(a) The board may establish and maintain university retirement programs for eligible employees in which retirement and death benefits are provided through the purchase of annuity contracts, either fixed, variable, or a combination of fixed and variable. Participation in a university retirement program is in place of participation in a state retirement system. The university may establish retirement programs for new employees in a participating position at any time. Retirement programs must be optional.

(b) The board shall

(1) provide for the administration of the retirement programs, including procedures for resolving complaints from participating employees;

(2) designate the company or companies to which payment of the contributions required under AS 14.40.691 may be made, after considering the

(A) nature and extent of the rights and benefits that the contracts will provide to employees who elect to participate and to their beneficiaries;

(B) relation of the contractual rights and benefits to the contributions to be made under AS 14.40.661 - 14.40.799;

(C) suitability of the contractual rights and benefits to the needs and interests of employees who participate and to the interest of the university in the employment and retention of employees;

(D) ability of the designated company or companies to provide rights and benefits under the contracts; and

(E) efficacy of the contracts in the recruitment and retention of faculty and administrators;

(3) take other actions required to ensure that the retirement programs comply with applicable provisions of 26 U.S.C. 401 - 417 (Internal Revenue Code).