DCR Plan Frequently Asked Questions


Account Balance Information

1. How can I determine my current account balance?

Your account balance, as well as your account activity, is included in your quarterly statement. You may also check your account balance between statements by calling KeyTalk at (800) 232-0859 or by using your PIN to access the information on this site.

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Application for Benefit Payments

2. What do I do with my account once I leave PERS or TRS service?

You are not required to remove your funds from the plan once you terminate employment. You may continue managing your account until a future date of your choosing. If you elect to withdraw your account, you may choose between several options. You may elect:

  • to rollover the amount to another qualified plan without tax consequences; or
  • choose a lump sum payout (See "Taxes and Penalties" section); or
  • a monthly annuity for a defined period (5, 10 or 15 years); or
  • a monthly annuity for your lifetime; or
  • a joint and survivor lifetime annuity.

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3. How do I start benefit payments from my PERS/TRS DCR account?

First, you must be terminated from employment. Then, you must submit an application for payment on the PERS/TRS DCR Distribution Request form. On the form, you can choose to be paid now or to defer payment to a future date.

The date of payment depends on when the Distribution Request is received. Generally, lump-sum payments are paid within 65 to 80 days after termination. Continuing annuity payments usually begin on the first day of the month following the month in which your 60-day waiting period ends.

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4. Do I have to submit a Distribution Request form if I do not want to be paid now?

If you are age 65 or greater and terminate employment you need to submit a Distribution Request form to defer payment to a later date, not later than April 1 of the year following the year in which you turn 70-1/2 years of age.

If you are under age 65, you do not need to submit a Distribution Request form until you are ready to begin receiving payments.

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5. Why does my spouse have to submit a waiver when I request payment of my PERS/TRS DCR plan as a lump sum?

Your PERS/TRS DCR plan account is considered marital property subject to equitable division in the event of a divorce or dissolution. Contributions and earning you have accumulated during your marriage are considered to be one-half the property of your spouse.

When you choose any option other than the 50% or 100% joint and survivor option with your spouse as a survivor, your spouse must consent to this choice by signing a Distribution Request form.

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6. If I have been involved in divorce, dissolution, or legal separation, do I have to submit proof of these circumstances before I can receive payment of my PERS/DCR plan account?

Yes. Because the contributions and earning you have accumulated during your marriage are considered to be one-half the property of your spouse, the plan cannot pay you the funds until the status of your spouse's entitlement is clear. You are required to submit a court-certified copy of the divorce decree or dissolution to the plan for review. If you have been released through the divorce or dissolution, a review of the property settlement will indicate the status of your ex-spouse's share of your account.

If your ex-spouse has retained ownership of his or her share after the divorce or dissolution, the plan requires a domestic relations order (DRO) issued by the court be filed prior to any payments being made from your account. Plan staff will review the DRO to determine if it meets the requirements set out by the statutes governing the plan. If it does, it will then be qualified and the plan will implement the order.

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7. What additional types of documents might be required before payments can begin?

Depending on the payout form you select, you may be required to provide proof of birth date for yourself as well as your designated spouse and a copy of your marriage certificate.

A birth certificate, baptismal record, military discharge, Alaska driver's license, or a passport are acceptable forms of proof of birth.

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8. Can I receive payment of my PERS/TRS DCR Plan account if I am laid off?

Yes, if you have been separated from employment.

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Beneficiaries

9. What is a beneficiary designation?

A beneficiary designation is a form on which you indicate who is to receive any benefits you may be entitled to from the PERS/TRS DCR Plan should you die before drawing your benefits out of the plan.

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10. I understand my spouse is automatically (50%) my primary designated beneficiary. What do I do if I want to elect someone else as primary?

If you wish to elect another person as your primary beneficiary (50% or greater), your spouse must provide written consent on the PERS/TRS DCR Plan Beneficiary Designation for Active and Deferred Participants form. Consent is not required if you were married for less than one year and you and your spouse were not living together when the designation was changed.

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11. My spouse and I have divorced. I still wish to have my ex-spouse as my primary beneficiary. Can I do this?

Yes. Since a divorce, dissolution or annulment voids any prior beneficiary designations you have made, you must file a new beneficiary designation after the divorce, dissolution, or annulment specifically affirming in writing that your former spouse is the primary beneficiary.

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12. I am a single parent and want to leave my account to my minor children. How can I do this?

If your account exceeds $5,000, the plan must make the payment to an adult member of the minor's family who is a court-appointed guardian, a person having custody and care of the minor or a financial institution with a federally insured savings account in the sole name of the minor. A conservatorship must be established for the minor before payments can be made.

If your account is less than $5,000, the plan may make payments without a conservatorship to the court-appointed guardian or person having custody and care of the minor or a financial institution with a federally insured savings account in the sole name of the minor.

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13. What happens if I don't file a beneficiary designation?

When you fail to designate a beneficiary or, if no designated beneficiary survives you, the death benefit will be paid according to statute in the following order:

  • First to your surviving spouse. If there is no surviving spouse;
  • second to your surviving children in equal parts. If there are no surviving children;
  • third to your surviving parents in equal parts or, if there are no surviving parents;
  • fourth to your estate.

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14. I want to designate a trust as my beneficiary. Can I do this?

Yes. When an estate or trust is the beneficiary, a copy of the court document naming the personal representative of the estate or trustee of the trust must be filed with the plan along with the beneficiary designation form. The estate or trust must have an Employer Identification Number (EIN) from the federal government before payment may be made.

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15. How many times may I change my beneficiary?

There is no limit to the number of times you can change who is to receive your benefits in the event of your death. The last beneficiary designation on file is the one the plan will use to determine who should receive your benefits. Please be sure to keep your beneficiary's contact information up-to-date or to change your beneficiary if you have a change in marital status.

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Contributions

16. How much does my employer contribute to my account?

For PERS members, your employer contributes 5% of your gross eligible PERS salary to your account.

For TRS members, your employer contributes 7% of your gross eligible TRS salary to your account.

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17. How much do I contribute to my account?

Both PERS and TRS members contribute 8% of gross eligible salary to the defined contribution account.

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18. Can I make additional contributions to my account?

No. The PERS/TRS DCR Plan does not allow additional voluntary contributions.

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Death – Occupational

30. Who determines if my death is from occupational causes?

To qualify as an occupational death, the proximate cause of death must be a bodily injury sustained or a hazard undergone while in the performance and within the scope you're your duties and not be the result of negligence on your part. A copy of your death certificate showing cause of death is usually sufficient to show your death was caused by an occupational injury or accident while you were conducting the usual duties of your job. To establish an occupational cause for illness may require additional medical documentation confirming causation.

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31. What is the difference between benefits that are available to my spouse or same-sex partner, if I am married, or to my nonspouse or same-sex partner beneficiary, if I am not married or in an eligible same-sex relationship at the time of my death?

Beneficiaries are only eligible to receive the balance of your retirement account, including gains and losses, less expenses.

A surviving spouse or eligible same-sex partner is eligible to receive a monthly survivor benefit of 40% of your monthly gross compensation at the time of your death or 50% of your monthly gross compensation if you are a peace officer/firefighter member until the time you would have reached eligibility for normal retirement.

Your employer will also continue to make monthly contributions based on your salary at the time of your death to a survivor account established for your surviving spouse or same-sex partner in the occupational death fund. At normal retirement, your survivor may withdraw the balance of this account, including gains and losses, less expenses. This fund is invested by the plan fund managers while the survivor benefit is being paid.

While your surviving spouse or eligible same-sex partner is receiving monthly survivor benefits, he or she may not withdraw your DCR retirement account balance. However, your surviving spouse or eligible same-sex partner will be able to direct the investment of the account among the ten available options.

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Disability Benefits - Occupational

32. Who determines if I qualify for an occupational disability retirement benefit?

A consulting physician will review your medical documentation and make a recommendation to the PERS/TRS DCR plan Administrator. The Administrator will then review your file and the consulting physician's recommendation to determine if you qualify for a disability retirement benefit. If you are approved for a benefit, you will be notified by phone, followed up by a letter.

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33. What happens if I'm not approved?

If the Administrator determines you do not qualify for a disability retirement benefit, you may appeal the decision to the Office of Administrative Hearings within 30 days of notification of the denial for benefits. You may also submit additional medical evidence to the Administrator for review.

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34. Do I have to terminate employment before applying for disability benefits?

No, you do not need to terminate employment before applying for a disability benefit. However, if your disability benefit is approved, you must terminate within 30 days of the Administrator's decision. Your termination of employment must be due to the medical condition causing your disability.

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35. How do I apply for disability benefits?

You contact the Division of Retirement and Benefits for an application packet. You will receive a booklet that gives you step-by-step information on how to apply and what types of documentation must be submitted. You must submit your application to the division within 90 days after termination of employment if you have already terminated. Remember, you do not have to terminate before you can apply. If you miss the 90-day deadline, please contact the division for assistance.

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36. How long does it take to find out if you're approved or not?

In general, disability applications take six to eight weeks to process. It can take longer if you do not provide adequate medical documentation or other required information to support your application. It is your responsibility to provide complete information to the division so a determination can be made.

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37. Will I be eligible for medical coverage while I am receiving disability benefits?

No. Coverage under the retiree medical plan is not available to any participants before eligibility for normal retirement. However, medical coverage can be provided for a limited period by using the federal COBRA entitlement to purchase continuing coverage from your employer health plan as a person losing coverage. Coverage for your disabling condition may be provided by Workers' Compensation. You will be eligible to enroll in the retiree medical plan when you reach normal retirement eligibility.

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38. What happens if I return to work?

Disability benefits are intended to provide a means of economic survival if you must terminate your employment because of a total and presumably permanent disability. The program is not intended to supplement your income if you should recover from your disability and are able to return to work. If you return to work, you should contact the division immediately.

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Disbursement – When You May Receive Payment of Your Account

39. When can I receive payment of my PERS/TRS DCR account?

You are eligible to receive payment of your account 60 days after you have been terminated from employment. If you are rehired before the 60-day period has passed, the withdrawal request will be canceled and a new 60-day period will begin at the next termination.

This 60-day period is established in the Alaska Statutes. The only exception is a qualified hardship (see question 50). Actual payment mailing occurs after you have been terminated 60 days.

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40. Can I receive payment of my PERS/TRS DCR account if I am laid off?

Yes, if you have been separated from service.

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41. Can I "pay back" money previously paid out from my PERS/TRS DCR plan account?

No. Money previously withdrawn cannot be re-deposited into your account. Once you have requested payment of the account and the 60-day waiting period has passed and the payment has been issued, the account cannot be reinstated.

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Disbursement – Account Payment Procedures

42. How do I start benefit payments from my PERS/TRS DCR account?

First, you must be terminated from employment. Then, you must submit an application for payment on the PERS/TRS DCR Distribution Request form. On the form, you can choose to be paid now or to defer payment to a future date.

The date of payment depends on when the Distribution Request is received. Generally, lump-sum payments are paid within 65 to 80 days after termination. Continuing annuity payments usually begin on the first day of the month following the month in which your 60-day waiting period ends.

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43. Do I have to submit a Distribution Request form if I do not want to be paid now?

If you are age 65 or greater and terminate employment you need to submit a Distribution Request form to defer payment to a later date, not later than April 1 of the year following the year in which you turn 70 1/2 years of age.

If you are under age 65, you do not need to submit a Distribution Request form until you are ready to begin receiving payments.

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44. Why does my spouse have to submit a waiver when I request payment of my PERS/TRS DCR plan as a lump sum?

Your PERS/TRS DCR plan account is considered marital property subject to equitable division in the event of a divorce or dissolution. Contributions and earning you have accumulated during your marriage are considered to be one-half the property of your spouse.

When you choose any option other than the 50% or 100% joint and survivor option with your spouse as a survivor, your spouse must consent to this choice by signing a Distribution Request form.

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45. If I have been involved in divorce, dissolution, or legal separation, do I have to submit proof of these circumstances before I can receive payment of my PERS/DCR plan account?

Yes. Because the contributions and earning you have accumulated during your marriage are considered to be one-half the property of your spouse, the plan cannot pay you the funds until the status of your spouse's entitlement is clear. You are required to submit a court-certified copy of the divorce decree or dissolution to the plan for review. If you have been released through the divorce or dissolution, a review of the property settlement will indicate the status of your ex-spouse's share of your account.

If your ex-spouse has retained ownership of his or her share after the divorce or dissolution, the plan requires a domestic relations order (DRO) issued by the court be filed prior to any payments being made from your account. Plan staff will review the DRO to determine if it meets the requirements set out by the statutes governing the plan. If it does, it will then be qualified and the plan will implement the order.

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46. What additional types of documents might be required before payments can begin?

Depending on the payout form you select, you may be required to provide proof of birth date for yourself as well as your designated spouse, a copy of your marriage certificate.

A birth certificate, baptismal record, military discharge or a passport are acceptable forms of proof of birth.

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Divorce

47. If I have been involved in divorce, dissolution, or legal separation, do I have to submit proof of these circumstances before I can receive payment of my PERS/DCR plan account?

Yes. Because the contributions and earning you have accumulated during your marriage are considered to be one-half the property of your spouse, the plan cannot pay you the funds until the status of your spouse's entitlement is clear. You are required to submit a court-certified copy of the divorce decree or dissolution to the plan for review. If you have been released through the divorce or dissolution, a review of the property settlement will indicate the status of your ex-spouse's share of your account.

If your ex-spouse has retained ownership of his or her share after the divorce or dissolution, the plan requires a domestic relations order (DRO) issued by the court be filed prior to any payments being made from your account. Plan staff will review the DRO to determine if it meets the requirements set out by the statutes governing the plan. If it does, it will then be qualified and the plan will implement the order.

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Hardship Withdrawal

48. Can I receive a hardship withdrawal of my PERS/TRS DCR account while I am still working?

No. You may only withdraw your PERS/TRS DCR Plan account after you have terminated employment.

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49. Can I receive a hardship withdrawal of PERS/TRS DCR account prior to the 60 days after termination?

Yes. You must be terminated from employment to receive any payment from your account. Only the following reasons are valid to obtain an early eligibility for payment.

  1. medical care described in 26 U.S.C. 213(d) incurred by the participant, the participant's spouse, or the participant's dependent, or necessary to obtain medical care;
  2. the purchase of a principal residence for the participant;
  3. postsecondary education tuition and related educational fees for the next 12-month period for the participant, the participant's spouse, or a dependent of the participant; in this paragraph, "dependent" has the meaning given in 26 U.S.C. 152;
  4. prevention of the eviction of the participant from the participant's principal residence or foreclosure on the mortgage of the participant's principal residence; or
  5. any need prescribed by the United States Department of the Treasury, Internal Revenue Service, in a revenue ruling, notice, or other document of general applicability that satisfies the safe harbor definition of hardship under regulations adopted under 26 U.S.C. 401(k)

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Investment Services

50. I don't know much about investing and don't know how to manage my investment account in the PERS/TRS DCR Plan. What do I do?

Most people do not have the time, the interest or the expertise to manage investments successfully. Keeping this in mind, the PERS/TRS DCR Plan automatically enrolls all new employees into an age based target fund called the Alaska Target Retirement Trust.  The target fund provides exposure to a diversified mix of stock, bonds, and money market securities for long-term investors with a higher tolerance for risk.  The trust is designed to gradually invest more conservatively as the target year approaches and beyond.

The plan also provides investment advice services offered by Great West and their subsidiary, Advised Assets Group (AAG).

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51. I don't want to be enrolled in the Alaska Target Retirement Trust, what do I do?

If you want account management that is tailored to your investment risk tolerance and takes into account other assets you may have or you want to do your own investing, there are three other options available to you. They are:

  • Managed Accounts - Under managed accounts Account you will have your account automatically monitored, rebalanced and reallocated every quarter by AAG based on data resulting from recommendations of an independent financial consultant to respond to market performance. You will receive an account update and forecast statement annually and can update personal information at any time by calling the Plan's toll-free customer service number or visiting the Plan web site.
  • Online Investment Advice - An online tool that provides specific recommendations based upon a participant's financial situation. The recommended investment portfolio is based on information drawn from the Participant's deferred compensation account profile and from the Core Investment Options available in the Plan. The Participant then implements the recommended investment portfolio and manages his or her retirement account online.
  • Online Investment Guidance - An online tool that provides personalized asset allocation assistance without recommending any one specific fund.

You may opt out of the Alaska Target Retirement Trust at any time by calling the Plan's toll-free customer service number or visiting the Plan web site. From there you can enroll in either the managed accounts, advice or guideance features.

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Fees

52. What are the fees for the investment services?

Under Managed Accounts, you will pay 0.5% annually of your assets. The fee is deducted from your account on a quarterly basis.

The fee for Online Investment Advice is $25.00 per year deducted from your account on a quarterly basis.

There is no charge for the Online Investment Guidance tools.

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53. Do I pay any other fees?

Yes. You will pay a fee to the investment fund managers based on the funds your contributions are invested in. Some of the fees are set while other vary over the course of the year.

You will also pay a recordkeeping and administrative fee of 0.142% of your asset balance annually as well as a flat fee of $35.00 per year for active participants and $25.00 per year for inactive participants (participants who are not actively employed but still have their contributions managed by the PERS/TRS DCR Plan)

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Health Reimbursement Account

54. Can I use the HRA if I don't buy the system medical insurance?

If you have at least ten year of service and are Medicare age eligible, yes, you may use the HRA without purchasing the system medical insurance.

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55. Can the HRA be used for covered expenses my dependents incur?

Yes.

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Loans, Pledges, and Attachments

56. Can I take a loan on my PERS/TRS DCR account?

No. Loans or borrowing of any kind are not permitted.

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57. Can I assign or pledge my PERS/TRS DCR account?

No. The plan does not recognize any voluntary or involuntary attempt by you to assign, pledge, sell, transfer, or encumber your account. Any attempt to do so is void.

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58. Can my account be attached in any way?

Yes. Your account can be divided as provided in a qualified domestic relations order with a separate account established for your ex-spouse. Your account can also be attached by a child support order or an IRS levy.

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Taxes and Penalties

59. What are the taxes and penalties on a PERS/TRS DCR plan payment?

In general, payments you receive will be subject to income taxes. If you choose a lump sum payment to yourself, the plan is required to withhold 20% for payment of federal taxes. In addition, your payments will be subject to an additional 10% penalty if you receive your payment before you reach age 59 1/2. The penalty generally dos not apply if:

  • Distributions are paid at your death;
  • You suffer a permanent and total disability and are not eligible for disability benefits from the PERS/TRS DCR plan;
  • You must comply with a Qualified Domestic Relations Order payment [for that portion to be distributed to the alternate payee, however, if an alternate payee transfers the money to an IRA, it is then subject to all the normal tax and penalty rules that apply to an IRA; or
  • You have selected lifetime distribution options.

You are solely responsible for determining how federal tax laws affect your particular situation. You should contact your tax advisor or the Internal Revenue Service if you need additional information. The Division of Retirement and Benefits does not give tax advice.

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Vesting

60. When do I vest into my Retirement Savings Account?

You are 100% vested in the contributions you make to the plan and any change in value when they are placed into your account.

You vest in the contributions your employer makes to your account in stages with 100% vesting after 5 years of service. The vesting schedule is:

  • 2 years 25%
  • 3 years 50%
  • 4 years 75%
  • 5 years 100%

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61. Since I am not vested in the contributions my employer makes to my account until I have five years of credited service, how are the employer contributions invested during that time?

You will be able to invest the employer contributions made on your behalf in any of the fund options you choose when they are placed into your account. The vesting schedule affects how much of the employer contributions and related gains or losses you can refund from the account when you terminate employment.

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