PERS & TRS Defined Contribution Retirement Plan

All employees that enter service with a participating Public Employees Retirement System (PERS) or Teachers Retirement System (TRS) employer after June 30, 2006, for the first time are automatically entered into the DCR Plan. Participation is dependent on the employer’s Participation Agreement and amendments.

The Alaska PERS and TRS Defined Contribution Retirement plan (DCR plan) is a defined contribution plan governed by Section 26 U.S.C. § 401a of the Internal Revenue Code. A portion of your wages and a matching employer contribution are made to this Plan before tax. Vested contributions, plus any change in investment value, are payable to you or your beneficiary at a future date. The Plan is a participant-directed plan with investment options offered by the Plan. The providers of these investment options were selected by the Alaska Retirement Management (ARM) Board.

The PERS/TRS DCR plan is a comprehensive plan. It includes the defined contribution investment account and benefits that are traditionally associated with defined benefit retirement plans, such as occupational death and disability benefits and retiree medical insurance. Also included in the plan is a separate Health Reimbursement Arrangement (HRA) account that will help eligible members pay medical premiums and other eligible medical expenses.

Important Documents:

• AlaskaCare Defined Contribution Plan Retiree Insurance Information Booklet
• PERS/TRS Defined Contribution Retirement System Information Handbook
• PERS DCR Overview
• TRS DCR Overview
• PERS Plan Highlights
• TRS Plan Highlights

Empower is the contract record keeper for the PERS/TRS Defined Contribution Retirement (DCR) plan. They process all payments for the DCR plan, the Supplemental Annuity (SBS-AP) plan and Deferred Compensation Plan (DCP).

For additional information, please watch the Defined Contribution Retirement Plan (DCR) educational videos.

Plan Expenses

There are no front-end loads for investments. Expenses are charged to your account in order to cover the cost of Plan administration.

There are two types of fees: a monthly fee based on a 0.1275% annual rate on assets (0.001275 / 12 x month-end asset balance), plus a fixed fee (charged annually) of $35 for actively contributing participants, or $25 for non-contributing members. This fee is charged to your account each July. In addition, the funds have annual investment expenses that vary depending on the funds you choose. The returns are net of these costs. For more detailed information, please visit Empower's website .

Each pay period, 8% of your gross eligible compensation is contributed to your retirement account through payroll deductions before it is taxed.

If you are a PERS participant, your employer will contribute an additional 5% of your gross eligible compensation to your retirement account. The total PERS DCR employee and employer contribution is 13% of your gross eligible salary.

If you are a TRS participant, your employer will contribute an additional 7% of your gross eligible compensation to your retirement account. The total TRS DCR employee and employer contribution is 15% of your gross eligible salary.

You’ll receive a comprehensive statement of your account each quarter. The default for statements is an electronic statement on the Empower website . If you wish to request paper statements, you can do that on the Empower website.

PERS & TRS Annual Compensation Limit

PERS & TRS Annual Compensation Limit
Calendar Year	Limit
2026	$ 360,000
2025	$ 350,000
2024	$ 345,000
2023	$ 330,000
2022	$ 305,000
2021	$ 290,000

Past PERS & TRS Annual Compensation Limit

Vesting refers to the percentage of your account you are entitled to receive when a distributable event occurs. Your contributions to the Plan and any earnings they generate are always 100% vested.

Employer contributions to the Plan, plus any earnings they generate, are vested as follows:

• 1 year of service = 0% vested.
• 2 years of service = 25% vested.
• 3 years of service = 50% vested.
• 4 years of service = 75% vested.
• 5 years of service = 100% vested.

Learn more about the DCR plan in the Defined Contribution Retirement System Information Handbook

The amount of taxes you pay, and when you pay them, is determined by whether you take payment directly or make a rollover to a traditional IRA or other qualified plan. Your payment will be taxed in the current year unless you roll it over. However, if you receive a payment before age 59 ½, you also may have to pay an additional 10% tax penalty. Direct transfers to Roth IRAs are reported as taxable income but are not subject to the additional 10% tax penalty. The 10% additional penalty does not apply if you are a qualified public safety employee and you (1) will be at least 50 in the year of separation or (2) have at least 25 years of service under the plan. This is provided by IRC 72 (t) (10) under separation of service.

The DCR plan is a participant-directed plan. This means that you choose from the investment options offered by the Plan. The providers of these investment options are selected by the Alaska Retirement Management Board. Investment options are described in detail in the individual Fund Overviews, which are available on Empower's website website by selecting "Investment information" under the "Investing" menu.

Initially, your contributions to the DCR Plan are automatically invested in one of the Alaska Target Retirement Trust funds or Alaska Balanced Trust funds based on your year of birth. This is the default option. You can move all or a portion of your existing balances among investment options and change how your contributions are invested. You may transfer among existing fund options and make changes to the allocation of your future contributions once a day. There is no extra charge for daily changes. Funds may impose redemption fees, and/or transfer restrictions, on certain transfers, redemptions or exchanges if assets are held for less than the period stated in the fund’s prospectus or other disclosure documents. For more information visit Empower's website or call Empower's Voice Response System (VRS) toll-free number. Until you change how your future contributions are allocated, your money will continue to be invested in the default fund. Changes may be made through Empower's website, by telephone via the VRS, through a client service representative, or in writing.

Learn more about Alaska Target Retirement Trusts .

Transfer requests made via the website or voice response system received on business days prior to close of the New York Stock Exchange (12 p.m. Alaska time or earlier on some holidays or other special circumstances) will be initiated at the close of business the same day the request was received. The actual effective date of your transaction may vary depending on the investment option selected.

Existing Investment Funds

The plan provides many investment options. Carefully consider the investment objectives, risks, fees and expenses before investing. Contact Empower or look on Empower's website for a prospectus, a summary prospectus and disclosure document, if available, containing this information. Read them carefully before investing.

• U.S. Small-Cap Trust
• S&P SmallCap 600® Equity Index Fund F
• Mid Capitalization Equity Index Fund J
• International Equity Fund
• Global Equity Ex-US Index Fund
• Environmental, Social, and Governance Fund
• Russell 3000 Index Fund
• S&P 500® Stock Index Fund
• Alaska Target Date Retirement Trusts (2010-2070)
• BlackRock Strategic Completion Fund
• Alaska Moderate Growth Balanced Fund
• Alaska Conservative Balanced Fund
• FIAM Core Plus CIT Class H
• Passive U.S. Bond Index Fund
• Alaska Stable Value Fund
• State Street Treasury Money Market Fund – Inst.

Generally, the asset allocation of each target retirement trust will gradually become more conservative as the trust nears the target retirement date and beyond. The date in a target retirement trust’s name is the approximate date when investors plan to start withdrawing their money (generally assumed to be at age 65). The principal value of the trust(s) is not guaranteed at any time, including at the time of the target date and/or withdrawal.

An investment in a Money Market Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to have your investment decrease in value.

Caution: Please consider the investment objectives, risks, fees and expenses carefully before investing. For this and other important information, your registered Empower representative can provide you with a mutual fund prospectus for the State Street Treasury Money Market Fund – Inst. and disclosure documents for the investment options exempt from SEC registration. Read them carefully before investing.

The DCR Plan is a participant-directed plan. You choose from the investment options offered by the Plan. You can invest your contributions in any of the following ways, depending on your knowledge and comfort level with researching and selecting investments.

Keep Your Money Invested in an Alaska Target Retirement Trust Based on Your Planned Retirement Date and Risk Tolerance. Visit Empower's website website and click Investing for detailed information about the Alaska Target Retirement Trusts.

Build and Manage Your Own Portfolio
You can build and manage your own portfolio by investing in one or more of your Plan’s investment options. The Plan offers investments in a mix of asset classes to help you create a portfolio that suits your retirement goals and risk tolerance.

The Alaska Retirement Management Board has selected the Plan’s investment options, which are described in detail in the Plan Information Booklet and in the individual Fund Overviews, which are available on Empower's website website by selecting Investment information under the Investing menu.

On Empower's website website , you can also find a variety of online calculators and planning tools to help you. From there, you select the investment options and implement your own retirement savings strategy.

How can I make changes to my investment selections?

You can move all or a portion of your existing balances among investment options and change how your future contributions are invested by visiting Empower's website website or by calling the voice response system toll free at . Until you change how your future contributions are allocated, your money will continue to be invested in your default investment option.

You can transfer assets among existing fund options and allocation changes for future contributions once a day at no charge. However, your chosen funds may impose redemption fees, and/ or transfer restrictions, on certain transfers, redemptions or exchanges if assets are held for less than the period stated in the fund’s disclosure documents. For more information, please refer to the fund’s disclosure documents on Empower's website website .

Carefully consider the investment option’s objectives, risks, fees and expenses. Contact Empower for a prospectus, summary prospectus for SEC registered products or disclosure document for unregistered products, if available, containing this information. Read each carefully before investing.

Your investment could decrease in value when investing in a money market fund. Although the fund seeks to preserve the value of your investment at $1 per share, it cannot guarantee it will do so. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The fund’s sponsor has no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide financial support to the fund at any time.

How can I get investment advice?

Our Point-in-time advice is a powerful, phone-based service delivered by Empower’s Workplace Planning & Advice (WPA) Group, acting as a fiduciary. Point-in-time advice can provide you with specific recommendations based on information you provide and intended to serve your best interest.

Your Alaska Retirement Plan Counselors and Advisors are also available to work with you. Their focus remains on helping to educate you about your options, so you can make informed decisions to and through retirement. However, if you occasionally need someone to just tell you what to do, point-in time advice is now here to help fill that gap.

Included in the services offered by WPA:

• Assistance with how to invest your contributions from the options available in the State of Alaska fund lineup.
• Roll-in help for participants who wish to consolidate assets. Consider all your options and their features and fees before moving money between accounts.
• Advice determining how much to save in an optional plan, and whether you should contribute pre-tax or Roth.
• Help with your overall financial wellness and retirement readiness.

There is no additional cost for this advice. Call and schedule a meeting to talk about any of the above topics, so we can help you meet your retirement and financial goals.

The following transactions must be conducted through Empower:

• Inactive and Retired Employees: Changing your address or your name. (Active employees: Contact your employer to change your address or name.)
• Account Withdrawals: Empower processes all Plan payments. Empower should be contacted for information on how to complete disbursement forms and for the status of pending payments.
• Hardship withdrawals.

The Division of Retirement and Benefits administers this plan. For assistance, call toll‑free at , or in Juneau at .

When you terminate service from an PERS/TRS DCR employer, either voluntary or via an involuntary layoff, this allows you to withdraw your account once you have been separated from employment for 60 days. There is no need to refund your DCR account if you do not currently need the funds. You have the option to possibly grow your balances in the Defined Contribution plan by leaving your money in the plan and directing your investments. Empower is available to assist you in your continued tax deferral of your retirement savings and allocation of funds in the Defined Contribution Plan. You will be an “inactive member” (no longer contributing to the plan) but actively investing. As a governmental retirement plan, we offer the added value of low fees for the management and administration of your account.

If you are planning on reinvesting your money by rolling into an outside plan, please be sure to compare the fees for the services you will receive. The DCR management and administrative fees are very low compared to many plans in the private sector.

Funds may be withdrawn in the event of:

• Leaving employment (including retirement), provided you have a bona fide termination PDF .
• Death (after which your beneficiaries will take the withdrawal)

You are first eligible to receive payment of your Defined Contribution Retirement (DCR) Plan account when you have been terminated for at least 60 days, provided you are not rehired in a DCR position before 60 days have passed or are not active with the same employer in a different plan (bona fide termination rules). The only exception to payment eligibility earlier than 60 days after termination is for a qualified hardship. In the event of your death, funds will be available to your beneficiary.

If you do not refund or rollover your entire account balance, your money remains invested and you can continue to move among the different investment options until your account balance is zero.

Please keep in mind that if you rollover or refund DCR funds (even if it’s only a partial withdrawal), you may forfeit unvested employer matching contributions. If you return to DCR service in the future after taking a distribution from the DCR plan, you will start over on the vesting schedule for employer matching contributions.

After you terminate, you may defer payment of your account for any length of time until April 1 of the year after you reach age 73. The balance of your account will continue to change in value depending on market conditions.

Withdrawals are made directly to you or your beneficiary or to another qualified plan on your behalf at your direction. There are only three recognized exceptions that would allow your account to be paid directly to another person or agency other than yourself. They are:

• An IRS Lien for unpaid taxes
• A Qualified Domestic Relations Order (QDRO) issued by a court of law
• An Order to Withhold and Deliver Property issued by the Child Support Services Division (CSSD)

Withdrawal Options

After you have met the 60-day termination of employment requirement, you are eligible to apply your account balance to the payment option(s) you choose. The actual dollar amount you will receive depends on such factors as the amount of your contributions, how your investments performed, the payment option(s) you select, and your life expectancy. Payment options include:

1. Do nothing

   and defer payment until you have obtained the age of Required Minimum Distribution

2. Lump Sum

   Partial lump sum withdrawals, or a full withdrawal of the entire account. In DCR there is a two per year limit on partial distributions.

3. Periodic Payment

   A payout method that allows you to be paid monthly, quarterly, semiannually, or annually. You can make changes to the payment frequency or amount, or stop it. You may select a specific dollar amount or the number of years over which your account will be paid to you, or you may choose IRC Minimum Distribution payments.

4. Five-Year Period Certain Annuity

   Equal monthly payments for five years (60 months). If you die before receiving all 60 payments, your beneficiary will receive the remaining benefit payments.

5. Ten-Year Period Certain Annuity

   Similar to the five-year period certain but for ten years (120 months).

6. Fifteen-Year Period Certain Annuity

   Similar to the five-year period certain but for fifteen years (180 months).

7. Single Life Annuity

   Monthly payments for your lifetime. No payments are made to your beneficiary after your death.

8. Single Life Annuity with Ten-Year Period Certain

   Monthly payments for the rest of your life. If you die before the guaranteed 120 payments have been made, your beneficiary will receive the remaining guaranteed benefit payments.

9. Single Life Annuity with Fifteen-Year Period Certain

   Monthly payments for the rest of your life. If you die before the guaranteed 180 payments have been made, your beneficiary will receive the remaining guaranteed benefit payments.

10. 50% Joint and Survivor Annuity

    Monthly payments for your lifetime. After your death, your survivor will receive one-half of the monthly amount you were receiving for their lifetime. Your survivor does not have to be your spouse.

11. 100% Joint and Survivor Annuity

    Similar to the 50% Joint and Survivor but, after your death, your survivor would receive the same benefit amount you were receiving for their lifetime. Your survivor does not have to be your spouse.

Any annuity option is irrevocable. The money leaves your account, purchases the guaranteed income, and that is a done deal.

1. Rollover to an Outside Account

Empower processes all payments for the Defined Contribution Retirement (DCR) plan. Contact Empower for disbursement forms, information on how to complete them, and for the status of pending payments. To contact Empower, call .

Hardship Withdrawals

There are strict provisions for hardship withdrawals. Only the following reasons are valid to obtain an early eligibility for payment of your account (you MUST be terminated in any case):

• medical care described in IRC Code §213(d) incurred by the Participant, by the Participant’s spouse, or by any of the Participant’s dependents.
• the purchase (excluding mortgage payments) of a principal residence for the Participant.
• the payment of tuition and related educational fees and room and board expenses, for the next 12-month period of postsecondary education, for the Participant, for the Participant’s spouse, or for any of the Participant’s dependents (as defined in IRC Code §152).
• to prevent the eviction of the Participant from their principal residence or the foreclosure on the mortgage on that residence.
• payments for burial or funeral expenses for the participant, the participant’s spouse, children, or dependents (as defined in IRC Code §152).
• any need prescribed by the Internal Revenue Service in a revenue ruling, notice or other document of general applicability which satisfies the safe harbor definition of hardship.

The Participant shall remain responsible for repayment to the plan of any excess amounts received pursuant to an early eligibility distribution should it be determined that such Participant is not entitled to the entire amount he or she was actually paid.

All hardship withdrawals are subject to the applicable requirements of the Internal Revenue Code and regulations.

Eligibility For Coverage Under the DCR Retiree Health Plan

A member is eligible to elect coverage under the AlaskaCare DCR Retiree Health Plan if they retire directly from the DCR Plan, meaning the member was an active member in the DCR Plan for at least 12 months immediately before application for retirement, and:

• has at least 25 years of membership service as a peace officer or firefighter, or
• for any other employee, has at least 30 years of membership service, or
• has at least 10 years of membership service and leaves at Medicare age or older.

Benefit recipients who are eligible to be covered under the AlaskaCare DCR Retiree Health Plan may voluntarily elect coverage. The plan requires monthly premium payments.

Important Information:

• AlaskaCare Defined Contribution Plan Retiree Insurance Information Booklet
• Overview of Your Retirement Benefits

DCR Health Premiums

Premiums may be paid by deductions from your Health Reimbursement Account (HRA). If you are not eligible for Medicare, you must pay the full monthly premium for the coverage elected under the DCR Retiree Health Plan. If you are eligible for Medicare, you must pay a percentage of the monthly premium for coverage elected under the medical plan, as follows:

• 30% if the member had 10 to 14 years of service;
• 25% if the member had 15 to 19, years of service;
• 20% if the member had 20 to 24, years of service;
• 15% if the member had 25 to 29, years of service; and
• 10% if the member had 30 or more years of service.

If eligible to elect coverage under the DCR Retiree Health Plan then a member is eligible to elect Dental-Vision-Audio (DVA) and or Long-term Care (LTC) coverage at retirement. All members who elect DVA and/or LTC pay the full premium for the coverage, although the member can use their HRA to pay the premiums for them.

Important Information:

• AlaskaCare Dental-Vision-Audio Benefits
• Long-Term Care

For more information on premiums, view the Defined Contribution Retiree premiums sheet or visit the Retiree Health Plans page.

Important Information:

• Employee Health Reimbursement Arrangement FAQs webpage
• Retiree Health Reimbursement Arrangement FAQs webpage
• HRA Amounts webpage
• Fiscal Year 2024 Investment Gain Information: PERS & TRS Defined Contribution Retirement Health Reimbursement Arrangement news page

A Health Reimbursement Arrangement (HRA) is a separate account that your employer contributes to while you are employed. Employers will contribute 3% of the annual average employee compensation of all PERS and TRS participants to the account. No contributions are made by the participant. Once a participant is eligible, the HRA account can be used tax-free on qualified medical expenses, which include health care insurance premiums not paid by your plan. In other words, if you are eligible, you can use the HRA for anything the IRS deems a qualified medical expense, but it is designed to pay the premiums for the DCR medical, dental/vision/audio (DVA), and/or long-term care (LTC) for participants who retire directly from the plan.

Eligibility

Age Eligibility

• A terminated participant who is eligible for Medicare and has at least 10 years of service.
  NOTE: A participant who quits covered employment before Medicare eligibility and who has less than ten years of service loses any right to the HRA except:
  • A former participant who reemploys in covered employment will have the HRA account and years of service towards medical eligibility restored to the amount at termination plus a cost-of-living adjustment based on the Anchorage area consumer price index from the date of termination to the date of reemployment. The participant must return to covered employment by December 31st of the year the participant turns 65.

Service Eligibility

• A participant under Medicare age who has at least 25 years of membership service as a peace officer or firefighter or at least 30 years of membership service for all other employees.

A participant does not have to retire directly from the plan to be eligible for the HRA. You may accrue your 10 years of membership service, terminate, and then access the HRA later at Medicare age.

An eligible participant can use the HRA even if not participating in the Retiree Health plan.

Benefits

Plan participants may request reimbursement for eligible medical expenses (as defined in 26 USC §213(d)) from the account, however, the account balance cannot be cashed out as a lump sum payment. The account:

• can be used to reimburse participants for prescription medication, but not over-the-counter drugs.
• can be used to reimburse participants for insurance premium payments.

Participant is responsible for substantiating expenses with receipts and filing for reimbursement with the Claims Administrator.

Rights to benefits under the HRA are not subject to attachment or garnishment but may be assigned by a qualified domestic relations order in the event of a divorce or dissolution.