The 93rd General Assembly
The Joint Retirement Committee (JRC) meeting for Wednesday, February 17th has been cancelled.
The next JRC meeting will be Monday, February 22nd at 8:30 a.m.
5oint Public Retirement & Social Security Committee (JRC)
The Joint Retirement Committee (JRC) met on Monday, February 8th. Representative Les Warren and Robyn Smith, ASHERS Executive Secretary, presented several bills for the Arkansas State Highway Employees' Retirement System (ASHERS). None of the bills presented have any impact on ATRS. The next JRC meeting will be held on Monday, February 22, 2021 where Representative Les Warren, Representative John Maddox, Representative Brian S. Evans, Representative Stu Smith, and I will present the bills in the ATRS Legislative Package.
HB1279, sponsored by Rep. Stu Smith, will clarify the disability retirement process and add a second review process for some additional fairness for our members.
HB1319, sponsored by Rep. John Maddox, will lower the current requirements for using a higher reciprocal final salary in calculating ATRS retirement benefits.
HB1320, sponsored by Rep. John Maddox, will require ATRS employers to submit contributions electronically. This will add administrative efficiency for the contribution collection process.
HB1326, sponsored by Rep. Les Warren, is a technical corrections bill that will streamline the Teacher Retirement laws by eliminating obsolete language and codifying existing practice and ATRS Board intent.
HB1339, sponsored by Rep. Brian Evans, will repeal some obsolete language and allow ATRS to treat all members the same in regard to including compensation for accumulated sick leave in the final average salary.
HB1340, sponsored by Rep. Brian Evans, will add fairness to the process that ATRS uses to resolve errors involving unreported service.
The actuaries found none of the above bills to have a significant cost effect on ATRS. They are all essentially bills to add efficiency and fairness to the ATRS procedures.
Senate Bill 174
It also possible that SB174, sponsored by Senator Larry Teague, will be presented at Monday’s JRC meeting. This bill is a little complicated and I have received many questions about what this bill does. I will attempt to explain it.
A Teacher Retirement member must have 28 years of service or have attained the age of 60 in order to receive full retirement benefits. This bill does not change those requirements. In order for a member to start drawing retirement benefits the IRS requires them to have a bona fide termination of employment or have attained the normal retirement age. Currently ATRS ensures the bona fide termination of employment by requiring a member stay separated from covered employment for six (6) months. However, if the member has thirty-eight (38) years of service they are only required to separate for only one month. The ATRS normal retirement age is currently defined as the age of 65.
The purpose of this bill is to simplify the separation period requirements by eliminating the one-month separation period. At the same time the normal retirement age is redefined to be a more flexible standard. This bill changes the definition of the "normal retirement age" to be age 65 with 5 years of service OR the "Rule of 100". The "Rule of 100" is satisfied when a member is at least age 60 and has service and age that total 100 or more (for example, a member aged 60 with 40 years of service). A member that has attained the normal retirement age is able to draw full retirement benefits and remain employed without separating from employment. This bill would not take effect until September 1, 2021 and there is a phase-in "Rule of 99" for the first fiscal year (FY2022).
This bill is needed to assist the ATRS staff in their efforts to counsel members as they near retirement. In short, having two separation periods is confusing. Furthermore, the one-month separation period almost invites members to create an agreement with their employer to return to work after the one month. This type of agreement is strictly prohibited by the IRS.
The system’s actuary found that this bill would not have any significant cost effect.
Monitoring Teacher Retirement Related Legislation
Now that the deadline for filing bills that directly impact one of the Arkansas public retirement plans has passed, ATRS is monitoring other bills as they are filed to determine if they could indirectly impact ATRS. As these bills are identified, we will add them to the ATRS Legislation page on the website. These bills will start in the “ATRS Monitoring” status. As more information is gathered about the purpose, intent, or actuarial cost of the bills, the status could change to “ATRS Opposes” or “ATRS Supports”.
As a reminder, the Joint Retirement Committee (JRC) meeting will be video streamed over the Internet each Monday morning during the session. Just visit the Arkansas Legislative Meetings and Events web page on Monday at 8:30 a.m. Look for the item “PUBLIC RETIREMENT & SOCIAL SECURITY PROGRAMS-JOINT” and click on the “video” icon. The agenda for the meeting will be posted here at least 18 hours before the start of the meeting.
Here is the link to the full procedures for public access to the committee meetings: Committee Procedures and Public Access for 2021 Regular Session
ATRS will try to keep its members informed about the bills that impact ATRS, its members and employers. For more information regarding the ATRS Bill Package and Bills that may Impact ATRS visit the Legislation page on our website.
Stay in Touch with ATRS and View YOUR Account Information
The ATRS website allows members to have direct access to specific member account information. Now, approximately 23,900 members have direct account access to individualized account information. Here is the link to the instructions to sign up: www.artrs.gov/registration.
You can also sign up to obtain these executive director updates through your private email address. Updates are made throughout the year such as at retirement season and other times when information needs to be shared. Now, over 25,900 people have signed up to receive this executive director update by direct email delivery. It is always a great pleasure for ATRS staff to learn of more ways to provide information to ATRS members, employers, beneficiaries, government officials, and the public. The ATRS Board is committed to providing a system that is member friendly and transparent. Remember that ATRS is here to serve you.
Best regards,
Clint Rhoden
Executive Director ATRS
Office: (501) 588-4367
Mobile: (501) 291-1623
clintr@artrs.gov