Edited by LM 4/28/22 Not Approved
PERS & TRS Defined Benefit
Retirement information for PERS Tiers I/II/III and TRS Tiers I/II.
Effective January 1,
The purpose of the Alaska Public Employees’ Retirement System (PERS) and the Teachers' Retirement System (TRS) is to attract qualified public employees by offering a variety of benefits to members and their survivors. These benefits, when combined with other income, are designed to provide members with the basis for financial security during their retirement years.
Both you and your employer make contributions to the retirement system during your employment to cover the cost of your retirement benefit. The Alaska Statutes related to the PERS & TRS Defined Benefit (DB) plans are under PERS AS 39.35 and TRS AS 39.35 .
The Director of the Division of Retirement and Benefits serves as the administrator of the PERS and TRS DB Plan by appointment of the Commissioner of Administration. The administrator oversees the day-to-day operation of the systems. The PERS and TRS DB Plan funds consists of employee and employer contributions and investment earnings. The Alaska Retirement Management Board (ARMB) is responsible for overseeing the management and investment of the PERS and TRS funds.
Membership begins when you are employed by a PERS or TRS employer in a qualified position, are receiving PERS/TRS-eligible compensation, and are eligible to make PERS or TRS contributions. Individuals who first entered PERS before July 1, 2006, are members of this plan. Members who first entered on or after July 1, 2006, are members of the Defined Contribution Retirement (DCR) Plan.
Who is a Member of the PERS Defined Benefit Plan?
The following individuals are covered under the PERS and earn membership service in the PERS:
- Permanent full-time or part-time employees and elected officials of the State of Alaska; and
- Permanent full-time or part-time employees and elected officials of participating political subdivisions or public organizations, unless specific employee or job classifications are excluded by Alaska Statutes or participation agreements.
A permanent full-time employee is one who is occupying a permanent position that regularly requires working 30 or more hours a week. A permanent part-time employee is one who is occupying a permanent position that regularly requires working at least 15 hours but less than 30 hours a week.
Members who first entered the PERS:
- Before July 1, 1986, are in Tier I;
- On or after July 1, 1986, but before July 1, 1996, are in Tier II;
- On or after July 1, 1996, but before July 1, 2006, are in Tier III;
- Individuals who first entered PERS on or after July 1, 2006 are members of the PERS DCR Plans.
You must have 5 years of paid-up PERS service to become vested.
Once you are vested, you may terminate your PERS employment and still receive a monthly retirement benefit when you reach retirement age and apply for benefits. You must leave your contributions in the PERS to stay vested.
You will be eligible to retire and receive monthly benefits after you are vested and reach retirement age or meet the minimum service requirements, and apply for retirement.
Learn more about the PERS DB plan in the Public Employees' Retirement System Information Handbook
Learn more about Medicare, Alaska Cost of Living Allowance (COLA), Post Retirement Pension Adjustments (PRPAs), Divorce and Returning to Work after Retirement on the Defined Benefit Retirement Resources page.
The following individuals are not covered under the PERS DB plan and do not earn membership service in the plan:
- Temporary (nonpermanent) employees. Employees may be able to claim their temporary service for additional credit when they become vested;
- Employees who work less than 15 hours per week;
- Employees who participate in the University of Alaska’s Optional Retirement Plan (ORP);
- Individuals who first entered PERS on or after July 1, 2006; and
- Employees excluded from the employer’s participation agreement.
Who is a Member of the TRS Defined Benefit Plan?
- The following individuals are covered under the TRS and earn membership service in the TRS:
- A certificated full-time or part-time elementary or secondary teacher, a certificated school nurse, or a certificated person in a position requiring a teaching certificate as a condition of employment in a public school of the state of Alaska or in the Department of Education and Early Development;
- A full-time or part-time teacher of the University of Alaska, except a teacher at the University who is participating in the University Optional Retirement Program (ORP). University employees who have questions about TRS benefits are encouraged to contact the TRS before enrolling in the University ORP;
- A person occupying a full-time administrative position at the University of Alaska that requires academic standing subject to prior approval of the TRS administrator, except an administrator who is participating in the University ORP;
- An employee who teaches Alaska Native language or culture in a permanent full-time or permanent part-time position with a TRS employer if they have been approved by the Department of Education and Early Development;
- State legislators who were active TRS members within 12 months before their election to office if they elect to participate within 90 days after taking the oath of office. In addition to standard TRS contributions, legislators must contribute an additional percentage equal to the difference, if any, between the TRS and Public Employees’ Retirement System (PERS) employer contributions. TRS legislators are required to earn at least 0.3 years of membership service during each five-year period;
- Special Education Service Agency (SESA) employees if they possess or are eligible to possess a teaching certificate;
- A member on approved sabbatical leave;
- A member on leave without pay or receiving workers’ compensation benefits because of being assaulted while on the job; and
- A member called to active duty military service during their TRS employment.
Members who first entered the TRS:
- Before July 1, 1990, are in Tier I;
- On or after July 1, 1990, but before July 1, 2006, are in Tier II;
- Individuals who first entered TRS on or after July 1, 2006 are members of the TRS DCR Plans.
You will be vested in the TRS when you have at least eight years of paid-up years of membership service or 12 school years of part-time membership service or 12 school years in which the member earned part-time or full-time membership service.
Once you are vested, you may terminate your TRS employment and still receive a monthly retirement benefit when you reach retirement age and apply for benefits. You must leave your contributions in the TRS to stay vested.
You will be eligible to retire and receive monthly benefits after you are vested and reach retirement age or meet the minimum service requirements, and apply for retirement.
Please note: the following individuals are not covered under the TRS DB plan and do not earn membership service in the plan:
- Those teaching as an assistant or graduate assistant, or teaching on a substitute, temporary or per diem basis;
- A teacher occupying a position requiring teaching on a regular basis for less than 50% of the normal workweek;
- Individuals who do not have a valid teaching certificate but are working in a position that requires a teaching certificate as a condition of employment a public school of the state, the Department of Education and Early Development, or the Department of Labor and Workforce Development;
- Employees who participate in the University of Alaska’s Optional Retirement Plan (ORP); and
- Individuals who first entered TRS on or after July 1, 2006.
Simultaneous PERS and TRS Credit
If you are a member of the PERS DB Plan and the TRS DB Plan at the same time, you may receive partial credit under both systems. To be eligible, you must be employed at least half-time in both the PERS DB and the TRS DB concurrently and you must make the required contributions.
The total PERS DB and TRS DB credit that you may earn during a school year (July 1 through June 30 of the following year) may not exceed one year.
Most PERS DB plan employees contribute 6.75% of their gross PERS eligible salary to PERS. If you are a peace officer or fire fighter, then you contribute 7.5% of your gross salary. If you are a noncertificated school district employee, you work less than 12 months a year, and you’ve selected the alternate service option, you contribute 9.6%
The contributions you make to the PERS DB Plan are deducted from your gross salary and sent to the PERS at the end of each pay period. You earn 4.5% interest a year, compounded semi-annually, on your employee contribution account. This interest is posted to your account on June 30 and on December 31 of each year.
PERS DB Plan employee mandatory contributions are pretax deductions from your salary.
Your employer contributes a percentage of your salary each pay period. This amount may change each year based on actuarial funding requirements. The employer contributions are not part of the employee contribution account.
PERS Voluntary Savings Plan
The PERS Voluntary Savings Plan, also known as the Employee’s Savings Account, is an account funded solely by your post-tax, voluntary contributions. Contributions made to the Voluntary Saving Plan are separate and completely independent of the mandatory contributions that you are required to make to the PERS.
Any active PERS Tier I, II, or III employee making mandatory contributions to the PERS is eligible to enroll in the Voluntary Savings Plan
Enrollment into the plan can occur at any time and will take effect the first of the month following receipt of your enrollment form. You are eligible to contribute a minimum of $5.00 and up to a maximum of 5% of your eligible gross salary to the plan. Your voluntary contributions earn 4.5% interest annually, compounded semi-annually. When you withdraw the account at retirement, you may take your withdrawal in the form of a lump sum payment, life annuity or in installments over a designated period of time. If you elect to take a withdrawal while employed, you may take a full or partial lump sum payment.
TRS DB plan employees contribute 8.65% of base salary each pay period. Contributions are taken up to the maximum salary allowable under the IRS 401(a)(17) limits for the year.
TRS DB Plan employee mandatory contributions are pretax deductions from your salary. You earn 4.5% interest a year, compounded annually on June 30 of each year.
PERS & TRS Annual Statement
Every year you will receive an Annual Statement of Account for the prior year. The statement you receive in the fall of for example, is for the period July 1, , through June 30, .
Your PERS/TRS DB Plan statement provides you with information regarding your mandatory contributions, interest earned, indebtedness principal, and indebtedness interest paid. The Statement of Credited Service shows your employer, occupation, status, begin date, end date, total years of service (both credited and claimed), and your personal information. The years of service and account balance reflect what has been reported to the PERS/TRS by your employer. Contact your employer if you believe there is a discrepancy on your Annual Statement. Your statement also includes general estimates of benefits you may be eligible for in the future. These estimates are designed to provide you with an idea of the value of your PERS/TRS DB Plan benefit and are not a promise of benefits to be paid.
Any benefits payable upon your death will be paid to your primary beneficiary or, if that person is deceased, benefits will be paid to your contingent beneficiary.
If you are married at the time of your death and you were married to the same person during part of your PERS/TRS employment, your spouse is automatically the primary designated beneficiary. If you wish to elect another person as your primary beneficiary, your spouse must provide written consent. Consent is not required if you were married for less than two years and you and your spouse were not living together when the designation was changed.
If a member designates a spouse as a beneficiary and is subsequently divorced or a dissolution or legal annulment of the marriage is granted, the beneficiary designation is void and the former spouse is no longer the beneficiary. If after the divorce, dissolution, or annulment, the member wishes to name the former spouse as a beneficiary, a new beneficiary form must be completed and submitted.
When a minor child is designated as the beneficiary, the death benefit will be paid to the child’s parent or legal guardian (the PERS/TRS cannot pay benefits directly to a minor). If you do not want the child’s benefit to be paid to that person, have your attorney set up a trust and designate the trust as the beneficiary. Be sure to include the name of the trustee on the beneficiary form
PERS Service Credit
The cornerstone of the PERS DB Plan retirement benefit is a pension calculated using a formula that includes your entry date, years of service, and average monthly salary. Average Monthly Salary (AMS) is based on your high three or your high five consecutive years earnings subject to your occupation and your tier status. Service can include direct PERS membership service and other forms of service credit that can be claimed by members.
You receive service credit for each day of PERS covered employment. To receive credit for holidays and weekends you must work the day before and the day after. Permanent part-time employees who work at least 15 hours per week, but less than 30 hours, receive credit on a proportionate basis.
The following types of paid PERS service count toward vesting and retirement eligibility but must be claimed for credit:
- Permanent full-time and part-time employment with a PERS employer while the employer is participating in the PERS. Some PERS employers have agreed to pay additional contributions to allow employees to receive credit for their earlier service before the employer joined the PERS;
- Part-time State of Alaska service from 1961–1975;
- Earlier service before January 1, 1961;
- Past peace and correctional officer, fire fighter, and special officer service;
- Elected official service;
- Alaska Bureau of Indian Affairs service in an Alaskan School;
- Leave Without Pay (LWOP) service after June 12, 1987, while receiving Workers’ Compensation; and
- Call to active duty military service during your PERS employment.
PERS Leave Without Pay (LWOP)
LWOP that exceeds 10 working days in any calendar year is not creditable under the PERS. If you have inappropriately received credit for LWOP on your PERS Statement of Credited Service, you should notify your employer immediately so your records may be corrected.
Accruing PERS Service
A PERS permanent full-time member (those who regularly work 30 or more hours per week) earns a day of service credit for each day they are actively employed in a PERS-covered position. This includes holidays or regularly scheduled days off (RDO), as long as they are in pay status the day before and the day after the holiday or RDO.
A PERS part-time member (those who regularly work at least 15 hours per week but less than 30 hours per week) receives credit for the number of hours they work. A total of 1,560 hours must be earned to receive a year of service credit. However, service accrued for a stated period of part-time service may not exceed the full-time equivalent.
Working a Reduced Work Week in PERS
Whether you work a reduced work day or work fewer days in the week, if you are regularly scheduled to work 30 or more hours a week you will continue to accrue service as a full-time member. However, if you are in the defined benefit plan this reduction to your work week may have an impact on the Average Monthly Salary (AMS) used to calculate your retirement benefit. For Tiers I and II, and for peace officer/firefighters the AMS is based on the three high consecutive salaries. For Tier III, the AMS is based on the high five consecutive salaries. (All Tiers must work at least 115 days in the last year of employment for that year’s salary to be considered one of the high salaries.)
If you reduce your work schedule to regularly work less than 30 hours per week, you will be a part-time member and your service will be calculated accordingly.
PERS Claimed Service
You may purchase certain types of service credit in order to increase the number of service years used in the calculation of your retirement benefit. The cost differs depending on the type of service you are eligible to claim.
The following types of service credit can be purchased in the PERS:
- Full-time temporary service;
- Military service;
- Alaska Bureau of Indian Affairs;
- Village Public Safety Officer service;
- Rural Public Safety Officer service;
- Workers’ Compensation; and
- Temporary Legislative service prior to July 1, 1979.
Military service that did not occur during your PERS employment does not count toward retirement eligibility, but the service may increase your PERS credit. In certain circumstances PERS Tier II and Tier III Police and Fire members may have an option to convert their claimed military service credit to help them meet service eligibility criteria for a system-paid medical coverage at retirement.
Temporary service can count toward retirement eligibility in certain circumstances. Contact the Division for more information.
Find additional brochures about the individual services above on the Forms & Documents page.
TRS Service Credit
The cornerstone of the TRS DB Plan retirement benefit is a pension calculated using a formula that includes your entry date, years of service, and final average salary. Service can include direct TRS membership service and other forms of service credit that can be claimed by members.
You receive credit for membership service based on the number of days worked during the school year from July 1 to June 30 of the following year. Membership service is credited as follows:
|Membership Service Chart
Full-Time Service Minimum Requirements
|Days Worked||Service Credit|
|0 to 8 days||=||no credit|
|9 to 26 days||=||0.1 year|
|27 to 44 days||=||0.2 year|
|45 to 62 days||=||0.3 year|
|63 to 80 days||=||0.4 year|
|81 to 99 days||=||0.5 year|
|100 to 117 days||=||0.6 year|
|118 to 135 days||=||0.7 year|
|136 to 153 days||=||0.8 year|
|154 to 171 days||=||0.9 year|
|172 days or more||=||1.0 year|
Service performed on a part-time basis will be credited in proportion to the amount of credit that would have been received for service performed on a full-time basis. For example, if you work 188 days and you work 75 percent of the time, you will accrue 0.7 years of service.
You are not eligible for TRS coverage if:
- You work less than 50 percent of the normal work week or work day on a regular basis; or
- You are employed as an assistant, graduate assistant, or are teaching on a substitute, temporary, or per diem basis
Sabbatical Leave Credit
Sabbatical leave is membership service and counts toward vesting and retirement eligibility. You may receive membership credit if:
- You have been granted an approved sabbatical leave;
- You pay the employee contributions and your employer pays the employer contributions to the TRS each month based on the salary you earn while on sabbatical leave; and
- You return to your teaching position for a full year after your sabbatical leave ends. If you are unable to return because of sickness, injury, or death, this requirement does not apply.
When you retire, the actual salary that you were paid while on sabbatical leave will be used in the benefit calculation if it is one of your three highest salaries.
TRS Claimed Service
You may purchase certain types of service credit in order to increase the number of service years used in the calculation of your retirement benefit. The cost differs depending on the type of service you are eligible to claim.
The following types of service credit can be purchased in the TRS:
- Military service;
- Call to Active Military Service;
- Inactive Leave Without Pay;
- Outside service; and
- Workers’ Compensation
Claiming Unused Sick Leave
When you retire, you may receive additional TRS credit by claiming your unused sick leave. To be eligible:
- You must have been an active TRS Defined Benefit member after June 30, 1977, and
- Your claim for unused sick leave, as verified by your last employer, must be received by the TRS no later than one year after you are appointed to retirement.
PERS Retirement Eligibility
You will be eligible to retire and receive a monthly pension benefit if you are vested and meet the following age requirements:
- Age 55 for normal retirement or age 50 for early retirement if you first entered the PERS before July 1, 1986 (Tier I); or
- Age 60 for normal retirement or age 55 for early retirement if you first entered the PERS on or after July 1, 1986 (Tier II or Tier III).
Under early retirement your monthly benefit is actuarially reduced based on your age. The closer you are to normal retirement age, the smaller the reduction. The early retirement reduction is effective for the lifetime of the benefit. Vested members who have terminated PERS employment and have reached normal retirement age will not receive larger monthly benefits by waiting until they are older to retire.
PERS Service-Based Requirements
You will be eligible to retire and receive a monthly pension benefit after you reach retirement age and satisfy the following service requirements.
You must have at least:
- Five paid-up years of PERS service;
- Two paid-up years of PERS service if you are vested in the Teachers’ Retirement System (TRS). See Conditional Service Benefit for more information;
- Two paid-up years of PERS service and your transferred nonvested TRS service combined equals a minimum of five years. See Public Service Benefit;
- If you were first hired as a legislative employee before May 30, 1987, you may retire with 60 days of paid-up service during each of five legislative sessions; or
- If you were first hired as an employee of the legislature after May 29, 1987, you may retire with 80 days of paid-up service during each of five legislative sessions.
You may be eligible to retire at any age and receive a normal, unreduced monthly pension benefit if you have:
- 30 paid-up years of PERS membership service; or
- 20 paid-up years of PERS service as a peace officer or fire fighter.
Military credit may not be used to satisfy the 20 or 30 years needed to retire. Temporary credit may be used to satisfy the 20 or 30 years needed to retire under certain circumstances. Contact the Division for more information.
Refunded service that has not been fully repaid cannot count towards retirement eligibility.
PERS Pension Benefit Calculation
Your normal retirement benefit will be calculated by multiplying the percentage multipliers times your average monthly salary (AMS) times your PERS credit service.
AMS for PERS Tier I, II (and Tier III Peace Officers or Firefighters)
Your AMS is determined by adding together the compensation that you earned during your three highest consecutive payroll years and dividing the total by the number of months and partial months worked during that same time period. You must have at least 115 days of credited service in the last payroll year worked to include that year as one of your three highest.
EXAMPLE Year Salary Months 2010 $30,000 12 2011 $27,500 11 2012 $15,000 6 $72,500 divided by 29 months equals $2,500
AMS for PERS Tier III (Excluding Peace Officers or Firefighters)
Your AMS is determined by adding together the compensation you earned during your five highest consecutive payroll years and dividing the total by the number of months and partial months worked during that same time period. You must have at least 115 days of credited service in the last payroll year worked to include that year as one of your five highest.
EXAMPLE Year Salary Months 2008 $30,000 12 2009 $27,500 11 2010 $30,000 12 2011 $15,000 6 2012 $15,000 6 $117,500 divided by 47 months equals $2,500
Benefit Calculation for All Others in the PERS
Benefits for “all other” members will be calculated using the formula as follows:
- 2% for all service earned up to 10 years times AMS, plus
- 2.25% per year for all service over 10 years, but less than 20 years times AMS, plus
- 2.5% per year for all service over 20 years times AMS
Benefit Calculation for Peace Officers or Fire Fighters
If you are a peace officer or fire fighter, then your pension benefit in the PERS Defined Benefit Plan will be calculated based on the three highest consecutive payroll years regardless of when you first entered the PERS.
The percentage multipliers for peace officers and fire fighters are:
- 2% for their first 10 years of service times AMS
- 2.5% for service over 10 years times AMS
Minimum PERS Benefit
The minimum monthly benefit for eligible members is $25 for each year of PERS service. For example, a member with 10 years of service is eligible for a minimum monthly benefit of at least $250 per month.
Please note: the PERS benefit will be reduced if an actuarial adjustment is necessary for early retirement, indebtedness, or a joint and survivor option. The benefit will be increased if the member is eligible for the Alaska Cost-of-Living Allowance (COLA) or a Post Retirement Pension Adjustment (PRPA).
TRS Retirement Eligibility
You meet eligibility requirements for retirement under the TRS DB plan either by age or by service. Age eligibility requirements are as follows:
- Tier I - First entered TRS on or before July 1, 1990
Early retirement age 50 if vested, and normal - age 55 if vested.
- Tier II - First entered TRS on or after June 30, 1990
Early retirement age 55 if vested, and normal - age 60 if vested.
You may be eligible to retire with a lifetime continuing monthly pension benefit from the TRS only if you meet a vesting requirement, or if you meet minimum service eligibility criteria for a conditional benefit under the TRS.
- Eight paid-up years of TRS membership service;
- 12 paid-up years of TRS service credit as a part-time or full-time member;
- Two paid up years TRS membership service credit if you are vested in the Public Employees’ Retirement System (PERS). See Conditional Service benefit for more information;
- One year of paid TRS service if you are retired from the PERS. See Conditional Service benefit for more information;
You may be eligible to retire at any age and receive a full unreduced pension benefit if you meet one of the service eligibility criteria:
- Have 20 years of retirement eligibility service credit; or
- Have 25 years of paid-up credited service with your last five years being Alaska TRS membership service credit. (This does not meet the 25 years of membership service credit requirement for a system-paid medical coverage for TRS Tier II members.)
Refunded service that is not fully repaid does not count towards vesting or the service-based retirement eligibility.
You should know retirement eligibility criteria for your tier so you can timely apply for your benefits under the TRS DB plan. The Division of Retirement and Benefits recommends that you request your TRS retirement application packet at least 120 days before your anticipated retirement date. You may download a PDF version of the TRS retirement application packet from the Division’s website. It is your responsibility to initiate the retirement process.
By law, your retirement benefits effective date will be the first of the month after the following requirements are met:
- You meet the minimum service or age requirements for retirement. You should not leave employment until you are absolutely certain that you are eligible to retire.
- You have established bona-fide separation from employment with your last TRS-participating employer. Note: If you terminate your employment on the first day of the month, you will not be appointed to retirement until the following month.
- Your completed TRS Retirement Application is received by the Division of Retirement and Benefits prior to your benefits effective date.
Note: If you have worked 172 days in this school year, your soonest retirement date would be July 1.
TRS Benefit Calculation
Your average base salary (ABS) is determined by adding together your three highest contract salary divided by three (3). You must have worked at least 115 days in the school year for that contract salary to be used as one of your three high.
Average Base Salary example for TRS Tier I and Tier II
School Year Full Contract Salary Number of School Years 2009-2010 School Year $58,000 1 2010-2011 School Year $60,000 1 2012-2013 School Year $62,000 1 $180,000 divided by 3 equals $60,000
Benefit formula for TRS Tier I and Tier II
Benefits for TRS Defined Benefit plan members will be calculated using the formula as follows:
- 2% times up to the first 20 years of service credit times ABS, plus
- 2.5% times all service credit years over 20 times ABS
Please note: the TRS benefit will be reduced if an actuarial adjustment is necessary for early retirement, indebtedness, or a joint and survivor option. The benefit will be increased if the member is eligible for the Alaska Cost-of-Living Allowance (COLA) or a Post Retirement Pension Adjustment (PRPA).
PERS & TRS Retiree Health Benefits
New benefit recipients who meet eligibility criteria for system-paid medical coverage under the PERS or TRS defined benefit plan will be covered under the State of Alaska Retiree Health Plan (AlaskaCare) as of their retirement effective date. Those who are not eligible for system-paid medical coverage at retirement, may choose to pay a full premium rate for retiree medical coverage. If you elect to self-pay premiums for retiree health coverage at retirement under the PERS or TRS defined benefit plan, you would be covered as of your retirement benefits effective date. Your spouse or your eligible dependent children could be also covered under the retiree health benefits if they qualify as health dependents under your retiree health plan.
Your retirement application should be filed with the Division a minimum of 60 days prior to your retirement effective date. If the Division does not receive your application by this requested time, eligibility reporting to the health carrier may be delayed. To ensure a smooth transition with your health insurance coverage, please submit your retirement application early.
When your application is received, a health plan welcome kit with information and forms will be sent to you. This will be confirmation that your eligibility is being reported to the claim administrator. Your health insurance identification cards will be mailed to you shortly after your eligibility has been reported. At that time, you will be able to file for reimbursement of any covered medical services that occurred since your retirement date.
When you are eligible to retire, you can choose among the following options:
- Normal or Early Retirement.
- Level Income Option (available if you entered the PERS before July 1, 1996 and is not available for TRS members);
- Joint and Survivor Options (50% or 75%); or
- 66 2/3% Last Survivor Option (available if you entered the PERS before July 1, 1996 and is available for TRS Tier I and II)
- 1% Supplemental Benefit (available if you first entered theTRS prior to July 1, 1982 and made the 1% additional contributions and is not available for PERS members)
If you select early retirement or one of the joint and survivor options, the normal retirement benefit amount will be reduced. If you are married, you are required to select a joint and survivor option unless your spouse provides a notarized consent by waiving any potential survivor benefits under your PERS or TRS defined benefit plan.
Before selecting your benefit option, you should be aware of the advantages and disadvantages of each option. We recommend you contact the Division of Retirement and Benefits to schedule your pre-retirement counseling session prior to applying for retirement benefits.
This option provides an unreduced lifetime monthly benefit for you. It will NOT provide a continuing lifetime monthly benefit to your spouse after you die. All benefits, including retiree medical benefits, cease at your death.
If you do not choose a joint and survivor option, your beneficiary will receive the balance of your contribution account, if any, at the time of your death. If the benefits that you received before your death exceeded the amount in your account, your beneficiary may receive your last month’s retirement check, if applicable.
If you select a joint and survivor option, your normal retirement benefit will be reduced.
Early retirement allows you to retire up to five years earlier. Your lifetime monthly benefit will be reduced by an early factor to offset the additional years of benefit you will receive.
If you don’t choose a joint and survivor option, your beneficiary will receive the balance of your contribution account, if any, at the time of your death. If the benefits that you received before your death exceeded the amount in your account, your beneficiary may receive your last month’s retirement check, if applicable.
If you select a joint and survivor option, your early retirement benefit will be further reduced.
Level Income Option
If you first entered the PERS before July 1, 1996 (Tier I or Tier II), you can choose the Level Income Option. You will receive a higher retirement benefit until age 65, and a reduced benefit amount after age 65 for the rest of your life. You cannot select this option if you wish to choose a joint and survivor option.
Level Income Option is not available for TRS members.
Conditional Service Benefit
You may be eligible for a conditional service benefit from the PERS if meet eligibility criteria as follows:
- you are vested in the TRS,
- you are eligible for an early or normal retirement benefit under the TRS, and
- you have at least two paid-up years of PERS membership service credit.
Conditional service benefits could be calculated based on the highest salaries that are earned in either system. For example, TRS salaries (if higher) will be used to calculate PERS conditional benefits and PERS salaries (if higher) will be used to calculate TRS conditional benefits. However, TRS salaries may not be used to calculate regular PERS retirement benefits, unless the member is vested in both systems.
Members who are eligible to receive conditional service benefits are NOT vested unless they satisfy the vesting requirements.
Also eligible for PERS conditional service benefits are those who are legislative employees:
- If hired before May 30, 1987, legislative employees must have at least 60 days of paid-up service during each of five legislative sessions; or
- If hired after May 29, 1987, and before June 30, 2006, legislative employees must have at least 80 days of paid-up service during each of five legislative sessions
Eligible legislative employees receive credit for each day they were in a paid status.
You may be eligible for a conditional service benefit from the TRS if you are eligible to retire from the PERS and have a minimum of two years of paid-up membership service credit in the TRS. If you are retired from the PERS, you may receive a conditional service benefit from the TRS with only one year of paid-up TRS membership service credit.
PERS Public Service Benefit
If you are not vested in either PERS or TRS, you may be able to combine your PERS defined benefit and TRS defined benefit service under the public service benefit provision in the PERS. This allows you to combine your PERS and TRS service to reach the minimum of five years of membership service credit required to receive a benefit under the PERS. You must have a minimum combined total of five years of membership service credit in both the PERS and the TRS with a minimum of two years in the PERS. Contact the Division to find out if this provision applies to you and what the related cost could be.
Retirement benefits are taxable by the federal government upon receipt. However, a portion of your monthly benefit may be tax excludable. The federal government requires the tax excludable amount be calculated based on your total contributions which have been taxed (Chart I) and a factor which takes into account your life expectancy. If a survivor’s benefit will be payable after your death, your spouse’s life expectancy will also be taken into account. This results in a payout of your tax excludable contributions over your expected lifetime. Chart II shows those contributions and interest which have not been taxed and are subject to federal income tax. You will be notified of the tax excludable portion after your final contributions are received from your employer.
Chart I. Tax excludable contributions that have been taxed
- PERS Members—Mandatory employee contributions made before January 1, 1987, indebtedness principal and interest payments, and any contributions.
- TRS Members—Mandatory employee contributions made before January 1, 1991; indebtedness principal and intrest payments.
Made with after-tax dollars.
Chart II. Contributions & interest subject to federal income tax.
- PERS Members—Mandatory employee contributions made after December 31, 1986; and all interest earned on employee contribution amounts.
- TRS Members—Mandatory employee contribution made after December 31, 1990; and all interest earned on employee contribution amounts.
Local and State Taxes
Although Alaska does not have a state income tax, members who live outside Alaska may be required to pay state and local income taxes on benefits they receive. Check with a tax expert in your area for more information. The Division is not able to withhold state income tax from your pension check.
Taxation of Disability Benefits
PERS nonoccupational disability benefits and TRS disability benefits are taxable as income upon receipt. PERS occupational disability benefits are generally excluded from taxation. Members who entered PERS prior to July 1, 1977 have different options for occupational disability, some of which are taxable. Contact the division for more information if you are in this category. Occupationally disabled peace officers and firefighters who elect to continue their disability benefit calculation at normal retirement will go from nontaxable to taxable status. This is because the disability benefit becomes a normal retirement benefit, and no longer meets IRS rules regarding occupational disability.
Taxation of Survivor’s Benefits
Monthly survivor’s benefits are taxable by the federal government upon receipt. However, a portion of the monthly survivor’s benefit may be tax excludable depending on the member’s circumstances at the time of death. The tax excludable amount is calculated based on your total taxed monthly contributions and factoring your spouse’s life expectancy. The tax excludable contributions are then paid out over your spouse’s lifetime.
Tax Excludable Employee Contributions
Most members who made “after-tax” contributions to their retirement account will see a taxable amount different than their total gross distribution. The difference will be the amount of your benefit that is excludable from federal taxes.
Withholding Certificate for Pensions or Annuity Payments
You may change your withholding option at any time by submitting a new W-4P to the division. When you are appointed to receive monthly benefits, federal income tax will automatically be withheld from your benefit. If you do not send the Division of Retirement and Benefits a W-4P specifying one of the withholding options, the tax rate for a single person with zero adjustments will be used to determine the withholding amount. This is according to Internal Revenue Service regulation. You may elect no withholding and pay your taxes directly to the IRS. In that case, you should contact the IRS about filing requirements and deadlines.
1099-R Statement for Recipients of Distributions from Retirement Plan
Each January, you will be sent a 1099-R showing the benefit payments and federal income tax withheld from your checks during the previous calendar year.
During the tax year in which you turn age 59½, you will receive two 1099-Rs. You will notice a different code in box number seven (7) for each one. Each 1099-R will reflect a gross distribution, taxable amount, and employee contributions, equal to the applicable period covered. When you receive more than one 1099-R, the totals for each should be combined to determine your total taxable distribution.
What you should know before you take a refund
When you leave employment you may ask for a refund of your employee contributions. To request a refund complete the form below and email it to or contact the Member Services Contact Center.
If your account balance is $5,000 or more, your signature must be witnessed by a DRB representative, postmaster, or notary.
If you are married and your account balance is more than $5,000, you must have your spouse fill out section C of the form. If you are divorced, the Division must have proof that your ex-spouse doesn't have a right to part of your retirement account. Send court-certified copies of the divorce decree and property settlement to the Division of Retirement and Benefits, if you have not already done so.
If the court has assigned a portion of your future monthly benefit to your former spouse by a Qualified Domestic Relations Order (QDRO), the QDRO must be amended to allow for a lump sum payment. Contact the Member Services Contact Center for more information.
You will be eligible for your refund payment when you have ended your employment for at least 60 days or 30 days after the Refund Election form has been received, whichever is later.
You may only refund your employee contributions. This includes:
- required contributions from your paycheck
- indebtedness payments (if any were made)
- mandatory interest earned
A refund will not include any contributions made by your employer to the retirement system or any income earned on employer contributions.
Two Forms of Payment
There are two ways to receive a refund payment:
- A one-time payment
- A direct rollover
You may rollover your refund only into a qualifying plan. Please read the Refund Election Form instructions about your choices for payment or rollover. You may want to speak to a tax advisor before making a decision. The Division of Retirement and Benefits does not give tax advice.
Taxes and Your Refund
If your contributions have already been taxed, no more taxes or penalties will be taken from them. This includes indebtedness payments you may have made with after-tax dollars.
Your contributions which have already had taxes paid on them may not be rolled over into an Individual Retirement Arrangement (IRA).
The federal government may charge a penalty when untaxed PERS and TRS contributions and interest are refunded in one lump-sum before age 59-1/2.
The PERS and TRS must withhold 20 percent federal income tax on all untaxed, lump-sum accounts directly refunded to members. The 20 percent tax does NOT apply to PERS or TRS refunds that are rolled DIRECTLY into an IRA, or other qualified plans.
The following have NOT been taxed at the time of contribution:
- PERS Members—Mandatory employee contributions made after December 31, 1986; and all interest earned on those employee contribution accounts.
- TRS Members—Mandatory employee contributions made after December 31, 1990; and all interest earned on those employee contribution accounts.
You may become eligible for retirement benefits based on service you refunded if you:
- are re-employed with a PERS employer prior to July 1, 2010;
- pay back the refund you received plus compound interest at 7%;
- go back to work and become vested in the retirement system again.
Interest and Your Refund
For PERS refunds issued before July 1, 1977, interest accrues at a rate of 7 percent from the first of the month following the date of your return to PERS employment.
For TRS refunds issued before July 1, 1977, interest accrues at a rate of 7 percent beginning July 1 following the date of your return to TRS employment.
For both PERS and TRS refunds issued July 1, 1977 and after, interest will accrue at a rate of 7 percent beginning the date of the refund.
After you receive a full refund of your contributions, if you are reemployed in a PERS or TRS position you will be enrolled in the PERS or TRS defined contribution plans. Former members were advised by the PERS and TRS to reemploy prior to July 1, 2010 to reinstate a full refund of contributions to the PERS and TRS. Former members who did not reemploy prior to that date can no longer reinstate their refunded service.
For questions on refunds please contact the Member Service Center. For more information please follow the links below:
In Alaska, retirement benefits from the following retirement systems are considered to be jointly “owned” by members and their spouses.
- Public Employees’ Retirement System (PERS) Tiers I, II, and III,
- Teachers’ Retirement System (TRS) Tiers I, and II,
- Judicial Retirement System (JRS),
- National Guard Naval Militia Retirement System (NGNMRS),
- Alaska Supplemental Annuity Plan (SBS-AP), and
- Alaska Deferred Compensation Plan (DCP)
Upon a divorce or dissolution of marriage, these benefits may be divided between you and your spouse or awarded to you only. The following points should be considered if you end your marriage.
Prior to your retirement from the PERS or TRS you will need to submit to the Division of Retirement and Benefits applicable Court Certified Copies of your Divorce/Dissolution documents associated with your earlier marriage that resulted in divorce or dissolution. Documents we normally require are listed below:
- Decree of Divorce/Dissolution
- Petition for Dissolution of marriage (if applicable)
- Findings of Facts/Conclusions of Law (if applicable)
- Property Settlement Agreement
- Any other documents that could be addressing your State of Alaska PERS or TRS retirement account(s).
If you do not have a court-certified copy, you will need to contact the Trial Court that processed your divorce. Court certified copies are distinguished by a stamped Seal of the Court. If you have a certified copy of your documents, you may submit them electronically, by scanning and attaching these documents to an email and sending them to the Attachments/QDRO Section: .
You may also mail a hardcopy of your Dissolution documents to this office:
Att. Attachments Unit
Division of Retirement Benefits
P.O. Box 110203
Juneau, AK 99811-0203
Benefits Do Not Have to be Split
Generally, retirement benefits are considered jointly held assets in a similar manner as the house, the car, bank accounts, or other items of value. But, at times, benefits are not divided if the member and spouse have agreed to exchange other assets instead of splitting the retirement benefits.
If you retain full “ownership” of your benefit, your property settlement must clearly state your account is not to be divided and you have full ownership-- specify the retirement plan by name. If you have multiple accounts (like PERS, SBS-AP, and DCP), your divorce or dissolution documents should individually name each account and clearly declare your former spouse has no claim against that specific account. Do not group your various accounts together under a generic term such as “Retirement Benefits.”
You must submit to the division court-certified copies of your divorce or dissolution documents, including any attachments that may address your retirement plans. If the documents show your benefits were not split, your accounts will be cleared from any attachment from your divorce or dissolution. If your benefits were divided, additional information will be needed.
If PERS, TRS, JRS, or NGNMRS Benefits are Divided
PERS, TRS, JRS, and NGNMRS all allow a former spouse to have an entitlement to a portion of the member’s benefit. However, certain rules apply:
- The accounts are not divided at the time of the divorce or dissolution;
- The member retains the right to decide when to retire and has great latitude relative to the retirement option elected;
- The former spouse (called the “alternate payee”) is entitled to only some portion of the member’s monthly benefit payment;
- The alternate payee’s portion is paid only when the member receives benefits; and
- The alternate payee may not name beneficiaries for continued payments after his or her death.
Qualified Domestic Relations Orders (QDROs)
A qualified domestic relations order (QDRO) is a specialized court order that is usually processed at the same time as the divorce or dissolution (processing could happen later after the final decree of divorce or dissolution has been issued). This document authorizes the Division of Retirement and Benefits to make payments to both you and your former spouse.
QDRO if Not Yet Retired
Under the PERS, TRS, JRS, and NGNMRS, a stream of payments QDRO may be filed that will divide your future benefit once you are receiving those benefits. Your former spouse is considered an alternate payee and will receive payments directly from the retirement system. Your retirement contribution account cannot be split and your alternate payee does not have a choice in benefit options. The future payments to your Alternate Payee (your ex-spouse) could be expressed as one of the following:
- A specified amount;
- A percentage of your total benefit; or
- A formula using your years of “marital” service credit based on dates of your marriage.
QDRO & Survivor Benefits
A QDRO may award a portion of your benefit to your former spouse as a survivor’s benefit in the event you die before you are eligible to retire. If you have remarried before your date of retirement, the survivor’s benefit may be split between your former spouse and your spouse at the time of retirement. Your alternate payee’s survivor benefit would be calculated on the percent granted by the QDRO. Your current spouse could be entitled to the remainder.
The QDRO could require that you must select one of the survivor options when you apply for retirement benefits. Your alternate payee would then receive a prorated survivor benefit if he or she survives you. In most cases the “cost” of providing the survivor benefits to your former spouse will be shared, but can be assigned to either you or to your former spouse. The “cost” is expressed as an actuaria reduction to your benefit and is based on your age, the age of your alternate payee, and the prorata share of the benefits set out in the QDRO.
If you have remarried before applying for retirement benefits, you may have an option to elect survivor benefits for your current spouse, unless the QDRO required that your former spouse must be recognized as a sole survivor under your PERS or TRS account.If you are eligible to select survivor benefits also for your current spouse (your spouse at retirement), you may select a different Joint and Survivor benefit option than the one covering your former spouse. After your death, your spouse and your former spouse may share the survivor benefit on a pro-rata basis.
Survivor benefits for members of the Judicial Retirement System (JRS), and members of the Teachers’ Retirement System (TRS) who have elected to participate in the 1% Supplemental Contribution Option work differently. If you are one of these members you should contact the Division for specific information on potential survivor benefits available.
Medical benefits are not automatically provided by the retirement plan to former spouses. However, an alternate payee may purchase medical coverage if they are awarded a continuing monthly benefit from your PERS or TRS defined benefit retirement plan.
Where to Get Help
Dividing benefits is a legal matter and many use the services of lawyers. Whether you obtain legal counsel or prepare the documents yourself, all of the legal requirements involving your benefits must be resolved before any benefits could be paid from the TRS or PERS to you or your Alternate Payee (your ex-spouse).