The 94th General Assembly - Joint Public Retirement & Social Security Committee (JRC)
The 94th General Assembly has recessed until May 2023 for the purpose of adjourning sine die, which will officially conclude the 2023 regular session.
ATRS thanks all the members of the Joint Retirement Committee for their time and patience spent working with ATRS staff and the ATRS Board of Trustees to keep our system strong while protecting the benefits of Arkansas educators. Here is the list of the committee members and alternates by chamber:
2023 Senate Members of Joint Retirement Committee
Senator John Payton (Co-Chair), Senator Greg Leding (Co-Vice Chair), Senator Linda Chesterfield, Senator Breanne Davis, Senator Kim Hammer, Senator Jimmy Hickey, Jr., Senator Mark Johnson, Senator Bryan King, Senator Reginald Murdock, and Senator Clarke Tucker.
2023 House Members of Joint Retirement Committee
Representative Les Warren (Co-Chair), Representative Mark Perry (Co-Vice Chair), Representative Wade Andrews, Representative Andrew Collins, Representative Charlene Fite, Representative John Maddox, Representative Tippi McCullough, Representative Richard McGrew, Representative Johnny Rye, and Representative Steven Walker.
ATRS would also like to thank the Joint Retirement Committee’s legislative drafting attorney, Laura Reynolds. Her professionalism and expertise helped ATRS maneuver the legislative session seamlessly.
Finally, ATRS is also grateful for all the assistance and advocacy by member organizations. Your voices and concerns about issues affecting ATRS have been heard by the JRC. The cooperation from Governor Sarah Huckabee Sanders' office and others is also recognized and appreciated.
Summary of ATRS Legislation
All of the bills in the ATRS sponsored package are now law. Here is a summary of the ATRS Acts of 2023:
Act 52 – Concerning the Membership Status of Certain Members. Act 52 provides that if a member enters into a contract with a covered employer after the start of the fiscal year, the system may prorate the number of contracted days in order to determine whether the member should be classified as a contributory member or a noncontributory member. For example, currently a full-time employee who is hired in the middle of the year would have the option of becoming a noncontributory member, whereas a full-time person who is hired at the start of the year would not have that option. Act 52 ensures the equal treatment of full-time employees regardless of their date of hire within the year.
Act 55 – To Permit a Refund of Unused Purchased Service Credit. Act 55 codifies the existing practice for refunding payments of purchased service. In all cases of purchased service credit, at the member’s request, payment for the purchased service credit shall be refunded if the member ceases to be an active member before the service credit is established in the system or the service credit is not otherwise used to establish eligibility under the system, effectively cancelling the entire transaction.
Act 63 – Concerning the Multiplier Used to Calculate a Life Annuity. Act 63 codifies the existing practice of applying a lower multiplier for members with less than 10 years of ATRS service credit. Act 63 clarifies that the ATRS Board may set the multiplier rate for contributory service during the first 10 years at no less than 1.75% and no higher than 2.15%. Act 63 further clarifies that the ATRS Board may set the multiplier rate for noncontributory service during the first 10 years at no less than 0.5% and no higher than 1.25%.
Act 64 - To Amend and Update Provisions for Outsourcing. Act 64 concerns the collection of a surcharge on the salary of outsourced positions in school districts. The current surcharge is at the maximum rate of 4%, therefore, the phase-in schedule of rates has been removed. No covered employers have elected to contribute the full 15% of outsourced salaries as currently allowed for in statute, therefore this option is being removed from the statute.
Act 69 – Concerning an Inactive Member’s Eligibility for Free Military Service Credit and Ability to Purchase Military, Contributory, and Federal Service Credit. Act 69 allows all qualifying members who served in the United States Armed Forces during a period that a military draft was in effect to receive up to 5 years of free service credit, before retirement, regardless of their current ATRS active status. Act 69 also allows all qualifying members to purchase military and federal service credit and convert noncontributory service to contributory service, before retirement, regardless of their current ATRS active status.
Act 77 - To Amend and Update the Law Concerning Survivor Annuity Benefits. Act 77 clarifies that eligibility for the dependent child annuity ends at age 23, adds vocational-technical schools to the list of acceptable schools, allows for a deferral enrollment period in accordance with promulgated rules, and provides that the annuity of a dependent child may be suspended if the dependent child is called to active duty military service.
Act 77 permits a dependent child annuity to be paid to each surviving child of a retiree who returns to work under the same conditions and in the same amount as if the return to work retiree were an ordinary active member.
Additionally, Act 77 clarifies that monthly survivor benefits are payable to a surviving spouse of an active member unless the active member directs an alternative beneficiary to receive his or her residue. The act further clarifies that the surviving spouse’s eligibility to receive survivor benefits is restored if an active member’s designated alternative beneficiary waives the right to the residue. If no residue exists, no waiver is required.
Finally, under the act, the time for completing the survivor benefit application is increased from 3 months to 6 full calendar months.
Act 104 – To Amend and Update the Law Concerning the Final Average Salary. Act 104 clarifies certain language related to the calculation of the final average salary. The act authorizes the ATRS Board to use the rules promulgation process to address how partial years will be used to calculate the final average salary. Act 104 also better identifies the statutory provisions that address anti-spiking.
Act 107 – To Enact ATRS’ General Omnibus. Act 107 cleans up the language in several sections of the Arkansas Code related to ATRS for the purpose of achieving clarity and consistency. The following is a summary of the changes:
- cleans up the definition of "alternate retirement plan";
- replaces "retirant" with "retiree";
- aligns wording with BLR style guide;
- adds fairness to the definition of "normal retirement age" to use a Rule of 98;
- defines "benefit enhancement";
- allows the ATRS Board to set the de minimis amount for distributing and collecting moneys;
- slightly extends deadlines for completing applications by using full calendar months;
- modifies provisions concerning required minimum distributions to align with federal law, which increases the required minimum distribution age from 72 to the range of 73 to 75; and
- clarifies that service credit purchase under a settlement agreement cannot result in more than one year of service in a fiscal year.
Act 125 – To Allow the Purchase of Permissive Service Credit. Act 125 creates a new type of service credit that can be purchased at actuarial value. If a classroom teacher leaves active employment for a one-year period and then returns back to employment, the classroom teacher may purchase service credit for the gap year at actuarial value. Up to 5 years of gap year service credit may be purchased. The gap years may occur consecutively or nonconsecutively. The hope is to encourage experienced teachers who took a break from teaching to return to the classroom.
Act 170 – To Amend the Law Concerning Annuity Options. Act 170 allows a retiree to designate both his or her qualifying spouse and qualifying dependent child as his or her Option A or Option B beneficiaries who may receive a survivor annuity. The act also ensures that the spouse of a disabled annuitant who dies within the first year of retirement has the same options as all other retirees.
Act 171 – To Amend the Law Concerning the Lump Sum Death Benefit. Act 171 clarifies language concerning eligibility for the lump sum death benefit and adds consistency by using “lump sum death benefit” throughout. The act also clarifies that the lump sum death benefit is extended to T-DROP participants.
Act 183 - To Amend the Law Concerning the Termination Separation Period. Act 183 lowers the number of months that a retiree must be terminated from covered employment before returning to the service of an ATRS employer. The separation period is reduced from 6 months to 4 months.
For more information regarding the 2023 legislation, visit our ATRS Legislation page on the website.
This executive director update concludes the legislative updates from the 2023 regular session.
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ATRS is always striving to keep its members, employers, beneficiaries, government officials, and the public informed. It is always a great pleasure for ATRS to learn of more ways to provide information to ATRS members. If you have any suggestions on how we can improve our communication you may e-mail them to info@artrs.gov for consideration.
As always, ATRS and its board are committed to providing a system that is member friendly and transparent. Remember that ATRS is here to serve you.
Kind regards,
ATRS Staff