Section 2 AAC 35.275 - Benefit adjustments(a) A benefit overpayment other than one described in AS 39.35.520(b) or waived under AS 39.35.522 must be recovered by applying a lifetime actuarial reduction to the benefit recipient's future monthly benefits, unless the benefit recipient elects to pay the overpayment in a lump sum.(b) A benefit underpayment must be paid to the recipient(1) by applying a lifetime actuarial increase to the recipient's future monthly benefits if the underpayment exceeds $3,500, unless the recipient elects to receive a lump sum payment; or(2) by lump sum if the underpayment is $3,500 or less.(c) The division will notify the recipient by certified mail of the overpayment or underpayment amount. The recipient must irrevocably elect a payment option under (a) or (b)(1) of this section within 90 days after receipt of the division's notice. Failure of the recipient to notify the division of a payment option election and to pay the lump sum overpayment, if applicable, by either hand delivering or mailing written notification and payment, which must be received or postmarked within 90 days after the recipient's receipt of the division's notice, will result in a lifetime actuarial reduction or increase to the recipient's monthly benefit.(d) The lifetime actuarial monthly benefit reduction or increase is calculated by multiplying the amount of the overpayment or underpayment, including interest if applicable, by the appropriate actuarial factor for the recipient's age at the time of the adjustment. The most advantageous table of factors adopted during the member's PERS employment will be used to calculate the actuarial reduction or increase to the recipient's future monthly benefits.(e) The administrator will require a member or beneficiary to submit evidence to support the claim of hardship, including a copy of the member's or beneficiary's most recent federal tax return if the member or beneficiary requests a waiver of overpayment under AS 39.35.522(a)(1) because of undue hardship. If the member or beneficiary is married and files a tax return separate from the member's beneficiary's spouse, copies of the spouse's tax return may also be required.(f) An actuarial adjustment to benefits that have been corrected due to an error or change in the record ceases on the first of the month following the date the member dies. If the member dies on the first of a month, the actuarial adjustment ceases on the date of the member's death. Survivor benefits calculated under AS 39.35.440 or 39.35.450 do not include the actuarial adjustment.Eff. 12/9/85, Register 99; am 3/2/88, Register 108; am 2/13/2004, Register 172; readopt 7/20/2006, Register 179; am 1/13/2010, Register 193Effective 7/20/2006, Register 179, the Department of Administration readopted 2 AAC 35.275, without change, to affirm the validity of that section following statutory amendments made in ch. 9, FSSLA 2005. Chapter 9, FSSLA 2005 eliminated the Public Employees' Retirement Board, and largely transferred the board's authority to adopt regulations in 2 AAC 35 to the commissioner of administration.
Even though the adoption of 2 AAC 35.275(e) was effective 2/13/2004, it was not published until Register 172, January 2005.
Authority:AS 39.35.003
AS 39.35.520
AS 39.35.522