A member who is employed by a PERS employer and receiving compensation for seasonal, permanent full-time, or permanent part-time services. A member must be making contributions to the PERS to be considered active.

A member who is working for a TRS employer and receiving compensation on a full-time or part-time basis; on sabbatical leave approved by the employer; or on live leave of absence without pay approved by the employer. A member must be making contributions to the TRS to be considered active.

The excess of the present value of a pension fund’s total liability for future benefits and fund administrative expenses over the present value of the normal cost of those benefits as accrued for the current year.

An adjustment to the basic calculation of a pension payment based on age, expected lifetime, and interest earnings to provide a pension of equal value under different benefit options.

Factors which actuaries use in estimating the cost of funding a defined benefit pension plan. Examples include: the rate of return on plan investments; mortality rates; and the rates at which plan participants are expected to leave the system because of retirement, disability, termination, etc.

An actuarial method which defines the allocation of pension costs (and contributions) over a member's working career. All standard actuarial cost methods are comprised of two components: normal cost and the actuarial accrued liability (past service cost). An actuarial cost method determines the estimated pension costs, not the ultimate cost of a pension plan; that cost is determined by the actual benefits paid less the actual investment income.

Actuarial valuations are technical reports providing full disclosure of the financial and funding status of public retirement systems administered by the Department of Administration, Division of Retirement and Benefits.

The ARC is equal to the sum of (1) the employer’s “normal cost” of retirement benefits earned by employees in the current year, and (2) the amount needed to amortize any existing unfunded accrued liability over a period of 25 years.

The Deferred Compensation Plan allows you to voluntarily set aside a portion of your income either before it is taxed or after it has been taxed. The amount set aside, plus any change in value (interest, gains and losses), is payable to you or your beneficiary at a future date. Upon becoming eligible to participate in the Plan, you may elect to defer your income on a pre-tax or post-tax basis. By doing so, you agree to reduce your salary by an agreed-upon amount. This amount may not exceed certain requirements.

The Alaska Retirement Management Board serves as the trustee of the assets of the state’s retirement systems, the State of Alaska Supplemental Annuity Plan and the State of Alaska Deferred Compensation Plan for state employees. The board manages and invests fund assets in a manner that is sufficient to meet the liabilities and the pension obligations of the system.

The Alaska Supplemental Annuity Plan (SBS-AP) is a defined contribution plan governed by 26 U.S.C. § 401a Internal Revenue Code. A portion of wages and a matching employer contribution are made pre-tax to this plan instead of contributions to Social Security. These contributions plus any change in value (interest, gains and losses), is payable to you or your beneficiary at a future date.

Membership service calculated under the provisions of the Teachers’ Retirement System based on a full year of credit for a minimum of 172 days of service. The maximum allowable credit for service between July 1 and June 30 is one year even if the number of days worked exceeds 172. Permanent part-time service will be credited based on 50 percent of the number of days. The employee contributions due to the PERS under this election are currently 9.6 percent of salary. This election is irrevocable for all periods of school district employment except in certain circumstances.

A retired member or a disabled member who is receiving a benefit under this system.

Average annual compensation refers to not only the fixed amount of annual salary an employee is paid for their work, but also includes any variable pay as well as any other benefits or other perks. It is the average total value an employee receives beyond just the base salary.

The result obtained by dividing the sum of the member’s three highest years’ base salary by three, or if a member does not have three years base salary, then by dividing the sum of all base salaries by the number of years of base salary; the base salary in a school year for which the member receives compensation for less than two-thirds of a year may not be used in the computation of the average base salary; if compensation is received for more than two-thirds of a year, the full base salary for that school year shall be used in the computation of the average base salary.

For members converting from a disability to normal retirement, the base salary for a year in which credit is granted for disability totaling more than one-third of a year may not be used in the computation of the average base salary.

Also referred to as: Average Monthly Salary (AMS)

The result obtained by dividing the compensation earned by an employee during a considered period by the number of months, including fractional months, for which compensation was earned; an employee must have at least 115 days of credited service in the last calendar year in order for that year to be used as part of the consecutive payroll years; the considered period consists of:

• For employees first hired before July 1, 1996 (Tier I or II), the three consecutive payroll years during the period of credited service that yield the highest average;
• For employees first hired on or after July 1, 1996 (Tier III), the five consecutive payroll years during the period of credited service that yield the highest average;
• If the employee does not have the number of consecutive payroll years required, the actual number of months, including fractional months, that the employee worked;
• For an employee who has made an election under the Alternate Service Option, the actual number of months, including fractional months the employee worked.