ATRS Plan Features
This section provides a brief explanation of the ATRS plan so you may better understand what types of benefits may be divided in a QDRO. It is not an exhaustive list of all the benefit provisions or options available to the participants.

The ATRS plan is a defined benefit plan established by state law for public school and other public education employees in Arkansas. It is administered as a “qualified” government sponsored retirement plan under the provisions of IRS § 401(a). The state statutes contain the benefit provisions for the plan found at Arkansas Code § 24-7-201 et. seq. which are supplemented by ATRS Rules and Regulations. These laws and rules describe retirement benefits available and the conditions under which an ATRS participant or beneficiary is eligible to receive them.

Member contributions and accumulated interest – If a participant is in the contributory plan, he or she contributes 6% of his or her salary received from the participating employer, pretax as a payroll deduction to the ATRS plan. Contributions are credited to the member and earn interest at the rate set by the ATRS Board. If the member does not receive a retirement annuity from ATRS, the contributions and accumulated interest are distributable, and a portion may be assigned to the alternate payee in the QDRO. Participant contributions are refundable in two instances, when the participant is no longer working for a participating employer and requests a refund under § 24-7-711 or the participant dies prior to receiving retirement benefits. If member contributions are withdrawn, the participant’s service credit is cancelled and annuity benefits are forfeited.

ATRS employer contributions – ATRS employers pay an employer match on the salary paid to ATRS participants. This amount paid by the employer is not credited to the member and is never refunded. Therefore, employer contributions may not be assigned in the QDRO since they are not participant benefits.

Accrued benefits – As a participant works for a participating employer, he or she accrues service credit and salary in the plan. Service credit is the length of participation in ATRS. For each 40 days the participant works for the participating employer each year, he or she receives service credit in quarterly (.25) increments. After completing 160 days or more of service in a fiscal year (July 1- June 30), a member will be credited with 1 full year of service. Salary is the total amount of income paid by the participating employer to a participant in a given fiscal year. ATRS uses a participant’s 3 highest salary years to calculate the retirement annuity payable to the participant.

A member is considered “vested” for purposes of eligibility for annuity benefits after receiving 5 or more years of service credit in the ATRS plan.

Annuity benefits – Upon reaching eligible for retirement, a participant receives a lifetime, monthly annuity from ATRS based on the following formula: years of service X final average salary (3 highest salary years) X multiplier (1.39% non-contributory / 2.15% contributory plan). A percentage or other set amount of this annuity may be assigned to an alternate payee in the QDRO beginning when the participant begins drawing benefits. These are known as “age and service” retirement annuity benefits.

Annuity options- Participants may elect one of four options for the ATRS retirement annuity: straight life annuity; Option A; Option B; or Option C. (ACA § 24-7-706). A participant may not designate his or her former spouse as an Option A or B annuity beneficiary if he or she is not married to the spouse at the time of retirement. For purposes of calculating assigned benefits to an alternate payee in a QDRO, ATRS assumes a straight life annuity is payable to the participant. The alternate payee’s annuity payments in the QDRO are not reduced because a participant elects an annuity option other than straight life.

Retirement eligibility – A participant is eligible for to draw a retirement annuity from ATRS when he or she applies for benefits and is approved by ATRS. Please note that ATRS prohibits “in service” payment of retirement benefits unless the participant has reached the plan’s normal retirement age of 65. This means that an alternate payee will not be eligible to draw benefits under a QDRO until the participant is eligible by terminating employment with his/her participating employer and applying for retirement. An ATRS participant is eligible for retirement benefits under the following circumstances:

  1. Deferred retirement - vested “inactive” participant with five (5) or more years of ATRS credited service upon reaching age sixty (60) (ACA § 24-7-707)
  2. Early retirement – 25 or more years of credited service, regardless of age (ACA § 24-7-701)
  3. Age and Service (voluntary) retirement – 28 or more years of credited service, regardless of age (ACA § 24-7-702)
Disability benefits – If a participant becomes disabled while working for a participating employer and he or she has five (5) or more years of actual service with ATRS, the participant may apply for disability benefits from ATRS. If approved, ATRS will pay annuity benefits using the same retirement formula described above for retirement annuity benefits. A portion (percentage) or other flat amount of a disability retirement annuity may be assigned to an alternate payee in the QDRO beginning when the participant is approved and begins drawing benefits. If a member receives retirement benefits due to disability and the parties wish to exclude these benefits from an assignment to the alternate payee, this needs to be specified in the QDRO. Otherwise, ATRS will treat disability annuities as accrued retirement benefits when administering the QDRO. (See ACA § 24-7-704)

Survivor benefits – If an “active” participant who has five (5) or more years of actual service with ATRS dies prior to receiving retirement benefits, his or her qualifying survivors will receive mandatory survivor benefits under Arkansas Code § 24-7-710. This includes a spouse married to the participant for at least 2 years at the time of death and any dependent children. The model QDRO provides that if a participant dies and survivor benefits are payable under this plan section, the alternate payee does not receive benefits unless “accumulated contributions and interest” remain after the survivor annuities terminate.

If you wish to provide benefits to an alternate payee in a QDRO even if survivor annuities are payable from a participant’s account, then the QDRO must specify that the amounts paid to the dependents must be reduced by the portion of the member’s account assigned to the alternate payee in the QDRO.

T-DROP – This is the teacher deferred retirement option plan found at ACA § 24-7-1301 et. seq. If a participant elects to participate in T-DROP, the retirement annuity benefits are frozen and any subsequent benefits in the ATRS plan will accrue in the T-DROP account. T-DROP benefits pay a portion of the retirement annuity benefits that the participant is eligible for and deposit that amount monthly in the participant’s T-DROP account. T-DROP accounts accrue interest at the rate set by the ATRS Board at June 30 each year between 2% and 6%. Upon retirement, T-DROP benefits may be paid as a single distribution or annuitized with the regular retirement annuity by the participant. The model QDRO provides that the T-DROP distribution election made by the member applies to the alternate payee unless otherwise ordered. A lump sum payment of a participant’s T-DROP account is taxable to the recipient but is eligible for rollover treatment from the IRS as a single distribution. An alternate payee may elect to roll over a lump sum distribution of T-DROP benefits under a QDRO to a qualifying depository institution.

If a participant is active in T-DROP at the time of divorce, the section on T-DROP must be included in the model QDRO or ATRS will not pay any accrued DROP benefits to the alternate payee when administering the order. If a distribution of the participant’s T-DROP benefits has occurred prior to entry of the QDRO or the participant has not participated in T-DROP at the time of the QDRO, the T-DROP section may be excluded.
Last Updated ( Thursday, 27 June 2013 )