Superintendent warns three-month lapse in state retirement contributions left employee accounts without purchases

The Denali Borough School District superintendent told the board the state Division of Retirement and Benefits was unable to accept employee contribution payments for about three months while it transitioned to a new system, and as a result the mutual-fund purchases for those contributions were not made during that time.

"For 3 months, those purchases of those mutual funds have not been made, and any growth potential during that time has been lost," the superintendent said, describing the lapse as an outcome of the division's system transition and related capacity and staffing challenges. He said the division expects to be able to accept payments by the end of the month and that the statewide superintendents association has contacted state partners to seek a plan to address the loss experienced by employees.

The superintendent framed the issue as a statewide administrative problem rather than a district error and urged district staff and employee representatives to track financial impacts. Board members asked whether the state had offered remediation; the superintendent said discussions are ongoing and that local associations are requesting clarification of how the division will rectify lost investment growth.

The superintendent also described an unrelated IRS refund/credit matter: the district received a $40,000 refund tied to a 2016 overpayment and staff discovered an additional credit of roughly $100,000 might exist related to missing quarterly reports from 2019; the district will investigate and, where appropriate, switch to electronic submissions to reduce future reporting gaps.

The board asked staff to continue tracking both the retirement contribution timeline and the IRS reporting/credit investigation and to report back with recommended next steps.