When Section 218 of the Act authorized states to voluntarily elect Social Security coverage for public employees in 1951, existing retirement systems were excluded by federal law from participation in Section 218 agreements.
The same Section 218 provision that excluded members of the original Anchorage Police and Fire system in 1951 also excluded members of the Teachers’ Retirement System (TRS), since they already had an existing retirement system (Territorial Teachers’ Retirement System, which later became TRS.)
Four years later, in 1955, the Social Security Administration decided to let these excluded systems enroll in Social Security coverage. The Social Security Administration declared that members of an excluded system could hold a vote and elect whether or not they wanted Social Security coverage.
TRS Members Can Vote for Social Security Coverage
The State Social Security Administrator holds the federal Social Security vote. To start the voting process, the governing body of the entity must pass a resolution to hold a vote. The resolution must state if the entity wants a majority rule or a divided vote.
Majority Rule Vote
In a majority rule vote, all TRS members vote. If the majority of TRS members vote yes, all TRS members, even those who voted no, are enrolled in Social Security immediately.
All future TRS members hired into favorable vote positions are enrolled in Social Security throughout the life of the entity. Section 218 modifications cover positions not people.
If a majority rule vote fails, a new vote can be held after the mandatory one-year waiting period.
Majority means the majority of TRS members at the entity, not the majority of the TRS members who voted. A no show is a no vote.
Divided Vote
Alaska is one of the 23 states authorized by the Social Security Administration to hold a divided vote.
In a divided vote, TRS members who vote no are not enrolled in Social Security and TRS members who vote yes are immediately enrolled in Social Security.
When a no vote leaves the entity that held the vote, the position rolls into Social Security coverage. Eventually all TRS positions will roll under Social Security coverage in a divided vote.
A no votes stays with the voter. If a TRS members votes no and is later employed by another school district with the same retirement system, they are not enrolled in Social Security at their new school district, should the new district offer it.
The University of Alaska was, and is still today, the only entity with TRS members who held a vote. The vote was successful and in 1958, the University of Alaska enrolled their TRS employees in Social Security. The University of Alaska later terminated their Section 218 agreement. Today, there are no TRS employees in Alaska enrolled in Social Security.