| 3 | 2 | | *LJH002* 01/16/2025 9:46:59 AM LJH002 |
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| 4 | 3 | | State of Arkansas 1 |
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| 5 | 4 | | A Bill 2 |
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| 6 | 5 | | Regular Session, 2025 HOUSE BILL 1160 3 |
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| 7 | 6 | | 4 |
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| 8 | 7 | | By: Representative K. Moore 5 |
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| 9 | 8 | | By: Senator J. Dotson 6 |
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| 10 | 9 | | 7 |
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| 11 | 10 | | For An Act To Be Entitled 8 |
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| 12 | 11 | | AN ACT TO AMEND THE LAW CONCERNING PERMISSIVE SERVICE 9 |
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| 13 | 12 | | CREDIT FOR GAP YEAR SERVICE UNDER THE ARKANSAS 10 |
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| 14 | 13 | | TEACHER RETIREMENT SYSTEM; TO DECLARE AN EMERGENCY; 11 |
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| 15 | 14 | | AND FOR OTHER PURPOSES. 12 |
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| 16 | 15 | | 13 |
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| 17 | 16 | | 14 |
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| 18 | 17 | | Subtitle 15 |
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| 19 | 18 | | TO AMEND THE LAW CONCERNING PERMISSIVE 16 |
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| 20 | 19 | | SERVICE CREDIT FOR GAP YEAR SERVICE 17 |
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| 21 | 20 | | UNDER THE ARKANSAS TEACHER RETIREMENT 18 |
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| 22 | 21 | | SYSTEM; AND TO DECLARE AN EMERGENCY. 19 |
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| 23 | 22 | | 20 |
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| 24 | 23 | | BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 21 |
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| 25 | 24 | | 22 |
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| 26 | 25 | | SECTION 1. Arkansas Code § 24 -7-202(23), concerning the definition of 23 |
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| 27 | 26 | | “gap year” as applicable to the Arkansas Teacher Retirement System, is 24 |
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| 28 | 27 | | amended to read as follows: 25 |
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| 29 | 28 | | (23) “Gap year” "Gap period" means a period of time one-quarter 26 |
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| 30 | 29 | | (1/4) of a fiscal year : 27 |
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| 31 | 30 | | (A) In which a member: 28 |
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| 32 | 31 | | (i) Was an inactive member; and 29 |
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| 33 | 32 | | (ii) Either: 30 |
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| 34 | 33 | | (a) Was unemployed; or 31 |
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| 35 | 34 | | (b) Did not provide qualified service; and 32 |
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| 36 | 35 | | (B) For which the system may grant the member permissive 33 |
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| 37 | 36 | | service credit; 34 |
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| 38 | 37 | | 35 |
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| 39 | 38 | | SECTION 2. Arkansas Code § 24 -7-613 is amended to read as follows: 36 HB1160 |
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| 40 | 39 | | |
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| 41 | 40 | | 2 01/16/2025 9:46:59 AM LJH002 |
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| 42 | 41 | | 24-7-613. Permissive service credit — Gap year period service. 1 |
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| 43 | 42 | | (a) A member of the Arkansas Teacher Retirement System may purchase 2 |
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| 44 | 43 | | permissive service credit for one (1) or more gap years periods if the 3 |
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| 45 | 44 | | member: 4 |
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| 46 | 45 | | (1) The member: 5 |
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| 47 | 46 | | (A) Has five (5) years of actual service in the system; 6 |
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| 48 | 47 | | (B)(2) Has left his or her position as a classroom teacher 7 |
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| 49 | 48 | | immediately before each nonconsecutive gap year gap period or the initial gap 8 |
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| 50 | 49 | | year gap period of consecutive gap years gap periods; 9 |
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| 51 | 50 | | (C)(3) Returns to his or her position as a classroom teacher 10 |
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| 52 | 51 | | after one (1) or more gap years gap periods; 11 |
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| 53 | 52 | | (D)(4) Accrues at least one -half (½) year of service credit 12 |
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| 54 | 53 | | after returning to his or her position as a classroom teacher; 13 |
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| 55 | 54 | | (E)(5) Was inactive during the gap year gap period or gap years 14 |
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| 56 | 55 | | gap periods; and 15 |
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| 57 | 56 | | (F)(6) Is ineligible to receive free service credit for each gap 16 |
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| 58 | 57 | | year gap period under another provision of the law applicable to the system ; 17 |
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| 59 | 58 | | and 18 |
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| 60 | 59 | | (2) Each gap year amounts to an entire fiscal year . 19 |
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| 61 | 60 | | (b)(1) A member may purchase one (1) one-quarter (1/4) year of 20 |
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| 62 | 61 | | permissive service credit for each one (1) gap year gap period. 21 |
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| 63 | 62 | | (2) A member shall not purchase more than five (5) years of 22 |
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| 64 | 63 | | permissive service credit. 23 |
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| 65 | 64 | | (c) Permissive service credit for one (1) or more gap years periods 24 |
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| 66 | 65 | | shall not be purchasable after a member retires from the system. 25 |
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| 67 | 66 | | (d) Permissive service credit shall be credited in accordance with § 26 |
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| 68 | 67 | | 24-7-601. 27 |
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| 69 | 68 | | (e)(1) The member shall pay the actuarial equivalent of the member's 28 |
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| 70 | 69 | | benefits to the system for each one-quarter (1/4) year of permissive service 29 |
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| 71 | 70 | | credit purchased. 30 |
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| 72 | 71 | | (2) A year Each one-quarter (1/4) year of permissive service 31 |
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| 73 | 72 | | credit that is being purchased by a member shall not become credited service 32 |
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| 74 | 73 | | under the system until the actuarial equivalent of the member's benefits is 33 |
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| 75 | 74 | | paid in full. 34 |
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| 76 | 75 | | (f) At the member's request, a member's payment for permissive service 35 |
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| 77 | 76 | | credit under this section shall be refunded if the: 36 HB1160 |
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| 78 | 77 | | |
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| 79 | 78 | | 3 01/16/2025 9:46:59 AM LJH002 |
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| 80 | 79 | | (1) Member ceases to be an active member before the permissive 1 |
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| 81 | 80 | | service credit is established as credited service in the system; or 2 |
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| 82 | 81 | | (2) Permissive service credit is not otherwise used to establish 3 |
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| 83 | 82 | | the member's eligibility for retirement under the system. 4 |
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| 84 | 83 | | 5 |
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| 85 | 84 | | SECTION 3. EMERGENCY CLAUSE. It is found and determined by the 6 |
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| 86 | 85 | | General Assembly of the State of Arkansas that the operations of a state 7 |
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| 87 | 86 | | public retirement system are complex; that the Arkansas Teacher Retirement 8 |
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| 88 | 87 | | System must be able to meet the needs of its members as anticipated by the 9 |
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| 89 | 88 | | General Assembly; that certain provisions of the Arkansas Teacher Retirement 10 |
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| 90 | 89 | | System Act, § 24-7-201 et seq., need immediate revision and updating to 11 |
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| 91 | 90 | | address administrative complexities caused by these provisions and to bring 12 |
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| 92 | 91 | | these provisions into conformance with sound public pension policy and 13 |
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| 93 | 92 | | actuarial requirements; that the revisions and updates are of great 14 |
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| 94 | 93 | | importance to members and covered employers of the Arkansas Teacher 15 |
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| 95 | 94 | | Retirement System and to other citizens of the State of Arkansas; that as the 16 |
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| 96 | 95 | | Arkansas Teacher Retirement System operates on a fiscal year of July 1 to 17 |
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| 97 | 96 | | June 30, a July 1, 2025, effective date is necessary in order to allow the 18 |
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| 98 | 97 | | provisions within this act to begin on the first day of the fiscal year and 19 |
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| 99 | 98 | | to allow for a structured and proper administration of the procedures 20 |
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| 100 | 99 | | referenced in this act; that the updates and revisions to the Arkansas 21 |
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| 101 | 100 | | Teacher Retirement System Act are of great importance and necessary for 22 |
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| 102 | 101 | | protecting member benefits and clarifying the reporting and contribution 23 |
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| 103 | 102 | | requirements of employers participating in the Arkansas Teacher Retirement 24 |
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| 104 | 103 | | System; and that this act is necessary in order to maintain an orderly system 25 |
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| 105 | 104 | | of benefits for the members of the Arkansas Teacher Retirement System. 26 |
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| 106 | 105 | | Therefore, an emergency is declared to exist, and this act being necessary 27 |
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| 107 | 106 | | for the preservation of the public peace, health, and safety, shall become 28 |
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| 108 | 107 | | effective on July 1, 2025. 29 |
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| 109 | 108 | | 30 |
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| 110 | 109 | | 31 |
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