Stricken language would be deleted from and underlined language would be added to present law.
Act 107 of the Regular Session
*LHR037* 02-07-2023 09:19:08 LHR037
State of Arkansas As Engrossed: H2/7/23 1
94th General Assembly A Bill 2
Regular Session, 2023 HOUSE BILL 1201 3
4
By: Representative Warren 5
By: Senator K. Hammer 6
7
For An Act To Be Entitled 8
AN ACT TO ENACT THE ARKANSAS TEACHER RET IREMENT 9
SYSTEM’S GENERAL OMN IBUS ACT; TO CORRECT CERTAIN 10
REFERENCES TO “ALTER NATE RETIREMENT PLAN ”, “COVERED 11
EMPLOYER”, “CREDITED SERVICE”, “RETIRANT” , “SERVICE 12
CREDIT”, AND “THE SY STEM”; TO AMEND AND ADD CERTAIN 13
DEFINITIONS APPLICABLE TO THE ARKANSAS TEAC HER 14
RETIREMENT SYSTEM; T O CLARIFY THE LAW CO NCERNING 15
BENEFIT INCREASES AN D COMPUTATION, DEADL INES, SYSTEM 16
ASSETS, TERMINATION SEPARATION PERIOD, S ERVICE 17
CREDIT, SECOND REVIE WS OF DISABILITY RET IREMENT 18
APPLICATIONS, A MEMBER’S RESIDUE, CO NTRACT BUYOUT 19
SETTLEMENT AGREEMENT S, THE DE MINIMIS AM OUNT, AND 20
OTHER VARIOUS PROVIS IONS APPLICABLE TO T HE ARKANSAS 21
TEACHER RETIREMENT S YSTEM; TO DECLARE AN EMERGENCY; 22
AND FOR OTHER PURPOS ES. 23
24
25
Subtitle 26
TO ENACT THE ARKANSAS TEACHER RETIREMENT 27
SYSTEM’S GENERAL OMNIBUS ACT; AND TO 28
DECLARE AN EMERGENCY. 29
30
31
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 32
33
SECTION 1. Arkansas Code § 21 -5-411(a)(1)(A)(v), concerning the 34
eligibility of certain retired employees to participate in the State and 35
Public School Life and Health Insurance Program, is amended to read as 36 As Engrossed: H2/7/23 HB1201
2 02-07-2023 09:19:08 LHR037
follows: 1
(v) An alternate retirement plan of a qualifying 2
institution under as defined in § 24-7-801 24-7-202; and 3
4
SECTION 2. Arkansas Code § 24 -2-302(3)(D), concerning the 5
classification under the Arkansas Teacher Retirement System of a person 6
employed in a position requiring professional training or certification with 7
an area vocational-technical school or employed by the Arkansas Educational 8
Television Commission, is amended to read as follows: 9
(D) Any person employed in a position requiring 10
professional training or certification with an area vocational-technical 11
school or employed by the Arkansas Educational Television Commission, except 12
that employees of area vocational-technical schools and the Division of 13
Career and Technical Education, the Adult Education Section, and the Office 14
of Skills Development, who have elected to participate in an alternate 15
retirement plan established by §§ 24-7-901 and 24-7-903 — 24-7-908 § 24-7-901 16
et seq. shall be active members of the alternate retirement plan; and 17
18
SECTION 3. Arkansas Code § 24-2-401(3)(F), concerning the definition 19
of "reciprocal system" that is applicable to public employee retirement 20
plans, is amended to read as follows: 21
(F) An alternate retirement plan for: 22
(i) A college, university, or the Division of Higher 23
Education provided for under § 24-7-801 et seq.; or 24
(ii) A vocational-technical school or the Division 25
of Career and Technical Education, the Adult Education Section of the 26
Division of Workforce Services, the Division of Higher Education, and the 27
Office of Skills Development, with respect to plans provided for under § 24-28
7-901 et seq. as defined in § 24-7-202; or 29
30
SECTION 4. Arkansas Code § 24 -2-401(4)(D), concerning the definition 31
of "state employer" that is applicable to public employee retirement pla ns, 32
is amended to read as follows: 33
(D) A public employer who is: 34
(i) A college, university, or the Division of Higher 35
Education whose employees are covered by an alternate retirement plan 36 As Engrossed: H2/7/23 HB1201
3 02-07-2023 09:19:08 LHR037
provided for under § 24-7-801 et seq.; or 1
(ii) A vocational-technical school or the Division 2
of Career and Technical Education, the Adult Education Section, and the 3
Office of Skills Development, whose employees are covered by an alternate 4
retirement plan provided for under § 24-7-901 et seq. that has an alternate 5
retirement plan as defined in § 24-7-202; 6
7
SECTION 5. Arkansas Code § 24 -2-402(g)(6), concerning death -in-service 8
benefits as to an alternate retirement plan, is amended to read as follows: 9
(6) If the reciprocal system is an alternate retirement plan 10
under § 24-7-801 et seq. or § 24-7-901 et seq. as defined in § 24-7-202, 11
death-in-service benefits shall be contingent on death-in-service benefits 12
having been provided by the alternate retirement plan and having been 13
selected by the member as a benefit. 14
15
SECTION 6. Arkansas Code § 24 -2-402(k), concerning the payment of 16
payable benefits in accordance with terms specified in a written alternate 17
retirement plan document, is amended to read as follows: 18
(k) If the reciprocal system is an alternate retirement plan for a 19
college, a university, or the Division of Higher Education provided for under 20
§ 24-7-801 et seq., or for a vocational-technical school or the Department of 21
Career Education provided for under § 24-7-901 et seq. as defined in § 24-7-22
202, the benefits payable shall be in accordance with terms specified in the 23
written alternate retirement plan document for purchasing the insurance 24
policies or annuity contracts, both fixed and variable in nature, for the 25
participants. 26
27
SECTION 7. Arkansas Code § 24-4-901(a)(1)(F), concerning credited 28
service and reciprocity under the Arkansas Public Employees' Retirement 29
System and the amount of annuity awarded to a member employed by an alternate 30
retirement plan, is amended to read as follows: 31
(F) An alternate retirement plan under § 24-8-101 et seq. 32
or § 24-9-201 et seq. as defined in § 24-7-202; or 33
34
SECTION 8. Arkansas Code § 24 -4-901(a)(3)(B), concerning credited 35
service and reciprocity under the Arkansas Public Employees' Retirement 36 As Engrossed: H2/7/23 HB1201
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System and the computation of final average compensation for credited service 1
in the Arkansas Judicial Retirement System or an alternate retirement plan, 2
is amended to read as follows: 3
(B) Compensation for credited service in the Arkansas 4
Judicial Retirement System or an alternate retirement plan under § 24-8-101 5
et seq. or § 24-9-201 et seq. as defined in § 24-7-202 shall not be used to 6
determine final average compensation. 7
8
SECTION 9. Arkansas Code § 24 -4-901(b)(1)(F), concerning credited 9
service and reciprocity under the Arkansas Public Employees ’ Retirement 10
System and what criteria an annuity is determined from when a member of an 11
alternate retirement plan retires due to disability or dies in service, is 12
amended to read as follows: 13
(F) An alternate retirement plan under § 24-8-101 et seq. 14
or § 24-9-201 et seq. as defined in § 24-7-202; or 15
16
SECTION 10. Arkansas Code § 24 -4-901(b)(4), concerning credited 17
service and reciprocity under the Arkansas Public Employees ’ Retirement 18
System and the conti ngency of disability and death -in-service benefits being 19
awarded if provision of the benefits were provided to the alternate 20
retirement plan and were selected by the member as a benefit, is amended to 21
read as follows: 22
(4) If a member has service credit in an alternate retirement 23
plan under § 24-8-101 et seq. or § 24-9-201 et seq. as defined in § 24-7-202, 24
disability and death-in-service benefits shall be contingent on provision of 25
those benefits having been provided by the alternate retirement plan and 26
having been selected by the member as a benefit. 27
28
SECTION 11. Arkansas Code § 24 -4-901(d)(6), concerning credited 29
service and reciprocity under the Arkansas Public Employees ’ Retirement 30
System and the provision of reciprocal service credits between contri butory 31
and noncontributory members of an alternate retirement plan, is amended to 32
read as follows: 33
(6) An alternate retirement plan for a college, university, or 34
the Division of Higher Education provided for under § 24-8-101 et seq. or for 35
a vocational-technical school or the Division of Career and Technical 36 As Engrossed: H2/7/23 HB1201
5 02-07-2023 09:19:08 LHR037
Education, the Adult Education Section, and the Office of Skills Development, 1
provided for under § 24-9-201 et seq. as defined in § 24-7-202; and 2
3
SECTION 12. Arkansas Code § 24 -7-202(6), concerning the definition of 4
"alternate retirement plan" applicable to the Arkansas Teacher Retirement 5
System, is amended to read as follows: 6
(6) "Alternate retirement plan" means a retirement plan based on 7
the purchase of contracts providing retirement and death benefits for 8
employees under § 24-7-801 et seq. or § 24-7-901 et seq. § 24-7-801 et seq., 9
§ 24-7-901 et seq., or § 24 -7-1001 et seq.; 10
SECTION 13. Arkansas Code § 24 -7-202(7), concerning the definition of 11
"annuity" applicable to the Arkansas Teacher Retirement System, is amended to 12
read as follows: 13
(7) “Annuity” means an amount payable to a retirant retiree each 14
fiscal year by the A rkansas Teacher Retirement System in equal monthly 15
installments; 16
17
SECTION 14. Arkansas Code § 24 -7-202(14), concerning the definition of 18
"credited service" applicable to the Arkansas Teacher Retirement System, is 19
amended to read as follows: 20
(14) “Credited service” means service which is creditable 21
credited as service by the Arkansas Teacher Retirement System; 22
23
SECTION 15. Arkansas Code § 24 -7-202(19)(D)(iii), concerning the 24
definition of "employment with a school" applicable to the Arkansas Teacher 25
Retirement System, is amended to read as follows: 26
(iii) Each education-related agency or organization 27
shall be: 28
(a) Approved Be approved according to rules 29
established by the board Board of Trustees of the Arkansas Teacher Retirement 30
System; 31
(b) Considered an employer under subdivision 32
(18) of this section Become a covered employer at the time that an employee 33
elects to become or remain a member of the Arkansas Teacher Retirement 34
System; and 35
(c) Be considered a covered employer only for 36 As Engrossed: H2/7/23 HB1201
6 02-07-2023 09:19:08 LHR037
each employee who elects to become or remain a member of the Arkansas Teacher 1
Retirement System; and 2
(d) Responsible Be responsible for all 3
required employer contributions; 4
5
SECTION 16. Arkansas Code § 24 -7-202(21)(B), concerning the definition 6
of "inactive member" applicable to the Arkansas Teacher Retirement System, is 7
amended to read as follows: 8
(B) Not a retirant retiree; 9
10
SECTION 17. Arkansas Code § 24 -7-202(28), concerning the definition of 11
"normal retirement age" applicable to the Ar kansas Teacher Retirement System, 12
is amended to read as follows: 13
(28) “Normal retirement age” means: 14
(A) Sixty-five (65) years of age if the member has at 15
least five (5) years of actual service or reciprocal service; or 16
(B) At least sixty (60) years of age if the member has a 17
combined total of thirty-eight (38) years or more of credited service in the 18
Arkansas Teacher Retirement System, Teacher Deferred Retirement Option Plan, 19
or reciprocal service in another eligible state retirement system Sixty (60) 20
years of age or older if the member’s age and the member’s combined years of 21
credited service in the Arkansas Teacher Retirement System, Teacher Deferred 22
Retirement Option Plan, or reciprocal service in another eligible state 23
retirement system tota l ninety-eight (98); 24
25
SECTION 18. Arkansas Code § 24 -7-202(32), concerning the definition of 26
"retiree" or "retirant" under the Arkansas Teacher Retirement System, is 27
amended to read as follows: 28
(32) “Retiree” or “retirant” means a member receiving an 29
Arkansas Teacher Retirement System annuity; 30
31
SECTION 19. Arkansas Code § 24 -7-202, concerning definitions 32
applicable to the Arkansas Teacher Retirement System, is amended to add 33
additional subdivisions to read as follows: 34
(45)(A) “Benefit enhancement” means any change to the current 35
benefit policy for a retired, active, or inactive member of the Arkansas 36 As Engrossed: H2/7/23 HB1201
7 02-07-2023 09:19:08 LHR037
Teacher Retirement System or T -DROP participant that increases the 1
amortization period by one (1) year or more. 2
(B) Benefit enhancement does not include any change that is 3
required to comply with federal law, prevent a manifest injustice, correct an 4
error, avoid an unintended consequence of an existing statutory provision, or 5
prevent undue hardship on any benefit particip ant or class of benefit 6
participants. 7
(46) “Employment with a covered employer ” means the employment 8
of an employee that would require a covered employer to pay employer 9
contributions to the system; and 10
(47) "Residue" for the purposes of § 24 -7-701 et seq. means the 11
difference between the accumulated contributions and regular interest 12
credited to the retirement reserve account as of the member's effective date 13
of retirement and the total amount of retirement annuities paid. 14
15
SECTION 20. Arkansas Code § 24-7-207 is amended to read as follows: 16
24-7-207. Increase in benefit amount. 17
(a)(1) The Board of Trustees of the Arkansas Teacher Retirement System 18
is authorized by this act to raise the level of benefits provided to the 19
current retirants retirees and other beneficiaries of the Arkansas Teacher 20
Retirement System to a comparable level increase to match the increase in 21
benefits that would accrue to active members as a result of any reduction of 22
the calculation of “final average salary” to not less than a three-year 23
period nor more than the five-year period in accordance with any rules the 24
board might promulgate. 25
(2) The board may raise the level of benefits to a comparable 26
level increase that matches the increase in benefits that would accrue to 27
active members as a result of any reduction caused by setting the applicable 28
number of years used in computing final average salary for retirement 29
benefits at not less than three (3) years and not more than five (5) years in 30
accordance with any rules that th e board may promulgate. 31
(b) The amount of any increase for retirants retirees and other 32
beneficiaries shall also be determined in accordance with the rules of the 33
board as is actuarially appropriate for the system. 34
35
SECTION 21. Arkansas Code § 24 -7-301(4) and (5), concerning the 36 As Engrossed: H2/7/23 HB1201
8 02-07-2023 09:19:08 LHR037
membership of the Board of Trustees of the Arkansas Teacher Retirement System 1
and the election thereof, are amended to read as follows: 2
(4)(A) Three (3) retirants retirees shall be elected retirant 3
retiree trustees by the retirees of the system. 4
(B) Each retirant retiree trustee shall be a retirant 5
retiree with an annuity being paid by the system at the beginning of his or 6
her term of office; 7
(5) The member and retirant retiree trustees shall be elected in 8
accordance with rules as have been adopted by the board to govern the 9
elections; and 10
11
SECTION 22. Arkansas Code § 24 -7-302(a)(2)(B), concerning the 12
ineligibility of a retirant trustee to serve on the Board of Trustees of the 13
Arkansas Teacher Retirement System after becoming active, is amended to read 14
as follows: 15
(B) A retirant retiree trustee is ineligible to serve 16
after becoming active. 17
18
SECTION 23. Arkansas Code § 24 -7-305(b)(5), concerning the ability of 19
the Board of Trustees of the A rkansas Teacher Retirement System to set a de 20
minimis amount to charge for distributing or collecting various moneys, is 21
amended to read as follows: 22
(5) The board may set or amend by a motion or resolution at any 23
board meeting a de minimis amount of twenty-five dollars ($25.00) or less 24
concerning the system's obligation to distribute or collect payments, 25
penalties, interest, funds, or moneys. 26
27
SECTION 24. Arkansas Code § 24 -7-403(b), concerning the restriction of 28
trustees, officers, and employees of the Board of Trustees of the Arkansas 29
Teacher Retirement System from holding an interest in the gains or profits of 30
any of the board's investments, is amended to read as follows: 31
(b)(1) Except as to the rights of a member, retirant retiree, or 32
beneficiary, no trustee and no officer or employee a trustee, officer, or 33
employee of the board shall not have any direct or indirect interest, direct 34
or indirect, in the gains or profits of any investment made by the board. 35
(2) Nor shall any of them, directly or indirectly, for himself 36 As Engrossed: H2/7/23 HB1201
9 02-07-2023 09:19:08 LHR037
or herself or as an agent, in any manner use the assets of the system except 1
to make such current and necessary payments as are authorized by the board; 2
nor shall any of them become an endorser or surety or become in any manner an 3
obligor for moneys loaned by or borrowed from the board A trustee, officer, 4
or employee of the board shall not directly or indirectly use the assets of 5
the system in any manner for himself or herself or as an agent . 6
(3) A trustee, officer , or employee of the board shall not in 7
any manner become an endorser, surety, or obligor for moneys loaned by or 8
borrowed from the board. 9
(4) A trustee, officer, or employee of the board may make such 10
current and necessary payments as are authorized by the board. 11
12
SECTION 25. Arkansas Code § 24 -7-408 is amended to read as follows: 13
24-7-408. Retirement fund assets accounts — Retirement reserve 14
account. 15
(a) The retirement reserve account shall be the account from which 16
shall be paid all annuities and benefits in lieu of annuities payable as 17
provided in this act to retirants retirees who retired on account of 18
superannuation or disability and to beneficiaries of such retirants retirees. 19
(b) If a disability retirant retiree returns to teaching service: 20
(1) The amount of his or her accumulated contributions at the 21
time of his or her disability retirement shall be transferred from the 22
retirement reserve account to the members' deposit account; and 23
(2) The remainder of his or her annuity reserve at the time of 24
return shall be transferred from the retirement reserve account to the 25
employer accumulation account. 26
27
SECTION 26. Arkansas Code § 24 -7-501(a)(2)(B)(iii), concerning the 28
employer contribution rate under the Arkansas Teacher Retirement System being 29
established at a rate necessary to fund liabilities, is amended to read as 30
follows: 31
(iii) The employer contribution rate for this closed 32
system shall be established at a rate necessary to fund all present and 33
future liabilities until such time as there are no longer members, retirants 34
retirees, or deferred annuitants. 35
36 As Engrossed: H2/7/23 HB1201
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SECTION 27. Arkansas Code § 24 -7-502(a)(6), concerning restrictions on 1
a member during his or her termination separation period under the Arkansas 2
Teacher Retirement System, is amended to read as follows: 3
(6) During the termination separation period, the member shall 4
remain terminated and shall not: 5
(A) Form an employment relationship with any system-6
covered employer a covered employer; 7
(B) Render any compensable services to or on behalf of any 8
system-covered employer a covered employer, except that a member may provide 9
perform volunteer activities at a system-covered employer for a covered 10
employer that does do not have the effect of holding a position open for the 11
member during a termination separation period; and 12
(C) Exercise any authority to act as a representative of 13
any system-covered employer a covered employer or exercise any authority over 14
employees of any system-covered employer a covered employer; or 15
(D) Be indirectly employed by or through an independent 16
contractor, limited liability company, partnership, corporation, or legal 17
entity that is employed by a covered employer if the member has substantial 18
control of the employer -employee relationship, including without limitation 19
the ability to negotiate rates of pay with the covered employer or assign 20
work and work hours to the member . 21
22
SECTION 28. Arkansas Code § 24-7-601(e)(5), concerning the provision 23
of a benefit amount that is not dependent on length of credited service under 24
the Arkansas Teacher Retirement System, is amended to read as follows: 25
(5) When the Arkansas Teacher Retirement System provides a 26
benefit amount that is not dependent on length of credited service, the 27
benefit amount shall be reduced to the proportion that actual system service 28
bears to total reciprocal system-credited service credited by a reciprocal 29
system. 30
31
SECTION 29. Arkansas Code § 24 -7-601(g)(1), concerning concurrent 32
service earned in the Arkansas Teacher Retirement System and reciprocal 33
systems, is amended to add an additional subdivision to read as follows: 34
(C) A member’s part-time employment with a PSHE em ployer 35
or an employer covered by the Arkansas Public Employees ’ Retirement System 36 As Engrossed: H2/7/23 HB1201
11 02-07-2023 09:19:08 LHR037
shall not prevent the member from earning service credit under the Arkansas 1
Teacher Retirement System if the member does not earn service credit in an 2
alternate retirement pl an or the Arkansas Public Employees ’ Retirement 3
System. 4
5
SECTION 30. Arkansas Code § 24 -7-602(c)(1), concerning military 6
service credit under the Arkansas Teacher Retirement System when a member 7
leaves employment with a school to serve in the uniformed s ervices of the 8
United States and later returns to employment with a school, is amended to 9
read as follows: 10
(c)(1)(A) Effective December 12, 1994, a A member who leaves 11
employment with a school or employment with a covered employer to serve, on a 12
voluntary or involuntary basis, in the uniformed services of the United 13
States and returns to employment with a school or employment with a covered 14
employer shall be treated as not having incurred a break in service with the 15
employer. 16
(B) The employer shall certify to the system that 17
reemployment was in accordance with the requirements set forth in section 18
4312 of the Uniformed Services Employment and Reemployment Rights Act of 19
1994, Pub. L. No. 103-353. 20
21
SECTION 31. Arkansas Code § 24-7-701(a)(1)(B), concerning the time 22
frame necessary for a member to submit a complete application for voluntary 23
retirement under the Arkansas Teacher Retirement System, is amended to read 24
as follows: 25
(B) If a member fails to submit a complete retirement 26
application within six (6) calendar months after by the end of the sixth full 27
calendar month immediately following the effective date of benefits, 28
including all additional documentation required by the system, the 29
application shall be void unless an extension has been granted by the system 30
Executive Director of the Arkansas Teacher Retirement System. 31
32
SECTION 32. Arkansas Code § 24 -7-701(e)(1), concerning when a member 33
may cancel an application for voluntary retirement benefits under the 34
Arkansas Teacher Retirement System, is amended to read as follows: 35
(e)(1) A member may cancel an application for voluntary retirement 36 As Engrossed: H2/7/23 HB1201
12 02-07-2023 09:19:08 LHR037
benefits up to two (2) calendar months after any time before the end of the 1
second full calendar month immediately following the effective date of 2
benefits. 3
4
SECTION 33. Arkansas Code § 24 -7-702(a)(1)(A) and (B), concerning a 5
member's application for voluntary early retirement under the Arkansas 6
Teacher Retirement System, are amended to read as follows: 7
(a)(1)(A) Except as provided under subdivision (a)(2) of this section, 8
an active or inactive member who has a combined total of twenty-five (25) or 9
more years of actual and reciprocal service, including purchased or free 10
credited service, but has not attained sixty (60) years of age and is not 11
eligible for retirement under § 24-7-701 may voluntarily retire early by 12
filing a written application with the Board of Trustees of the Arkansas 13
Teacher Retirement System Arkansas Teacher Retirement System. 14
(B) If a member fails to submit a complete retirement 15
application within six (6) calendar months of by the end of the sixth full 16
calendar month immediately following the effective date of benefits, 17
including all additional documentation required by the Arkansas Teacher 18
Retirement System, the application shall be void unless an extension is 19
granted by the system Executive Director of the Arkansas Teacher Retirement 20
System. 21
22
SECTION 34. Arkansas Code § 24 -7-702(f)(1), concerning when a member 23
may cancel an application for early voluntary retirement benefits under the 24
Arkansas Teacher Retirement System, is amended to read as follows: 25
(f)(1) A member may cancel an application for early voluntary 26
retirement benefits up to two (2) full calendar months after the effective 27
date of benefits. 28
29
SECTION 35. Arkansas Code § 24 -7-704(a)(1)(D)(i) and (ii), concerning 30
when a member must submit an application and accompanying documentation for 31
disability retirement under the Arkansas Teacher Ret irement System, are 32
amended to read as follows: 33
(D)(i) A member has six (6) calendar months from until the 34
end of the sixth full calendar month immediately following the date of his or 35
her application for disability retirement to submit a completed application 36 As Engrossed: H2/7/23 HB1201
13 02-07-2023 09:19:08 LHR037
and accompanying documentation. 1
(ii) If a member does not provide all accompanying 2
documentation requested by the system within the six (6) calendar months by 3
the end of the sixth full calendar month immediately following the date of 4
his or her application for disability retirement, the system shall: 5
(a) Submit the application to the medical 6
committee for review as complete; or 7
(b) Withdraw the application at the request of 8
the member unless an extension is granted by the system Executive Director of 9
the Arkansas Teacher Retirement System. 10
11
SECTION 36. Arkansas Code § 24 -7-704(a)(1)(G) and (H), concerning 12
actions by the medical committee related to when a member submits an 13
application for disability retirement under the Arkansas Teacher Retirement 14
System, are amended to read as follows: 15
(G) If the medical committee requests additional 16
documentation upon initial review, a member has six (6) calendar months from 17
until the end of the sixth full calendar month immediately following the date 18
of a medical committee request to submit any additional accompanying 19
documentation unless an extension is granted by the system executive 20
director. 21
(H)(i) If the medical committee finds that a member is not 22
qualified to receive disability benefits, written notice of the medical 23
committee's finding shall be sent to the member and the member may request a 24
second review provided the member submits additional medical documentation. 25
(ii)(a) A second review may be requested one (1) 26
time A member may request a second review one (1) time for each application 27
for disability retirement filed by the member. 28
(b) A member's option to request a second 29
review does not apply to a disability retiree who applies for a review under 30
subsection (b) of this section. 31
(iii) The member has six (6) calendar months until 32
the end of the sixth full calendar month immediately following the date of 33
the written notice to submit additional medical documentation unless an 34
extension is granted by the system executive director. 35
36 As Engrossed: H2/7/23 HB1201
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SECTION 37. Arkansas Code § 24 -7-704(a)(3)(B), concerning when a 1
member must submit all documents and election forms required to begin annuity 2
payments for disability retirement under the Arkansas Teacher Retirement 3
System, is amended to read as follows: 4
(B) If a member does not submit the required documents 5
within six (6) calendar months after by the end of the sixth full calendar 6
month immediately following the date on which the medical committee finds 7
that the member qualifies to receive disability benefits, the member's 8
application shall be void unless an extension has been granted by the system 9
executive director. 10
11
SECTION 38. Arkansas Code § 24-7-704(a)(4), concerning restrictions on 12
when a member is eligible to begin receiving disability retirement payments 13
under the Arkansas Teacher Retirement System, is amended to read as follows: 14
(4) To begin receiving disability retirement, a member shall 15
not: 16
(A) Be employed by a system-covered employer covered 17
employer; or 18
(B) Be indirectly employed by or through an independent 19
contractor, limited liability company, partnership, corporation, or legal 20
entity that is employed by a system-covered employer if the member has 21
substantial control of the employer-employee relationship, including without 22
limitation the ability to negotiate rates of pay with the system-covered 23
employer or assign work and work hours to the member Unless otherwise 24
provided by law, perform any action described in § 24-7-502(a)(6). 25
26
SECTION 39. Arkansas Code § 24 -7-704(b)(3)(C)(iii), concerning actions 27
not taken by a disability retiree under the Arkansas Teacher Retirement 28
System that will cause termination of disability retirement benefits, is 29
amended to read as follows: 30
(iii) Apply for a review by the system's medical 31
committee within three (3) months of disability benefits ceasing by the end 32
of the third full calendar month immediately following the cessation of 33
disability benefits due to the lack of a Social Security Administration 34
determination letter finding that the disability retiree is unable to perform 35
his or her former work duties as described in subdivision (a)(1)(E)(iii) of 36 As Engrossed: H2/7/23 HB1201
15 02-07-2023 09:19:08 LHR037
this section. 1
2
SECTION 40. Arkansas Code § 24 -7-704(b)(3)(D)(i), concerning certain 3
conditions that allow a disability retiree under the Arkansas Teacher 4
Retirement System to seek a review by the system's medical committee, is 5
amended to read as follows: 6
(D)(i) A disability retiree who seeks and fails to receive 7
a determination letter finding the disability retiree is unable to perform 8
his or her former work duties as described in subdivision (a)(1)(E)(iii) of 9
this section by the Social Security Administration may seek a review 10
permitted under subdivision (b)(3)(C)(iii) of this section no earlier than 11
three (3) full calendar months before the date on which the member's 12
disability retirement would otherwise end and no later than three (3) months 13
after the end of the third full calendar month immediately following the 14
termination of disability retirement. 15
16
SECTION 41. Arkansas Code § 24 -7-706(a)-(e), concerning annuity 17
options under the Arkansas Teacher Retirement System, are amended to read as 18
follows: 19
(a)(1) Before the date the first payment of his or her annuity becomes 20
due, a member may elect to receive his or her annuity as a straight life 21
annuity, or he or she may elect to receive the actuarial equivalent, at that 22
time, of his or her straight life annuity in a re duced annuity payable 23
throughout his or her life. 24
(2) The member may nominate a beneficiary, in accordance with 25
one (1) of the following options: 26
(A) Option A — 100% Survivor Annuity. 27
(i) Under Option A, upon the death of a retirant 28
retiree, his or her reduced annuity shall be continued throughout the life of 29
and paid to such person as he or she shall have nominated by written 30
designation executed and filed with the Board of Trustees of the Arkansas 31
Teacher Retirement System before the date the first payment of his or her 32
annuity becomes due. 33
(ii) The person designated as a beneficiary by the 34
retirant retiree shall be: 35
(a) The retirant's retiree's spouse for not 36 As Engrossed: H2/7/23 HB1201
16 02-07-2023 09:19:08 LHR037
less than one (1) year immediately preceding the first payment due date; or 1
(b) A dependent child of the retirant retiree 2
who has been adjudged physically or mentally incapacitated by a court of 3
competent jurisdiction; 4
(B) Option B — 50% Survivor Annuity. 5
(i) Under Option B, upon the death of a retirant 6
retiree, one-half (½) of his or her reduced annuity shall be continued 7
throughout the life of and paid to such person as he or she has nominated by 8
written designation executed and filed with the board before the date the 9
first payment of his or her annuity becomes due. 10
(ii) The person designated as a beneficiary by the 11
retirant retiree shall be: 12
(a) The retirant's retiree's spouse for not 13
less than one (1) year immediately preceding the first payment due date; or 14
(b) A dependent child of the retirant retiree 15
who has been adjudged physically or mentally incapacitated by a court of 16
competent jurisdiction; or 17
(C) Option C — Annuity for Ten (10) Years Certain and Life 18
Thereafter. 19
(i) Under Option C, a retirant retiree shall receive 20
a reduced annuity payable throughout his or her life with the provision that 21
if he or she dies before he or she has received one hundred twenty (120) 22
monthly annuity payments, the payments shall be continued for the remainder 23
of the period of one hundred twenty (120) months and paid to such persons in 24
equal shares as the retirant retiree has nominated by written designation 25
executed and filed with the board. 26
(ii) If the designated beneficiaries predecease the 27
retirant retiree, the retirant retiree may nominate successor beneficiaries 28
or may elect to return to his or her single lifetime benefit equivalent by 29
written designation executed and filed with the board, to be effective the 30
month following receipt of his or her election by the Arkansas Teacher 31
Retirement System. 32
(iii)(a) If the designated beneficiary is the spouse 33
of the retirant retiree and the marriage ends in divorce or other marriage 34
dissolution, the retirant retiree may: 35
(1) Nominate a successor beneficiary; or 36 As Engrossed: H2/7/23 HB1201
17 02-07-2023 09:19:08 LHR037
(2) Elect to return to his or her single 1
lifetime benefit equivalent. 2
(b) The nomination or election made under 3
subdivision (a)(2)(C)(iii)(a) of this section shall be in writing, executed 4
by the retirant retiree, and filed with the board, to be effective the month 5
following receipt of his or her election by the system. 6
(iv) If no designated beneficiary survives the 7
retirant retiree, the annuity reserve for the remainder of the annuity 8
payments shall be paid to the retirant's retiree's estate. 9
(v) If the last designated beneficiary receiving 10
annuity payments dies before all annuity payments are made, the annuity 11
reserve for the remainder of the annuity payments shall be paid to the 12
beneficiary's estate. 13
(vi) Effective the month following completion of the 14
one-hundred-twenty-month period, the retirant's retiree's annuity shall 15
return to his or her single lifetime benefit equivalent. 16
(3) In addition to the persons eligible to be designated as a 17
beneficiary under either Option A or Option B in subdivision (a)(2) of this 18
section, the board may promulgate rules concerning the addition of classes of 19
eligible persons to be designated as a beneficiary under this section and for 20
the rights of option beneficiaries of deceased disability retirees under § 21
24-7-704. 22
(b)(1)(A) If a member's marital status changes after retirement due to 23
the death of the member's spouse, or a divorce or marriage dissolution from 24
the member's spouse who is also the member's designated beneficiary, then the 25
member may elect to cancel any optional plan designating the former spouse as 26
a beneficiary. 27
(B) A member's election under subdivision (b)(1)(A) of 28
this section shall cause the member to return to his or her lifetime benefit 29
equivalent, to be effective the month following the system's receipt of the 30
approved form. 31
(2) A retirant retiree who is receiving a single lifetime 32
benefit and who marries after retirement may elect to cancel his or her 33
single lifetime benefit and may elect an annuity providing continuing 34
lifetime benefits to his or her spouse under rules promulgated by the board. 35
(c) If a member fails to elect an option, his or her annuity shall be 36 As Engrossed: H2/7/23 HB1201
18 02-07-2023 09:19:08 LHR037
paid to him or her as a straight life annuity. 1
(d)(1) Notwithstanding anything contained in this section to the 2
contrary, the residue beneficiary under § 24-7-709 may elect to cancel the 3
form of annuity in effect and elect Option A — 100% Survivor Annuity upon the 4
death of a retirant retiree on or after July 1, 1989, if: 5
(A) The retirant retiree died within one (1) year 6
following the effective date of retirement; 7
(B) The retirant retiree was receiving a straight life 8
annuity; and 9
(C) The residue beneficiary otherwise qualifies for an 10
Option A — 100% Survivor Annuity. 11
(2) The election to change may be made only one (1) time and 12
shall be on a form approved by the system. 13
(3) The election form must be received by the system within one 14
hundred twenty (120) days of the death of the retiree. 15
(e)(1) Notwithstanding anything in this section to the contrary, a 16
retirant retiree who retired on or after July 1, 1994, may elect to cancel 17
his or her election made at retirement for receiving an annuity and elect 18
another option, provided that he or she: 19
(A) Does so within one (1) year after July 1, 1995, or 20
within one (1) year of retirement; 21
(B) Files with the system a new election form approved by 22
the system; and 23
(C)(i) Repays to the system the difference between the 24
amount of the annuity received when he or she retired and the new annuity due 25
as a result of the election change, plus interest from July 1, 1994, or his 26
or her retirement date, whichever is later, to the date of payment in full. 27
(ii) The difference shall be calculated 28
retroactively to July 1, 1994, or his or her retirement date, whichever is 29
later. 30
(2) The election to change shall be made only one (1) time. 31
(3) The election change shall be effective retroactively to the 32
effective date of his or her annuity. 33
34
SECTION 42. Arkansas Code § 24 -7-707(d), concerning when a member must 35
submit an application for deferred retirement under the Arkansas Teacher 36 As Engrossed: H2/7/23 HB1201
19 02-07-2023 09:19:08 LHR037
Retirement System, is amended to read as follows: 1
(d) If a member fails to submit a complete deferred retirement 2
application within six (6) calendar months of by the end of the sixth full 3
calendar month immediately following the effective date of benefits, 4
including all additional documentation required by the system, the 5
application shall be void unless an extension is granted by the system 6
Executive Director of the Arkansas Teacher Retirement System . 7
8
SECTION 43. Arkansas Code § 24 -7-707(e)(1), concerning when a member 9
may cancel an application for deferred retirement under the Arkansas Teacher 10
Retirement System, is amended to read as follows: 11
(e)(1) A member may cancel an application for deferred retirement 12
benefits any time before two (2) calendar months from the end of the second 13
full calendar month immediately following the effective date of benefits. 14
15
SECTION 44. Arkansas Code § 24 -7-709 is amended to read as follows: 16
24-7-709. Disposition of member retiree contributions — Residue. 17
(a)(1)(A) If a retiree and his or her option annuitants, if any, die 18
before receiving annuity payments equal to the member's retiree's residue 19
amount, then the residue amount shall be paid to such persons as the retiree 20
shall have nominated by written designation duly one (1) or more 21
beneficiaries nominated by the retiree in a written designation that is 22
executed and filed with the Arkansas Teacher Retirement System. 23
(B) As used in this subchapter, “residue” means the 24
difference between the accumulated contributions and regular interest 25
credited to the retirement reserve account as of the member's retirement 26
effective date and the total amount of retirement annuities paid. 27
(2) If a retiree designates more than one (1) beneficiary, the 28
residue shall be divided equally among each designated beneficiary. 29
(3) If a retiree and his or her option annuitants die and the 30
member has failed to designate a beneficiary or if all designated 31
beneficiaries have predeceased the retiree, the residue shall be paid to the 32
retiree's estate. 33
(4) If all designated beneficiaries predecease the retiree, the 34
residue shall be paid to the estate of the most recently deceased designated 35
beneficiary. 36 As Engrossed: H2/7/23 HB1201
20 02-07-2023 09:19:08 LHR037
(b) If upon the termination of the option annuity no surviving 1
beneficiary designated by the member retiree survives and it is impracticable 2
to make payment to the member's retiree's estate, the residue shall be 3
forfeited to the trust assets of the system subject to any valid claim of the 4
member's retiree's estate under § 24-7-734. 5
6
SECTION 45. Arkansas Code § 24 -7-710(a)(2)(B), concerning when an 7
eligible survivor or a minor survivor's guardian or legal representative must 8
complete an application for survivor annuity benefits under the Arkansas 9
Teacher Retirement System, is amended to read as follows: 10
(B) If an immediately eligible survivor or the minor 11
survivor's guardian or legal representative fails to complete the application 12
process within six (6) calendar months after by the end of the sixth full 13
calendar month following the date on which the application required under 14
subdivision (a)(2)(A) of this section is filed, including the submission of 15
any additional documentation requi red by the system, the application shall be 16
void unless an extension is granted by the system Executive Director of the 17
Arkansas Teacher Retirement System . 18
19
SECTION 46. Arkansas Code § 24 -7-710(b)(1)(A)(i), concerning a 20
member's survivor annuity under th e Arkansas Teacher Retirement System and 21
when it is received by a member's surviving spouse who was married to the 22
member for at least the two (2) years immediately preceding the member's 23
death, is amended to read as follows: 24
(b)(1)(A)(i) Unless the member otherwise directs an alternative 25
beneficiary to receive the member's residue amount by using a beneficiary 26
form approved by the system, a member's surviving spouse, who was married to 27
the member for at least the two (2) years immediately preceding the member's 28
death, shall receive an annuity computed in the same manner in all respects 29
as if the member had retired on the date of the member's death and elected 30
Option A under § 24-7-706 to provide one hundred percent (100%) survivor 31
annuity benefits, including benefits applicable under § 24-7-713, for his or 32
her spouse. 33
34
SECTION 47. Arkansas Code § 24-7-710(b)(1)(B)(ii), concerning when an 35
immediately eligible spouse must complete an application process for a 36 As Engrossed: H2/7/23 HB1201
21 02-07-2023 09:19:08 LHR037
survivor annuity benefit under the Arkansas Teacher Retirement System, is 1
amended to read as follows: 2
(ii) If an immediately eligible spouse fails to 3
complete the application process within six (6) calendar months after by the 4
end of the sixth full calendar month following the date on which the 5
application required under subdivision (b)(1)(B)(i) of this section is filed, 6
including the submission of all additional documentation required by the 7
system, the application shall be void unless an extension is granted by the 8
system executive director. 9
10
SECTION 48. Arkansas Code § 24 -7-710(b)(1)(C)(ii), concerning when a 11
surviving spouse's application for surviving spouse benefits becomes void 12
under the Arkansas Teacher Retirement System, is amended to read as follows: 13
(ii) If a surviving spouse becomes eligible for 14
surviving spouse benefits and fails to complete the application proces s 15
within six (6) calendar months after by the end of the sixth full calendar 16
month following the date on which the application required under subdivision 17
(b)(1)(B)(i) of this section is filed, including the submission of any 18
additional documentation requir ed by the system, the application shall be 19
void unless an extension is granted by the system executive director. 20
21
SECTION 49. Arkansas Code § 24 -7-713(a)(1), concerning when certain 22
persons receiving benefits under the Arkansas Teacher Retirement System 23
receive a simple cost of living adjustment, is amended to read as follows: 24
(a)(1) July 1 of each year, retirants retirees, survivors, 25
participants in the Teacher Deferred Retirement Option Plan, and annuity 26
beneficiaries who have been receiving monthly benefits for the previous 27
twelve (12) months shall receive a simple cost of living adjustment. 28
29
SECTION 50. Arkansas Code § 24 -7-713(d), concerning the administration 30
of the Arkansas Teacher Retirement System benefit stipend by the Board of 31
Trustees of the Arkansas Teacher Retirement System, is amended to read as 32
follows: 33
(d)(1) The board may remove by board resolution the benefit stipend 34
from the base amount of current retirants retirees and option beneficiaries 35
if the board determines that the removal of the benefit stipend from the base 36 As Engrossed: H2/7/23 HB1201
22 02-07-2023 09:19:08 LHR037
amount is prudent in order to maintain actuarial soundness. 1
(2) The board may phase in the removal of the benefit stipend 2
from the base amount of current retirant retiree and option beneficiaries by 3
board resolution. 4
5
SECTION 51. Arkansas Code § 24 -7-714 is amended to read as follows: 6
24-7-714. Increase in monthly benefits — Acts 1979, No. 655, and Acts 7
1981, No. 885. 8
(a) The monthly retirement benefit payable to retirants retirees and 9
beneficiaries of the Arkansas Teacher Retirement System who were retired on 10
or before July 1, 1978, and who were receiving benefits on July 1, 1979, 11
shall be increased as follows: 12
(1) For all benefits to retirants retirees and beneficiaries of 13
the system whose total credited service is before July 1, 1961, a monthly 14
benefit increase equal to one dollar ($1.00) per each year of credited 15
service; 16
(2) For all benefits to retirants retirees and beneficiaries of 17
the system which are based in whole or in part upon credited service rendered 18
after July 1, 1961, a monthly benefit increase equal to seventy-five cents 19
(75¢) per each year of credited service; 20
(3) For benefit increases authorized by subdivisions (a)(1) and 21
(2) of this section, fractional years of service shall be disregarded, and 22
the increase shall be added to the monthly annuity after the annual 23
postretirement increase based on the consumer price index has been applied to 24
the retirant's retiree's base annuity; and 25
(4) In the event that there is more than one (1) beneficiary or 26
survivor of a member or retirant retiree receiving benefits, the increases in 27
subdivisions (a)(1) and (2) of this section shall be based upon the member's 28
total credited service. The benefit increase so determined shall be divided 29
between the survivors or beneficiaries in proportion to their base annuities. 30
(b) For retirements effective after July 1, 1978, for which a monthly 31
benefit is payable for the month of July 1981 or later, calculations shall be 32
made as provided in subdivisions (b)(1) and (2) of this section. If the 33
monthly benefit calculated using subdivision (b)(1) of this section is more 34
than the monthly benefit calculated using subdivision (b)(2) of this section, 35
then the difference shall be paid to the retirant retiree as a monthly 36 As Engrossed: H2/7/23 HB1201
23 02-07-2023 09:19:08 LHR037
benefit increase, subject to the provisions of subdivisions (b)(3)-(6) of 1
this section, as follows: 2
(1) Calculate the monthly annuity payable to the member under § 3
24-7-705, based on the provisions of § 24-7-705, his or her salary record, 4
and his or her service record, all as of July 1, 1978, and add seventy-five 5
cents (75¢) for each year of the member's credited service rendered before 6
July 1, 1978; 7
(2) Calculate the monthly annuity payable to the member under 8
the provisions of § 24-7-705 in effect at the time of the member's 9
retirement; 10
(3) For benefit increases authorized by this subsection, 11
fractional years of service shall be disregarded. The increase shall be added 12
to the monthly annuity after the annual postretirement increase based on the 13
consumer price index has been applied to the retirant's retiree's base 14
annuity; 15
(4) In the event that there is more than one (1) beneficiary or 16
survivor of a member or retirant retiree receiving benefits, the increases in 17
this subsection shall be based upon the member's total credited service, and 18
the benefit increase so determined shall be divided between the survivors or 19
beneficiaries in proportion to their base annuities; 20
(5) Any benefit increase created by this subsection shall be 21
effective at retirement but not for any month before July 1981; and 22
(6) If there is any change in § 24-7-705 after the member's 23
retirement, the amount under subdivision (b)(2) of this section shall be 24
recalculated using the changed provisions, and the benefit increase provided 25
by this subsection shall be changed correspondingly. 26
27
SECTION 52. Arkansas Code § 24 -7-727(a)(1), concerning when the Board 28
of Trustees of the Arkansas Teacher Retirement System may compound the cost 29
of living adjustment for retirants and participants in the Teacher Deferred 30
Retirement Option Plan, is amended to read as follows: 31
(a)(1) After July 1, 1999, the The Board of Trustees of the Arkansas 32
Teacher Retirement System may compound the cost of living adjustment for all 33
retirants retirees and participants in the Teacher Deferred Retirement Option 34
Plan who have received a monthly retirement benefit for the prior twelve-35
month period. 36 As Engrossed: H2/7/23 HB1201
24 02-07-2023 09:19:08 LHR037
1
SECTION 53. Arkansas Code § 24 -7-727(b)(3)(A), concerning when the 2
Board of Trustees of the Arkansas Teacher Retirement System may reverse a 3
compounding of the cost of living adjustment for retirants and participants 4
in the Teacher Deferred Retirement Option Plan, is amended to read as 5
follows: 6
(3)(A) The board may reverse a compounding of the cost of living 7
adjustment for all retirants retirees and participants in the Teacher 8
Deferred Retirement Option Plan who benefit from the compounding. 9
10
SECTION 54. Arkansas Code § 24 -7-728 is amended to read as follows: 11
24-7-728. Computation of benefits based on life annuity. 12
(a)(1) The Board of Trustees of the Arkansas Teacher Retirement System 13
is authorized by this section to raise the level of benefit to the current 14
retirants retirees and other beneficiaries of the Arkansas Teacher Retirement 15
System to a comparable level increase to match the increase in benefits that 16
would accrue to active members as a result of any increase in the calculation 17
of a life annuity as provided in § 24-7-705(a)(1) in accordance with any 18
rules the board might promulgate. 19
(2) The board may raise the level of benefit to a comparable 20
level increase that matches the increase in benefits that would accrue to 21
active members as a result of any increase in the ca lculation of a life 22
annuity as provided in § 24 -7-705(a)(1) in accordance with any rules the 23
board might promulgate. 24
(b)(1) The amount of any increase for retirants retirees and other 25
beneficiaries shall also be determined in accordance with the rules of the 26
board as is actuarially appropriate for the system. 27
(2) Prior to Before increasing a benefit as provided in this 28
section, the board shall file relevant information concerning the actuarial 29
appropriateness of the action with the Joint Committee on Public Retirement 30
and Social Security Programs, and the action shall be reviewed by the Joint 31
Committee on Public Retirement and Social Security Programs. 32
33
SECTION 55. Arkansas Code § 24 -7-730(a)(1), concerning the required 34
dates of distributions of membe r benefits under the Arkansas Teacher 35
Retirement System, is amended to read as follows: 36 As Engrossed: H2/7/23 HB1201
25 02-07-2023 09:19:08 LHR037
(a)(1)(A) Notwithstanding the provisions of this subchapter regarding 1
the required dates of distribution of benefits under the Arkansas Teacher 2
Retirement System to former members, the distribution of a former member's 3
benefits under the system shall in any event be made or begun by April 1 of 4
the calendar year following the later of the calendar year latter of the 5
calendar year in which the member attains age seventy-two (72) or the 6
calendar year in which the member retires or the calendar year in which the 7
member attains the applicable age. 8
(B) The applicable age for a member is as follows: 9
(i) In the case of a member who attains seventy-two 10
(72) years of age after December 31, 2022, and seventy-three (73) years of 11
age before January 1, 2030, the applicable age is seventy-three (73) years of 12
age; 13
(ii) In the case of a member who attains seventy-14
three (73) years of age after December 31, 2029, and seventy-four (74) years 15
of age before January 1, 2033, the applicable age is seventy-four (74) years 16
of age; and 17
(iii) In the case of a member who attains seventy-18
four (74) years of age after December 31, 2032, the applicable age is 19
seventy-five (75) years of age. 20
21
SECTION 56. Arkansas Code § 24 -7-733(a)(2), concerning the requirement 22
that annual benefits under the Arkansas Teacher Retirement System shall not 23
violate limitations under the Internal Revenue Code, 26 U.S.C. 415(b), is 24
amended to read as follows: 25
(2) The annual benefits, as may be increased in subsequent 26
years, that are paid to retirants retirees by the system shall not violate 27
the limitations under the Internal Revenue Code, 26 U.S.C. 415(b), applicable 28
to the annuity effective date under the Internal Revenue Code, 26 U.S.C. 29
415(d), and benefits shall be paid in a manner that protects the tax-30
qualified status of the system. 31
32
SECTION 57. Arkansas Code § 24 -7-735(c), concerning a member or 33
employer's ability to purchase service credit, additional salary, or both for 34
a member under the Arkansas Teacher Retirement System, is amended to add a n 35
additional subdivision to read as follows: 36 As Engrossed: H2/7/23 HB1201
26 02-07-2023 09:19:08 LHR037
(4)(A) Service credit purchased under a settlement agreement or 1
court order shall offset service credit that is earned by the member as an 2
employee of another covered employer during the same period of time c overed 3
by the service credit purchased under the settlement agreement or court 4
order. 5
(B) Service credit purchased under a settlement agreement 6
or court order shall not be applied by the system in a manner that allows the 7
member to earn more than one (1) year of service credit in a fiscal year. 8
9
SECTION 58. Arkansas Code § 24 -7-738(b)(2), concerning the recovery of 10
an erroneously paid disability retirement benefit for a month in which a 11
member receives salary from a covered employer under the Arkansas Teacher 12
Retirement System, is amended to read as follows: 13
(2) Any disability retirement benefit erroneously paid to the 14
member or retirant retiree for a month in which the member receives salary 15
from a covered employer may be recovered by the system as an overpayment as 16
allowed by law. 17
18
SECTION 59. Arkansas Code § 24 -7-1302(c), concerning when a member may 19
withdraw his or her application for the Teacher Deferred Retirement Option 20
Plan under the Arkansas Teacher Retirement System, is amended to read as 21
follows: 22
(c) The member may withdraw his or her plan application if notice to 23
withdraw is received by the system no later than two (2) calendar months 24
after by the end of the second full calendar month immediately following the 25
member's plan date. 26
27
SECTION 60. Arkansas Code Title 24, Chapter 7, Subchapter 15 is 28
amended to read as follows: 29
Subchapter 15 — Retirants’ Retirees’ Ad Hoc Increase Act 30
31
24-7-1501. Title. 32
This subchapter shall be known and may be cited as the “ Retirants’ 33
Retirees’ Ad Hoc Increase Act”. 34
35
24-7-1502. Benefit generally. 36 As Engrossed: H2/7/23 HB1201
27 02-07-2023 09:19:08 LHR037
(a)(1) The annual benefit payable to eligible retirees, survivors, and 1
beneficiaries of retirants retirees of the Arkansas Teacher Retirement System 2
shall be subject to a one-time ad hoc increase based on the retirant's 3
retiree's years of credited service that is grouped within descending decades 4
as calculated by subtracting the total years of credited service from the 5
date of retirement. 6
(2) A break in credited service is not considered under this 7
subchapter. 8
(3) Teacher Deferred Retirement Option Plan participants shall 9
have the total years of credited service subtracted from the date of entry 10
into the plan. 11
(b)(1) One-half (½) of the annual dollar increase per year of credited 12
service shall be calculated and provided to all retirees, survivors, and 13
beneficiaries of retirants retirees that are eligible to receive this 14
increase. 15
(2) One-half (½) of the annual dollar increase per year of 16
credited service shall be calculated then prorated based on the amount of 17
contributory service credit to total service on the retirant's retiree's: 18
(A) Retirement date; or 19
(B) Plan entry date. 20
(3) The amounts under this subsection shall be calculated and 21
provided to all retirees, survivors, and beneficiaries of retirants retirees. 22
(c) The ad hoc benefit is payable to the retirees, survivors, and 23
beneficiaries of retirants retirees of the system beginning on a July 1 that 24
is at least twelve (12) full months after the effective date of a monthly 25
benefit. 26
(d) The ad hoc benefit for a retirant retiree, survivor, and 27
beneficiary of a retirant retiree shall not increase the retirant's retiree's 28
current benefit by more than twenty-five percent (25%) of the annuity benefit 29
payable as of the prior June 30. 30
31
24-7-1503. Ad hoc benefit formula. 32
The schedule of decade dollar amounts per year of credited service is: 33
34
Formula Decades in Which Credited Annual $ Increase Per Year of 35
Service Was Accrued Service Credited Service 36 As Engrossed: H2/7/23 HB1201
28 02-07-2023 09:19:08 LHR037
1
2000 – and later $5 2
1990–1999 $10 3
1980–1989 $20 4
1970–1979 $30 5
1960–1969 $40 6
1950–1959 $50 7
1940–1949 $60 8
1930–1939 $70 9
1920–1929 $80 10
1910–1919 $90 11
12
24-7-1504. Promulgation of rules — Duty of board. 13
(a) The Board of Trustees of the Arkansas Teacher Retirement System 14
shall promulgate rules for the ad hoc benefit under this subchapter. 15
(b) An ad hoc benefit under this subchapter shall not be implemented 16
if the ad hoc benefit would cause the Arkansas Teacher Retirement System's 17
unfunded actuarial accrued liabilities to exceed an eighteen-year 18
amortization. 19
(c) The board shall only authorize an ad hoc benefit that is 20
actuarially appropriate for the system. 21
(d) Before an increase of retirement benefit through an ad hoc benefit 22
is authorized, the board shall file relevant information with the Joint 23
Interim Committee on Public Retirement and Social Security Programs regarding 24
the actuarial appropriateness of the increase. 25
(e) The board may reduce the decade increase formula under § 24-7-1503 26
proportionately on a one-to-one formula basis for each decade when the 27
reduction is actuarially feasible to implement. 28
(f) The ad hoc benefit increase is a one-time adjustment and shall 29
also be used to increase the base amount of a retirant's retiree's benefits 30
when calculating any future additional benefit increases. 31
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SECTION 61. EMERGENCY CLAUSE. It is found and determined by the 33
General Assembly of the State of Arkansas that the operations of a state 34
public retirement system are complex; that the Arkansas Teacher Retirement 35
System must be able to meet the needs of its members as anticipated by the 36 As Engrossed: H2/7/23 HB1201
29 02-07-2023 09:19:08 LHR037
General Assembly; that certain provisions of the Arkansas Teacher Retirement 1
System Act need revision and updating to bring them into conformance with 2
sound public pension policy and actuarial requirements; that the revisions 3
and updates are of great importance to members of the Arkansas Teacher 4
Retirement System and to other citizens of the State of Arkansas; that as the 5
Arkansas Teacher Retirement System operates on a fiscal year of July 1 to 6
June 30, a July 1, 2023, effective date is necessary in order to allow the 7
provisions within this act to begin on the first day of the fiscal year and 8
to allow for a structured and proper administration of the procedures 9
referenced in this act; that the updates and revisions to the Arkansas 10
Teacher Retirement System Act are of great importance for actuarial purposes 11
and for the improvement and protection of member benefits under the Arkansas 12
Teacher Retirement System; and that this act is necessary in order to 13
maintain an orderly system of benefits for the members of the Arkansas 14
Teacher Retirement System. Therefore, an emergency is declared to exist, and 15
this act being necessary for the preservation of the public peace, health, 16
and safety shall become effective on July 1, 2023. 17
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/s/Warren 19
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APPROVED: 2/21/23 22
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