Stricken language would be deleted from and underlined language would be added to present law.
Act 170 of the Regular Session
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State of Arkansas As Engrossed: H2/16/23 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 As Engrossed: H2/16/23 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 as he or she shall have nominated as provided under 3
subdivision (a)(4) of this subsection to the persons that he or she nominates 4
by written designation executed and filed with the Board of Trustees of the 5
Arkansas Teacher Retirement System before the date the first payment of his 6
or her annuity becomes due. 7
(ii)(a) The person designated as a beneficiary by the 8
retirant shall be: The designated beneficiary or beneficiaries of a retiree 9
shall be either: 10
(1) The retiree’s spouse; 11
(2) One (1) or more of the retiree’s 12
children who qualify as a dependent child under subdivision (a)(2)(A)(ii)(c) 13
of this section; or 14
(3) Both the retiree’s spouse and one (1) 15
or more of the retiree’s children who qualify as a dependent child under 16
subdivision (a)(2)(A)(ii)(c) of this section. 17
(a)(b) The retirant's spouse for not less than 18
one (1) year immediately preceding the first payment due date; or spouse of a 19
retiree may be designated as the retiree's beneficiary if the retiree has 20
been married to the spouse for at least one (1) year immediately preceding 21
the first annuity payment due date. 22
(b)(c) A dependent child of the retirant who 23
has been adjudged physically or mentally incapacitated by a court of 24
competent jurisdiction A child of a retiree qualifies as a dependent child 25
and may be designated as an Option A beneficiary of the retiree if the child 26
has been adjudged physically or mentally incapacitate d by a court of 27
competent jurisdiction ; 28
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SECTION 2. Arkansas Code § 24 -7-706(a)(2)(B), concerning the Option B 30
— 50% Survivor Annuity option under the Arkansas Teacher Retirement System, 31
is amended to read as follows: 32
(B) Option B — 50% Survivor Annuity. 33
(i) Under Option B, upon the death of a retirant 34
retiree, one-half (½) of his or her reduced annuity shall be continued 35
throughout the life of and paid to such person as he or she has nominated as 36 As Engrossed: H2/16/23 HB1186
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provided under subdivision (a)(4) of this subsection to the persons that he 1
or she nominates by written designation executed and filed with the board 2
before the date the first payment of his or her annuity becomes due. 3
(ii)(a) The person designated as a beneficiary by 4
the retirant shall be: The designated beneficiary or beneficiaries of a 5
retiree shall be either: 6
(1) The retiree’s spouse; 7
(2) One (1) or more of the retiree's 8
children who qualify as a dependent child under subdivision (a)(2)(B)(ii)(c) 9
of this section; or 10
(3) Both the retiree’s spouse and one 11
(1) or more of the retiree's children who qualify as a dependent child under 12
subdivision (a)(2)(B)(ii)(c) of this section. 13
(a)(b) The retirant's spouse for not less than 14
one (1) year immediately preceding the first payment due date; or The spouse 15
of a retiree may be designated as the retiree's beneficiary if the retiree 16
has been married to the spouse for at least one (1) year immediately 17
preceding the first annuity payment due date. 18
(b)(c) A dependent child of the retirant who 19
has been adjudged physically or mentally incapacitated by a court of 20
competent jurisdiction A dependent child of a retiree may be designated as an 21
Option B beneficiary of the retiree if the dependent child ha s been adjudged 22
physically or mentally incapacitated by a court of competent jurisdiction ; or 23
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SECTION 3. Arkansas Code § 24 -7-706(a), concerning annuity options 25
under the Arkansas Teacher Retirement System, is amended to add new 26
subdivisions to read as follows: 27
(4)(A)(i) Upon the death of a retiree, if both a spouse and one 28
(1) dependent child are designated as the retiree’s Option A beneficiaries, 29
the retiree’s reduced annuity shall be paid in equal shares to the spouse and 30
the dependent child. 31
(ii) Upon the death of a retiree, if both a spouse 32
and more than one (1) dependent child are de signated as the retiree’s Option 33
A beneficiaries, the spouse shall receive fifty percent (50%) of the 34
retiree’s reduced annuity and the remaining fifty percent (50%) of the 35
retiree’s reduced annuity shall be paid in equal shares to the dependent 36 As Engrossed: H2/16/23 HB1186
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children. 1
(iii) Upon the death of a retiree, if more than one 2
(1) dependent child is designated as the retiree's Option A beneficiary and a 3
spouse is not designated as the retiree's Option A beneficiary, the retiree's 4
reduced annuity shall be paid in equal shar es to each dependent child 5
designated as the retiree's Option A beneficiary. 6
(B)(i) Upon the death of a retiree, if both a spouse and 7
one (1) dependent child are designated as the retiree’s Option B 8
beneficiaries, one-half (1/2) of the retiree’s reduce d annuity shall be paid 9
in equal shares to the spouse and the dependent child. 10
(ii) Upon the death of a retiree, if both a spouse 11
and more than one (1) dependent child are designated as the retiree’s Option 12
B beneficiaries, the spouse shall receive fi fty percent (50%) of one -half 13
(1/2) of the retiree’s reduced annuity and the remaining fifty percent (50%) 14
of one-half (1/2) of the retiree’s reduced annuity shall be paid in equal 15
shares to the dependent children. 16
(iii) Upon the death of a retiree, i f more than one 17
(1) dependent child is designated as the retiree's Option B beneficiary and a 18
spouse is not designated as the retiree's Option B beneficiary, the retiree's 19
reduced annuity shall be paid in equal shares to each dependent child 20
designated as the retiree's Option B beneficiary. 21
(5) If both a spouse and one (1) or more dependent children are 22
designated as the Option A or Option B beneficiaries of a retiree and annuity 23
payments to either the spouse or one (1) or more of the dependent children 24
have begun, the following shall apply: 25
(A) A dependent child’s portion of the annuity shall not 26
revert to the spouse or any other dependent children if the dependent child: 27
(i) Predeceases the spouse or any other dependent 28
children; or 29
(ii) Otherwise becomes ineligible to continue 30
receiving annuity payments; and 31
(B) The spouse's portion of the annuity shall not revert 32
to any dependent child if the spouse: 33
(i) Predeceases one (1) or more dependent children; 34
or 35
(ii) Otherwise becomes ineligible to continue 36 As Engrossed: H2/16/23 HB1186
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receiving annuity payments. 1
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SECTION 4. Arkansas Code § 24 -7-706(d), concerning the ability of a 3
residue beneficiary under § 24 -7-709 to cancel the form of annuity in effect 4
and elect Option A — 100% Survivor Annuity option under certain conditions, 5
is amended to add additional subdivisions to read as follows: 6
(4) A surviving spouse who is eligible to receive an annuity 7
under this section may elect to receive a lump -sum distribution of the 8
retiree's residue in li eu of the spousal annuity if: 9
(A) The retiree did not designate one (1) or more 10
dependent children as a beneficiary; and 11
(B) The surviving spouse files a written waiver of his or 12
her right to the spousal annuity with the system. 13
(5) If a residue beneficiary elects the Option A — 100% Survivor 14
Annuity under this subsection and is the surviving spouse of a disability 15
retiree, the same procedures used under § 24 -7-710 to determine when an 16
active member’s surviving spouse is entitled to begin receiving benefit 17
payments shall be used to determine when the residue beneficiary is entitled 18
to begin receiving benefit payments. 19
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SECTION 5. Arkansas Code § 24 -7-706, concerning annuity options, is 21
amended to add an additional subsection to read as follows: 22
(g) A retiree's effective retirement date and the date when survivor 23
benefits under this section are payable shall be determined by the law in 24
effect at the time of the retiree's death. 25
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SECTION 6. EMERGENCY CLAUSE. It is found and d etermined by the 27
General Assembly of the State of Arkansas that the operations of a state 28
public retirement system are complex; that the Arkansas Teacher Retirement 29
System must be able to meet the needs of its members as anticipated by the 30
General Assembly; that certain provisions of the Arkansas Teacher Retirement 31
System Act need revision and updating to bring them into conformance with 32
sound public pension policy and actuarial requirements; that the current 33
provisions of the Arkansas Teacher Retirement Sy stem Act do not allow a 34
retirant to provide for both his or her surviving spouse and dependent 35
children in the event of the retirant ’s death by designating both his or her 36 As Engrossed: H2/16/23 HB1186
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surviving spouse and dependent children as option beneficiaries; that the 1
current provisions of the Arkansas Teacher Retirement System Act do not 2
clearly address when the surviving spouse of a disability retirant is 3
entitled to begin receiving benefit payments; that the revisions and updates 4
are of great importance to members of the Arkan sas Teacher Retirement System 5
and to other citizens of the State of Arkansas; that the Arkansas Teacher 6
Retirement System operates on a fiscal year of July 1 to June 30; that a July 7
1, 2023, effective date is necessary to allow the provisions within this a ct 8
to begin on the first day of the fiscal year to provide for the proper 9
administration of the procedures referenced in this act; that the updates and 10
revisions to the Arkansas Teacher Retirement System Act are of great 11
importance for actuarial purposes a nd for the improvement and protection of 12
member benefits under the Arkansas Teacher Retirement System; and that this 13
act is necessary in order to maintain an orderly system of benefits for the 14
members of the Arkansas Teacher Retirement System. Therefore, an emergency 15
is declared to exist, and this act being necessary for the preservation of 16
the public peace, health, and safety shall become effective on July 1, 2023. 17
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/s/A. Collins 19
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APPROVED: 3/2/23 22
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