting the findings, and responses are included in the final audit report.
   
   When writing an audit finding response, the employers should use the following guidelines:
   
   • Clear and concise response
   • Respond directly to the finding and its recommendation
     
   • Provide specific actions that management will commit to in order to correct the findings
     
     
2. Resolving the Audit Findings.
   To resolve the audit findings, the employers should:
   • Provide a specific and realistic timetable for implementation
   • Identify specific positions, if applicable, responsible for the implementation

Please note: Findings should not be corrected until you receive the final audit report unless otherwise directed by the Division.

Resources:

• Alaska Statutes Book 
• PERS Employer Manual
• TRS Employer Manual

Full-time, Part-time, or Seasonal Positions

Are your employees full-time, part-time, or seasonal? Full-time, part-time, and seasonal positions may be dependent on a definition of full-time and part-time employment in terms of scheduled hours of work per week. Likewise, a seasonal position may be per season or a calendar year of scheduled employment.

Most employers, including political subdivisions, set a specific number of hours of work per week for full-time and part-time employees, and per season for seasonal employees for the benefits to employees. As a reminder, political subdivisions in the State of Alaska are required to adhere to the definition of full-time, part-time, and seasonal positions defined by the Alaska Statutes (AS) 39.35.680 (32)(33)(40) for Public Employees' Retirement System (PERS) enrollments unless excluded by an individual employer.

AS 39.35.680 (32)(33)(40)

(32) "Permanent full-time" means an employee who is occupying a permanent position that regularly requires working 30 or more hours a week.

(33) "Permanent part-time" means an employee who is occupying a permanent position that regularly requires working at least 15 hours but less than 30 hours a week.

(40) “Seasonal” refers to an employee who is occupying a position for less than 12 months each year where it is anticipated that the same employee will return to the position when needed and includes a temporary employee of the legislature if part of the service for the legislature during each calendar year is performed during a legislative session.

For PERS enrollment, political subdivisions that have employees in the above-listed category should adhere to a definition of AS 39.35.680 (32)(33)(40) to avoid denying employees retirement benefits that they are perhaps eligible to participate in.

Social Security Administration Establishing
National Native American Office

Acting Commissioner Kilolo Kijakazi recently announced that we established an Office of Native American Partnerships within the Office of the Commissioner.

This office will elevate and centralize efforts to administer comprehensive programs and policies related to American Indians and Alaska Natives. It will enhance our relationship with Tribes and serve as the primary point of contact on Tribal affairs for all stakeholders.

IRS Pension Plan Limitations for Calendar Year 2023

The IRS has announced the calendar year 2023 pension plan limitations. The pension plan limitations that specifically apply to the pension contributions submitted to the Division include:

• 401(a)(17) Compensation Limit – For the calendar year 2023, the compensation limit is increasing to $330,000. The compensation limit is the maximum amount of compensation that employee contributions are allowable. This limitation applies to the PERS, TRS, JRS, and EPORS. Gross earnings and Employer contributions are still due to the Division if an employee’s compensation exceeds the limit.
  
  
• 457 Deferred Compensation Limits – For the calendar year 2023, the DCP contribution limit is $22,500. Participants are allowed to contribute an additional $7,500 in the year they turn age 50 or greater for an annual maximum of $30,000. This represents the annual allowable of $22,500, plus the additional $7,500. The catch-up maximum is $45,000. This represents double the annual maximum of $22,500.

SBS Limitation for Calendar Year 2023

The Social Security Administration has announced the calendar year 2023 base wage is increasing to $160,200 (Social Security Contribution Base). The SBS base wage mirrors the social security limits.

If you have any questions regarding the IRS Pension Limitations, especially if you have an employee who may meet or exceed the limitations, please reach out to your payroll contact.

Public Employee Retirement Membership Eligibility for Elected Officials in the State of Alaska

A member qualifies for PERS membership if they are certified as a full-time elected official by the participating employer. Per Alaska Statutes (AS) 39.35.725, an elected official of a political subdivision of the State of Alaska is eligible to participate in both plans, known as the Defined Benefit (DB) Plan and the Defined Contribution Retirement (DCR) Plan. Elected officials' membership eligibility depends on when the member is certified or hired as an elected official.

AS 39.35.725 (a)(1) requires the political subdivision to cover elected officials under AS 39.35.600 — 39.35.650 and designated elected officials under AS 39.35.957, as a classification of employees entitled to participate in the plan. The DB members are those elected and entered into PERS service prior to July 1, 2006, and DCR members are those who first entered PERS service on or after July 1, 2006.

Nevertheless, under AS 39.35.725 (b)(1)(2), for PERS eligible purposes, an elected official who is certified, entered the PERS service on or after July 1, 2006, receiving compensation amount of at least $2,001 a month from the political subdivision for services as an elected official are required to participate in elected official DCR plan.

Under AS 39.35.125, (a) an elected official of the state or of a political subdivision of the state designate elected officials in the classifications of employees entitled to participate in the plan is included in the plan unless the official files a written waiver of coverage with the administrator.

A waiver under this subsection waives coverage of future employment as an elected official, regardless of any change of employer. An elected official may file a waiver under this subsection at any time after the election to office, including the period before taking the oath of office. An elected official may revoke a waiver under this subsection by filing a written revocation with the administrator. A revocation under this subsection operates prospectively only, and the elected official may not receive credited service for service as an elected official while the waiver is in effect. There is no limit on the number of times an elected official may file a waiver or revocation under this subsection.

Please don't hesitate to contact the Division Regional counselor should you have any questions regarding the elected official's eligibility.

Resources:

• AS 39.35.725 
• AS 39.35.125
• PERS Employer Manual, Page 6