Stricken language would be deleted from and underlined language would be added to present law.
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State of Arkansas 1
94th General Assembly A Bill 2
Regular Session, 2023 HOUSE BILL 1186 3
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By: Representative A. Collins 5
By: Senator K. Hammer 6
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For An Act To Be Entitled 8
AN ACT TO AMEND AND UPDATE THE LAW CONCE RNING ANNUITY 9
OPTIONS UNDER THE AR KANSAS TEACHER RETIR EMENT SYSTEM; 10
TO ALLOW A RETIRANT TO DESIGNATE BOTH SU RVIVING 11
SPOUSE AND DEPENDENT CHILDREN AS OPTION B ENEFICIARIES 12
UNDER THE ARKANSAS T EACHER RETIREMENT SY STEM; TO 13
CLARIFY WHEN A SURVI VING SPOUSE OF A DIS ABILITY 14
RETIRANT IS ENTITLED TO BEGIN RECEIVING P AYMENTS 15
UNDER THE ARKANSAS T EACHER RETIREMENT SY STEM; TO 16
DECLARE AN EMERGENCY ; AND FOR OTHER PURP OSES. 17
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Subtitle 20
TO AMEND AND UPDATE THE LAW CONCERNING 21
ANNUITY OPTIONS UNDER THE ARKANSAS 22
TEACHER RETIREMENT SYSTEM; AND TO DECLARE 23
AN EMERGENCY. 24
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BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 27
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SECTION 1. Arkansas Code § 24 -7-706(a)(2), concerning a member's 29
annuity election and criteria that must be met for a member's nominated 30
beneficiary to receive an annuity in accordance with the Option A — 100% 31
Survivor Annuity option under the Arkansas Teacher Retirement System, is 32
amended to read as follows: 33
(2) The member may nominate designate a beneficiary one (1) or 34
more beneficiaries, in accordance with one (1) of the following options: 35
(A) Option A — 100% Survivor Annuity. 36 HB1186
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(i) Under Option A, upon the death of a retirant 1
retiree, his or her reduced annuity shall be continued throughout the life of 2
and paid to such person in equal shares to each person as he or she shall 3
have has nominated by written designation executed and filed with the Board 4
of Trustees of the Arkansas Teacher Retirement System before the date the 5
first payment of his or her annuity becomes due. 6
(ii)(a) The A person designated as a beneficiary by 7
the retirant of a retiree shall be: the spouse or a dependent child of the 8
retiree. 9
(a)(b) The retirant's spouse for not less than 10
one (1) year immediately preceding the first payment due date; or spouse of a 11
retiree may be designated as the retiree's beneficiary if the retiree has 12
been married to the spouse for at least one (1) year immediately preceding 13
the first annuity payment due date. 14
(b)(c) A dependent child of the retirant who 15
has been adjudged physically or mentally incapacitated by a court of 16
competent jurisdiction dependent child of a retiree may be designated as the 17
beneficiary of the retiree if the dependent child has been: 18
(1) Adjudged physically or mentally 19
incapacitated by a court of competent jurisdiction; or 20
(2) Found by the Social Security 21
Administration to be disabled, as shown by a Social Security Administration 22
determination letter; 23
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SECTION 2. Arkansas Code § 24 -7-706(a)(2)(B), concerning the Option B 25
— 50% Survivor Annuity option under the Arkansas Teacher Retirement System, 26
is amended to read as follows: 27
(B) Option B — 50% Survivor Annuity. 28
(i) Under Option B, upon the death of a retirant 29
retiree, one-half (½) of his or her reduced annuity shall be continued 30
throughout the life of and paid to such person in equal shares to each person 31
as he or she has nominated by written designation executed and filed with the 32
board before the date the first payment of his or her annuity becomes due. 33
(ii)(a) The A person designated as a beneficiary by 34
the retirant of a retiree shall be: the spouse or a dependent child of the 35
retiree. 36 HB1186
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(a)(b) The retirant's spouse for not less than 1
one (1) year immediately preceding the first payment due date; or The spouse 2
of a retiree may be designated as the retiree's beneficiary if the retiree 3
has been married to the spouse for at least one (1) year immediately 4
precediing the first annuity payment due date. 5
(b)(c) A dependent child of the retirant who 6
has been adjudged physically or mentally incapacitated by a court of 7
competent jurisdiction dependent child of a retiree may be designated as the 8
beneficiary of the retiree if the dependent child has been: 9
(1) Adjudged physically or mentally 10
incapacitated by a court of competent jurisdiction; or 11
(2) Found by the Social Security 12
Administration to be disabled, as shown by a Social Security Administration 13
determination letter; or 14
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SECTION 3. Arkansas Code § 24-7-706(a), concerning annuity options 16
under the Arkansas Teacher Retirement System, is amended to add a new 17
subdivision to read as follows: 18
(4) If both a spouse and dependent child are designated as the 19
Option A or Option B beneficiaries of a retiree and annuity payments to 20
either the spouse or dependent child have begun, the following shall apply: 21
(A) The dependent child's portion of the annuity shall not 22
revert to the spouse if the dependent child predeceases the spouse or 23
otherwise becomes ineligible to continue receiving annuity payments; and 24
(B) The spouse's portion of the annuity shall not revert 25
to the dependent child if the spouse predeceases the dependent child or 26
otherwise becomes ineligible to continue receiving annuity payments. 27
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SECTION 4. Arkansas Code § 24 -7-706(d), concerning the ability of a 29
residue beneficiary under § 24 -7-709 to cancel the form of annuity in effect 30
and elect Option A — 100% Survivor Annuity option under certain conditions, 31
is amended to add additional subdivisions to read as follows: 32
(4) A surviving spouse who is eligible to receive an annuity 33
under this section may elect to receive a lump -sum distribution of the 34
retiree's residue in lieu of the spousal annuity if: 35
(A) The retiree did not designate one (1) or more 36 HB1186
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dependent children as a beneficiary; and 1
(B) The surviving spouse files a written waiver of his or 2
her right to the spousal annuity with the system. 3
(5) If a residue beneficiary elec ts the Option A — 100% Survivor 4
Annuity under this subsection and is the surviving spouse of a disability 5
retiree, the same procedures used under § 24 -7-710 to determine when an 6
active member’s surviving spouse is entitled to begin receiving benefit 7
payments shall be used to determine when the residue beneficiary is entitled 8
to begin receiving benefit payments. 9
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SECTION 5. Arkansas Code § 24 -7-706, concerning annuity options, is 11
amended to add an additional subsection to read as follows: 12
(g) A retiree's effective retirement date and the date when survivor 13
benefits under this section are payable shall be determined by the law in 14
effect at the time of the retiree's death. 15
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SECTION 6. EMERGENCY CLAUSE. It is found and determined by the 17
General Assembly of the State of Arkansas that the operations of a state 18
public retirement system are complex; that the Arkansas Teacher Retirement 19
System must be able to meet the needs of its members as anticipated by the 20
General Assembly; that certain provisions of the A rkansas Teacher Retirement 21
System Act need revision and updating to bring them into conformance with 22
sound public pension policy and actuarial requirements; that the current 23
provisions of the Arkansas Teacher Retirement System Act do not allow a 24
retirant to provide for both his or her surviving spouse and dependent 25
children in the event of the retirant’s death by designating both his or her 26
surviving spouse and dependent children as option beneficiaries; that the 27
current provisions of the Arkansas Teacher R etirement System Act do not 28
clearly address when the surviving spouse of a disability retirant is 29
entitled to begin receiving benefit payments; that the revisions and updates 30
are of great importance to members of the Arkansas Teacher Retirement System 31
and to other citizens of the State of Arkansas; that the Arkansas Teacher 32
Retirement System operates on a fiscal year of July 1 to June 30; that a July 33
1, 2023, effective date is necessary to allow the provisions within this act 34
to begin on the first day of th e fiscal year to provide for the proper 35
administration of the procedures referenced in this act; that the updates and 36 HB1186
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revisions to the Arkansas Teacher Retirement System Act are of great 1
importance for actuarial purposes and for the improvement and protect ion of 2
member benefits under the Arkansas Teacher Retirement System; and that this 3
act is necessary in order to maintain an orderly system of benefits for the 4
members of the Arkansas Teacher Retirement System. Therefore, an emergency 5
is declared to exist, and this act being necessary for the preservation of 6
the public peace, health, and safety shall become effective on July 1, 2023. 7
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