AGE AND SERVICE (VOLUNTARY) RETIREMENT
1.
ELIGIBILITY/QUALIFICATIONS
(Amended by Acts 281 and 282 of 1995; Acts 992 and 1053 of 1997; Act 461
of 2001) (A.C.A. §
24-7-701)
A. Effective
July 1, 1998, any active member who attains age 60 and has five (5) or more
years of actual service may voluntarily retire upon written application filed
with the Board of Trustees.
B.
Active membership will continue beyond a fiscal year in which credited service
was rendered provided the employing institution certified continuing
employment. Leave of absence with pay upon which the member is making
contributions also continues active membership.
C. Effective April 1, 1997, any active or
inactive member who has 28 or more years of credited service but has not
attained age 60 years may voluntarily retire without reduction in benefits upon
written application filed with the Board.
i.
For active members, said annuity shall begin the first day of the calendar
month next following the latest of:
(a) one
month after the date the written application is filed with the Board;
(b) the member's termination of active
membership;
(c) the member's
attainment of the minimum age; or
(d) the member's completion of the minimum
years of credited service.
ii. For inactive members, said annuity shall
begin the first of the month following the date of application.
D. Effective July 1, 2001:
i. A member who has not attained normal
retirement age (65) must terminate covered employment to be eligible for
retirement.
ii. A member shall not
be considered terminated from employment for retirement purposes if the person
returns to a position that would otherwise be covered by ATRS within thirty
(30) days of the person's effective date of retirement.
iii. A person failing to meet these
termination of employment requirements shall forfeit retirement benefits until
the requirements are met.
E. In no event shall such annuity begin
earlier than the July 1 next following a fiscal school year for which the
member has signed an employment contract unless his contract is terminated with
employer consent before the year of service is rendered.
F. Effective July 1, 1995, a member retiring
with an effective date other than July 1, who has not completed his employment
contract and who wants to retain credit for service within the current fiscal
year may make application to retire one (1) full month prior to the month
benefits are to be effective. No salary earned during the fiscal year may be
used in the computation of benefits, and no more than one-fourth (1/4) of a
year of service credit shall be given for each quarter completed regardless of
the number of days worked in a quarter. If a member has signed an employment
contract for a fiscal year and has been paid in full for that year, benefits
shall not become effective until July 1.
G. The official postmark date may be used as
the official date of a transaction when the use of the mails is the usual and
customary method of communication for handling such transactions.
H. The date of application for disability
retirement benefits may be used to determine the effective date of age and
service retirement benefits under the provisions of the law. The date of
application for age and service retirement benefits may be used to determine
the effective date of disability retirement under the provisions of the
law.
I. A er may cancel his
application for retirement benefits any time prior to thirty (30) days after
the later of: the effective date of benefits or the receipt of the first
retirement check. The member shall notify the Teacher Retirement System of such
cancellation in writing within the 30-day period, and he shall again become
eligible for active membership in the System. This shall be in effect for the
1993-94 fiscal year and thereafter.
J. Leave earned prior to the date of
termination of employment does not change the date of termination, although a
lump-sum payment is made subsequent to the date of termination. The key to
termination is the date the employee actually goes off the payroll.
2.
BENEFITS
A.
Benefits Formula (Amended by
Act 992 of 1997 and Act 396 of 1999)
For payment periods April 1, 1997, and later, the benefits
payable under the above formula shall not be less than the total number of
years of credited service multiplied by not less than 2.065% of his final
average salary, except that benefits shall not be less than 1.305% of his final
average salary multiplied by his number of years of credited service rendered
after July 30, 1986, for which no member contributions were made. For an
increase(s) in benefit formulas to be effective, the regular annual actuarial
valuation for the calendar year immediately preceding the effective date of the
increase(s) shall be based upon an investment rate assumption of no more than
eight percent (8%) and shall indicate that up to and including a twelve percent
(12%) of pay employer contribution rate is sufficient to amortize all unfunded
actuarial accrued liabilities for members over a period of thirty (30) years or
less. For any increase to be effective on a scheduled date, all increases
scheduled for that date must collectively meet the minimum financial
conditions.
On any scheduled date the increases do not collectively meet the
minimum financial conditions, the Board of Trustees shall have the authority to
delay the increase until the minimum financial conditions are met. Such delayed
increase shall only be given on a July 1 and shall be the increases set out
above.
Act 396 of 1999 provides the ATRS Board authority to increase the
multiplier used to compute retirement benefits from 2.065% to 2.15% for
contributory service and 1.305% to 1.39% for noncontributory service when
actuarially appropriate. In addition, this legislation authorized the Board to
provide an increase for retirees and beneficiaries already on the retirement
rolls.
Effective July 1, 1971, if additional Teacher Retirement
contributions are remitted by an employer for any retirant, and the additional
salary does not result in an annual increase or decrease in benefits of at
least $5.00, the contributions will be transferred from the Member's Deposit
Account to the Employer Accumulation Account without making any change in the
records in the member's folder. These transfers will be made annually or as
deemed necessary. If the additional salary does increase or decrease the
retirant's benefits at least $5.00 annually, the benefits will be recomputed,
and necessary changes will be made in the member's records.
A retirant whose final average salary for annuity purposes was
$7,800.00 may elect to change effective July 1, 1986, to the noncontributory
plan and from that date be considered on full salary. Additional employer
contributions for that period shall not be due from the retirant. However, if a
retirant elects to make this change, he must pay the additional employee and
employer contributions due on any service reported between July 1, 1969, and
June 30, 1986. When all contributions due have been paid, the monthly annuity
for the retirant shall be recalculated, using the actual salary earned, and the
increase in the annuity shall be effective the first of the month following the
payment of all contributions due.
B.
Minimum Benefits (Amended by Act 1053 of 1997; Acts 221 of 1999
and 396 of 1999)
i. Any member who has 10 or
more years of credited service shall receive the following minimum benefit:
$150.00 per month if the member has only contributory credited service; $94.00
per month if the member has only noncontributory service; and a monthly amount
prorated between $94.00 and $150.00 if the member has a combination of
contributory and noncontributory service.
i. Any member retiring July 1, 1998, or later
and who has five (5) or more years of credited service shall receive the
following minimum benefit: $100.00 per month if the member has only
contributory service; $64.00 per month if the member has only noncontributory
service; and a monthly amount prorated between $64.00 and $100.00 if the member
has a combination of contributory and noncontributory service.
ii. Beginning July 1, 1998, if a member has
at least five (5) years of contributory service, regardless of his number of
years of noncontributory service, his monthly annuity shall not be less than
one hundred dollars ($100.00).
C.
Fractional Years of Service
Credit
Board policy allows fractional years of credit for service
rendered after July 1, 1971, as follows:
|
Number of Days
|
Years of Service Credit
|
|
0 - 29
|
None
|
|
30 - 59
|
1/4 year
|
|
60 - 89
|
1/2/year
|
|
90 - 119
|
3/4 year
|
|
120 or more
|
1 year
|
For a member retiring before August 13, 1993, if any fractional
part of a year in which the member retires is used in computing benefits, the
effective date of benefits would be the following July 1. The member would have
the option of forfeiting the fractional year. In this case, contributions that
he made during the year in which he retired would be refunded to him upon
request. If the member chose this option, his benefits would be computed on his
service through the preceding fiscal year.
In no event shall such annuity begin earlier than July 1 next
following a fiscal school year for which the member has signed an employment
contract unless the contract is terminated with employer consent before the
year of service is rendered.
For a member retiring after August 13, 1993, with an effective
date other than July 1, who has not completed his employment contract and who
wants to retain credit for service within the current fiscal year, the
retirement date may be October 1, January 1, or April 1. No salary earned
during the fiscal year may be used in the computation of benefits, and no more
than one-fourth (1/4) of a year of service credit may be given for each quarter
worked regardless of the number of days worked in a quarter. If a member has
signed an employment contract for a fiscal year and has been paid in full for
that year, benefits shall not become effective until the next July 1.
Should a member not want to retain his current year service
credit, his retirement will be handled in the same manner as if he had retired
before August 13, 1993.
D.
Built-in Cost of Living Increase
i. Beginning July 1, 1983, and each year
thereafter, all retirees who have been on the rolls 12 months or longer shall
receive a 3% increase. This increase will be added each year as long as they
remain on the benefit payrolls. (Act 400 of 1999)(A.C.A.
§
24-7-713)
ii. Act 404 of 1999
grants the ATRS Board of Trustees authority to compound the cost-of-living
adjustment when actuarially appropriate. (A.C.A. §
24-7-727)
E.
Additional Benefit
(Act 400 of 1999; Acts 360 and 742 of 2001; Act 853 of 2003) [A.C.A.
§
24-7-713(b)(2)] .
Members with five (5) or more years of credited service with ATRS
retiring after July 1, 1999, and their survivors and beneficiaries, shall
receive an additional benefit of $75.00 per month over and above their regular
annuity. The ATRS Board may authorize raising the additional benefit to an
amount not to exceed $200.00 per month.
F.
Suspension of Benefits (Act
29 of 1999)
Anyone entitled to receive an annuity from the System may request
the ATRS Executive Director in writing, for personal reasons and without
disclosure, to suspend the payment of all benefits otherwise payable to him/her
by the System. Upon approval to authorize suspension of benefits, the person
shall be deemed to have forfeited all rights to the benefit but will retain the
right to have the full benefit reinstated upon written notice to the Executive
Director to revoke the request for suspension.
G. Benefits are payable through the month in
which the retirant's death occurs.
ANNUITY OPTIONS
A.C.A. §
24-7-701, A.C.A. §
24-7-706, A.C.A.
24-7-709,as amended by Acts 385 and 494 of 2005)
DEFINITIONS
1.
Annuity Options - The
member's election at retirement of the annuity that shall be paid throughout
the retiree's life in accordance with A.C.A. §
24-7-706.
2.
Option Beneficiary - A
person(s) nominated by the retiree by written designation duly executed and
filed with ATRS at the time of retirement, who, if eligible, will receive
annuity payments under the annuity option chosen by the retiree after the
retiree's death.
3.
Marriage
Dissolution - A final order of divorce or annulment duly executed by a
Court of competent jurisdiction and filed of record in the Office of the
Ex-Officio Recorder.
4.
Person - an individual, corporation, partnership, or other legal
entity.
5.
Retirement Account
Balance - The total of the accumulated contributions plus interest
standing to the retiree's credit in the member's deposit account at the time of
retirement.
6.
Residue
- The difference between the retirement account balance and the total
amount of annuities paid to the retiree and his option beneficiaries.
7.
Residue Beneficiary - A
person(s) nominated by the member/retiree to receive the retirement account
balance, if any, at the termination of any option annuities payable on account
of the retiree's death.
POLICIES
Before the date the first payment of an annuity becomes due, a
member retiring on age and service or disability may elect to receive an
annuity payable as provided in one of the following:
1.
Option 1: A straight life
annuity payable monthly for the life of the retiree.
Upon the retiree's death, if the retiree has not received
payments equal to the retirement account balance, the residue, if any, shall be
paid to the residue beneficiary. If no residue beneficiaries survive the
retiree, the residue will be paid to the retiree's estate.
2.
Effect of Option 1 Retiree's Death
Within the First Year of Retirement
If an Option 1 retiree dies within one year of retirement,
his/her spouse may elect to cancel the Option 1 annuity in effect and elect
Option A (100% survivor annuity) if:
A. The spouse otherwise qualifies as an
Option A beneficiary;
B. The spouse
is designated as the retiree's residue beneficiary; and
C. The election form to convert the annuity
to Option A is received by ATRS within 90 days of the retiree's death.
The election shall become effective the first day of the month
following receipt of the election form by ATRS. If the spouse elects Option A,
the residue, if any, will not be paid until the Option A beneficiaries'
death.
3.
Option A: A 100% survivor annuity paid to the
retiree as a reduced annuity monthly for the retiree's life and, upon his/her
death, the reduced annuity shall be paid throughout the life of the retiree's
option beneficiary.
4.
Option B: A 50% survivor annuity paid to the
retiree as a reduced annuity monthly for the retiree's life and, upon his/her
death, a one-half reduced annuity shall be paid throughout the life of the
retiree's option beneficiary.
5.
Persons Eligible as Option A or B Beneficiaries
In order to be nominated as an Option A or B beneficiary, the
person must be one of the following:
A. The retiree's spouse (if the retiree has
been married to the spouse for at lease one (1) year prior to the first annuity
payment being paid to the retiree);
B. A person, aged 40 or older, who receives
more than one-half support from the retiree for a minimum of one (1) year
immediately preceding the first annuity payment being paid to the retiree;
or
C. A dependent child (regardless
of age) who has been ruled physically or mentally incapacitated by an Arkansas
court of competent jurisdiction or by the Board.
6.
Option C: A
reduced annuity payable for 10 years certain, then as a straight life annuity
thereafter for the retiree's life. If the retiree dies before receiving 120
monthly annuity payments, the annuity shall be continued for the remaining 120
months and paid to the retiree's option beneficiary.
A. If, after retirement, the Option C
beneficiaries predecease the retiree, the retiree may either nominate successor
beneficiaries or elect to return to an Option 1 annuity. The election will be
effective the first day of the month following receipt of the election form by
ATRS.
B. If a retiree receives the
one hundred twenty (120) monthly payments under Option C, ATRS will return the
retiree to an Option 1 annuity for the remainder of his life.
C. An Option C beneficiary may not nominate a
successor beneficiary should he/she not survive to draw the 120
payments.
7.
Payment of Residue Upon Option A, B, or C Retiree's Death
If a retiree who elected Option A, B, or C and his option
beneficiaries die before receiving annuity payments equal to the retirement
account balance, the residue shall be paid to the residue beneficiaries on file
with ATRS.
If no designated option or residue beneficiary survives the
retiree at his death, the residue, if any, shall be paid to the retiree's
estate.
If after a retiree dies, an option beneficiary begins receiving
an annuity but dies prior to the retiree and the option beneficiary receiving
payments equal to the retirement account balance, the residue shall be paid to
last surviving option beneficiaries' estate if the retiree has no residue
beneficiary surviving or otherwise filed with ATRS.
8.
Final Benefit Check
Benefits are payable through the month in which the option
beneficiaries' death occurs. If the option beneficiary dies prior to receiving
the last check, ATRS will pay the final check in the normal manner it was paid
prior to death. If payment of the final check in the normal course becomes
impossible, the final annuity check will be paid to the option beneficiaries'
estate.
9.
Effect of
the Beneficiary Spouse's Death, Marriage Dissolution, and Retiree Marriage
after Retirement on Annuity Options
A.
Cessation of Marriage to a Spouse Selected as the Retiree's Option Beneficiary
After Retirement
If a retiree receiving an Option A, B, or C annuity ceases to be
married to a spouse who is nominated as his/her option beneficiary due to the
spouse's death or marriage dissolution, the retiree may elect to return to an
Option 1 annuity. The election must be submitted on an approved form, and the
change shall be effective the first day of the month following receipt of the
election.
B. Retiree
Marriage after Retirement
A retiree who is receiving an Option 1 annuity and marries after
retirement may cancel the Option 1 annuity and elect Option B providing a 50%
survivor annuity for the life of his/her spouse. The election must be filed
with ATRS on an approved form within 6 months from the date of the
marriage.
10.
Change of Option Election Allowed Within One (1) Year of
Retirement
A member who retires on or after July 1, 1994, may cancel the
annuity election made at retirement and elect a different option provided
that:
A. The election is received by
ATRS on an approved form within one (1) year from the date of
retirement;
B. The retiree repays
ATRS the difference between the annuity received under the prior option and the
annuity elected from the date of retirement, plus regular interest (8% after
July 1, 1998); and
C. The change of
annuity option is made only once during the first year of retirement and is
effective retroactive to the commencement date of the annuity.
11.
Beneficiaries Designated
at Retirement
Prior to the receipt of the first monthly annuity check, a
retiree shall name a beneficiary or beneficiaries and may name contingent
beneficiaries.
ANNUITY OPTIONS
A.C.A. §
24-7-701, A.C.A. §
24-7-706, A.C.A.
24-7-709,as amended by Acts 385 and 494 of 2005)
DEFINITIONS
1.
Annuity Options - The
member's election at retirement of the annuity that shall be paid throughout
the retiree's life in accordance with A.C.A. §
24-7-706.
2.
Option Beneficiary - A
person(s) nominated by the retiree by written designation duly executed and
filed with ATRS at the time of retirement, who, if eligible, will receive
annuity payments under the annuity option chosen by the retiree after the
retiree's death.
3.
Marriage
Dissolution - A final order of divorce or annulment duly executed by a
Court of competent jurisdiction and filed of record in the Office of the
Ex-Officio Recorder.
4.
Person - an individual, corporation, partnership, or other legal
entity.
5.
Retirement Account
Balance - The total of the accumulated contributions plus interest
standing to the retiree's credit in the member's deposit account at the time of
retirement.
6.
Residue
- The difference between the retirement account balance and the total
amount of annuities paid to the retiree and his option beneficiaries.
7.
Residue Beneficiary - A
person(s) nominated by the member/retiree to receive the retirement account
balance, if any, at the termination of any option annuities payable on account
of the retiree's death.
POLICIES
Before the date the first payment of an annuity becomes due, a
member retiring on age and service or disability may elect to receive an
annuity payable as provided in one of the following:
1.
Option 1: A straight life
annuity payable monthly for the life of the retiree.
Upon the retiree's death, if the retiree has not received
payments equal to the retirement account balance, the residue, if any, shall be
paid to the residue beneficiary. If no residue beneficiaries survive the
retiree, the residue will be paid to the retiree's estate.
2.
Effect of Option 1 Retiree's Death
Within the First Year of Retirement
If an Option 1 retiree dies within one year of retirement,
his/her spouse may elect to cancel the Option 1 annuity in effect and elect
Option A (100% survivor annuity) if:
A. The spouse otherwise qualifies as an
Option A beneficiary;
B. The spouse
is designated as the retiree's residue beneficiary; and
C. The election form to convert the annuity
to Option A is received by ATRS within 90 days of the retiree's death.
The election shall become effective the first day of the month
following receipt of the election form by ATRS. If the spouse elects Option A,
the residue, if any, will not be paid until the Option A beneficiaries'
death.
3.
Option A: A 100% survivor annuity paid to the
retiree as a reduced annuity monthly for the retiree's life and, upon his/her
death, the reduced annuity shall be paid throughout the life of the retiree's
option beneficiary.
4.
Option B: A 50% survivor annuity paid to the
retiree as a reduced annuity monthly for the retiree's life and, upon his/her
death, a one-half reduced annuity shall be paid throughout the life of the
retiree's option beneficiary.
5.
Persons Eligible as Option A or B Beneficiaries
In order to be nominated as an Option A or B beneficiary, the
person must be one of the following:
A. The retiree's spouse (if the retiree has
been married to the spouse for at lease one (1) year prior to the first annuity
payment being paid to the retiree);
B. A person, aged 40 or older, who receives
more than one-half support from the retiree for a minimum of one (1) year
immediately preceding the first annuity payment being paid to the retiree;
or
C. A dependent child (regardless
of age) who has been ruled physically or mentally incapacitated by an Arkansas
court of competent jurisdiction or by the Board.
6.
Option C: A
reduced annuity payable for 10 years certain, then as a straight life annuity
thereafter for the retiree's life. If the retiree dies before receiving 120
monthly annuity payments, the annuity shall be continued for the remaining 120
months and paid to the retiree's option beneficiary.
A. If, after retirement, the Option C
beneficiaries predecease the retiree, the retiree may either nominate successor
beneficiaries or elect to return to an Option 1 annuity. The election will be
effective the first day of the month following receipt of the election form by
ATRS.
B. If a retiree receives the
one hundred twenty (120) monthly payments under Option C, ATRS will return the
retiree to an Option 1 annuity for the remainder of his life.
C. An Option C beneficiary may not nominate a
successor beneficiary should he/she not survive to draw the 120
payments.
7.
Payment of Residue Upon Option A, B, or C Retiree's Death
If a retiree who elected Option A, B, or C and his option
beneficiaries die before receiving annuity payments equal to the retirement
account balance, the residue shall be paid to the residue beneficiaries on file
with ATRS.
If no designated option or residue beneficiary survives the
retiree at his death, the residue, if any, shall be paid to the retiree's
estate.
If after a retiree dies, an option beneficiary begins receiving
an annuity but dies prior to the retiree and the option beneficiary receiving
payments equal to the retirement account balance, the residue shall be paid to
last surviving option beneficiaries' estate if the retiree has no residue
beneficiary surviving or otherwise filed with ATRS.
8.
Final Benefit Check
Benefits are payable through the month in which the option
beneficiaries' death occurs. If the option beneficiary dies prior to receiving
the last check, ATRS will pay the final check in the normal manner it was paid
prior to death. If payment of the final check in the normal course becomes
impossible, the final annuity check will be paid to the option beneficiaries'
estate.
9.
Effect of
the Beneficiary Spouse's Death, Marriage Dissolution, and Retiree Marriage
after Retirement on Annuity Options
A.
Cessation of Marriage to a Spouse Selected as the Retiree's Option Beneficiary
After Retirement
If a retiree receiving an Option A, B, or C annuity ceases to be
married to a spouse who is nominated as his/her option beneficiary due to the
spouse's death or marriage dissolution, the retiree may elect to return to an
Option 1 annuity. The election must be submitted on an approved form, and the
change shall be effective the first day of the month following receipt of the
election.
B. Retiree
Marriage after Retirement
A retiree who is receiving an Option 1 annuity and marries after
retirement may cancel the Option 1 annuity and elect Option B providing a 50%
survivor annuity for the life of his/her spouse. The election must be filed
with ATRS on an approved form within 6 months from the date of the
marriage.
10.
Change of Option Election Allowed Within One (1) Year of
Retirement
A member who retires on or after July 1, 1994, may cancel the
annuity election made at retirement and elect a different option provided
that:
A. The election is received by
ATRS on an approved form within one (1) year from the date of
retirement;
B. The retiree repays
ATRS the difference between the annuity received under the prior option and the
annuity elected from the date of retirement, plus regular interest (8% after
July 1, 1998); and
C. The change of
annuity option is made only once during the first year of retirement and is
effective retroactive to the commencement date of the annuity.
11.
Beneficiaries Designated
at Retirement
Prior to the receipt of the first monthly annuity check, a
retiree shall name a beneficiary or beneficiaries and may name contingent
beneficiaries.
SURVIVOR BENEFITS
(ACTIVE MEMBERS) (A.C.A. §
24-7-710)
DEFINITIONS:
1.
Person includes a
corporation, partnership, or other legal entity.
2.
Refund beneficiary means a
person(s) designated by the member in writing on file with ATRS to receive the
member's accumulated contributions standing to his or her credit in the
member's deposit account at the time of the member's death, together with
regular interest thereon from the time of death to the time of
payment.
3.
Residue
beneficiary means a person(s) designated by the member in writing on
file with ATRS to receive the residue amount, if any, at the termination of the
survivor benefit annuities payable on account of the member's death.
4.
Residue means the difference
between the member's accumulated contributions, including regular interest,
standing to the member's credit in the members' deposit account at the time of
her/her death and the aggregate amount of survivor annuity payments paid prior
to the termination of such survivor annuity payments.
5.
Waiver beneficiary means a
person(s) designated by the member in writing on file with ATRS to receive a
lump-sum distribution of the deceased member's accumulated contributions, plus
interest, under the conditions set out in No. 1B below.
POLICIES
If an active member with five (5) or more years of credited
service, including credited service for the year immediately preceding his or
her death, dies in employer service before retirement, benefits as provided in
A.C.A. §
24-7-710 ("Survivor Benefits") shall be paid as set forth
below:
1.
SPOUSE
A. The member's surviving spouse, who was
married to the member for at least the two (2) years immediately preceding his
or her death, shall receive an annuity computed in the same manner in all
respects as if the member had:
i. Retired the
date of his or her death with entitlement to an annuity provided for in §
24-7-705, notwithstanding that he or she might not have attained age sixty (60)
or acquired five (5) years of actual service;
ii. Elected Option A - One hundred percent
(100%) survivor annuity, as provided for in §
24-7-706; and
iii. Nominated his or her spouse as
beneficiary.
B.
Specifics in the law dealing with the rights of the spouse are construed to
take precedence over designated beneficiaries. If at the time of the member's
death there are no dependent children and the surviving spouse who would
otherwise receive the annuity under this subsection has filed with the Arkansas
Teacher Retirement System a signed written waiver of his or her right to the
annuity and that waiver was in effect at the time of the member's death, a
lump-sum distribution of the deceased member's accumulated contributions plus
interest may be made to any waiver beneficiary or beneficiaries so designated
by the member before death.
C. The
spouse annuity shall commence at the later of the spouse's age of sixty-two
(62) or the spouse's age at the member's death and be payable until the earlier
of the spouse's remarriage or death.
D. However, if the member had:
i. Satisfied the age and service requirements
provided for in §
24-7-701 or had acquired twenty (20) years of credited
service, the spouse annuity shall commence immediately and be payable for the
spouse's life; or
ii. Acquired
fifteen (15) years of credited service but had not attained age sixty (60),
then the spouse annuity shall commence at the later of the spouse's age of
fifty (50) or the spouse's age at the member's death and be payable until the
earlier of the spouse's remarriage or death.
E. If the member had:
i. Only contributory credited service, the
spouse annuity shall not be less than the greater of ten percent (10%) of the
deceased member's covered salary at the time of death or fifty dollars ($50.00)
monthly, plus the benefits applicable under §
24-7-713.
ii. Only noncontributory credited service,
then the amounts shall be six percent (6%), instead of ten percent (10%), and
thirty-one dollars ($31.00), plus the benefits applicable under §
24-7-713, instead of fifty dollars ($50.00); or
iii. A mixture of credited service, the
minimum amount shall be prorated between the all-contributory minimum amount
and the all-noncontributory minimum amount according to the relationship
between his or her noncontributory credited service and his or her total
credited service, plus the benefits applicable under §
24-7-713.
F. In any event, as long as the
surviving spouse has in his or her care any of the deceased member's dependent
children receiving a benefit as provided for in No. 2 below (Dependent
Children) of this policy, there shall be payable to the spouse a spouse annuity
of not less than the minimum amount determined according to No. Ei above of
this rule.
2.
DEPENDENT CHILDREN
The member's dependent children shall each receive an
annuity:
A .
i. If the member had only contributory
credited service, the greater of ten percent (10%) of the member's covered
salary at the time of death or fifty dollars ($50.00) monthly, plus the
benefits applicable under §
24-7-713.
ii. However, if there are three (3) or more
dependent children, each dependent child shall receive an annuity of an equal
share of the greater of twenty-five percent (25%) of the member's covered
salary or one hundred twenty-five dollars ($125) monthly, plus the benefits
applicable under §
24-7-713.
B. If the member had only noncontributory
credited service, then the amounts shall be six percent (6%) instead of ten
percent (10%), and thirty-one dollars ($31.00) instead of fifty dollars
($50.00), and if there are three (3) or more dependent children, sixteen
percent (16%) instead of twenty-five percent (25%), and seventy-nine dollars
($79.00) instead of one hundred twenty-five dollars ($125), plus the benefits
applicable under §
24-7-713; or
C. If the member had a mixture of credited
service, the amounts payable shall be prorated between the all-contributory
amounts and the all-noncontributory amounts according to the relationship
between his or her noncontributory credited service and his or her total
credited service, plus the benefits applicable under §
24-7-713.
D. A child of a member is defined in A.C.A.
§
24-7-202(8) as:
i. A natural child of
the member;
ii. A child that has
been made a child of the member by adoption or other court action prior to the
time of the death of the member; or,
iii. A child under the permanent care of the
member at the time of death of the member, which permanent care status shall be
determined by evidence satisfactory to the Board.
E. To be a dependent child under these rules,
the child must:
i. Meet requirements and
qualify for survivor benefits under Social Security;
ii. Have been claimed as a dependent by the
deceased member on his federal income tax for the immediately preceding
calendar year; and
iii. Have lived
in the same household for at least two (2) years immediately preceding death of
the member, unless the child is under two years of age.
F. A child identified as a dependent will
remain so until his death or his marriage or his attainment of age 18,
whichever comes first, provided however, that:
i. The age 18 maximum shall be extended as
long as the child continues uninterruptedly being a full-time student at an
accredited secondary or postsecondary school (vocational technical school) or
college or university, but not beyond his attainment of age 23 (a full time
student is defined as one carrying 12 semester hours (8 trimester hours) in
college or four hours per day in a secondary or postsecondary school) and
ii. The age l8 maximum shall be
also be extended for any surviving dependent child who has been deemed
physically or mentally incapacitated either by an Arkansas court of competent
jurisdiction or by the Board of Trustees of the Arkansas Teacher Retirement
System, for as long as the incapacity exists.
iii. If a surviving dependent child who has
obtained or passed age 18 (and drawing benefits) becomes temporarily physically
or mentally incapacitated, the Teacher Retirement Board can continue paying
benefits upon receipt of a doctor's certification that the child is not
competent to attend school for the period of one semester (term). At the
beginning of the next semester or term, A.C.A. §
24-7-710 (c) will be
effective.
iv. Certification of
attendance in an accredited school may be made by the dependent child in the
absence of a parent or legal guardian (after the dependent child reaches age
18).
G. Upon a child's
ceasing to be a dependent child, his or her annuity shall terminate, and there
shall be a redetermination of the amounts payable to any remaining dependent
children.
H. Survivor Benefit
Payments: Separate payments shall be made to the spouse and to each child,
rather than one lump-sum check payable to the spouse each month.
3.
DEPENDENT PARENT
If at the time of the member's death, there is neither a spouse
nor a dependent child, each dependent parent found by the board to have been
dependent for at least fifty percent (50%) of his or her financial support from
the member shall receive an allowance of:
A. If the member had only contributory
credited service, the greater of ten percent (10%) of the member's covered
salary or fifty dollars ($50.00) monthly, plus the benefits applicable under
§
24-7-713,
B. If the member
had only noncontributory credited service, then the amounts shall be six
percent (6%) instead of ten percent (10%), and thirty-one dollars ($31.00),
plus the benefits applicable under §
24-7-713, instead of fifty dollars
($50.00); or
C. if the member had a
mixture of credited service, the amount shall be prorated between the
all-contributory amount and the all-noncontributory amount according to the
relationship between his or her noncontributory credited service and his or her
total credited service, plus the benefits applicable under §
24-7-713.
D. A parent is considered
50% dependent for financial support if the annual income of the parent was not
greater than the amount contributed by the deceased member for his or her
support.
4.
COMMENCEMENT OF ANNUITIES
Annuities payable under the provisions of this rule shall
commence the first day of the calendar month next following the later of the
date of the member's death or a later date specified for commencement of
annuity payments.
5.
REPAYMENT OF AMOUNTS PAYABLE
In the event the member had previously received benefits from the
system and has not repaid in full all amounts payable by him or her to the
system, the annuity amounts otherwise provided by this section shall be
withheld and used to effect repayment until the total of the withholdings
repays in full all amounts payable by him or her to the system.
6.
DISPOSITION OF RESIDUE.
(A.C.A. 24-7-710(e)
A. In the event all
the survivor benefit annuities provided for in A.C.A. § 24--710 payable on
account of the death of a member terminate before there has been paid an
aggregate amount equal to the accumulated member contributions standing to the
member's credit in the members' deposit account at the time of the member's
death, the residue shall be paid to the member's designated residue
beneficiary.
B. If there are no
such designated residue beneficiaries surviving when the survivor benefit
annuities terminate, the residue shall be payable in the following statutory
succession:
i. Spouse; then
ii. Children; then
iii. Parents; then
iv. Estate.
C. Effective for all members dying after June
30, 2006, if there are no designated residue beneficiaries surviving the member
at termination, the residue shall be payable to the member's estate.
D. If the designated residue beneficiary
survives both the member and the recipient of the survivor benefit annuities
but dies prior to receiving the residue, the residue shall be payable to such
beneficiary's estate.
7.
DISPOSITION (REFUND) OF ACCUMULATED CONTRIBUTIONS.
(A.C.A.§
24-7-711)
A. In the
event a member dies and no annuity becomes, or can become, payable by the
Arkansas Teacher Retirement System on account of the member's death, the
member's accumulated contributions standing to his or her credit in the
member's deposit account at the time of the member's death, together with
regular interest thereon from the time of death to the time of payment, shall
be paid to the designated refund beneficiary.
B. If there are no designated refund
beneficiaries surviving the member, the accumulated contributions shall be paid
in the following statutory succession:
i.
Spouse; then
ii. Children;
then
iii. Parents; then
iv. Estate.
C. Effective for all members dying after June
30, 2006, if there are no designated refund beneficiaries surviving the member,
the accumulated contributions shall be payable to the member's
estate.
D. If no annuity can become
payable to a dependent child on account of the member's death and if the sole
beneficiary who could receive the annuity is the surviving spouse, then the
surviving spouse may elect to receive a refund of accumulated contributions in
place of any benefits being paid under the provisions of §
24-7-710.
E. If at the time of an
active member's death, a surviving spouse is listed on the death certificate,
the Arkansas Teacher Retirement System (ATRS) will search for the surviving
spouse for up to one year. If after one year, ATRS has not located the
surviving spouse, nor been contacted by the surviving spouse, ATRS will refund
the member's account to the designated refund beneficiary(s), or if there are
no designated refund beneficiaries surviving the member, the accumulated
contributions shall be payable to the member's estate.
8.
SURVIVOR BENEFITS IN CASE OF DEATH
OF DISABILITY APPLICANT
In the case of an active member who has applied for disability
retirement and dies before receipt of the first retirement check, determination
must be made on an individual basis as to whether survivor benefits will be
payable or whether the case will be processed for disability retirement.
9.
COVERED SALARY
For the purposes of determining survivor benefits, covered salary
shall be that salary on which the member would have made contributions had he
lived through the end of the fiscal year as evidenced by the contract salary or
$7,800.00 maximum. If, however, a member making contributions only on the first
$7,800.00 of his total annual salary receives a refund of his contributions and
subsequently returns to covered service as a noncontributory member, he shall
be considered on full salary for reporting purposes. Should he wish to repay
any refunds that include contributory service, he must pay the additional
contributions due to change to full salary.
For a deceased member whose salary for reporting purposes is
$7,800.00 and who did not receive a refund, the beneficiary may elect to change
the member's status effective July 1, 1986, to the noncontributory plan, and
the account shall be considered on full salary for reporting purposes.
Additional employer contributions for that period shall not be due. However, if
the beneficiary elects to make the change in the member's account, additional
employee and employer contributions must be paid on any service reported
between July 1, 1969, and June 30, 1986.
10.
INCLUSION OF POST-DEATH PAYMENTS
AS SALARY AND DAYS OF SERVICE
Payments of salary that are made after the death of a member, but
have been earned prior to death are subject to Teacher Retirement deductions
and reported in total salary and days of service on the D-2a. Payments made by
an employer subsequent to the death of an active member that had not been
earned but are made as a gratuity shall not be included as salary and are not
subject to deductions.
11.
CONTINUATION OF ACTIVE MEMBERSHIP STATUS
Active membership will continue beyond a fiscal year in which
credited service was rendered, provided the employing institution certifies
continuing employment, and leave of absence with pay upon which the member is
making contributions also continues active membership.
12.
DEATH BENEFITS PAYBLE BY MORE THAN
ONE RECIPROCAL SYSTEM
If death-in-service benefits are payable by more than one
reciprocal system to eligible survivors of a deceased member, such survivors
shall not receive more as a percent of the deceased member's final pay or as a
minimum dollar amount than the largest amount payable by a single reciprocal
system. The Teacher Retirement System will prorate minimum benefits payable
with any other reciprocal system that has a minimum benefit provision in its
plan. Each reciprocal system shall pay only a proportionate share of such
minimum amount based on the ratios of such service in such system to the total
service in all reciprocal systems.
13.
ACT 793 TRANSFERS
When the member elects to transfer from the Teacher Retirement
System to the Public Employees Retirement System under the provisions of Act
793 of 1977, the Public Employees Retirement System becomes the system
responsible for determining, upon the death of a member, a survivor's
eligibility for a refund of the member's account or monthly survivor
benefits.
LUMP-SUM DEATH BENEFIT
(Act 1022 of 1997, Act 312 of 1999, Act 359 of 2001*, Act 494 of
2005)
A.C.A. §
24-7-720, 711)
Effective July 1, 1997, Act 1022 of 1997, provides a lump-sum
death benefit for active and retired members with five (5) or more years of
credited service.
DEFINITIONS
1.
Statutory succession means
the order in which benefits are paid if there are no designated beneficiaries
surviving the member or retirant who dies on or before June 30, 2006: spouse;
then children; then parents; then estate.
2.
Designated lump sum death
beneficiary means a person(s) or entity(s) a member or retiree has
designated in writing on file with ATRS to receive the lump sum death benefit
payable under A.C.A. §
24-7-720.
3.
Person includes a
corporation, partnership or other legal entity.
4.
Surviving dependent child
shall be determined according to the guidelines contained in section No.
2 of Policy No. 11-1 (Survivor Benefits).
POLICIES
1.
If an active member of the Arkansas Teacher Retirement System with five (5) or
more years of credited service, including service for the year immediately
preceding the member's death, dies while in employer service before retirement,
then a lump sum shall be paid to the member's designated lump sum death
beneficiary(ies). Effective for members dying on or before June 30, 2006, if
there are no such designated beneficiaries surviving the member the lump sum
shall be paid in the order of statutory succession. Effective for members dying
after June 30, 2006, if there are no such designated beneficiaries surviving
the member, the lump sum shall be paid to the retirant's estate.
A. If the member had only contributory
service, then the lump sum payable shall be ten thousand dollars
($10,000.00);
B. If the member had
only noncontributory service, then the lump sum payable shall be six thousand
six hundred and sixty-seven dollars ($6,667.00).
C If the member had a combination of credited service, both
contributory and noncontributory, the lump sum will be prorated according to
the ratio of the member's contributory and noncontributory service.
D. In addition, each surviving
dependent child will receive a lump-sum benefit of ten thousand dollars
($10,000.00) upon the death of the active member.
2. If a retirant whose annuity is paid by the
Arkansas Teacher Retirement System dies, a lump sum shall be paid to any
designated lump sum death beneficiary. Effective for retirants dying on or
before June 30, 2006, if there are no such designated beneficiaries surviving
the retirant, the lump sum shall be paid in the order of statutory succession.
Effective for retirants dying after June 30, 2006, if there are no such
designated beneficiaries surviving the retirant, the lump sum shall be paid to
the retirant's estate.
A. If the retirant had
only contributory service, then the lump sum payable; shall be ten thousand
dollars ($10,000.00);
B. If the
retirant had only noncontributory service, then the lump sum payable shall be
six thousand six hundred and sixty-seven dollars ($6,667.00).
C. If the retirant had a combination of
credited service, both contributory and noncontributory, the lump sum will be
prorated according to the ratio of the retirant's contributory and
noncontributory service.
D. In
addition, each surviving dependent child will receive a lump-sum benefit of ten
thousand dollars ($10,000.00) upon the death of the retiree.
3. The Board of Trustees sets the
exact amount of the lump-sum payments as it determines is actuarially
appropriate for the system.
4. The
Board of Trustees is authorized to set the level of the lump-sum benefit to the
current members and retirants where the ratio between the contributory and
noncontributory benefits are maintained at a three-to-two (3:2) ratio and to a
level to match the benefits that the Board finds are appropriate for the
actuarial soundness of the System.
5. The lump-sum payments shall be directly
payable from the System upon receipt and acceptance of the lump-sum death
benefit application, member or retirant's original death certificate, copy of
the recipient's Social Security card or Form W-9, and such other documentation
required by ATRS.
6. The Arkansas
Teacher Retirement System shall honor any and all federal and state income tax
laws regarding the payment of lump-sum death benefits.
*Act 359 of 2001 authorized the Board of Trustees to increase the
active and retired contributory members' lump-sum death benefit to $15,000.00
and the active and retired noncontributory members' lump-sum death benefit to
$10,000.00. However, the act provided that no benefit enhancement under the act
is to be implemented if it would cause ATRS' unfunded actuarial accrued
liabilities to exceed a 30-year amortization. Further, if ATRS has unfunded
actuarial liabilities being amortized over a period exceeding 30 years, no
benefit enhancement is to be implemented until the unfunded actuarial accrued
liability is reduced to a level less than the standards prescribed by Arkansas
Code, Title 24.
Amended: June 15, 2004
February 7, 2006
