Retirement

Why do so many ATRS members become July 1st retirees?

A large majority of ATRS members retire at the end of a school year and become July 1st retirees. A July 1st retiree receives the first benefit payment near the end of July. A very important reason to be a July 1st retiree is that members who retire by July 1st earn a cost of living allowance (COLA) the following July 1st. ATRS pays a 3% simple COLA each July 1st to members who have been retired at least 12 months. If a member misses becoming a July 1st retiree and retires later in the fiscal year, then the member would not receive a COLA until the second July 1 of their retirement.

Am I eligible to retire?

In order to retire, you must meet one or more of the following requirements:

Members at or over age 60 and have five (5) or more years of actual and reciprocal service credit. Reciprocal service is service credit in another Arkansas public retirement plan such as APERS, LOPFI, Highway, State Police, or an alternate plan. Any member with less than five (5) years of service credit with ATRS who also has reciprocal service credit may need special counseling to best protect the member.
Members with at least twenty-eight (28) years of combined ATRS actual and reciprocal service credit at any age.
Members who have completed at least twenty-five (25) years of combined actual and reciprocal service credit may take early retirement at any age, but will be subject to an early retirement reduction. The reduction is the lessor of the number of years/fractional years by which the time of early retirement precedes the earlier of completion of 28 years of service credit or year/months prior to attaining age 60. The reduction factor is 10% per year, and is prorated according to service credit or age. ATRS staff will help calculate the early retirement reduction.

See Retirement Eligibility for more information.

How can I obtain a current estimate of my benefits?

Based upon policy and law changes that have occurred over time, updated benefit estimates may have substantially changed from estimates you may have received in the past. You can contact ATRS at (501) 682-1517, info@artrs.gov, or visit ATRS offices during regular business hours, 8:00 a.m. – 4:30 p.m., to obtain an updated estimate of benefits. An updated estimate provides the most current information upon which to make a retirement decision. ATRS strongly encourages members to get a current benefit estimate before deciding to retire.

Can I estimate my own benefits using the ATRS website?

Yes. You may estimate your benefits at any time using our online benefit estimator. The estimate provided by the online benefit estimator will be fairly close to the official estimate you would receive from ATRS. To get started just visit us at http://www.artrs.gov/login to sign up for an account, a process which takes approximately 10 minutes. After logging in, ATRS members can access the online benefit estimator under the "My Account" menu.

Members who register and complete the member verification process can access their member data, including salary and service credit history and 1099 tax documents.

For help with any issues regarding the website, questions about your benefits, or other retirement issues, you can contact ATRS at (501) 682-1517 or info@artrs.gov.

Am I eligible to purchase additional service?

An active or inactive member, who did not have a service purchase plan in place prior to July 1, 2011, may be eligible to Purchase Service in the system at actuarial cost in order to increase the total number of years used in the calculation of benefits for the member. In general, the types of service a member may purchase are as follows:

Changing non-contributory service to contributory service
Repayment of refunded service (total withdrawal of member contributions plus interest)
Out-of-state teaching service
Private School service (both certified and classified service)
Sabbatical leave
Prior service (unreported in an ATRS covered position)
Domestic Federal service
Federal Retirement service
National Guard and Armed Forces Reserve Service (year for year credit for national guard or reserve service)
Military Service (if you were drafted into service you may be eligible for Free Military Service)
Gap service (Must have left your position as a classroom teacher and returned as a classroom teacher. Must accrue at least one-half year of service after returning. Other conditions may apply.)

Purchases of service must be paid in full before retirement for the service to be counted in benefit calculations. ATRS strongly encourages those members interested in purchasing service to immediately contact the ATRS Benefits & Counseling Department at 501-682-1517 or info@artrs.gov for estimated costs and further information.

If I have a purchase of service account, does it have to be paid in full?

Yes. Several members at the time of retirement are still completing purchase service accounts (established prior to July 1, 2011). Prior to retirement, all purchase accounts must be paid in full for the service to be recognized in calculating retirement benefits. Members planning to retire are urged to have a financial plan in place to complete payments on any outstanding purchase service balances before retirement. ATRS strongly encourages members to have all purchase service accounts paid in full at least five (5) weeks before anticipated retirement date in order to recognize the service credit in retirement benefit calculations.

How do I obtain a retirement application from ATRS?

ATRS will provide a retirement application upon request, or it can be downloaded from the ATRS website: Retirement Application. The application must be completed by both the member and the employer. A completed retirement application, including the employer's portion, must be filed in most cases at least thirty (30) days in advance of the desired retirement effective date. The decision to retire may be cancelled up to two (2) calendar months after the effective date of retirement. There is no special form used to cancel retirement, so cancellation is achieved by contacting ATRS in writing via fax at 501-682-2359, email at info@artrs.gov, or letter. The cancellation notice must be received in writing by ATRS before the deadline. Please contact ATRS at (501) 682-1517 or info@artrs.gov to confirm receipt of your cancellation notice, regardless of the type of delivery.

Can my retirement application be filed with ATRS prior to the date I want to retire?

Yes. ATRS will accept retirement applications in advance of the date you wish to retire. To be a July 1 retiree, ATRS must receive your retirement application on or before May 31. The application may be delivered by fax, email, personal delivery, private express courier (e.g UPS or Federal Express), or by the U.S. Postal Service.

If the application is sent through a courier or the U.S.P.S, ATRS will treat the postmark date or the date recorded on the transmittal receipt as the date of receipt by ATRS. For all other types of delivery the date of receipt will be the date the application arrives at ATRS.

Please contact ATRS at (501) 682-1517 or info@artrs.gov to confirm receipt of your retirement application, regardless of the type of delivery.

Does filing a retirement application make my retirement decision irrevocable?

ATRS allows a retirement application to be withdrawn at any time prior to the effective date of retirement. In addition, a member has two (2) calendar months from the effective date of retirement to cancel retirement. A July 1 retiree can cancel a retirement application through August 31. Any benefit payments made by ATRS must be returned promptly. However, after two (2) months have passed beyond the effective date of retirement, the decision to retire is irrevocable.

PLEASE NOTE: Due to IRS regulations, a T-DROP retiree who elects to have all or part of the T-DROP balance rolled over to an outside administrator or as a cash distribution to the retiree may have a shorter time to cancel retirement. Therefore, the ability to revoke retirement that includes a T-DROP distribution would typically be shorter than two (2) calendar months. (If you utilize the ATRS CBA to rollover your T-DROP account and/or annuitize your T-DROP account with ATRS, you would still have the two (2) calendar months to cancel retirement.)

What paperwork/documentation should accompany my application?

If ATRS does not already have certain documents on file, copies of the member's Social Security card, or other taxpayer identification form, and birth certificate are required. Depending upon which Annuity Option is selected at retirement time (Straight Life Annuity, Option A, B, or C), a copy of the member's marriage license and the spouse's Social Security card and birth certificate may be required. Retirement time also provides a good opportunity to review and update beneficiaries, both Residue and Lump Sum Death designations.

PLEASE NOTE: If a member's benefits are subject to a Qualified Domestic Relations Order (QDRO), a copy of the order must be provided to and qualified by ATRS. (Please contact the ATRS Membership Attorney at (501) 682-1517 or info@artrs.gov for more information regarding Divorce/QDRO.) (Also, see Divorce.)

What happens if I cannot obtain all needed paperwork before my retirement date?

Lack of a Social Security card, taxpayer identification form, birth certificate or other necessary documents by the effective date of retirement will delay the first benefit payment. ATRS will keep the retirement application pending for up to six (6) calendar months after the effective date of retirement. An extension may be granted after six (6) months for good cause shown. During the time it takes to receive all required documents, benefit payments will not commence. Once ATRS receives the required documents, ATRS will pay all benefit payments due to the member retroactive to the effective date of retirement, and will continue to pay monthly benefits afterwards. If the required documents are not received within six (6) months after the effective date of retirement plus any extensions granted, the application will be voided and the member will be required to file a new retirement application. The effective date of retirement cannot be earlier than the filing date of the new retirement application.

Once I submit my application and related documents, what does ATRS do?

Once the ATRS retirement application is received, ATRS will send a letter acknowledging receipt of the application within a few days and request any needed documents. ATRS counselors will research the member's account to prepare the necessary payroll documentation. You will receive correspondence with a Retirement Benefit Statement outlining benefits you will receive.

What benefit option elections are available to me when I apply for benefits?

ATRS has four (4) options for benefit payments: (1) Straight Life Annuity (SLA), (2) Option A, (3) Option B, and (4) Option C. All options provide for benefit payments to the retiree for life. Three of the four options provide for the payments to continue to an option beneficiary after the member's death. Options A and B will continue payments for the lifetime of the named beneficiary. Option C payments will continue for a guaranteed period of 10 years, either to the member or the member's named beneficiary.

STRAIGHT LIFE ANNUITY (SLA):

The election that provides maximum benefit payments to the retiree and DOES NOT provide coverage for any other individual after the retiree's death is "Straight Life Annuity." Upon the retiree's death, all monthly benefits cease and any applicable lump sum death benefit and any residual accumulated member contributions will be paid to a designated beneficiary. In most instances, a member who has been retired for eighteen (18) months has no residual balance left, and only the death benefit, if applicable, will be paid. If a member annuitizes all or part of a T-DROP balance, a residual balance will usually remain payable up to ten (10) years after the effective date of retirement. If a retiree drawing SLA benefits dies within the first year of retirement, the spouse may elect to receive an Option A benefit if certain conditions are met and the spouse otherwise qualifies for Option A benefits. The surviving spouse should contact ATRS as quickly as possible regarding this benefit.

OPTION A and OPTION B:

Option A or Option B provides the retiree a monthly benefit for life and, if the retiree dies first, for the life of an eligible spouse and/or incapacitated child. If a member elects Option A or Option B, a monthly benefit will be payable until both the member and his or her option beneficiary are deceased.

If a member elects an Option A benefit (100% of retiree's monthly benefit payable to option beneficiary) to cover a spouse and/or incapacitated child, the member's "Straight Life Annuity" is reduced by a predetermined formula developed by the ATRS actuaries. Upon the retiree's death, the retiree's monthly Option A benefit will be paid to a surviving option beneficiary for the rest of the option beneficiary's life.

If a member elects an Option B benefit, (50% of retiree's monthly benefit payable to option beneficiary) to cover a spouse and/or incapacitated child, the member's "Straight Life Annuity" is reduced by a predetermined formula developed by the ATRS actuaries. Upon the retiree's death, the retiree's monthly Option B benefit will be paid to a surviving option beneficiary for the rest of the option beneficiary's life.

Option A Example: The member elects an Option A benefit and has a monthly benefit of $2,500. If the retiree dies, the Option A beneficiary receives approximately $2,500 each month for the rest of his or her lifetime with an annual 3% simple COLA added each July 1.

Option B Example: The member elects an Option B benefit and has a monthly benefit of $2,500. If the retiree dies, the Option B beneficiary receives approximately $1,250 each month for the rest of his or her lifetime with an annual 3% simple COLA added each July 1.

OPTION C:

With Option C, the member's lifetime benefit is reduced during the first 10 years of retirement. If a member elects an Option C benefit, ATRS guarantees that at least 120 benefit payments will be paid. The retiree will receive a reduced benefit for that 120 months, and then "pops-up" to a straight life annuity (SLA) beginning with the 121st month and draws a SLA benefit for the remainder of his or her life. If the retiree dies before receiving one hundred twenty (120) monthly benefit payments, the payments shall be continued for the remainder of the original 120 month period and be paid to the Option C beneficiary named by the retiree. If the Option C beneficiary predeceases the retiree in the 1st 120 months, or if a marriage ends in divorce or other marriage dissolution, the retiree may name a successor beneficiary or may elect to return to "Straight Life Annuity." Effective the month following completion of 120 payments to the retiree, the retiree's monthly benefit shall return to the "Straight Life Annuity" and the Option C beneficiary no longer has rights to the retiree's benefit. The Option C beneficiary does not have to be a relative. The Option C beneficiary can be a person or any entity that has a tax payer identification number (TIN), such as a church or charity.

Option C Example: The member elects an Option C benefit and is paid a monthly benefit of $2,500 and dies six (6) months later. The Option C beneficiary will receive a monthly benefit of $2,500 for the remaining nine and one-half (9.5) years along with a 3% simple COLA each year.

NOTE: For Option A or Option B beneficiaries, ATRS requires copies of the spouse's birth certificate, Social Security number, and a copy of the marriage license. For an incapacitated child, ATRS requires a probate order, birth certificate, and a Social Security card. For Option C, a copy of an entity's TIN or a person's Social Security Card is required.

Upon the death, divorce, or other marriage dissolution from a retiree's spouse of an Option A, Option B, or Option C beneficiary, the member may elect a "Straight Life Annuity," to become effective the month following the receipt of a written election form.

Can I change my option beneficiary choice after I retire?

A new retiree has one year after the effective date of retirement to make changes to the benefit option elected (Straight Life Annuity, Options A, B, or C). The benefit option election may be changed only once during the first year of retirement. If the election change reduces the member's payable monthly benefit, the member must reimburse ATRS any overpayment from the effective date of retirement, plus interest.

ATRS is available to help explain all retirement options and provide assistance with retirement decisions. Members may contact ATRS at (501) 682-1517, info@artrs.gov, or visit a counselor in the ATRS office for assistance prior to and after retirement.

Other than Option Beneficiaries, how many beneficiaries can I name, and what impact can occur by who is named?

Most retirees prefer to designate the beneficiaries who will receive any amounts payable upon their death. Retirees are not required to name beneficiaries, but should strongly consider doing so. If a retiree does not name beneficiaries, then his or her estate is paid the last monthly benefit payment, the lump sum death benefit, if any, and any accumulated member contributions that might be payable. An estate requires legal action, and can take several months to establish. There can be legal and court costs associated with the establishment of a deceased person's estate. Named primary beneficiaries will receive the type and amount of payment designated on beneficiary forms filed with ATRS. If primary beneficiaries predecease the retiree, then contingent beneficiaries will receive the type and amount of payments designated on beneficiary forms filed with ATRS. Retirees may designate up to three (3) separate beneficiary types:

Option Beneficiary:

If a retiree chooses Option A, Option B, or Option C benefits, the member must select an option beneficiary to receive benefit payments upon the retiree's death. This may not be the case if a member selects Option C, and lives to draw a minimum of 120 payments. The Option Beneficiary election form is provided in the retirement application packet which is filed with ATRS at the time of retirement.

Residual Beneficiary:

The residual beneficiary receives all employee contributions plus interest accrued by the retiree that have not already been paid to the retiree as monthly benefits. Most retirees exhaust the residual benefit in the 1st eighteen (18) months of retirement. If a retiree is married, careful consideration should be given to the named residual primary beneficiary. If a retiree chooses a Straight Life Annuity and dies in the first year of retirement, the spouse may elect Option A lifetime benefits only if the spouse is named as the residual primary beneficiary. If someone other than a spouse is named as the residual primary beneficiary, the last retirement benefit payment due to the member in addition to the accumulated member contributions, if any, will be paid to the residual primary beneficiary or if the residual primary beneficiary is deceased, then the residual contingent beneficiary will receive the payments

The Disposition of Residue – Beneficiary Designation Form is only one (1) page, and can be completed in less than five (5) minutes.

Lump Sum Death Benefit Beneficiary:

Members with ten (10) or more years of actual service (cannot be reciprocal service or non-ATRS purchased service) are entitled to a death benefit up to $10,000. If no beneficiary is named for the death benefit, it will be paid to the retiree's estate which causes delayed payment and associated legal fees for establishment of the estate. Both primary and contingent beneficiaries may be named on the lump sum death benefit form.

The Lump Sum Death Benefit – Beneficiary Designation Form is only one (1) page, and can be completed in less than five (5) minutes.

Did you know that members with ten (10) or more years of actual service credit will receive a monthly stipend added to their retirement benefit?

In 1999 the ATRS Board of Trustees developed legislation that was approved by the General Assembly to add this special benefit for retirees. At least ten (10) years of actual ATRS service credit is required to qualify for the monthly stipend. The ten (10) years cannot be reciprocal service or non-ATRS purchased service. For instance, private school and out-of-state service that is purchased does not count in the ten-year requirement. Please contact ATRS at (501) 682-1517, info@artrs.gov, or visit a counselor in the ATRS office for more information about the monthly stipend.

If I am approved as a July 1 retiree – what do I need to know?

SOCIAL SECURITY:

Many retirees are concerned that receipt of Social Security benefits will reduce their ATRS benefit. The good news: this is not true. Although many state retirement systems do coordinate their benefits with Social Security, ATRS does not reduce its benefits once you become eligible for Social Security. So your Social Security benefit has no impact whatsoever on your ATRS benefit. ATRS retirees have the double benefit of both ATRS lifetime benefits and Social Security benefits.

RECEIPT OF MONTHLY BENEFITS:

As a July 1 retiree, the first benefit payment will be paid near the end of July. ATRS pays monthly benefits electronically to retirees' bank accounts in order to avoid lost or stolen paper checks. At the time of retirement, retirees will be asked to provide the necessary bank account information to ensure monthly benefit payments are deposited into the designated bank accounts.

HEALTH INSURANCE:

ATRS does not manage or administer the public school health insurance program for retirees. That program is administered by a separate state entity, Employee Benefits Division (EBD). ATRS acts as a payment agent to withhold health insurance premiums and forward those premiums to EBD on behalf of retirees. The contact information for EBD is on the ATRS website at www.artrs.gov/links. If you feel ATRS may be able to help resolve a payment issue, please feel free to call ATRS for any help we can provide.

What about employment after I have retired – what do I need to know?

New retirees who have met the Normal Retirement Age before their official retirement date can receive their first retirement payment and continue working for an ATRS employer without termination or any separation. A contract may be signed to work for the next school year at any time. Effective July 1, 2023, (Act 107 of 2023) Normal Retirement Age is defined as the age of 65 with 5 or more years of credited service OR if the member is at least age 60 and the member's age and combined years of credited service total 98 or more. A member must terminate employment unless they meet the Normal Retirement Age. This is a specific benefit to long-serving ATRS members who have reached either of these milestones and wish to continue working.

For any other retiree who has not met the Normal Retirement Age by their effective date of retirement, there is a TERMINATION SEPARATION PERIOD.

Effective July 1, 2023 (Act 107 of 2023), new retirees who have NOT met the Normal Retirement Age, must terminate employment with all ATRS covered employers, including colleges, for four (4) calendar months from their effective date of retirement. In addition to ceasing work for all ATRS covered employers, there must be no agreements to work for any ATRS employer before the termination separation period of four calendar months ends. Any contract for the upcoming fiscal year must be canceled to make the contract no longer effective. A new retiree may volunteer for an ATRS employer during the termination separation period as long as the volunteering is not used to hold a position open during the termination separation period. Retirees are strongly encouraged to get written clearance from ATRS before returning to work. ATRS strictly enforces the termination separation period. Failure to comply is financially harsh because the retiree must submit a new retirement application and repay all benefits received from the cancelled retirement.

Please rely on ATRS to determine the amount of recognized service credit.

Can ATRS provide a quick summary of the termination/separation periods for a July retiree?

Age 65 by June 30: No Separation Requirement
Age 60 AND the member's age and years of credited service total 98 or more by June 30: No Separation Requirement
All other retirees: May return to covered employment after October 31

If I work for an ATRS employer as a retiree, is my retirement benefit reduced or suspended?

Very good news, the answer is No. Once the termination separation period has ended, retirees may work for ATRS employer without any impact on ATRS retirement benefits. The earnings limitation that once applied to retirees returning to work for an ATRS employer was repealed in 2009. After completing the applicable termination separation period, retirees may work full time, obtain full salary, and also receive full retirement benefits without suspension or reduction.

Anything else I need to keep in mind or know regarding retirement?

Retirees often change addresses or bank accounts during retirement. ATRS should be contacted promptly of any change of address to ensure delivery of correspondence from ATRS, such as tax documents. ATRS temporarily suspends benefits if tax documents are returned to ATRS. Please keep addresses updated in retirement to prevent a disruption in benefits that occurs when ATRS cannot locate retirees during tax season. Any change in banks or bank account numbers should be reported to ATRS to prevent a delay in delivery of monthly benefits. A change in marital status could provide a change in benefit options or changes to your beneficiary forms. If any designated beneficiaries die, such as an option beneficiary, a residual beneficiary or a lump sum death beneficiary, beneficiary designation forms should be updated. Please contact ATRS for one-on-one counseling on these issues.

Must I be currently employed with an ATRS covered employer to be eligible for retirement benefits with ATRS?

No. Inactive members who have completed at least twenty-five (25) years of combined actual and reciprocal service credit may take early retirement at any age, but will be subject to an early retirement reduction. Inactive members who have at least 5.00 years of combined ATRS and reciprocal service credit are eligible to receive an ATRS monthly retirement benefit at age 60. Please contact ATRS for estimates and the proper forms to apply for benefits as an inactive member.

What if I have reciprocal service credit with another state public retirement system?

Members with reciprocal service should NEVER retire without obtaining one-on-one counseling from ATRS and their reciprocal system(s). Without such counseling, the member may be harmed by failing to receive all reciprocal benefits and retirement rights.

What if I get married after retirement?

If a retiree is newly married at the time of retirement or marries after retirement, the member may elect to cover the spouse after being married one (1) full year. Upon meeting the one (1) year marriage requirement, the member has six (6) months to file an election to cover the spouse under Option A or Option B (Review of Annuity Options).

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