(a) Subject to AS 39.35.450, a terminated employee is eligible for a normal retirement benefit

(1) at age 60 with at least five years credited service;

(2) with at least 20 years of credited service as a peace officer or firefighter; or

(3) with at least 30 years of credited service for all other employees.

(b) Subject to AS 39.35.450, a terminated employee is eligible for an early retirement benefit at age 55 with at least five years credited service. An actuarial adjustment shall be made to retirement benefits paid under this section for an early retirement benefit. The monthly amount of a retirement benefit that would be due under (c) of this section shall be reduced by multiplying one-half of one percent times the number of months, to the nearest month, by which the retirement date of the employee falls short of the date that the employee reaches age 60.

(c) The monthly amount of a retirement benefit for a peace officer or firefighter is two percent of the average monthly compensation times the years of credited service through 10 years, plus two and one-half percent of the average monthly compensation times the years of service over 10 years. For all other employees it is

(1) two percent of the average monthly compensation times all years of service before July 1, 1986, and for years of service through a total of 10 years; plus

(2) two and one-quarter percent of the average monthly compensation times all years of service after June 30, 1986, over 10 years of total service through 20 years; plus

(3) two and one-half percent of the average monthly compensation times all years of service after June 30, 1986, over 20 years of total service.

(d) The monthly amount of a retirement benefit for a deferred vested member shall be determined in accordance with (c) of this section as it was in effect on the date of the employee's termination of employment.

(e) Benefits payable under this section accrue from the first day of the month after which all of the following requirements are met: (1) the member meets the eligibility requirements of this section; (2) the member terminates employment; and (3) the member applies for retirement. The benefits are payable the last day of the month. If payment is delayed, a retroactive payment shall be made to cover the period of deferment. The last payment shall be made for the month in which a benefit is payable under this section.

(f) A member who is vested in the plan as a peace officer or firefighter at the time the member incurs a permanent disability of at least 33 1/3 percent under workers' compensation and who (1) undergoes retraining because of the disability; and (2) is subsequently employed with the state or other employer in a position other than peace officer or firefighter, is eligible for a normal retirement benefit as a peace officer or firefighter under (a) and (c) of this section upon completing 20 years of credited service.

(g) When an employee who was employed as a dispatcher in a state trooper office or in a police or fire department in the plan applies for appointment to retirement, the employee may convert the credited service for that position to credited service as a peace officer by claiming the service as peace officer service. An employee who has converted credited service to peace officer service under this subsection shall be treated as a peace officer for purposes of AS 39.35.095 - 39.35.680. When the member claims this credited service as peace officer service, an indebtedness of the member to the plan shall be established. The indebtedness is equal to the full actuarial cost of the conversion of the credited service to treatment as peace officer service. Any outstanding indebtedness that exists at the time the member is appointed to retirement shall require an actuarial adjustment to the benefits payable based upon the conversion of the credited service.

(h) When an employee applies for appointment to retirement in the plan, the employee may convert the credited service to which this subsection applies to credited service as a peace officer by claiming the service as peace officer service. This subsection applies to credited service as an employee of a state correctional facility, other than as a correctional officer or correctional superintendent. This subsection also applies to credited service as an employee of the Department of Corrections in a management position in the division that has responsibility for institutions or the division that has responsibility for community corrections if the employee also has at least five years of credited service as a probation officer, correctional officer, assistant correctional superintendent, or correctional superintendent at a state correctional facility. An employee who has converted credited service to peace officer service under this subsection shall be treated as a peace officer for purposes of AS 39.35.095 - 39.35.680. When the member claims this credited service as peace officer service, an indebtedness of the member to the plan shall be established. The indebtedness is equal to the full actuarial cost of the conversion of the credited service to treatment as peace officer service. Any outstanding indebtedness that exists at the time the member is appointed to retirement will require an actuarial adjustment to the benefits payable based upon the conversion of the credited service. In this subsection,

(1) “correctional facility” has the meaning given in AS 33.30.901; and

(2) “management position” includes positions as division director, deputy director, and assistant director.

(i) For plan fiscal years beginning after December 31, 1975, and notwithstanding any other provision of AS 39.35.095 - 39.35.680, the projected annual benefit provided by AS 39.35.095 - 39.35.680 and the benefit from all other defined benefit plans required to be aggregated with the benefits from this plan under the provisions of 26 U.S.C. 415 may not increase to an amount in excess of the amount permitted under 26 U.S.C. 415 at any time. In the event that any projected annual benefit of a member exceeds the limitation of 26 U.S.C. 415(g) for a limitation year, the plan shall take any necessary remedial action to correct an excess accrued annual benefit. The provisions of 26 U.S.C. 415, and the regulations adopted under that statute, as applied to qualified defined benefit plans of governmental employers are incorporated as part of the terms and conditions of the plan. This subsection applies to any member of this plan.

(j) Notwithstanding (c) of this section,

(1) for the plan fiscal years beginning on or after January 1, 1996, the annual compensation of a member who joined the plan after the first day of the first plan fiscal year beginning after December 31, 1995, that is used to calculate the member's average monthly compensation may not exceed $150,000, as adjusted for the cost of living in accordance with 26 U.S.C. 401(a)(17)(B);

(2) for the plan fiscal years beginning on or after January 1, 2002, the annual compensation limitation for such a member, which is so taken into account for such a member which is so taken into account for such purposes, may not exceed $200,000, as adjusted for the cost of living in accordance with 26 U.S.C. 401(a)(17)(B);

(3) the cost-of-living adjustment in effect for a calendar year applies in this subsection to a determination period beginning in the calendar year.

(k) [Repealed, § 116(a) ch 20 SLA 2007.]