Stricken language would be deleted from and underlined language would be added to present law.
Act 247 of the Regular Session
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State of Arkansas As Engrossed: S2/21/23 1
94th General Assembly A Bill 2
Regular Session, 2023 SENATE BILL 126 3
4
By: Senator Hickey 5
By: Representative Maddox 6
7
For An Act To Be Entitled 8
AN ACT TO AMEND THE ARKANSAS PUBLIC EMPL OYEES’ 9
RETIREMENT SYSTEM PL AN REGARDING SURVIVO R BENEFITS; 10
TO SIMPLIFY THE POST RETIREMENT MARRIAGE PERIOD FOR 11
ELECTION OF SPOUSAL BENEFITS; TO STREAML INE THE 12
ADMINISTRATION OF SU RVIVOR BENEFITS FOR MEMBERS' AND 13
FORMER MEMBERS' CHILDREN; TO CLARIFY THE EFFEC TIVE 14
DATE OF SURVIVORS' B ENEFITS; TO REMOVE O BSOLETE LAW 15
REGARDING THE ARKANS AS PUBLIC EMPLOYEES' RETIREMENT 16
SYSTEM; TO DECLARE A N EMERGENCY; AND FOR OTHER 17
PURPOSES. 18
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Subtitle 21
TO AMEND THE ARKANSAS PUBLIC EMPLOY EES’ 22
RETIREMENT SYSTEM PLAN REGARDING SURVIVOR 23
BENEFITS; AND TO DECLARE 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 -4-606 is amended to read as follows: 29
24-4-606. Annuity options. 30
(a) Before the date the first payment of a member's annuity becomes 31
due, but not thereafter, a A member may elect to receive his or her annuity 32
as a straight life annuity or may elect to have his or her that annuity 33
reduced and nominate designate a beneficiary in writing and file the election 34
with the Arkansas Public Employees' Retirement System before that annuity 35
starting date in accordance with the provisions of under one (1) of the 36 As Engrossed: S2/21/23 SB126
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following options: 1
(1) Option A60 — 60 Months Certain and Life Annuity. 2
(A) Under Option A60, the retirant shall be paid a reduced 3
annuity for life with the provision that if the retirant's death occurs 4
before sixty (60) monthly payments have been made, the full reduced annuity 5
shall continue to be paid for the remainder of the sixty (60) months to such 6
persons and in such shares as the retirant shall have has designated in 7
writing and filed with the plan. If there is no payee beneficiary surviving, 8
the lump-sum actuarial equivalent of the remaining monthly payments shall be 9
paid to the estate of the last survivor among the retirant and the designated 10
persons beneficiary. 11
(B) The reduced annuity shall be ninety-eight percent 12
(98%) of the straight life annuity; 13
(2) Option A120 — 120 Months Certain and Life Annuity. 14
(A) Under Option A120, the retirant shall be paid a 15
reduced annuity for life with the provision that if the retirant's death 16
occurs before one hundred twenty (120) monthly payments have been made, the 17
full reduced annuity shall continue to be paid for the remainder of the one 18
hundred twenty (120) months to such persons and in such shares as the 19
retirant shall have has designated in writing and filed with the plan. If 20
there is no payee beneficiary surviving, the lump sum actuarial equivalent of 21
the remaining monthly payments shall be paid to the estate of the last 22
survivor among the retirant and the designated persons beneficiary. 23
(B) The reduced annuity shall be ninety-four percent (94%) 24
of the straight life annuity; 25
(3) Option B50 — 50 Fifty Percent (50%) Survivor Beneficiary 26
Annuity. 27
(A)(i) Under Option B50, the retirant shall be paid a 28
reduced annuity for life with the provision that, and upon the retirant's 29
death, one-half (½) of the reduced annuity shall be continued continue 30
throughout the future lifetime of and paid to such person as the retirant 31
shall have has designated in writing and filed with the plan before his or 32
her annuity's starting date. 33
(ii) However, the person must be The member may 34
elect either his: 35
(a) His or her spouse, to whom the member has 36 As Engrossed: S2/21/23 SB126
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been married for not less than six (6) months immediately preceding the first 1
payment due date; or another person 2
(b) A dependent child aged forty (40) or older 3
receiving more than one-half (½) support from the retirant who is claimed as 4
a dependent on the retirant's federal tax return for not less than one (1) 5
year immediately preceding the first payment due date. 6
(B) The reduced annuity to the retirant shall be eighty-7
eight percent (88%) if the retirant's age and his or her beneficiary's age 8
are the same on the first payment due date, which shall be decreased by one-9
half of one percent (0.5%), for each year that the beneficiary's age is less 10
than the retirant's age, or which shall be increased by one-half of one 11
percent (0.5%), up to a maximum of ninety-five percent (95%), for each year 12
that the beneficiary's age is more than the retirant's age. 13
(C) However, if If the named beneficiary under Option B50 14
predeceases the retirant, the original unreduced benefit shall be paid to the 15
retirant prospectively; or 16
(4) Option B75 — 75 Seventy-Five Percent (75%) Survivor 17
Beneficiary Annuity. 18
(A)(i) Under Option B75, the retirant shall be paid a 19
reduced annuity for life with the provision that, and upon his or her the 20
retirant's death, three-fourths (¾) of the reduced annuity shall be continued 21
throughout the future lifetime of, and paid to, such person as the retirant 22
shall have has designated in writing and filed with the plan before his or 23
her annuity's starting date. 24
(ii) However, the person must be The member may 25
elect either: 26
(a) the retirant's His or her spouse to whom 27
the member has been married for not less than six (6) months immediately 28
preceding the first payment due date; or another person 29
(b) A dependent child aged forty (40) or older 30
receiving who is claimed as a dependent on the retirant's federal tax return 31
more than one-half (½) support from the retirant for not less than one (1) 32
year immediately preceding the first payment due date. 33
(B) The reduced annuity to the retirant shall be eighty-34
three percent (83%) if the retirant's age and his or her beneficiary's age 35
are the same on the first payment due date, which shall be decreased by 36 As Engrossed: S2/21/23 SB126
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seven-tenths of one percent (0.7%) for each year that the beneficiary's age 1
is less than the retirant's age or which shall be increased by seven-tenths 2
of one percent (0.7%) up to a maximum of ninety percent (90%) for each year 3
that the beneficiary's age is more than the retirant's age. 4
(C) However, if If the named beneficiary under Option B75 5
predeceases the retirant, the original unreduced benefit shall be paid to the 6
retirant prospectively. 7
(b)(1)(A) The member may elect to cancel the designation of a 8
beneficiary under Option B50 or Option B75 in writing and file with the 9
system upon: 10
(i) A The death, of a spouse or divorce, or other 11
marriage dissolution from the member's spouse; or the 12
(ii) The death of a person the member's dependent 13
child forty (40) years of age or older who is the has been designated as a 14
beneficiary under Option B50 or Option B75 shall cancel, at the written 15
election of the retirant, Option B50 or Option B75 at retirement, providing 16
continuing lifetime benefits to the designated person, and § 24-4-606(a). 17
(B) The member's election under subsection (b) of this 18
section shall return the retirant to his or her straight life, or the member 19
may elect the Option A60, or Option A120 annuity, to be effective the month 20
following receipt by the system of his or her election by the Arkansas Public 21
Employees' Retirement System. 22
(2)(A) A retirant who is receiving a straight life, Option A60, 23
or Option A120 annuity and who marries after retirement or within the one (1) 24
year six (6) months immediately preceding retirement may elect to cancel his 25
or her straight life, Option A60, or Option A120 annuity and may elect Option 26
B50 or Option B75, providing to provide continuing lifetime benefits to his 27
or her spouse, but only if the election is: 28
(i) Submitted on a form approved by the system; and 29
is received 30
(ii) Received by the system not no earlier than one 31
(1) year six (6) months after the date of the marriage and not no later than 32
eighteen (18) months one (1) year after that date. 33
(B) The election shall be effective the first day of the 34
month following the receipt of the notice. 35
(c) If a member fails to elect an option, his or her annuity shall be 36 As Engrossed: S2/21/23 SB126
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paid to him or her as a straight life annuity. 1
(d)(1) The surviving spouse of a system member who retired prior to 2
July 1, 1967, shall receive a monthly survivor's annuity equal to seventy-3
five percent (75%) of the retirant's monthly benefit at the time of death, 4
provided that the surviving spouse was married to the retirant on the date of 5
retirement, the surviving spouse is unmarried, and the surviving spouse makes 6
application to the system on or before June 30, 1995. 7
(2) The monthly survivor's annuity shall be effective the first 8
day of the month following the month of application, and no annuity will be 9
paid the surviving spouse for any period prior to the first of the month 10
following the month of application. 11
(e)(d) The surviving spouse of a member of the system who retired on 12
or after February 1, 1991, and who elected a straight life annuity shall be 13
entitled to receive a survivor's annuity equal to the amount that would have 14
been received had the member elected Option B75, provided: 15
(1) The member dies within twelve (12) months of the effective 16
date of retirement; and 17
(2) The surviving spouse makes application to the system within 18
twelve (12) months of the date of the member's death. 19
20
SECTION 2. Arkansas Code § 24 -4-608 is amended to read as follows: 21
24-4-608. Payment of benefits upon death of member before retirement 22
Death before retirement — Exception. 23
(a) Effective July 1, 2001, if an active a member or former member 24
with five (5) or more years of actual service dies before retirement, the 25
applicable benefits provided in this section shall be paid allowed upon the 26
survivor's written application to filed with the Board of Trustees of the 27
Arkansas Public Employees' Retirement System. 28
(b) For purposes of computing To compute benefits provided by this 29
section, the deceased member's or deceased former member's compensation at 30
the time of death shall be the member's compensation for the year immediately 31
preceding the cessation of his or her pay. 32
(c)(1) A deceased member's or deceased former member's surviving 33
spouse who was married to the member at least six (6) months immediately 34
preceding his or her the member's death shall receive an annuity computed in 35
the same manner in all respects as if the member or former member had: 36 As Engrossed: S2/21/23 SB126
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(A) Retired the date of his or her death with entitlement 1
to an annuity provided for in § 24-4-601; 2
(B) Elected the Option B75 survivor annuity provided for 3
in § 24-4-606(a)(4); and 4
(C) Nominated his or her spouse as joint beneficiary. 5
(2)(A)(i) If the deceased member or deceased former member had 6
satisfied the age and service requirements provided for in § 24-4-101 or had 7
acquired twenty (20) years of actual service, then the spouse spousal annuity 8
shall commence immediately and be payable for life. 9
(ii) If the deceased member or deceased former 10
member had not satisfied the age and service requirement provided for in § 11
24-4-101 or had not acquired twenty (20) years of actual service, then the 12
spouse spousal annuity shall commence immediately and be payable until the 13
earlier of his or her remarriage or death. 14
(B)(i) A surviving spouse who is otherwise eligible but 15
whose benefit has been deferred because the spouse did not meet the age 16
requirements in effect before July 1, 1999, shall be eligible to commence a 17
spouse spousal annuity effective July 1, 1999. The spouse annuity shall not 18
be retroactive. 19
(ii) However, the spousal annuity in subdivision 20
(c)(2)(B)(i) of this section shall not be retroactive. 21
(3) The spouse spousal annuity shall not be less than ten 22
percent (10%) of the deceased member's or deceased former member's covered 23
compensation at the time of death. 24
(4) In any event, For as long as the surviving spouse has in his 25
or her care any of the deceased member's or deceased former member's 26
dependent children receiving who receive a benefit provided for in this 27
section, there shall be payable to him or her a spouse spousal annuity as 28
indicated in this section which shall not be less than ten percent (10%) of 29
the deceased member's or deceased former member's compensation at the time of 30
death. 31
(d)(1)(A) A deceased member's or deceased former member's dependent 32
child or dependent children shall each receive an annuity of the greater of 33
either ten percent (10%) of the deceased member's or deceased former member's 34
covered compensation at the time of death or an equal share of one hundred 35
fifty dollars ($150) monthly. 36 As Engrossed: S2/21/23 SB126
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(B) Where there are For three (3) or more dependent 1
children, each dependent child shall receive an annuity of an equal share of 2
the greater of either twenty-five percent (25%) of the covered compensation 3
or one hundred fifty dollars ($150) monthly. 4
(2)(A) A child shall be is considered a dependent child as used 5
in subdivision (d)(1) of this section and for purposes of receiving a child 6
survivor's annuity until the child's death, marriage, or attainment of age 7
eighteen (18) years of age, whichever occurs first. 8
(B)(i) However, the age-eighteen maximum shall be extended 9
as long as the child continues uninterruptedly being a full-time student at 10
an accredited secondary school, college, or university, but in no event 11
beyond his or her attainment of age twenty-three (23) years of age. 12
(ii) In addition, the age-eighteen maximum shall be 13
extended for any child who has been deemed physically or mentally incompetent 14
by an Arkansas court of competent jurisdiction or by the board Board of 15
Trustees of the Arkansas Public Employees' Retirement System, for as long as 16
the incompetency exists. 17
(3) Upon a child's ceasing Once a child ceases to be a dependent 18
child, his or her annuity shall terminate, and there shall be a 19
redetermination of the amounts payable to any remaining dependent children. 20
(e)(1) If at the time of the deceased member's or deceased former 21
member's death there is neither a spouse nor a dependent child, each 22
dependent parent shall receive an allowance of the greater of ten percent 23
(10%) of the covered compensation or an equal share of one hundred fifty 24
dollars ($150) monthly, but only if the board finds that the parent was 25
dependent for at least fifty percent (50%) of his or her financial support 26
upon the member or former member. 27
(2) A dependent parent eligible for a survivor benefit under 28
this section shall be claimed as a dependent on the deceased member's or 29
deceased former member's federal tax return for not less than one (1) year 30
immediately preceding the member's death. 31
(f)(1) If no annuity can become payable to a dependent child due to 32
the death of the member or former member and a, the surviving spouse or 33
dependent parents may elect to receive a refund of the member's or former 34
member's accumulated contributions as provided in § 24-4-602(d) in lieu of 35
any benefits which could become payable under this plan if: 36 As Engrossed: S2/21/23 SB126
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(A) The surviving spouse or dependent parents are the only 1
persons who will be eligible for monthly benefits; and the 2
(B) The spouse or dependent parents are also the designated 3
beneficiaries of the deceased member or deceased former member, then, in that 4
event, the surviving spouse or dependent parents may elect to receive a 5
refund of the member's or former member's accumulated contributions as 6
provided in § 24-4-602(d) in lieu of any benefits which could become payable 7
under this act. 8
(2) The option to choose a refund of the deceased member's or 9
deceased former member's contributions shall also be afforded to any spouse 10
or dependent parent qualified under this section whose eligibility for the 11
benefit occurred before the passage of this act and who could not exercise 12
the option. 13
(3) Once the A refund of the deceased member's or deceased 14
former member's accumulated contributions has been made to the surviving 15
spouse or dependent parents under this section, the person shall have no 16
precludes any right or future claim to monthly retirement benefits due to the 17
death of the member or former member. 18
(g)(1) In the event that all the annuities provided for in this 19
section payable on account of the member's or former member's death of a 20
member or former member terminate before there has been paid an aggregate 21
amount equal to his or her accumulated contributions standing to his or her 22
credit in the members' member's or former member's deposit account at the 23
time of his or her death, the difference between the accumulated 24
contributions and the aggregate amount of annuity payments shall be paid to 25
such person as he or she shall have nominated by written designation duly 26
executed and filed with the board system. 27
(2) If there is no designated person surviving at termination, 28
the difference shall be paid to the deceased member's or deceased former 29
member's estate. 30
(h) Annuities payable under the provisions of this section shall be 31
effective the first day of the calendar month next following the date of the 32
member's or former member's death or the first day of the month following the 33
month in which the survivor becomes eligible for benefits as provided by law. 34
(i)(h) The provisions of this section shall not be applicable in 35
determining survivor benefits under the General Assembly Division or the 36 As Engrossed: S2/21/23 SB126
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State Constitutional Officers' Division of the Arkansas Public Employees' 1
Retirement System if a benefit is provided to the surviving spouse by other 2
laws applicable to the Arkansas Public Employees’ Retirement System. 3
(j)(i) The benefits provided in this section for former members shall 4
not apply to former members who terminated covered employment prior to July 5
1, 1997, with less than ten (10) years of service or whose death occurred 6
before July 1, 2001. 7
8
SECTION 3. Arkansas Code § 24 -4-609 is amended to read as follows: 9
24-4-609. Effective date of benefits — Survivors and beneficiaries . 10
All monthly benefits payable to survivors of deceased members or 11
retirants of the Arkansas Public Employees' Retirement System shall be 12
effective the first day of the month following the month in which the member 13
or retirant died or the first day of the month following the month in which 14
the survivor becomes eligible for benefits as provided by law. 15
(a) The effective date of monthly benefits payable to a survivor of a 16
deceased member under § 24 -4-608 is the first day of the calendar month next 17
following the month in which the member died. 18
(b) The effective date of monthly benefits payable to a beneficiary of 19
a retirant under § 24 -4-606 is the first day of the calendar month next 20
following the month in which the retirant died. 21
22
SECTION 4. EMERGENCY CLAUSE. It is found and determined by the 23
General Assembly of the State of Arkansas that certain provisions of the 24
Arkansas Public Employees' Retirement System law are in need of revision and 25
updating to maintain the retirement laws in conformance with sound public 26
pension policy; that the Arkansas Public Employees' Retirement System 27
operates on a fiscal year of July 1 to June 30; that having a July 1, 2023 28
effective date is necessary to allow the provisions within this act to begin 29
on the first day of the fiscal year to provide proper administration of the 30
procedures herein; that such revisions and updating are of great importance 31
for actuarial purposes and to protect the benefits to members of the Arkansas 32
Public Employees' Retirement System. Therefore, an emergency is declared to 33
exist, and this act being necessary for the preservation of the public peace, 34
health, and safety shall become effective on July 1, 2023. 35
36 As Engrossed: S2/21/23 SB126
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/s/Hickey 1
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APPROVED: 3/9/23 4
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