DEFINITIONS
1.
Salary means the remuneration paid to a member by an ATRS
participating employer on which the employer withholds federal income tax. This
includes all salary "picked up" by the employer including employee
contributions to a qualified retirement plan, deferred compensation plan, or
cafeteria plan. For remuneration paid other than in cash, salary is the amount
reported to the Internal Revenue Service for income tax purposes.
2.
Final Average Salary means
the average of the salaries paid to a member by a participating employer during
the fiscal year ending June 30 used in calculating a member's retirement
annuity under A.C.A. § 24-7-705.
3.
Participating Employer means
an employer who participates in the Arkansas Teacher Retirement System whose
employees are eligible for membership under A.C.A. § 24-7-501 or other
applicable law.
REGULATIONS
1. The Board of Trustees may set the number
of years used in calculating a member's final average salary at no less than
three (3) years or more than five (5) years.
2. For purposes of calculating a member's
final average salary, the System will include salary received from all
participating employers during a fiscal year.
3. When calculating final average salary, the
following limits shall apply:
A. The System
shall rank the member's highest salary years from lowest to highest. The lowest
salary year shall be considered the initial base year. Except for the base
year, the highest salary years shall be reduced to the extent either exceeds
120% of the prior year's salary, subject to the limitations in ACA §
24-7-202(27)(c).
B. However, if a
salary year used in calculating final average salary does not constitute salary
for a full service year, the next highest salary year shall not be reduced
although it may exceed by 120% or more the next highest or highest
year.
4. For purposes of
determining if a salary year constitutes a full service year, The following
shall be excluded from the limits under No. 3 above:
A. Any salary year which constitutes member
service during two (2) or fewer quarters in a fiscal year; or
B. Any salary year that constitutes less than
one (1) year of service credit under the schedule set forth in ATRS Policy No.
7-2.
5. If a member is
retiring with a retirement effective date other than October 1, January 1,
April 1, or July 1, no salary paid to a member for the last year worked shall
be counted in calculating a member's final average salary.
6. Regardless of any provision in statute or
regulation to the contrary, salary or other compensation paid which exceeds the
limitations set forth in Section 401(a)(17) of the Internal Revenue Code shall
be disregarded. The limitation on compensation for "eligible employees" shall
not be less than the amount allowed under the System in effect on July 1, 1993.
For this purpose, an "eligible employee" is an individual who was a member of
the System before the first plan year beginning after December 31,
1995.
7. If a conflict exists
between the statute or policy governing the treatment of a member's salary
between the participating employer's laws or policies relating to compensation
and the calculating of a member's final average salary for benefits, the
System's laws and regulations shall control.
RULES (Amended by Act 146 of 2005, and Act 1325 of
2009).
1. Effective April
1, 1998, when calculating a member's final average salary, the System shall
calculate final average salary using the three (3) years in which the member
received the highest salary from a participating employer subject to the
foregoing limitations.
2. The final
average salary used for members with reciprocal service shall be the highest
salary years credited by either the ATRS participating employer or the
reciprocal system under ACA § 24-7-402.
3. For members who are retiring and who are
employed in agencies or other institutions that use the state 26-week payroll,
employers should report to Teacher Retirement the salary, contributions, and
actual days worked through the current year payroll period. Contributions
should not be withheld on any salary earned after the close of the current
year's payroll, nor should any salary or days of service be reported for that
period.
4. For members who are
retiring and who are employed by employers using a fiscal year ending June 30,
employers should report to the System the salary contributions, and actual days
worked through the current fiscal years ending June 30. Contributions should
not be withheld on any salary earned after the end of the current fiscal year,
no should any salary or days of service be reported for that period.
5. For retiring members, employee
contributions remitted on salary paid after the end of the current fiscal year
or current year payroll period, whichever applied, will be refunded as promptly
as possible.
6. In case of any
dispute concerning a member's final average salary, the Board shall have the
authority to decide the dispute.
Amended: August 11, 1998
July 18, 2005
June 16, 2009 (Emergency)
October 5, 2009 (Permanent)
PROOF OF SERVICE CREDIT
A.C.A. §§ 24-7-601-611, A.C.A. § 24-7-406, and A.C.A.
§ 24-7-705
DEFINITION
Reciprocal service means credited service rendered under a
reciprocal system as defined in A.C.A. § 24-2-401.
REGULATIONS
The Board shall determine the number of years and fractions thereof for
paid service credited to members of the System. No fewer than 120 days of
employee service in a fiscal year (ending June 30) shall be credited as a full
year of service.
Upon a member's retirement, he or she shall receive a straight life
annuity calculated as provided in A.C.A. § 24-7-705. The years of service
credit year credited to the member shall be counted as provided therein.
RULES
The Board shall determine the number of years and fractions thereof for
paid service credited to members of the System. No fewer than 120 days of
employee service in a fiscal year (ending June 30) shall be credited as a full
year of service.
Upon a member's retirement, he or she shall receive a straight life
annuity calculated as provided in A.C.A. § 24-7-705. The years of service
credit year credited to the member shall be counted as provided
therein.
1.
FOR
MEMBERS WITH SERVICE AFTER JULY 1, 1971
A. Actual service credited to a member's
account shall be determined in accordance with the following table:
|
Number of Days Worked in a Fiscal Year
|
Service Credit Earned
|
|
1 - 29
|
None
|
|
30 - 59
|
0.25 year
|
|
60 - 89
|
0.50 year
|
|
90 - 119
|
0.75 year
|
|
120 days or over
|
1.00 year
|
B. Four (4)
hours in a day shall be required as the minimum for a "day of service" for all
members. For members who do not work four (4) hours or more a day, the total
number of hours worked in a fiscal quarter divided by four (4) will determine
the number of days to be credited. If the employer is unable to verify the
number of service days, the System may credit 20 days of service for each month
of member service verified by the employer.
C. For purposes of days counted toward
service credit, absences shall be counted as service if for paid leave
including paid sick leave.
D.
Service credit purchased by a member under A.C.A. § 24-7-602 - 611 shall
be credited upon full payment of the amount required for the purchase including
any required interest. The amount of service credited to the member for
purchased service shall be established using the rules for actual service
credit.
E. Service credit certified
by a member as reciprocal service shall be established using the rules for
actual service credit.
F. The
System shall not give service credit to a member until all required
contributions and interest, if any, are remitted to the System.
G. The participating employers shall certify
proof of service on such forms with any documentation required by the
System.
H. If a member is retiring
with an effective date other than October 1, January 1, April 1, or July 1,
service credited for the year in which a member retires shall not exceed
¼ year for each full calendar quarter worked during the fiscal year. A
full calendar quarter shall be considered working at least 30 days in any
fiscal quarter.
I. If a member has
signed an employment contract for a fiscal year and the member does not work
for the full period covered by the contract, the member shall receive service
credit for only the full calendar quarters worked during the fiscal
year.
J. In any case of question as
to service credit of a member, the Board of Trustees has the final authority to
decide the amount of service creditable to a member.
2.
SERVICE CREDITED PRIOR TO JULY 1,
1971
A. One day or more is a year of
service when rendered prior to February 11, 1949, and proved prior to July 1,
1955, unless otherwise determined by information in the member's file. "Proved"
for membership service means service rendered and contributions paid before
February 11, 1949, or a contract entered into prior to July 1, 1955, to pay
such contributions at a later date and at least a partial payment is
made.
B. Sixty (60) days in a
fiscal year of service when rendered and proved between the period of February
11, 1949, and July 1, 1957.
C.
Eighty-five (85) days in a fiscal year is a year of service when proved
subsequent to July 1, 1957 (1957-71).
D. Service rendered and proved prior to July
1, 1957, can be combined to count as a year of service provided:
i. The minimum number of days combined is
85.
ii. The maximum number of
fiscal years to be combined is three (3) and the years do not have to be
consecutive.
iii. The minimum
number of days in a fiscal year to be counted is thirty (30).
E. Service rendered subsequent to
July 1, 1957, and proved before July 1, 1971 (1957-1971) can be combined to
count as a year of service provided:
i. The
minimum number of days to be combined is 85.
ii. The maximum number of fiscal years to be
combined is two (2).
iii The fiscal
years combined must be consecutive years.
iv. The minimum number of days in one fiscal
year is forty (40).
F.
One hundred twenty (120) days in a fiscal year is a year of service beginning
July 1, 1971, to present.
G
Service prior to July 1, 1937, shall not be established as credit with the
System. The 1937-38 year may be established as a back contribution year without
cost to the member, unless contributions were paid for the 1937-38 year and
later refunded. In such case, the amount of refund plus interest must be paid
in order to establish credit for the 1937-38 year.
Proof submitted subsequent to July 1, 1971, must show a minimum of 120
days of service.
Amended: July 18, 2005
June 16, 2009 (Emergency)
October 5, 2009 (Permanent)
AGE AND SERVICE (VOLUNTARY) RETIREMENT
A.C.A. § 24-7-502, A.C.A. §§ 24-7-701-707, and A.C.A.
§ 24-7-202
REGULATIONS
1.
RETIREMENT ELIGIBILITY
If eligible, any active or inactive member who attains age 60 and has
five (5) or more years of actual and reciprocal service credit may voluntarily
retire upon written application filed with the System. In order to be eligible,
a member must comply with the following requirements:
A. Satisfy the credited service requirements
under one of the System's retirement statutes, A.C.A. §§
24-7-701-707,
B. Be credited with
all required employer and member contributions in the member's deposit account
with no amounts owed to the System,
C. Pay all amounts owed to the System for
underpayments or purchase service accounts; and
D. Terminate employment with all
participating employers or have reached age 65 or older.
2.
BENEFITS
A.
Benefits Formula
The retirement benefits payable shall be the total number of
contributory years of credited service multiplied by 2.065% of the final
average salary, plus the total number of noncontributory years of credited
service multiplied by 1.305% of the final average salary.
If an employer reports additional salary for a member, but the result
does not increase or decrease the annual benefits by $25.00 or more, the
contributions will be transferred from the member's deposit account to the
employer accumulation account without making any change in the member's
benefit. If the additional salary does increase or decrease the retiree's
annual benefit by $25.00, the retirement benefits will be recalculated, and
necessary changes will be made in the member's benefit.
B.
Minimum Retirement Benefits
(A.C.A. § 24-7-707 and A.C.A. § 24-7-713)
A member who retires under A.C.A. § 24-7-701 shall receive no less
than the following benefits:
i. A
member who has at least ten (10) years of contributory credited service with
ATRS will receive not less than $1,800 per year; or
ii. A member who has at least five (5) years
of contributory credited service with ATRS will receive not less than $1,200
per year; or
iii. A member who has
at least ten (10) years of noncontributory credited service with ATRS will
receive not less than $1,128 per year; or
iv. A member who has at least five (5) years
of noncontributory credited service with ATRS will receive not less than $768
per year; or
v. A member who has a
mixture of contributory and noncontributory credited service greater than ten
(10) years but less than the minimum credited years listed above will receive a
prorated amount between $1,128 and $1,800 per year according to the
relationship between the member's noncontributory and contributory credited
service and total credited service; or
vi. A member who has a mixture of
contributory and noncontributory credited service greater than five (5) years
but less than the minimum credited years listed above will receive a prorated
amount between $768 and $1,200 per year according to the relationship between
the member's noncontributory and contributory credited service and total
credited service.
In addition to the minimum benefit amount, a member who meets
eligibility requirements shall receive benefits applicable under A.C.A. §
24-7-713.
C.
Effective Date of Retirement Benefits (A.C.A. § 24-7-701)
If a member meets all eligibility requirements for retirement and is
approved for retirement, annuity benefits shall be effective the month proposed
by the member. If the member does not file an application at least one calendar
month prior to the effective retirement date under § 24-7-701, then that
retirement effective date cannot be used, and the member's effective retirement
date shall be the following month.
If a member has signed an employment contract for the fiscal year and
has been paid in full without providing service for the full period of the
employment contract, the member's retirement effective date shall not be prior
to July 1 of the subsequent fiscal year.
D.
Annual Cost of Living
Increase
On July 1 of each year, all retirees who have received a retirement
benefit for 12 months or longer shall receive a 3% cost-of-living (COLA)
increase (A.C.A. § 24-7-713).
E.
Compound Cost of Living
Adjustment (A.C.A. § 24-7-727)
Effective each July 1, when actuarially appropriate, the ATRS Board may
elect to compound the cost of living adjustment for all retirees who have been
receiving benefits for the prior 12-month period.
i. The compound COLA shall apply to all
retirees and beneficiaries who have been receiving a monthly retirement annuity
for the prior 12-month period. The compound COLA will also apply to T-DROP
participants if the member is otherwise eligible for a retirement benefit under
A.C.A. § 24-7-705.
ii. The
compound COLA shall be calculated on 100% of the prior June 30 benefit amount
times (X) 3%.
iii. The redetermined
amount will be payable for the ensuing fiscal year.
iv. In the years that the Board elects to
compound the COLA, the simple COLA shall not be payable. In a year the Board
elects not to compound the COLA, the simple COLA under A.C.A. § 24-7-713
shall be given under paragraph 2D above.
v. Each July 1 of a year in which the Board
has compounded the COLA, the base amount shall be updated to include the prior
June 30 benefit plus the compound COLA amount.
F.
Annuity Stipend - Additional
Benefit [A.C.A. § 24-7-713(b)(2)]
Members with five (5) or more years of actual service with ATRS
retiring after July 1, 1999, but prior to July 1, 2008, and their survivors and
beneficiaries, shall receive an additional benefit of $75.00 per month over and
above the regular annuity.
Members with ten (10) or more years of actual service with ATRS
retiring on or after July 1, 2008, and their survivors and beneficiaries shall
receive an additional benefit of $75 per month over and above the regular
annuity.
For the purpose of determining eligibility for the additional benefit,
"actual service" means service rendered in a position covered by ATRS. "Actual
service" does not include purchased or free credited service or reciprocal
service.
G.
Suspension of Benefits [A.C.A § 24-7-209(a)]
Subject to the minimum distribution provisions of A.C.A. §
24-7-730, 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.
H. Benefits are payable through the month in
which the retirant's death occurs.
RULES
1. A member age 65 or older may apply for
retirement benefits without terminating employment and may begin drawing
benefits with no effect on the member's retirement benefit.
2. For members requiring termination of
employment to retire, a member shall not be terminated if the member does not
terminate employment with all participating employers including public higher
education institutions by his or her effective date of retirement or the member
becomes employed within the required termination period with a participating
employer after retirement.
Salary paid after the member's termination will not affect retirement
eligibility if the payment is for services or other benefits accruing prior to
termination and not uninterrupted employment.
3. Effective July 2, 2009, the following
termination requirements shall apply:
A. For
a member with 38 years of participation in ATRS, including actual or purchased
service, reciprocal service, or T-DROP participation, by the member must
terminate and remain terminated with all participating employers for a minimum
of 30 calendar days after the effective date of retirement.
B. For a member with less than 38 years of
participation in ATRS, including actual or purchased service, reciprocal
service, or T-DROP participation, the member must terminate and remain
terminated with all participating employers for a minimum of 180 calendar days
after the member's effective date of retirement.
4. The retirement application and all
required documentation must be received by the System at least 30 calendar days
prior to the proposed effective date of benefits. If the application is not
received within 30 calendar days prior to the proposed effective date, the
proposed date may not be used, and the member's effective date will be the
following month.
5. 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.
6. A member
may cancel an 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 System of cancellation in
writing and, upon cancellation, the member shall be eligible for active
membership in the System.
Amended: June 15, 2004
February 7, 2006
April 26, 2007
October 6, 2008
June 16, 2009 (Emergency)
October 5, 2009 (Permanent)
RETIRANT'S RETURN TO COVERED EMPLOYMENT
A.C.A. §§ 24-7-708 and 24-7-202 (as amended by Act 1293 of
1995, Act 384 of 1997, Act 30 of 1999, Act 1146 of 2001, Act 911 of 2005 and
Acts 612 and 698 of 2007)
DEFINITIONS
1.
Covered salary means
remuneration paid from a covered employer to an ATRS retirant on which waiver
contributions are paid.
2.
Earnings limitation means the limitation applicable to a member's
retirement annuity when a retiree receives remuneration from a covered
employer.
3.
Normal
retirement age means sixty-five (65) years of age.
4.
Retirant means a member
receiving an ATRS retirement annuity.
5.
Retires means that a member
ceases to be active and is eligible to receive an ATRS annuity.
AGE AND SERVICE RETIRANT
1. If a retirant returns to work service for
a covered employer
1 without rescinding retirement under A.C.A.
§ 24-7-717, then for each twelve-month period ending June 30, the amount
of the member's covered salary shall be subject to a limitation equivalent to
twice the limitation imposed by the Social Security retirement
test.2
2. Upon adoption of rules by the ATRS Board
implementing Act 698 of 2007, when a retirant entering into a position of
employment with the Department of
Education is exempt from item 1 of this section and shall be employed
with no limitations placed on his or her
earnings.3
3. For any retired member returning to work
for the Department of Education pursuant to item 2 in this section, the
employee and employer contribution rate shall recommence on behalf of the
retired member at the rate in effect at the time of the employment and shall be
remitted by the employer in the manner prescribed by the System. Any
contribution amounts paid under this section shall not be refundable and shall
not constitute the addition of service credit.
4. Effective July 1, 1992, a retirant who is
under normal retirement age may receive earnings from a covered employer up to
twice the Social Security earnings limitation amount without affecting his/her
ATRS annuity benefits. If his/her ATRS covered earnings exceed that amount,
ATRS will reduce the member's retirement annuity $1 for each $2 earned in
covered salary above the earnings limitation amount.
A. A retirant reaching the System's normal
retirement age may return to service without being subject to the earnings
limitation.4 Normal retirement age for the System
means sixty-five (65) years of age or older.
B For each year ending June 30, the Social
Security retirement test to be considered shall be the test in effect for the
calendar year beginning the January 1 immediately preceding June 30. The
retirant's earnings shall be his or her remuneration for the employment for the
year ending June 30.
C
i. For those retirants exceeding the
earnings limitation, the System will suspend annuity payments to collect the
reduction when the earnings limitation is exceeded. If at the end of the fiscal
year, the System has not received from the suspension the amount due from the
retirant exceeding the earnings limitation, the System may carry over
suspension of benefits into the next fiscal year.
ii. Upon written request by the retirant upon
reemployment, the System may initiate an equal monthly reduction of the
retirant's retirement annuity in the fiscal year in which the earnings
limitation will be exceeded to collect the earnings limitation
reduction.
iii. The amount
recovered by ATRS will not exceed the amount of benefits paid during the
year(s) in which the earnings limitation is/was exceeded.
iv. In extraordinary hardship circumstances,
the retirant may request an alternate method of repayment other than total
suspension of benefits for a violation of the earnings limitation.
v. For questions not covered by this rule,
see Rule No. 9-7 (Error Corrections and Collection of Overpayments).
5.
A. Upon acceptance of employment with a
covered employer, the retirant and employer must report to ATRS that the
retirant has returned to covered employment. A Statement of Employment form
must be completed immediately by employers and retirants upon acceptance of
employment for each retirant hired in a position covered by ATRS.
B. Employers will report monthly all
retirants who have returned to employment in an ATRS covered position. The
monthly report will be filed on a Return to Service form, which will be
furnished by ATRS.
C. In the event
that both a retirant and employer fail to notify the System of a retiree's
return to covered employment, any retirement benefits paid in violation of this
policy during the time of employment are subject to collection by the System
under the overpayment policy. ATRS reserves the right to immediately suspend
the retirement annuity until all benefits overpaid to the retirant are repaid
to the System.
6.
A. Effective July 1, 1977, a retirant may
receive remuneration as an employee from any private employer or as a member of
the General Assembly without any effect on his/her
annuity.5
B. Effective July 1, 1991, an age and service
retiree may be employed by a public employer whose employees are not covered by
ATRS without any effect on his/her annuity.
7. When a retirant returns to covered
employment and does not rescind his/her retirement, the retirant shall not
accrue additional service credit in the System, and no contributions shall be
remitted on behalf of the retirant.6
8. For the return to work rules applicable to
disability retirees receiving benefits under A.C.A. § 24-7-704, see Policy
No. 9-3 (Disability Retirement).
WAIVER OF EARNINGS LIMITATION (Act 30 of 1999, Act 1146 of
2001, Act 911 of 2005, and Act 612 of 2007)
1.
A. In
accordance with rules and regulations adopted by the State Board of Education,
the Arkansas Department of Education (ADE) may request of the ATRS Executive
Director a waiver of the conditions subjecting annuities to the ATRS earnings
limitation.
B. All requests for
waiver must originate with ADE and be submitted to the ATRS Executive Director
for approval within sixty (60) days of employment. If approved, the waiver
shall be effective for one (1) year from the date of hire or until the end of
the current fiscal year, whichever comes first, with the option to renew
annually for up to a total of three (3) years as requested by ADE. Waiver
renewals are not automatic and any extensions must be approved by the ATRS
Executive Director.
C. Upon
adoption of Rules by the ATRS Board implementing Act 612 of 2007, a waiver may
be renewed annually for up to a total of six (6) years as requested by
ADE.
D. Waiver requests (1)
initiated by the employer prior to the member's effective date of retirement or
(2) filed within thirty (30) days following the member's effective date of
retirement will not be eligible for consideration by ATRS.
2. Effective July 1, 2005, under Act 911 of
2005, the ATRS Executive Director is authorized to take appropriate action on
waivers of the ATRS earnings limitations requested by the Department of
Education:
A. If the retiree is hired by a
public school district due to a shortage of certified teachers in a critical
academic area in which the retiree is certified; OR
B. If the retiree is hired as a
superintendent due to a reconstitution or reorganization of a public school
district as allowed in A.C.A. §§ 6-15-201 et seq., §§
6-15-401 et seq., or §§ 6-20-1901 et seq., following an appropriate
determination by the State Department of Education that:
i. The public school district has failed to
meet standards of accreditation pursuant to A.C.A. §§ 6-15-201 et
seq.; OR
ii. The public school
district is in academic distress status for failing to meet the minimum level
of academic achievement on the ACTAAP examinations pursuant to A.C.A.
§§ 6-15-401 et seq.; OR
iii. The public school district is in fiscal
distress status pursuant to A.C.A. §§ 6-20-1901 et seq.;
AND
iv. An appropriately qualified
applicant, as determined by the State Department of Education, who is not an
ATRS-covered retirant is not available to be employed.
3. Critical academic areas in
which there is a shortage of certified teachers shall be determined annually by
the State Department of Education.
4. Employers shall maintain audit files
identifying personnel granted a waiver and documenting the reasons for the
waiver and will be responsible for reporting to ATRS all retirees who have
returned to employment under these provisions.
5. Beginning July 1, 2005, a covered employer
who employs a retired member who is approved for a waiver under this policy
shall remit to the System an amount equal to the combined employee and employer
contribution rate in effect for the fiscal year worked. This waiver fee shall
be paid on all covered salary earned in the fiscal year and shall not be
charged to or collected from the retirant. These amounts shall be recorded by
the System in the ADE Waiver Income Account. (Act 911 of 2005).
Amended: June 15, 2004
July 18, 2005
October 4, 2005
December 6, 2005
June 19, 2007
February 11, 2008
LUMP-SUM DEATH BENEFIT
A.C.A. § 24-7-720
DEFINITIONS
1.
Active member is any member
rendering service to an ATRS participating employer.
2.
Actual service is service
credit accrued by a member for service to an ATRS covered employer, excluding
purchased, free, or reciprocal service with another Arkansas public retirement
plan.
3.
Lump-sum
beneficiary means the person{s) or entity(s) designated in writing by
the member to receive payment of the lump-sum death benefit under A.C.A.
§24-7-720.
4.
Retired
member is a member receiving a retirement annuity from the System.
REGULATIONS
1.
Lump-sum Death Benefit Paid on or
before July 1, 2007 (Act 296 of 2007)
Before July 1, 2007, upon the death of an active or retired member with
five (5) or more years of actual sen/ice, the System shall pay a benefit in the
amount of $10,000 for contributory members, $6,667 for noncontributory members,
or a prorated amount at a ratio of 3:2 based upon the member's contributory and
noncontributory service credit. The payment will be paid as a lump sum to the
beneficiary designated by the member. If the member failed to designate a
beneficiary or a designated beneficiary did not survive, the lump-sum benefit
will be paid to the following persons in statutory succession: spouse, then
children, then parents, then the member's estate.
2.
Lump-sum Death Benefit Paid after
July 1, 2007 (Acts 1022 and 296 of 2007)
On or after July 1, 2007, upon the death of an active or retired member
with ten (10) or more years of actual service, the System shall pay a benefit
in the amount of $10,000 for contributory members, $6,667 for noncontributory
members or a prorated arribunt at a ratio of 3:2 based upon the member's
contributory and noncontributory service credit. The benefit will be paid as a
lump sum to the beneficiary designated by the member. If the member failed to
designate a benefieary or a designated beneficiary did not survive, the
lump-sum benefit will be paid the member's estate.
3.
Lump-sum Death Benefit Paid on or
after July 1, 2009 (Act 1323 of 2009)
On or after July 1, 2009, upon the death of an active or retired member
with 10 or more years of actual service, the System shall pay a benefit in the
amount of $10,000 for contributory members, $6,667 for noncontributory members,
or a prorated amount at a ratio of 3:2 based upon the member's contributory and
noncontributory service credit. The benefit will be paid as a lump sum to the
beneficiary designated by the member. If the member failed to designate a
beneficiary or a beneficiary did not survive, then the benefit will be paid to
the member's estate.
To effectuate the legislative intent of Act 1323 of 2009, all lump-sum
death benefit distributions made after June 30, 2009, shall be tax exempt, and
no federal or state income tax shall be withheld the System. After June 30,
2009, the lump-sum death benefit will not be eligible for a direct
rollover.
4.
Lump-sum
Death Benefit Payable on or after July 1, 2009, for Retired Members (Act 1323
of 2009)
On or after July 1, 2009, upon the death of a retired member with five
(5) or more years of actual service, the System shall pay a benefit in the
amount of $10,000 for contributory members, $6,667 for noncontributory members,
or a prorated amount at a ratio of 3:2 based upon the member's contributory and
noncontributory service if the member retired on or before July 1,2007.
The benefit will be paid as a lump sum to the beneficiary designated
by the member. If the member failed to designate a beneficiary or no designated
beneficiary survives, then the benefit will be paid to the member's
estate.
If a retired member died between July 1, 2007, and July 1, 2009, and
was eligible for the lump-sum benefit under Section 4, with more than five (5)
but less than ten (10) years of actual sen/ice at his or her death, the System
will notify the beneficiary(s) of eligibility at the last known address. If the
beneficiary(s) fails to make application for the lump-sum benefit after written
notice is provided, ATRS is not obligated to search for the beneficiary(s).
ATRS will distribute the lump sum upon receipt of a valid claim by the
beneficiary under A.C.A. § 24-7-734.
RULES
1. The amount of the lump-sum death benefit
may be set pursuant to the rules and regulations adopted by the Board of
Trustees in an amount up to $10,000 per member. The Board of
Trustees may adjust the amount of the lump-sum beriefit each year.
2. The Board of Trustees may, as actuarially
appropriate, prorate the amount of the lump-sum benefit based on the ratio of
the member's contributory and noncontributory service credit.
3. A member must be classified as either
active or retired at the time of his or her
death to qualify for the lump-sum death benefit. Inactive members shall not be
entitled to a lump-sum death benefit.
4. A member must have accrued the required
amount of actual service at the time of his or her death to qualify for the
lump-sum death benefit.
5. A member
may nominate any natural person(s) or duly formed legal entity as his or her
lump-sum beneficiary including a corporation, trust, partnership, or other
recognized legal entity.
6. To
nominate a lump-sum death beneficiary, a member must designate an eligible
beneficiary on an ATRS approved form and sign the form.
7. To be effective, the completed lump-sum
beneficiary form must be received by ATRS prior to the member's
death.
8. A lump-sum beneficiary
form, which is properly executed and filed with ATRS, supercedes all prior
designations filed by the member for the lump-sum benefit.
9. if the member is eligible for the lump-sum
death benefit at his or her death, the lump-sum benefit payment shall be made
within a reasonable amount of time to the member's proper beneficiary upon
receipt of a written application, acceptable proof of the beneficiary's
identification, and proof of the member's death.
10. Lump-sum beneficiary forms signed by a
member's agent (such as an attorney-in-fact under a power of attorney) will not
be processed until the document appointing the agent is filed with and accepted
by the System. The authorizing document must contain authorization for the
agent related to retirement plan transactions or the change of beneficiaries in
order to authorize the agent to change the member's lump-sum
beneficiary{s).
11. ATRS will not
accept a beneficiary form signed by a guardian of the member's estate or other
court-appointed conservator without an accompanying court order authorizing the
guardian's designation of beneficiary(s).
12. A lump-sum beneficiary may waive his or
her rights to payment of the lump sum benefit by submitting a waiver and
relinquishment from acceptable to A TRS. Upon receipt of a valid waiver, A TRS
Will pay the remaining eligible beneficiery(S)
13. A lump-sum beneficiary may not assign
payment of a lump-sum death) benefit to another person or entity.
14. ATRS reserves the right to deduct from
the lump-sum benefit any amounts owed to ATRS by the member under A.C.A. §
24-7-205.
15. ATRS reserves the
right to collect any overpayments or other amounts owed to ATRS by the lump-sum
beneficiary(s).
16. ATRS shall
comply with all applicable laws relating to the distribution of the lump-sum
benefit including federal and state tax laws and the Uniform Transfer to Minors
Act.
Amended: June 15, 2004
February 7,2006
April 26, 2007
June 16, 2009 (Emergency)
October 5, 2009 (Permanent)
1 Prior to July 1, 1991, the earnings
limitation applied to retirants who were
Employees with ATRS, ASHERS, or ASERS from July 1, 1971, through June
30, 1977;
Employees with a public employer, whose employers are covered by a
state-supported retirement plan or the University of Arkansas from July 1,
1977, through June 30, 1978;
Employees of a public employer whose employees are covered by a
retirement plan supported wholly or in part by state contributions from July 1,
1978, through June 30, 1991.
2 The Social Security earnings limitation
ceases upon reaching Social Security "full retirement age" as defined P.L.
106-182.
3 The ATRS Board of
Trustees may not implement Acts 612 and 698 of 2007 until the System has
reduced its unfunded accrued liabilities being amortized over a period
exceeding thirty (30) years to a level less than the standards prescribed for
those public retirement systems under A.C.A. §24-1-104 and
§24-1-105.
4 In establishing
an equivalent limitation for the System, ATRS considers full retirement age to
be the "normal retirement age" for the System under A.C.A. §
24-7-202(19).
5 From July 1, 1971,
through June 30, 1977, this "exemption" covered employees receiving
remuneration "from any other public employer or private employer."
6 Act 1293 of 1995 provided that if a
retirant is employed in a covered position by a public college, university, or
vocational-technical school, his/her annuity shall not be subject to the
limitations provided in No. 1 above. This exemption was repealed by Act 384 of
1997, effective July 1, 2007.
