Alaska PERS Retirement Options: 50%, 75% or 66 2/3% Survivor

Updated October 2, 2026. Quick answer: In the Alaska PERS defined benefit plan (Tiers I, II and III, for members who first entered before July 1, 2006), a married retiree must elect a joint and survivor option unless the spouse gives consent (the division’s pages say notarized; AS 39.35.450(c) asks for a consent signed by the spouse on the administrator’s forms). The survivor choices are 50% or 75%, plus a 66 2/3% last survivor option and a Level Income Option for members who entered before July 1, 1996. Once pension benefits begin, the selection cannot be changed. A refund of contributions ends the pension and medical benefits at retirement age, and a direct refund of untaxed money carries 20% federal withholding. Vesting takes 5 paid-up years.

What this page covers and what it does not

This page works from four Alaska Division of Retirement and Benefits documents: its Public Employees’ Retirement System (PERS) and Teachers’ Retirement System (TRS) defined benefit page, the 2011 edition of the PERS handbook, a brochure dated May 2025, and its survivor benefits page. “Members who first entered on or after July 1, 2006, are members of the Defined Contribution Retirement Plan (DCR).” Those newer members are not covered. Within the defined benefit plan the division assigns tiers by entry date: “Before July 1, 1986, are in Tier I; On or after July 1, 1986, but before July 1, 1996, are in Tier II; On or after July 1, 1996, but before July 1, 2006, are in Tier III”. Every rule below carries its tier, and TRS has its own short section.

Where the older handbook and the newer documents differ, this page says so. Confirm anything consequential with the division. For the state tax side, see Alaska retirement taxes and does Alaska tax pensions.

Vesting, retirement age and the pension formula

Vesting comes first. “You must have 5 years of paid-up PERS service to become vested.” “You must leave your contributions in the PERS to stay vested.”

The table follows the division’s pages, and the statute reads differently for Tier I. AS 39.35.370(a)(1) makes a terminated employee eligible for a normal retirement benefit “at age 60 with at least five years credited service;” and 39.35.370(b) says “a terminated employee is eligible for an early retirement benefit at age 55 with at least five years credited service.” AS 39.35 as read states no separate age 50 or age 55 rule for members who first entered before July 1, 1986. AS 39.35.547(b) fixes the monthly benefit by the provisions “in effect on the date of termination of the member’s last segment of employment”, and the Tier I ages the division applies may rest on law this page did not read, so ask the division which rule applies to your service.

Early retirement is permanent: “The early retirement reduction is effective for the lifetime of the benefit.” Waiting past normal age adds nothing: “Vested members who have terminated PERS employment and have reached normal retirement age will not receive larger monthly benefits by waiting until they are older to retire.” Service alone can qualify a member at any age, with “30 paid-up years of PERS service”. The statute sets the early reduction rate, which the page does not: AS 39.35.370(b) says “The monthly amount of a retirement benefit that would be due under (c) of this section shall be reduced by multiplying one-half of one percent times the number of months, to the nearest month, by which the retirement date of the employee falls short of the date that the employee reaches age 60.” It states the service routes as “with at least 20 years of credited service as a peace officer or firefighter; or” and “with at least 30 years of credited service for all other employees.” (AS 39.35.370(a)(2), (3)).

The pension is formula based: “Your normal retirement benefit will be calculated by multiplying the percentage multipliers times your average monthly salary (AMS) times your PERS credit service.” The multipliers for a member other than a peace officer or fire fighter are “2% for all service earned up to 10 years times AMS, plus 2.25% per year for all service over 10 years, but less than 20 years times AMS, plus 2.5% per year for all service over 20 years times AMS”. Tier I and Tier II average the three high years and Tier III the five high years. The statute carves out the uniformed services: AS 39.35.680(4)(E) uses “for a peace officer or firefighter hired at any time, the three consecutive payroll years during the period of credited service that yield the highest average;” whatever the hire date. “All service earned before July 1, 1986, will be calculated using the 2% multiplier.”

A computed example from assumed figures, not an Alaska figure: a Tier II or Tier III member with an assumed $5,000 average monthly salary and 25 years of service, all earned after June 30, 1986. The formula is each multiplier times the salary times the years in its band. The first 10 years at 2% give a computed $1,000 a month, the next 10 years at 2.25% a computed $1,125, and the last 5 years at 2.5% a computed $625, for a computed $2,750 a month before any early, survivor or indebtedness reduction. Peace officers and fire fighters use different multipliers, which AS 39.35.370(c) states: “The monthly amount of a retirement benefit for a peace officer or firefighter is two percent of the average monthly compensation times the years of credited service through 10 years, plus two and one-half percent of the average monthly compensation times the years of service over 10 years.”

“Your contribution balance does not reflect the true value of your PERS DB pension benefit since it only includes any contributions you have made (as well as any indebtedness payments and interest earned).”

The election at retirement: what each option pays a survivor

The benefits page lists the choices: normal or early retirement, a Level Income Option, joint and survivor options, and a last survivor option. Availability is stated by entry date: “Level Income Option (available if you entered the PERS before July 1, 1996 and is not available for TRS members)”. The last survivor option is limited the same way.

The statute is narrower on the options. AS 39.35.450(a) lets the employee elect a reduced benefit payable for life with the contingent beneficiary then entitled to “75 percent of the reduced benefit payable for life; or” or “50 percent of the reduced benefit payable for life.” It names the Level Income Option only as an alternative open where the spouse’s designation has been revoked under 450(c): “if the employee was first hired before July 1, 1996, benefit payments under the level income option under former AS 39.35.460.” That section is marked repealed in 1996. No 66 2/3% last survivor option appears in AS 39.35 as read; the division’s regulations were not read, so that row stays as the division describes it.

Without a survivor option the division says: “All benefits, including retiree medical benefits, cease at your death.” The general trade is at single-life versus joint-and-survivor pension.

The joint and survivor options pay different shares. “After the member’s death, their spouse would receive a lifetime monthly benefit equal to 50% of the reduced benefit.” “If the spouse dies first, the benefit does not change.” The 75% option is the same with a larger share: “After the member’s death, their spouse would receive a lifetime monthly benefit equal to 75% of the reduced benefit.” The last survivor option: “If the member dies first, their spouse would receive 66-2/3% of the reduced benefit.”

The Level Income Option pays more before 65 and less after, so it suits a member with other income at 65. Health coverage rides on the choice: “If the member wishes to continue both pension and health benefits for their spouse in the case of their death, they must have elected a Joint and Survivor Option.” More on survivor rules is at survivor benefits with a government pension.

How much a survivor option costs: worked examples

The reduction depends on both ages. “The actual reduction to your benefit will be based on your age and the age of your spouse or qualified same-sex partner when you retire.” The handbook’s sample factors are dated July 1, 1983, so they are not current quotes.

A computed check of the handbook’s own $1,000 example using its sample factors: for the 50% option the factor 0.91548 turns $1,000 into a computed $915.48 for the member, and the survivor’s 50% share is a computed $457.74. For the 75% option the factor 0.87837 gives a computed $878.37 and a survivor share of a computed $658.78. For the last survivor option the factor 0.91860 gives a computed $918.60, and 66 2/3% of that is a computed $612.40 a month. Each is the normal benefit times the factor, then the survivor percentage times that reduced benefit.

A computed example from an assumed $2,000 reduced monthly benefit, not an Alaska figure: the survivor payment is the percentage times the reduced benefit, a computed $1,000 a month under the 50% option, a computed $1,500 under the 75% option, and about a computed $1,333 under the 66 2/3% option. The pages read do not state current factors, so the real reduction for a pair of ages comes from the division.

What is irrevocable, and what happens to the spouse

“Warning: Once you begin receiving pension benefits, your selection cannot be changed!” Later events do not reopen it. The statute puts the line at the appointment date. AS 39.35.450(e): “Once the employee is appointed to retirement, the election is irrevocable.” Before that date AS 39.35.450(c) says “An employee may elect or change an option without the approval of the administrator if the election or change is filed in writing with the administrator before the effective date of the employee’s retirement.” “The divorce does not nullify your survivor designation.” A later spouse gets no survivor rights: “However, your new spouse will have no rights to survivor benefits.”

A member unmarried at retirement chooses between the regular and Level Income options, and “If you were not married at the time of retirement, but marry after appointment to retirement, you cannot change the type of retirement benefit you elected.”

A married member cannot simply opt out. “If you are married, you are required to select a joint and survivor option unless your spouse provides a notarized consent by waiving any potential survivor benefits under your PERS or TRS defined benefit plan.” “A spouse may provide written consent to the PERS administrator for another type of benefit and forfeit a joint and survivor benefit.” “If the spouse provides this consent, all benefits, including continuing medical coverage, cease at the member’s death.” A court order can also require a survivor option. The statute itself says signed, on the administrator’s forms: under AS 39.35.450(c), revoking a joint and survivor option needs, filed before the effective date of retirement, “a revocation and consent to the revocation signed by the employee’s present spouse and each person entitled to benefits under a qualified domestic relations order on forms provided by the administrator.” The administrator may waive the spouse’s consent in the cases 450(c)(2) lists, such as a spouse who cannot be located. And with no election the default is set by AS 39.35.450(h): “If an employee fails to elect an option under this section, and if no effective revocation is filed with the administrator, the employee is considered to have elected the option provided in (a)(2) of this section.”

The division recommends talking first: “We recommend you contact the Division of Retirement and Benefits to schedule your pre-retirement counseling session prior to applying for retirement benefits.”

If the member dies before retiring

For a vested member’s spouse the survivor page lists the account balance plus “A lump-sum death benefit of $1,000 plus $100 multiplied by the years of credited service”, or a monthly 50% joint and survivor benefit if married to the member for at least one year. A computed example from an assumed 20 years of service, not an Alaska figure: $1,000 plus $100 times 20 is a computed $3,000 lump sum on top of the balance. The statute states the same arithmetic in AS 39.35.420(c): “The amount of the lump-sum death benefit is $100 times the years of credited service of the deceased member plus $1,000.” And where a vested or deferred vested member dies from nonoccupational causes having named no beneficiary other than the surviving spouse, AS 39.35.420(b) says “the surviving spouse may elect to receive either the amounts set out in (c) of this section or a 50 percent joint and survivor option based on credited service to the date of the employee’s death or termination.”

Refund of contributions versus leaving them in

A member leaving covered employment who is not retiring can refund or leave contributions in. A refund ends the plan benefit: “If you choose to request a refund of your employee contributions after you leave employment, you will no longer have benefits when you reach retirement age.” “This includes pension benefits and medical coverage.”

A refund pays only the member’s own money. “A refund will not include any contributions made by your employer to the retirement system or any income earned on employer contributions.” A vested member is weighing the cash against a lifetime pension that the balance does not measure; the general trade is at pension refund versus leaving it.

On timing: “You will be eligible for your refund payment when you have ended your employment for at least 60 days or 30 days after the Refund Election form has been received, whichever is later.” Leaving contributions in has a deadline: “To maintain rights to PERS benefits, inactive (terminated) PERS members must apply for a refund or benefit before July 1 following their 75th birthday or within 50 years of the last active date of PERS membership.”

Spouses have a say. On the benefits page: “If you are married and your account balance is more than $5,000, you must have your spouse fill out section C of the form.” The statute has no balance threshold. AS 39.35.200(c) covers a terminated vested or deferred vested employee “who is married at the time of application for a refund” and says that employee “is entitled to receive a refund of the balance of the employee contribution account only if the employee’s present spouse and each person entitled under the order consent to the refund in writing on a form provided by the administrator.” The administrator may waive the consent in five listed cases. The brochure words it differently: “If you are married, a notarized consent from your spouse on the Refund Election form (gen008) is required if you are vested and want to receive a refund of your contributions.”

Cash or rollover, and what the 20% withholding does

A refund can be paid as a lump sum, as a direct rollover, or as a combination of the two. “You may rollover your refund only into a qualifying plan.” “The PERS and TRS must withhold 20% federal income tax on all untaxed, lump-sum accounts directly refunded to members.” “The 20% tax does NOT apply to PERS or TRS refunds that are rolled DIRECTLY into an IRA, or other qualified plans.”

Which money is untaxed matters. For PERS the division lists “Mandatory employee contributions made after December 31, 1986; and all interest earned on those employee contribution accounts.”

A computed example from an assumed $20,000 untaxed lump-sum refund paid directly, not an Alaska figure: 20% withholding is a computed $4,000, leaving a computed $16,000 in cash. A member who wanted to roll over the full $20,000 afterward would have to supply the withheld amount from other money, which is why the direct route exists. “Although Alaska does not have a state income tax, members who live outside Alaska may be required to pay state and local income taxes on benefits they receive.”

Getting service back, and buying more

On reinstating after a refund the documents read do not agree. The benefits page says: “After you receive a full refund of your contributions, if you are reemployed in a PERS or TRS position you will be enrolled in the PERS or TRS defined contribution plans .” “Refunded service that has not been fully repaid cannot count towards retirement eligibility.” The 2025 brochure says: “If they return to PERS work in the future, they must choose whether to return to their original DB PERS tier within 30 days of rehire, and an indebtedness will be set up to repay refunded DB contributions, plus interest.” The pages read do not reconcile the two. The statute does not settle it: AS 39.35.350, headed “Reinstatement of credited service”, is marked repealed in 2005, and the 30 day election is not in AS 39.35 or AS 14.25 as read.

Claiming other service is a purchase. “You may purchase certain types of service credit in order to increase the number of service years used in the calculation of your retirement benefit.” “Military service that did not occur during your PERS employment does not count toward retirement eligibility, but the service may increase your PERS credit.” For military service the statute does state the price. AS 39.35.340(a) caps the credit: “The credited service allowed may not exceed an aggregate period of five years.” Under 39.35.340(b) the indebtedness is the compensation for calendar year 1976 or the year the employee first became vested, whichever is later, then “multiply the amount determined under (1) of this subsection by the number of years of military service credited under this section;” then “multiply the product determined under (2) of this subsection by six percent for members who are first eligible to claim this military service before January 1, 1987, or eight and one-half percent for members who are first eligible to claim this military service on or after January 1, 1987.” Interest set by regulation accrues on that indebtedness (340(j)); a member who went from an employer into the armed forces and returned within 90 days of discharge owes no retroactive contributions (340(a)); and the credit cannot count toward the service needed for normal retirement (340(d)). The pages read do not state a price for the other types. The general trade is at pension buyback calculator.

An unpaid debt costs benefits: “Unless otherwise stated in this handbook, if your indebtedness is not completely paid when you retire, your monthly benefits will be actuarially reduced over your lifetime.” The statute sets a floor on that reduction. AS 39.35.541(a): where the reduction would leave a benefit lower than it would have been without the claimed credit, “the retirement benefit shall be equal to the amount it would have been had the service credit not been claimed.” The floor does not apply to a peace officer’s or firefighter’s election under 340(i) (541(b)).

Cost-of-living increases after retirement

Two adjustments are described. “Retired members who are principally domiciled and physically present in Alaska and receiving a monthly pension may also be eligible for an additional after-retirement increase of 10% of their base pension benefit.” The 2011 handbook sets eligibility: “Members who first entered the PERS before July 1, 1986 (Tier I), and their survivors”, and “Members who first entered the PERS on or after July 1, 1986 (Tier II or Tier III), and their survivors if they are at least age 65”. The statute does not draw that line by tier. AS 39.35.480(a) gives the allowance, “While residing in the state,” to a person receiving a benefit “who is 65 years of age or older or who is receiving a disability benefit is entitled to receive a monthly cost-of-living allowance in addition to the basic benefit.” It adds: “The amount of this allowance shall be $50 or 10 percent of the basic benefit, whichever is greater.” So the codified text reads residence in Alaska plus age 65 or a disability benefit for every recipient, with a $50 floor the page does not mention; AS 39.35 as read does not state the handbook’s Tier I rule, so ask the division which applies to you. Under 480(b) the allowance stops after notice of an absence from the state longer than 90 days, unless a physician orders an absence of up to six months.

The other is the post retirement pension adjustment (PRPA). The 2011 handbook says “Eligible PERS benefit recipients will receive an automatic annual PRPA when the cost of living increases”. The statute now states the formula. AS 39.35.475(b) sets the increase at “the lesser of 75 percent of the increase in the cost of living in the preceding calendar year or nine percent, for recipients who on July 1 are at least 65 years old and for members receiving disability benefits; and” and at “the lesser of 50 percent of the increase in the cost of living in the preceding calendar year or six percent, for recipients who on July 1 are at least 60 but less than 65 years old or for recipients who are less than 60 years old on July 1 but who have received benefits from the plan for at least five years.” Under 39.35.475(f) it “is effective July 1 of each year and is based on the percentage increase in the consumer price index for urban wage earners and clerical workers for Anchorage, Alaska during the previous calendar year”.

TRS defined benefit members

None of the PERS figures above transfer to TRS. For the TRS defined benefit plan the benefits page says a member is vested with “eight paid-up years of membership service”, and the Tier I and Tier II formula reads “2% times up to the first 20 years of service credit times ABS, plus 2.5% times all service credit years over 20 times ABS”. The statute adds two points the formula line leaves out. AS 14.25.110(d)(2) applies the 2.5% to “two and one-half percent of the years of credited service earned after June 30, 1990, that are more than 20 years of total credited service”, not to all service over 20 years. And among the seven routes AS 14.25.110(a) lists, a member is eligible for a normal retirement benefit who “has attained the age of 60 years and has at least eight years of membership service”, who “has at least 20 years of membership service”, or who “has at least 25 years of credited service, the last five of which have been membership service”; the others cover members first hired before July 1, 1975, Alaska BIA service and part-time teaching. A TRS member should read the TRS handbook, which this page did not.

What the IRS adds on tax

A refund or lump sum from a public pension is a distribution, so the IRS rules apply on top of the division’s own. On withholding, the IRS says that a taxable eligible rollover distribution paid to you “is subject to mandatory income tax withholding (generally at a rate of 20%), even if you intend to roll it over later”, and that if you roll it over yourself “you’ll have to add funds from other sources equal to the amount withheld”. The division’s brochure and benefits page describe the same direct rollover and say that withholding applies to a direct refund of untaxed money. The rollover clock, if the money is paid to you: “you have 60 days from the date you receive it to roll it over to another eligible retirement plan”.

On early distributions the IRS says “the law imposes a 10% additional tax on certain early distributions from certain retirement plans”. Its list of exceptions includes “Distributions made to you after you separated from service with your employer after attainment of age 55” and “Distributions made to a qualified public safety employee from a governmental plan”. Whether an exception fits a particular refund depends on your own plan and facts, so confirm it with a tax preparer before you take one.

What this page could not settle

• The 66 2/3% last survivor option, the 60 and 30 day refund timing, the 30 day choice of the original tier and the divorce sentence are not in AS 39.35 or AS 14.25 as read; the division’s regulations were not read.
• The pages read do not state current actuarial factors; the handbook’s samples are dated July 1, 1983.
• The benefits page says 20 paid-up years and the brochure says 25 paid-up years for peace officers and fire fighters retiring at any age; the statute, AS 39.35.370(a)(2), says 20 years of credited service as a peace officer or firefighter, as quoted above.
• The benefits page says a fully refunded member who is reemployed is enrolled in the defined contribution plans, while the 2025 brochure describes a 30 day choice of the original tier; the pages read do not reconcile them.
• The spousal consent rule for refunds is worded differently in the benefits page, the brochure and the 2011 handbook; the statute, AS 39.35.200(c), requires the spouse’s written consent of a married vested or deferred vested employee with no balance threshold, as quoted above.
• The pages read do not state how often the 7% reinstatement interest compounds, price each type of purchased service, or describe a lump sum retirement option or deferred retirement option program.
• The handbook’s cost-of-living eligibility by tier differs from AS 39.35.480(a), quoted above, and retiree medical eligibility by tier is outside this page.

Common mistakes

• Assuming a joint and survivor election can be undone after the appointment to retirement; the statute makes it irrevocable then, and it can be changed or revoked only before the effective date of retirement.
• Taking a single-life benefit and expecting the spouse to keep the pension or health coverage; both stop at the retiree’s death.
• Requesting a refund because the account balance looks small, when a refund forfeits the pension and retiree medical coverage.
• Treating the 2011 handbook’s sample factors or cost-of-living rules as current quotes instead of confirming with the division.

Related on this site: Alaska retirement taxes, does Alaska tax pensions, single-life versus joint-and-survivor pension, survivor benefits with a government pension, pension refund versus leaving it, pension buyback calculator and public pension retirement decisions by system.

Sources

• Alaska Division of Retirement and Benefits, source 1: https://drb.alaska.gov/employee/dbrplan.html
• Alaska Division of Retirement and Benefits, source 2: https://drb.alaska.gov/docs/booklets/PERS_handbook_WEB.pdf
• Alaska Division of Retirement and Benefits, source 3: https://drb.alaska.gov/docs/brochures/pers024.pdf
• Alaska Division of Retirement and Benefits, source 4: https://drb.alaska.gov/retiree/survivor.html
• Alaska Legislature, Alaska Statutes AS 39.35 (Public Employees’ Retirement System) and AS 14.25 (Teachers’ Retirement System), read on October 24, 2026: https://www.akleg.gov/basis/statutes.asp
• IRS, Topic no. 413, Rollovers from retirement plans (irs.gov): https://www.irs.gov/taxtopics/tc413
• IRS, Topic no. 558, Additional tax on early distributions from retirement plans other than IRAs (irs.gov): https://www.irs.gov/taxtopics/tc558

Sources: the primary documents linked above, read on October 2, 2026. General information from each system’s own published materials, not legal, tax or financial advice. Your own member statement and the system’s current rules decide your benefit, and a pension counsellor at the system or a fee-only adviser is the right place to confirm anything consequential.