Have you ever wondered why ATRS invests your retirement funds?
It’s a question I get from time to time, because members don’t always understand why we would need anything more than what is withheld from their paychecks.
Modern pension systems like ATRS are all designed to pay benefits from three income sources: contributions from the employer, investment returns, and for most pensions, contributions from the employee. The contributions are invested in the years when the employee is working, so that there will be enough money left at retirement to pay lifetime benefits.
Here’s how that works out in practice: For a typical ATRS member who retires with a straight annuity, that member receives back every penny of their contributions in about 3 years of retirement. And by the end of their 6th year of retirement, the member has also received back their portion of the employer’s contribution.
But retirement for most of our members will last much longer than 6 years. An ATRS member with an average life expectancy can have a retirement - and receive monthly benefits - that lasts 25 years or more.
That’s why ATRS invests these funds, to fill that gap between the 6th year and the 25th year - or more - of retirement.
This guarantee of receiving a regular monthly payment for your lifetime, a payment that can never be decreased, is what makes ATRS so valuable for our members. Our investments are what ensure that we can keep that promise.
We pursue an investment strategy that balances earning a strong return over time with protecting the safety and stability of the funds. It is an investment strategy that focuses on long-term performance over decades, not short-term gains over weeks or months. And every investment decision made by your ATRS Board of Trustees is based on a commitment to prudently manage assets in a way that will protect and preserve member benefits.
In a future monthly email update, I will explain more about how the ATRS Board makes its investment decisions. And any member is welcome to email or call me with any questions about our investments.
MEDICARE OPEN ENROLLMENT
Here’s a special message for our retirees who are Medicare-eligible and receive their healthcare coverage through the state: Please keep in mind that Open Enrollment is November 1 through November 30. If you want to change your ARBenefits health insurance plan, the Open Enrollment period is the time to do so. If you are satisfied with your plan or don't want to change, you don't need to do anything.
For assistance with your healthcare options or to make a change, please contact the state’s Employee Benefits Division by calling (877) 815-1017 or emailing ask.ebd@arkansas.gov, or go to their website at https://www.transform.ar.gov/employee-benefits/retirees/. We at ATRS can’t assist with Medicare issues, but we can connect you with the folks at EBD who can.
REMEMBERING VETERANS DAY
And finally, I want to note that we mark Veterans Day this week. For those who have served our country to protect our freedoms, and especially for those who have given their lives in defense of our nation, we thank you and honor you.
Mark White
Executive Director, ATRS
MarkW@artrs.gov
Office: (501) 621-8853
Cell: (501) 541-2057