GENERAL PHILOSOPHY AND BELIEFS OF THE BOARD OF TRUSTEES OF THE TEACHER
RETIREMENT SYSTEM
1. The Board of
Trustees is dedicated to the proposition that its paramount purpose is that of
providing an adequate and equitable retirement plan for the members of the
teaching profession; to protect this group in the event total and permanent
disability causes them to become physically or mentally unable to continue
employment in their profession; and to provide in part for their dependents in
case of death before retirement.
2.
We believe it is the duty of the board to fully support the educational program
of the state and to participate in its activities.
3. We recognize the problems relating to
reaching retirement age and offer counseling and information with reference to
the personal account of the individual member.
4. The Board is charged with the
responsibility of investing the funds of the System. The two more important
factors in the investment policies are safety and yield. The yield is of first
importance, provided such investments contain the necessary safeguards as are
provided by law.
5. It is the duty
of the Board to be fully informed of its financial liabilities not only to the
retirants and beneficiaries on roll but also to recognize the vested rights of
the active members of the teaching profession; to make these rights and
liabilities know to the members of the state legislature, other state officials
and the professional organizations who deal with the general educational
programs.
6. We believe it is our
responsibility to make known to all citizens interested in the total
educational program the manner in which the funds of the system are invested
and disbursed and that the control and budgeting of the funds be fully
reported.
7. We feel we should
exert every effort to aid in federal legislation that affects the welfare of
the retired member, particularly in regard to equitable tax credit.
8. We believe that every effort should be
made to be cognizant of the problems and solutions of such problems in the
other state pension plans on the national and regional level and to use their
experience in helping to solve such similar situations that face or will face
the Arkansas system.
ARKANSAS TEACHER RETIREMENT SYSTEM COMPOSITION
AUTHORITY
The authority and responsibility for the administration, management and
control of the Retirement System, and for the construing and carrying out the
provisions of the Plan is vested in the Board of Trustees by Act 427 of
1973.
MEMBERSHIP
Section 4 of Act 427 makes membership in the Teacher Retirement System
a condition of employment in a position in the state. Membership in the
Retirement System shall be an integral part of the contract or agreement
entered into by a member and his Board or employing agency. As a condition of
his employment in Arkansas teaching service, each member shall be deemed to
consent and agree to abide by the rules and regulations from time to time
adopted by the Board of Trustees to govern the administration and operation of
the Retirement System.
ADMINISTRATION
The Board of Trustees shall appoint an Executive Director. The
Executive Director shall be the administrative officer of the Retirement
System, and he shall be directly responsible to the Board of Trustees. The
Board of Trustees may, by resolution duly adopted, delegate to the Executive
Director any of the powers and duties vested in or imposed by law,
Within such limitations as may be contained in legislative
appropriations therefore, the Executive Director, subject to approval of the
Board of Trustees, may employ, and fix the compensation of such secretarial,
clerical, professional and other personnel as may be required for the proper
administration of the System.
BOAED OF TRUSTEES
COMPOSITION
Section 3 of Act 427 of 1973, as amended, [A.C.A. 24-7-301] provides
that the general administration and responsibility for the proper operation of
the System and for making effective the provisions of the Teacher Retirement
law are vested in the Board of Trustees of 12 persons. The State Bank
Commissioner, the State Treasurer, and the State Commissioner of Education
shall be the ex officio trustees. Six members shall be elected member trustees;
provided, each such member shall have at least 5 years of credited . service in
force and be an active member at the beginning of his term of office. One
member trustee shall be elected from each of the 4 congressional districts of
the State by the active members employed in such congressional district, and
such trustee must be a resident of such district. One person other than a
Caucasian shall be elected by the Arkansas Education Association. One classroom
teacher shall be elected member trustee by the members of Classroom Teachers of
the Arkansas Education Association. The member trustees shall be elected in
accordance with such rules and regulations as the Board shall from time to time
adopt to govern such elections. Three retirants shall be elected retirant
trustees by the Arkansas Retired Teachers Association, provided such persons
are retirants at the beginning of their terms of office. The retirant trustees
shall be elected in accordance with such rules and regulations as the Board
shall from time to time adopt to govern such elections.
TERM OF OFFICE
The term of office of each member trustee shall be 5 years. The term of
office of each retirant trustee shall be 3 years. Each trustee shall continue
to serve as trustee until his successor is elected and has qualified.
In the event any member trustee fails to attend 3 consecutive meetings
of the Board unless in each case excused for cause by the remaining trustees
attending such meeting or meetings, he shall be considered to have resigned
from the Board and the Board shall by resolution declare his office of trustee
vacated. If a vacancy occurs in the office of member or retirant trustee, the
remaining trustees shall fill the vacancy for the remainder of the unexpired
term.
The board shall elect a Chairman and Vice Chairman from its own
membership each year at its first regular quarterly meeting following the
election of an active member from a congressional district. In years in which
there is no board election by congressional district, the Board shall hold its
election at the time it would if such election of a Board member had been held.
In the event a vacancy of Chairman or Vice Chairman occurs for any reason other
than completion of a term, the Board shall fill said vacancy by election for
the remainder of the unexpired terra at its next regular meeting.
ELECTION PROCEDURES FOR MEMBER TRUSTEES
Each year in which the five (5) year term of a member trustee expires,
the position shall be filled either by election or re-election by use of the
following procedures:
1. During the
month of June of each year in which a member trustee is to be elected from a
congressional district, a notice of such election shall be submitted to the
Arkansas Educator, the Arkansas Association of Educational Administrator's
Newsletter and the Department of Education's Connect-Ed and Education Update
for publication. This announcement shall include the number of the
congressional district in which an election is to be held, a listing of
counties in such district, the name of the incumbent trustee, the procedure for
nominating a candidate and an announcement that nominating petitions may be
obtained from the Teacher Retirement System.
2. Nomination for election shall be upon
petition signed by not less than twenty-five active members of the Retirement
System from the congressional district from which such person is seeking
election. Such petitions must also have the social security number of each
signer. Nominating petitions must be filed with the Executive Director of the
Teacher Retirement System not later than September 15 of the year in which the
member trustee's term expires.
3.
Should only one candidate file a timely and verified petition, that person
shall be declared by the Board of Trustees as elected to fill the vacant member
trustee position, and no ballots will be mailed to the active
members.
4. A firm of certified
public accountants will be retained by the Board to count the votes and certify
the results of the election.
5.
Ballots will be mailed directly from the Retirement System with postage for
mailing ballots to members and for members returning them to the System to be
paid by the System.
6. A mailing
list of active members will be established on the state computer from teacher
rosters obtained from school districts. This list will be updated each year
before annual statements of members' accounts are mailed in September and
ballots are mailed in October.
7.
Instructions to voters and a return envelope with the word "Ballot" stamped on
it will be mailed to each eligible voter. In cooperation with the accounting
firm referred to in number 3, the Board will decide whether these return
envelopes will be addressed directly to the accounting firm or addressed to the
Teacher Retirement System to be delivered to the accounting firm.
8. The instructions will say that ballots are
not to be copied. They will be printed on colored paper, and the color will be
changed for each election.
9.
Voters' social security numbers will not be requested, and no space will be
provided for them on the ballot.
10. One list of eligible voters receiving
ballots will be furnished to each candidate.
11. The election schedule will be as follows:
Deadline for Nomination - September 15
Ballots to be mailed to voters - October 1
Deadline for ballots to be returned - October 20
Firm of certified accountants counts votes and certifies results -
October 31
If no candidate receives a majority of votes, a runoff will be held
between the two candidates receiving the highest number of votes. The schedule
for the runoff will be as follows:
Ballots will be mailed - November 10
Deadline for ballots to be returned - November 23
Firm of certified accountants counts votes and certifies results -
November 30
If one of the above fixed dates is on a weekend or holiday, the above
procedures will occur on the next regular work day following such weekend or
holiday.
12. If a candidate
receives a majority of the votes cast on the first ballot, he/she will be
considered qualified on October 31 and will assume office on November 1. If a
runoff is necessary, the candidate receiving the majority of the votes cast
will be considered qualified on November 30 and will assume office on December
1.
ELECTION PROCEDURES FOR RETIRANT TRUSTEES BY THE ARKANSAS RETIRED
TEACHERS ASSOCIATION (ARTA)
There are three (3) retirant members of the Board of Trustees of the
Arkansas Teacher Retirement System. Each is elected for a term of three (3)
years and the terns are so staggered as to require that one member be elected
annually.
The procedure followed in this election is as follows:
1. The President of the Arkansas Retired
Teachers Association appoints a committee of three (3) of its members in early
March of each year for the express purpose of selecting a nominee or nominees
for the position of Retirant Trustee on the TRS Board. The committee is
responsible for obtaining permission from the nominee after it has been
determined by the committee that the nominee chosen is a member in good
standing of the Arkansas Retired Teachers Association and draws a regular
benefit check from the Arkansas Teacher Retirement System.
2. Any retiree who is a member in good
standing of the ARTA is eligible to be a nominee for the position of retirant
trustee on the Teacher Retirement board. To become a qualified candidate, the
retiree should submit a petition signed by 25 persons who are members of the
Arkansas Retired Teachers Association. The petition will be submitted to the
ARTA office by August 1.
3. The
Teacher Retirement System is to be notified of the name and address of each
nominee by September 15.
4. The
Teacher Retirement System assumes the responsibility of preparing the
ballots.
5. All persons on the
retired rolls of the Teacher Retirement System have the opportunity, during the
month of September, to study the qualifications of the candidate or candidates.
The August issue of ARTA's quarterly publication INTERLINK, carries a
photograph and a biographical sketch of each candidate.
6. The election schedule will be as follows:
Deadline for Nomination - August 1
Ballots to be mailed to retirants with September check
Deadline for ballots to be returned - October 15
Certification of results - October 20
If a runoff is necessary the schedule will be;
Runoff ballots to be mailed with October check
Deadline for ballots to be returned - November 15
Certification of results - November 20
7. The President of the ARTA names three (3)
tellers who, with the assistance of volunteer workers, count the ballots and
certify the results to the Teacher Retirement System. If one nominee does not
receive a majority of the votes, a runoff election will be held. The
above-described appointed tellers will count the runoff ballots and certify the
results to the Teacher Retirement System.
8. If a candidate receives a majority of the
votes cast on the first ballot, he/she will be considered qualified on October
31 and will assume office on November 1. If a runoff is necessary, the
candidate receiving the majority of the votes cast will be considered qualified
on November 30 and will assume office on December 1.
ELECTION PROCEDURES FOR MEMBER TRUSTEES BY THE ARKANSAS EDUCATION
ASSOCIATION (AEA)
Nominating Procedures
A. Any
local affiliated association or 20 members by petition may nominate candidates
for any of the offices of the Association, Executive Committee members,
Members-at-Large on the Board of Directors, District Director positions.
Alternate District Director positions, NEA Director, Alternate NEA Director for
Arkansas, NEA Delegates, and Member Trustee positions on the Arkansas Teacher
Retirement Board allocated by law to AEA.
B. Nomination forms, petition forms,
information on positions to be filled and procedural instructions for the
positions named in Section A shall be mailed to the president of each local
affiliated association by the third Friday in October. A nomination form from
AEA for AEA offices to be filled should appear in an official publication of
the Association at least two weeks prior to the deadline for nominating.
Nominations must be received by the office of the AEA President by the close of
business on the third Friday in December.
C. The name of each nominee and a brief
position statement and biographical sketch, if one is submitted, shall be
published at least two weeks prior to the applicable election in an official
publication of the Association.
D.
In any position for which an election is to be held and only one candidate is
legally nominated, that candidate shall be declared elected without the
necessity of printing ballots and going through the formality of an
election.
E. a person may hold only
one AEA state elective office at a time. This includes President, Vice
President, Secretary-Treasurer, NEA Director, Executive Committee and Board of
Directors.
Election Procedures for AEA Offices
Members-at-Large on the Board of Directors, District Directors
Positions and Alternate District Director Positions, NEA Delegates, Member
Trustee Positions on the Arkansas Teacher Retirement Board
A. Dates
1.
In the event more than two persons are nominated for any position, a 7-day
Nominating Primary election shall be held during the period beginning with the
Monday following the third Sunday in February and ending with the Friday
following the third Sunday in February. Any candidate receiving a majority of
all the votes cast in the Nominating Primary shall be certified as having been
elected. If no majority is received, the State Election Committee shall certify
the names of the two highest (or in the case of a tie for second place, the
three highest) for the Final Election. NEA Delegates shall be elected by a
plurality vote during this Nominating Primary election period,
2. The Final Election of officers, members of
the Board of Directors and alternate members to the Board of Directors shall be
held during a 7-day period beginning with the Monday following the third Sunday
in April and ending with the Friday following the third Sunday in April. Prior
to the Final Election, the names of the nominees and their pictures shall be
published in an official publication of the Association.
B. Election Materials
1. The AEA office shall furnish the local
association president or school district contact person materials to be used in
the election process - official ballots, registration blanks, election
regulations,, certification blanks, and an envelope for certified returns. The
local associations shall provide sealed ballot boxes and provisions to insure
that all ballots cast will be secret ballots.
2. Positions on the ballot shall be
determined by a random drawing by the President of the Association, witnessed
by the Executive Director, Associate Executive Director, and Election Committee
Chairperson, or his or her designee.
C. Election Returns
Two copies of the certification form shall be executed by the President
and/or Election Committee Chairperson. The original form is to be returned to
the AEA office, with the carbon retained by the local association. Envelopes
containing the original certification forms reporting the election results
should be mailed at least one week before the deadline to insure timely
receipt, and must be filed in the AEA office not later than 10:00 a.m. on the
second Saturday following the last day of the election period.
Nomination and Election of Member Trustee Positions on the Arkansas
Teacher Retirement Board allocated by law to AEA
A. Nomination and election procedures for
member trustees of the Teacher Retirement System allocated to AEA shall be the
same as those set forth for other AEA elections.
B. Nominees for these positions shall meet
the requirements as set forth in State Law, which are as follows:
1. Classroom Teacher Member Trustee - The
classroom teacher member trustee shall have at least five (5) years of credited
service in force and shall be an active classroom teacher at the beginning of
his/her term.
2. Non-Caucasian
Member Trustee - The Non-Caucasian member must be a person other than a
Caucasian, shall have five (5) years of credited service in force and shall be
an active member at the beginning of his/her term.
C. The length of term of member trustees
allocated to AEA shall be five (5) years with a regularly scheduled election
being held in 1981 cind every (5) years thereafter for a Classroom Teacher
Member Trustee and in 1982 and every five (5) years thereafter for a
Non-Caucasian Member Trustee.
Challenge Procedures
A challenge of any AEA election shall be directed to the Constitution,
By-Laws and Rules Committee within fifteen (15) days of the certification of
the results of that election. The Constitution, By-Laws, and Rules Committee
shall hear the challenge within thirty (30) days and shall make its
recommendation in writing to the AEA Board within ten (10) days. The Board
shall take action on the Committee's recommendation within sixty (60) days of
its receipt.
Responsibilities of the Local Association President
A. Insure the secrecy of the
ballot.
B. See to it that an
election is held during the designated dates.
C. Distribute ballots, official registration
blanks, membership lists, and election regulations to the Election
Committee
D. See that election
returns are certified and filed in the SEA office not later than the stated
deadline.
Responsibilities of the Local Election Committee
A. Designate polling places and inform
Building Reps/Faculty Reps or Designees.
B. Determine hours that polling places will
be open and inform members.
C.
Distribute to the polling places: the ballots, official registration blanks,
membership list, election regulations and sealed ballot boxes.
D. Set a time and place for Building
Reps/Faculty Reps/Designees to return ballot boxes and registration blanks to
the Election Committee.
E. Count
and certify election returns to the AEA office.
Responsibilities of Building Reps/Faculty Reps or Designated
Persons
A. See that the name of each
member, before receiving a ballot, is listed on the official registration form,
giving name and address.
B. See
that only eligible AEA members are furnished with ballots and permitted to vote
secretly.
C. See that every voter
has the opportunity to cast a secret ballot, folding and placing his own ballot
in the sealed ballot box.
D. Return
sealed ballot boxes and registration forms to the designated place.
State Election Committee
A State Election Committee composed of 17 members, one from each
District, shall be appointed by the President of the association in accordance
with the bylaws of the association. The Election Committee shall meet on the
second Saturday following the times designated for the Nominating Primary and
Final Election. It shall tabulate the returns submitted and certify the results
to the President of the association.
Amendments
These regulations may be amended by the Representative assembly of this
association at a regular or called meeting, advance notice that changes will be
proposed shall be given in official publications of the Association. Copies of
the proposed amendments shall be furnished delegates to the Representative
assembly.
BOARD OF TRUSTEES MEETINGS
The Board shall hold regular meetings at least quarterly. Additional
meetings may be called by the Chairman or scheduled by action of the Board in a
regular meeting. The Board shall adopt its own rules of procedure, which shall
be subject to the following rules:
1.
Quorum: Six trustees, of whom at least one (1) shall
be an ex officio trustee, shall constitute a quorum at any meeting of the
Board.
2.
Ex officio
Trustees and Designated Substitutes: Ex officio Trustees are urged
and expected to attend meetings when possible. Each ex officio tnistee is
authorized to designate an official substitute to be approved by the Board to
represent him/her when responsibilities as a constitutional officer or head of
a State agency make it impossible for him/her to attend. Such designated
substitutes shall be counted in determining if a quorum is present. They shall
have the same rights as other trustees to participate in a meeting, including
voting, making and speaking on motions.
3.
Roberts Rules of
Order shall be followed in the conduct of all meetings except when
a departure from Roberts is authorized by action of the Board.
4.
Agenda; A
suggested agenda for each meeting shall be submitted in advance to all
trustees. The Board shall adopt an agenda at the beginning of each
meeting.
5.
Minutes: The board shall keep an official record of
the proceedings of each meeting, the final draft of which must be approved by
the Board and signed by the Chairman and the Director.
6.
Public Meetings, Freedom of
Information Act: All meetings of the Board shall be public and in
compliance with the Freedom of Information Act. Representatives of the Little
Rock news media shall be notified of each meeting.
FREEDOM OF INFORMATION , MEMBER RECORDS
In compliance with a.C.a. 24-19-104, the Board of Trustees will release
information taken from member records under the following conditions;
1. Unless a member requests information on
his account, only the names and addresses of members will be supplied from the
records.
2. The request for
information must be made in writing to the Executive Director.
3. Any costs incurred in supplying the
requested information must be paid by the person or organization requesting the
information.
PAYMENT OF INVESTMENT COUNSEL FEES
1. In addition to the various retirement
systems funds established as trust funds in the State Treasury, a bank trust
fund or funds may be established and maintained in such depository bank or
banks as may be designated by the boards of trustees of the respective
retirement systems.
2. Each bank
fund shall consist of and there may be deposited in the fund:
a) Any and all employer contributions,
including any interest;
b) Any and
all employee contributions, including any interest;
c) Interest, dividend, and other incomes
realized from investments and reinvestments;
d) Interest earned upon any moneys in the
fund; and
e) Such other proceeds as
may be derived from the sale, exchange, redemption, transfer, or disposition of
any securities or investments.
3. The following disbursements may be made
from the bank funds:
a) Payments for any and
all securities and investments, the purchase of which is authorized by law,
which may include principal, accrued interest, commission, taxes, and
fees;
b) Payments for money manager
and custodian bank fees;
c) The
deposit to the appropriate State Treasury fund for the payment of annuities and
refunds as authorized by law that are paid on vouchers issued by the respective
retirement systems and on warrants issued thereon by the Auditor of
State;
d) The payment of annuities
and refunds as authorized by law that are paid on cash fund vouchers issued by
the respective retirement systems and on checks or wire transfers issued from
bank funds; and
e) The deposit to
the appropriate State Treasury fund for payments of salaries, maintenance, and
operating expenses of the retirement systems supported from investment
earnings.
INVESTMENT POLICIES AND PROCEDURES (Rules and Regulations)
I. STATEMENT OF INVESTMENT POLICY
The PURPOSE of the Teacher Retirement System is: to provide an orderly
means whereby employees of the participating employers who have attained
retirement age may be retired from active service, to enable such employees to
accumulate reserves for themselves and their dependents and to provide for old
age, death and termination of employment.
Monies of the System shall be invested to achieve the investment
OBJECTIVE which is to make the monies as productive as possible.
THE STANDARD OF INVESTMENT for the Director and Board of Trustees of
the assets of the fund is: investing and reinvesting monies in the fund and in
acquiring, retaining, managing and disposing of investments of the fund there
shall be exercised "the care, skill, prudence and diligence under the
circumstances then prevailing that a prudent man acting in a like capacity and
familiar with such matters would use in the conduct of an enterprise of a like
character and with like aims."
With the preceding propose, objective, and standards in mind,
investment GOALS will be established to guide the Director, and investment
counsel. Goals will be directed at achieving, over a period of years, the
actuarial interest assumption rate of the System, with due consideration being
given to preservation of capital and its purchasing power, and to maintaining
the element of risk at a prudent level.
Available funds should be invested to achieve a total return level
necessary to maintain the fiscal soundness of the fund and to achieve the
actuarial reserve requirements within the standards set forth above.
In order for the Board of Trustees to achieve the purpose, objective,
standards and goals of the Fund, Investment Counsel (Investment Managers) and
an Investment Consultant or Consultants will be retained. Investment Counsel
will provide general economic information, as well as recommendations, on
specific investments. Investment Counsel will at all times be responsible for
the development and articulation of investment strategy, which will be a topic
in each of its quarterly reports to the Board of Trustees. The Board's
acceptance of the quarterly report of Investment Counsel shall constitute Board
approval of investment strategy for the next quarter. In each of its follow-up
letters on specific investment recommendations (Item D of Procedures for
Investment Counsel), Investment Counsel shall justify each specific
recommendation and its relationship to investment strategy approved by the
Board of Trustees at the prior quarterly meeting. The Investment Consultant or
Consultants will provide advice on investment results of the Fund using such
techniques as market valuation, time weighted rates of return, comparison with
capital market indices and/or other relevant measures.
At the time of issuing this Statement of Investment Policy, the
actuarial interest rate assumption utilized by the System is 8%. It is the
desire of the Board of Trustees that the investment of the funds of the System
will achieve a total return that will exceed the interest rate assumption,
preserve the purchasing power of the assets and, in addition, produce earnings
that may reduce the cost of the Retirement System to the participating
employers or provide additional funds so that improvements in the System
benefits may be adequately funded. While there can be no assurance that these
desires can be achieved, the intent of the Board of Trustees is that by careful
selection of individual securities and by constant supervision of the
investment portfolio, the long-term value of the funds of the System will be
enhanced and the stated goals will be achieved.
The Board of Trustees is sensitive to its responsibility to see that
funds of the Teacher Retirement System are invested wisely, prudently and at a
rate of return which will support the financial objectives of the System.
However, the Board realizes that it would be impractical, if not impossible, of
it to make all the investment decisions that are necessary in the management of
a large trust fund.
Therefore, the Board, pursuant to authority vested in it by Section
3.04(c) of Act 427 of 1973 as amended, delegates to the Executive Director the
authority to purchase, hold, assign, transfer or sell common and preferred
stock, government bonds or notes, federal agency securities, corporate bonds or
other securities permitted under Section 1 of Act 412 of 1985 as amended. The
Board by resolution dated November 10, 1993, delegates to the Associate
Director-Investments in the absence of the Executive Director, the authority to
purchase sell, assign and endorse for transfer securities held in the name of
the system. Investments in mortgages or in bank capital notes shall have
specific approval by the Board before the investments are made. The Board
delegates to the Executive Director authority to make short-term investments
that are consistent with strategy adopted by the Board and with the general
recommendations of Investment Counsel.
Through written and oral reports by Investment Counsel, the Investment
Consultant or Consultants and by either the Executive Director or Associate
Director-Investments, the Board shall insure that all investments made under
this delegation of authority are in conformity with Section 1 of Act 412 of
1985 as amended and with the investment policies and procedures of the
System.
Investment Counsel shall observe the following limitations and
guidelines subject to the Prudent Investor Rule as amended by Act 412 and Act
1009 of 1985.
PRUDENT INVESTOR RULE. The prudent investor
rule, as interpreted and defined by the Federal Employee Retirement Income
Security Act (ERISA) of 1974, as amended, and regulations promulgated pursuant
thereto, shall be applied by each party serving in a fiduciary capacity for the
respective retirement systems. The prudent investor rule means that in making
investments the fiduciaries shall exercise the judgment and care, under the
circumstances then prevailing, which an institutional investor of ordinary
prudence, discretion, and intelligence exercises in the management of large
investments entrusted to it, not in regard to speculation but in regard to the
permanent disposition of funds, considering probable safety of capital as well
as probable income.
Goals and Guidelines
The overall goal will be directed at achieving, over a period of years,
the actuarial interest assumption rate of the System with due consideration
being given to preservation of capital and its purchasing power and to
maintaining the element of risk at a prudent investor level.
Goal for Equity Investment
The goal for the investment of retirement system funds invested in the
equity segment of the capital markets shall be to achieve a total rate of
return which will exceed the rate of inflation and substantially outperform
pertinent indices and peer groups over a 3 to 5 year period. The concern of the
Trustees is maintaining the growth of purchasing power of assets allocated to
the market sector.
Equity Investment Strategy and
Implementation
In accordance with prudent investment practice, the ATRS has adopted a
multiple manager equity investment philosophy to increase diversification and
enhance total rate of return. The success of the goals for each manager and the
aggregate portfolio will be measured against the investment objectives
described in Goals for Aggregate Equity Investment.
The ATRS Trustees will be responsible for an annual allocation of
assets between the different investment styles of Investment Counsel, to
maintain a prudent level of risk and volatility and allow for future growth. An
annual asset allocation study will be provided by the Investment Consultant or
Consultants.
Goal for Aggregate Equity Investment
The goal for the investment of Retirement System funds invested in the
equity segment of the capital markets shall be to achieve a total rate of
return which will exceed the rate of inflation and substantially outperform
pertinent indices and peer groups over a three- to five-year period. The
concern of the Trustees is maintaining the growth of purchasing power of assets
allocated to this market sector.
Goals for Individual Equity Managers
The goal for large cap value oriented investment managers shall be to
achieve a minimum total rate of return which will exceed the rate of inflation
and outperform on an absolute and risk adjusted measure the Standard and Poor's
500 Index and the Russell Price 1000 Index and exceed the median manager from
comparative equity Large Cap Value Style Universes over two full market
cycles.
The goal for the growth oriented investment managers shall be to
achieve a minimum total rate of return which will exceed the rate of inflation
and outperform on an absolute and risk adjusted measure the Standard and Poor's
500 Index and the Russell 1000 Growth Index and exceed the median manager from
comparative equity Large Cap Growth Style Universes over two full market
cycles.
The goal for small cap oriented investment managers shall be to achieve
a minimum total rate of return which will exceed the rate of inflation and
outperform on an. absolute and risk adjusted measure the Standard and Poor's
500 Index and the Russell 2000 Index and exceed the median manager from
comparative equity Value or Growth Style Universes over two full market
cycles.
The goal for international oriented investment managers shall be to
achieve a minimum total rate of return which will exceed the rate of inflation
and outperform on an absolute and risk adjusted measure the Standard and Poor's
500 Index and the EAFE Market Cap Index and exceed the median manager from
comparative equity International Style Universes over two full market
cycles.
Guidelines
The statutes (Section 1 of Act 412 of 1985 as amended) will be the
guidelines for the equity investment; however, it will be the responsiblity of
each investment manager to manage his exposure of assets to the equity market
on an ongoing basis. It is not the intent of the SIRS to evaluate a manager on
his ability to time the equity market but only to evaluate the use of cash as a
vehicle to enhance long-term returns. Ability to manage the asset allocation
between equities and cash equivalent investments will be evaluated over full
market cycles.
1. In view of present
market conditions, no more than approximately 60% of cost value of the
Retirement System's assets may be invested in common stock. Preferred stock
and/or convertible securities will, for the purpose of determining the 60%
level, be considered as common stock. The policy will be reviewed by investment
management quarterly and appropriate recommendations made to the Trustees.
Goal for Fixed Income Investments
The goal for fixed income investments will be to maintain a high degree
of consistency of total investment return. It is the further goal of the
Trustees to reduce the volatility of the principal value of the fixed income
investments while maintaining a total investment rate of return which is
consistent with the stated objectives of the entire Arkansas Teacher Retirement
System Fund.
Guidelines
The Arkansas statutes will be the guidelines for the fixed income
investments. The fixed income investments shall be approximately 40% of the
entire Arkansas Teacher Retirement System fund at cost value. The Trustees
further believe that to achieve the goal for fixed income investments, the
duration and maturity of the fixed income portfolio should at all times range
between the Lehman Intermediate Government/Corporate Bond Index and the Lehman
Government/Corporate Bond Index. The Trustees wish to maintain high quality
fixed income investments. Therefore, only U.S. Treasury securities, U.S.
Government Agency issues mortgage-backed securities, and corporate bonds rated
A or better shall be purchased. A weighted average quality rating of AA or
better shall be maintained.
Investment Strategy and Implementation
The strategy of the Investment Manager to accomplish the goal of
consistency of total investment return will be to passively manage and ladder
the fixed income investments.
The investments will primarily be spread over a 10-year ladder. A
maximum of 15% of the fixed income portfolio may have maturities greater than
10 years but not exceed 15 years. The duration and maturity of the fixed income
portfolio should at all times range between the Lehman Intermediate
Government/Corporate Bond Index and the Lehman Government/Corporate Bond
Index.
The portfolio weighted average maturity and the portfolio weighted
average quality rating should be calculated using the dollar face amount
percentage as the weighting factor.
Principal and coupon payments are to be reinvested at the current
interest rate so that over the life of the fixed income portfolio a consistency
of total investment return will be achieved.
It is the responsibility of the investment manager to maintain the
quality at the average rate of AA or better and to advise the sale of any
security which in the investment manager's judgement is in jeopardy of being
downgraded, or has been downgraded below the grade of A.
The investment manager shall also offer recommendations concerning the
spreads between the various sectors of the fixed income market, i.e. which
sector (U.S. Government or corporate) offers the best value at the time of
purchase. These recommendations are to be made within the passively managed
maturity schedule guidelines.
Mortgages
A) The total principal amount held by the
Teacher Retirement System shall not exceed 20% of the total investment holdings
of the System.
B) All mortgage
loans shall be first mortgages on property located in Arkansas.
C) Mortgage investments shall not be made in
excess of eighty percent (80%) to value or cost whichever is less, unless
insured or guaranteed by an agency of the Federal Government or by a private
mortgage insurance company authorized to insure loans purchased by the Federal
Home Loan Mortgage Corporation.
D)
Mortgages other than single-family residences must be submitted through an
approved Arkansas financial institution or mortgage banking firm and be
accompanied by a current financial statement of the proposed mortgagor,
prepared by a member of the American Institute of Certified Public Accountants,
and an appraisal prepared by an approved state licensed appraiser.
E) Mortgage servicing agreements may be
entered into with commercial banks and mortgage banking companies at
competitive rates with mortgage servicers.
F) Mortgage investments shall be made only
after affirmative recommendation by a Board approved Investment Advisor and
approval of the Board of Trustees.
Bank Capital Notes
A) At no time shall the System have invested
more than $3 million of its assets valued at cost in bank capital
notes.
B) Bank capital notes shall
not be subordinated to any other debt of the bank which would be classified as
capital except first mortgages on bank property that may exist prior to the
time of issue.
C) Bank capital
notes of a single financial institution shall be limited to no less than
$500,000 and to no more than $2 million.
D) Investment Counsel shall issue an
affirmative recommendation prior to purchase of bank capital notes.
E) All purchase of bank capital notes shall
have prior approval by the Board of Trustees.
Short-Term Investments
A) Short-term investments may include, but
are not limited to, government securities, repurchase agreements, which are
collateralized by securities issued by the Federal Government or an agency of
the Federal Government, and have a current market value of no less than 100% of
the System's investment in repos, certificates of deposit, savings accounts,
Prime 1 Commercial Paper of eligible corporations, bankers' acceptances in an
amount not to exceed the capital funds, represented by capital, surplus, and
undivided profits, of financial institutions that are insured by an agency of
the Federal Government, or mutual fund accounts that are backed by securities
that are backed by the full faith and credit of the United States
government.
B) Consideration should
be given to safety, liquidity needs and rate of return when considering
short-term investments.
Small Business Administration Loans
The Teacher Retirement System may invest up to $10,000,000 in the U.S.
Government guaranteed parts of U.S. Small Business administration loans subject
to the following conditions:
A) That
the Teacher Retirement System will purchase only the U.S. Government part of
any loan.
B) That loans must be
made to small businesses located in Arkansas.
C) That the maximum maturity of any loan
purchased will be ten (10) years. The average maturity of such loans is
expected to be 7 to 8 years.
D)
That the rate of return to ATRS will be at least 3/4% more than U.S. Treasuries
of the same maturity are being priced to yield at the time each loan is
purchased.
E) That the SBA agrees
to repurchase any loan on which there is a default on principal and interest
payments, unless such loan is repurchased by the bank which sold it to the
Retirement System.
F) That the
Step-by-step Procedure for Guaranty Sale to Pension Fund which was distributed
to members of the Board will be adhered to in the administration of this
program.
Certificates of Deposit
The Teacher Retirement System may invest up to $40,000,000 in insured
certificates of deposit of Arkansas financial institutions subject to the
following conditions:
A)
FDIC Insurance. Implementation of this program is
dependent upon the Teacher Retirement System receiving from the Legal Counsel
for FDIC acceptable written assurance that deposits made will be covered by
FDIC insurance in the amount of each member' s individual account in the fund
up to a maximum of $100,000.00 per member,, and that records of the System
satisfy FDIC requirements for insurance coverage. The eligibility of a
depository institution to receive deposits under this program will be subject
to such institution meeting all requirements for FDIC insurance and its
issuance of a Certificate of Deposit in accordance with FDIC Regulation 330.1
governing insurability of pension trust fund accounts.
B)
Amount of
Participation. The $40,000,000 authorized for this program is a
maximum authorization that can be increased only by action of the Board of
Trustees. The amount actually invested under this authorization from time to
time will be determined by the Investment Committee with the advice of
Investment Counsel. Decisions of the Committee will be based on:
1) The amount of money that the System has
available for fixed income investments
2) Rates of return available from this
program compared with other investment opportunities
3) The amount that the System needs to invest
in Arkansas to satisfy the requirements of act 412 of 1985.
C)
Credit
Line. If the demand for funds exceeds the amount that the System
is prepared to invest, the amount to be deposited in each depository
institution will be determined by use of the formula used by the State Board of
Finance in the allocation of State Funds, except that in no case will the
maximum deposited in any institution be allowed to exceed fifty percent (50%)
of the adjusted equity account of the Depository Institution.
D)
Rates of Return.
CD rates will be indexed off the U.S. Treasury Bill rate for the desired
maturity at the time the money is offered for deposit. The rate will not be
less than the bond equivalent Treasury yield.
E)
Maturity
schedules up to a maximum of seven (7) years will be set by the
System when funds are made available.
F)
Interest will be
due and payable semi-annually. Interest will be calculated on a 365-day
basis.
G)
Funds must be
invested in Arkansas. Each depository institution receiving funds
under this program will be required to agree in writing that such funds will be
used for First Mortgage Home Loans, Home Improvement Loans, Consumer Loans,
Business, Commercial, Industrial or Agriculture Loans within the Institution's
commonly known "trade area". Funds invested in this program may not, in any
manner, be used by a Depository Institution for lending outside the State of
Arkansas.
Corporate Bonds
A) Corporate bonds shall at the time of
purchase, be rated within the three highest classifications by at least one
nationally recognized rating service-
II. PROCEDURES FOR INVESTMENT COUNSEL
A. The Board shall have full power to invest
and reinvest the monies of the System and to hold, purchase, sell, assign,
transfer or dispose of any investments so made, as well as the proceeds of such
investments and such monies, provided no investment shall be made by the Board
until it has received the advice of its Investment Counsel. Pursuant to A.
C.&. 24-3-410, the Board of Trustees will retain such Investment Counsel to
provide advice for any or all investments made by the System. In no event will
the Director of the System invest funds belonging to the System without the
advice of the Investment Counsel who is under contract to provide such
advice.
B. The Board of Trustees
may employ professional Investment Counsel in either an advisory only capacity
or as a money manager with authority to execute transactions. If the Board
chooses the latter method of asset management, the funds of the System shall be
invested and reinvested in accordance with the following procedures =
1. From time to time the Board shall
formulate the policy to be followed in future investment activity. Investment
policy shall be reviewed and changed or reaffirmed at least once
annually;
2. Investment Counsel
shall have full power to hold, purchase, sell, assign, transfer, or dispose of
any of the monies or investments of the System pursuant to the provisions of
this subchapter and in accordance with the current investment policy filed with
the Board;
3. The monies of the
System allocated to the Investment Managers shall be actively managed by the
Investment Managers, which may include selling investments and realizing losses
if such action is considered advantageous to longer-term return
maximization;
4. The System shall
manage those monies not specifically allocated to investment
managers;
5. At least
semi-annually, the Investment Counsel shall file with the Board a written
report setting forth, for the period since its last report, all investments
purchased and sold, all receipts and disbursements, and any other transactions
concerning System monies;
6. At
each regular meeting the Board shall examine each written report received from
the Investment Advisor since the last regular meeting; and
7. Anything in this section to the contrary
notwithstanding from time to time the Board may direct a specific investment
activity and shall be fully responsible for any such direction.
C. Investment Counsel will make
specific recommendations on long-term investments in stocks and bonds. Specific
recommendations may take the form of buying and selling programs- The
Investment Manager may substitute purchases or sales of other bonds for
specific recommendations in a buy and sell program subject to approval of
Investment Counsel.
D. Investment
Counsel shall be aware of and operate within the Statement of Investment
Policy, this Statement of Procedures, and act 412 and 1009 of 1985.
E. Recommnendation by the Counsel for
portfolio changes will be made by a confirmation letter which sets out the
specifics of the recommendation. The letter should be mailed to the system
within thirty (30) days.
F. The
Investment Counsel will report in person to the Board of Trustees on a
quarterly basis.
G. Investment
Counsel will provide a list of assets with cost and market value comparisons
monthly.
H. Investment Counsel
shall:
1. Provide a monthly letter (1-2 pages)
to the individual Trustees and the Director discussing the month's activity,
highlights, unusual situations, and whatever else may be necessary to provide a
brief overview of the Investment Counsel's portfolio; notify the Board and the
Director in writing of any material change in strategy.
2. Provide a quarterly letter to the
individual Trustees who request it, as well as the Director, and a written and
oral report at the appropriate Board of Trustees meeting. Written and oral
reports should contain whichever of the following as are necessary to enable
the Board of Trustees to be aware of the Investment Counsel's portfolio
makeing, portfolio activity, and anticipated action:
a) Economic overview
b) Review of recent and anticipated
investment activities
c) analysis
of major changes that have occurred since the last report
d) Comments on the general condition and
anticipated action of the securities market
e) approximate current income yield of the
portfolio at reporting date
f)
Present portfolio strategy as relates to stock/bond ratio and changes likely to
occur in the following quarter
3. Counsel will advise the Board in writing
of changes in key personnel, ownership, and any changes in bonding and
fiduciary liability insurance coverage.
Loan of Securities
In order to increase investment income with mininal risk, the Board of
Trustees may loan bonds, stocks, or other securities, but only if, at the time
the loan is executed, at least one hundred percent (100%) of the full market
value of the security loaned shall be collateralized by cash or securities
guaranteed by the United States government or an agency thereof.
At all times during the term of each loan, the collateral shall be
equal to not less than ninety-five percent (95%) of the full market value
calculated on the total value of all securities on
loan.
III.
PROCEDURES - PURCHASING AND SELLING OF CORPORATE BONDS AND STOCKS
A. Delegation of Authority to execute
specific investment transactions
1. Pursuant
to authority vested in it by A.C.A. 24-3-410 the Board of Trustees of the
Teacher Retirement System, in a regular quarterly meeting on February 9, 1993,
voted to authorize its Investment Counsel for equities, to execute specific
equity investment transactions for the System.
IV. ROLE OF INVESTMENT CONSULTANT
The responsibilities of the designated Investment Consultant or
Consultants with respect to the Board of Trustees and Director, shall be
to:
A. Assist the Board to develop,
and from time to time change its Investment Policy Statement due to broad
economic and/or statutory changes in the State of Arkansas.
B. Develop portfolio strategies and plan for
portfolio growth.
C. Assist the
Board in selection and control of Investment Counsel.
D. Monitor the investment performance of
Investment Counsel.
INVESTMENT COMMITTEE
POLICIES
1. There shall be an Investment Committee
composed of five (5) members of the Board of Trustees. Three (3) will be
appointed by the Chairman of the Board. The Chairman and Vice-chairman of the
Board shall serve as ex-officio voting members of the Committee.
2. Appointments shall be for terms of three
(3) years with no limit on the number of times a member may be
reappointed.
3. The Committee shall
elect its own Chairman. The Executive Director may serve as secretary to the
Committee or delegate another member of the staff to serve in this
capacity.
4. Three (3) members of
the Investment Committee, one (1) of whom must be the Chairman or Vice-chairman
of the Board of Trustees, shall constitute a quorum. At least three (3)
affirmative votes are necessary to approve an investment submitted to the
Investment Committee.
5. The
Committee shall meet on call by the Chairman and/or the Executive Director, but
not less than on a quarterly basis (provided there is business pending before
the Commiittee).
6. The primary
purpose of the Committee shall be to consider investment proposals other than
stocks, U.S. Government Corporate Bonds, or short-term investment transactions
which are routinely recommended by Investment Counsel and executed by staff.
Such proposals usually will be, but do not have to be Arkansas-related
investments submitted under Act 412 of 1985,
7. The committee may develop guidelines or
procedures for certain U.S. Government guaranteed investments such as Small
Business Administration loans, Arkansas-related investments, and FDIC insured
certificates of deposit issued by Arkansas financial institutions. Such
guidelines or procedures shall be submitted to the Board of Trustees for
approval. Investments which are specifically covered by approved guidelines may
be administered by the ATRS Director and/or Associate
Director-Investments.
8.
Investments which are not guaranteed or insured by the U.S. Government or an
agency thereof shall be made only with approval of the Board or the Investment
Committee subject to the following conditions:
a. Investment proposals which can reasonably
be held until a meeting of the full Board is scheduled will be approved only by
action of the full Board. Such proposals will be considered first by the
Investment Committee and will be considered by the full Board only if
recommended by the Investment Committee.
b. Proposals for investments of less than
$5,000,000 may be approved by the Investment Committee provided it satisfies
all requirements of Board policies for such investments.
c. Special meetings of the Board may be
called to consider investment proposals which do not meet the conditions in (b)
for approval by the Investment Committee, but which the Chairman of the
Investment Committee and Director feel are of sufficient importance and urgency
to justify a called meeting of the Board. Decisions on whether or not to call
special Board meetings to consider investment proposals shall be made jointly
by the Chairman of the Board, the Chairman of the Investment Committee and the
Executive Director.
d. All
available information about each investment proposal to be considered shall be
mailed to each Trustee at least one week prior to the meeting at which
consideration is scheduled. No special meetings to consider investments will be
held unless such information has been provided to Trustees.
PROCEDURES
PURCHASING FHA, VA AND INSURED CONVENTIONAL MORTGAGES
1. Based on consistent investment strategy.
Investment Counsel shall recommend purchase of FHA, VA and/or insured
conventional mortgages.
2. Rate of
return shall be consistent with current market conditions. Servicing fee shall
be a competitive rate.
3. Loans
submitted for. approval to the Retirement System must be in an amount of not
less than $20,000 and cover homes not over five (5) years old.
4. Applicants must be 21 years of age.-
Applications by co-mortgagors are not acceptable.
5. The submitted loans are reviewed by the
Investments Administrator and the Associate Director-Investments.
6. When mortgages are presented to the
Teacher Retirement System for its review, the following items must be included:
a. Mortgagee's Application
b. Supplement to Mortgagee's Application, and
Mortgagor's Statement
c.
Verification of Employment
d.
Verification of Deposit
e. Credit
Report
f. Offer and
Acceptance
g. Photographs of
Property
h. FHA Commitment
Form
i. VA Certificate of
Reasonable Value, or Appraisal
j.
Other Exhibits the Retirement System may specify
7. If a mortgage investment is acceptable to
the Teacher Retirement System staff, it is then presented to the Board of
Trustees for approval. If approved a commitment is then made to a servicing
company.
8. The servicing company
files a repurchase agreement and forwards to the Retirement System all
documents necessary for the closing of the loan. These documents are as
follows:
a. Invoice
b. Deed of Trust Note
c. Deed of Trust
d. Assignment of Deed of Trust
e. Certificate of Hazard Insurance
Policy
f. Tax Report
g. Title Insurance
h. FHA Form 2080
i. Final compliance Inspection
Report
j. Builders Warranty of
Completion or Verification of Completeness by Appraiser
k. Plat of Property
l. Amortization Schedule
9. Payment is made by check on the local bank
account, or wired per instructions.
10. All documents pertaining to the loan are
filed in the Teacher Retirement System office. The Deed of Trust, the Deed of
Trust Note, Assignment of Deed of Trust of the mortgagor are filed in the
fireproof vault in the office of the custodian for the Teacher Retirement
System.
MEMBERSHIP
DEFINITION
1. Membership in the Teacher Retirement
System shall be an integral part of the contract or agreement entered into by a
member and his board or emloying agency. Membership is automatic and the
cooperation of the member is needed to fulfill the rules and regulations as
adopted by the Board of Trustees and required by law.
2. Beginning July 1, 1989, membership in the
System covers all employees of the school district. Those employees whose
non-teaching service began before July 1, 1989, and whose non-teaching service
is covered or coverable by the Public Employees Retirement System, shall
continue to be covered by that system for all non-teaching service. All persons
newly hired after July 1, 1989, by a covered employer shall become members of
the Teacher Retirement System. Beginning July 1, 1991, all part-time persons,
except public school students, employed in a covered position shall become
members of the Teacher Retirement System. Beginning July 1, 1993, employees who
accumulate less than thirty (30) days of credited service within a fiscal year
are not eligible for membership in the Teacher Retirement System.
Effective July 1, 1993, membership in the Teacher Retirement System
shall include employment in a position with an educationally-related agency if
the employee is or has been a member of the Teacher Retirement System for a
minimum of five (5) years and elects to become or remain a member of the
system. The employment shall be related to the training of public school
employees or school board members, or teaching public school students or in
adult education programs. The employment shall not be related in any manner to
private schools. The employer shall be responsible for all required employer
contributions.
a person who has excluded himself from membership before July 1, 1991,
may rescind the exclusion by filing with the system a Membership Data
Form.
ACTIVE MEMBER
DEFINITION
active member means any person rendering service covered by the
System.
POLICIES
An active member means a person rendering teaching service and
contributing to the System as follows:
a) For the purpose of crediting service in a
fiscal year, a member must earn a year of credit (120 teaching days) or a
fraction thereof (not less than 1/4 year - 30 teaching days)
b) Active membership will continue beyond a
fiscal year in which credited service was rendered, provided the employing
institution certified continuing employment, and leave of absence with pay upon
which the member is making contributions or is a non-contributory member, also
continues active membership
c)
Deferred members acquire survivor, disability, and early retirement privileges
after rendering one (1) year of service credit subsequent to reentering the
Teacher Retirement System (must be done in a maximum of four (4) years).
INACTIVE MEMBER
DEFINITION
Inactive member means a member who is vested but not in a current
position covered by the System.
INELIGIBLE MEMBERSHIP
DEFINITION
1. Teachers and other employees who are
eligible for membership in the Teacher Retirement System are ineligible for
membership in another state retirement system while employed in a position
covered by Teacher Retirement.
2.
Beginning July 1, 1993, employees who accumulate less than thirty (30) days of
credited service within a fiscal year are not eligible for membership in the
Teacher Retirement System.
KINDERGARTEN TEACHER
POLICY
Kindergarten teachers who are employed by a school district shall be
compulsory members of the Teacher Retirement System. The local school districts
will be responsible for employer contributions on salaries paid kindergarten
teachers when the salaries are financed from any source other than the Public
School Fund allocation.
CAFETERIA MANAGERS, SUPERVISORS, AND CLERKS
Cafeteria Managers, Supervisors, and Clerks are eligible for membership
in the Teacher Retirement System. (Attorney General's Opinion of November 9,
1965).
NON-MEMBER
DEFINITION
a non-member is a former member who is not contributing to the System
and who is not vested.
POLICY
1. a non-member who returns to service after
July 1, 1971, and who did not withdraw his contributions must render 120 days
of continuous service (fractional years may be combined if rendered in
consecutive succeeding years) to reestablish prior credit.
2. a non-member who returns to service and
who did withdraw his contributions may repay his refund. He must render one
year of service subsequent to his re-entry before the repaid refunded service
is credited.
DEFERRED MEMBER
DEFINITION
a deferred member is a member who has 10 or more years of credited
arkansas service. For additional information see "Deferred Retirement".
NON-CONTRIBUTORY SERVICE
DEFINITIONS
1.
Non-contributory
service is service on which a member has elected not to make
contributions to the Teacher Retirement System and to accept a reduced
retirement annuity for the years of service on which he/she does not
contribute.
2.
Non-contributory election is a written election by a
member to stop making contributions. To be valid, an election must be on a
special election form provided by the system. It must be signed by the member,
his employer and a representative of the Teacher Retirement System. It must be
filed with the system prior to July 1 of the year in which it is to become
effective.
POLICIES
1. Once an election form is received in the
Teacher Retirement office, it becomes a binding agreement upon its effective
date. It cannot be voided or changed for one full year after its effective
date.
2. For members hired before
July 1, 1991, an election to stop contributions may be reversed one (1) time,
on any July 1 after it has been in effect for at least one full year.
3. For purposes of administration of Act 504
of 1985, any person who is a former or an inactive member during the year
preceding his change of an election, and who has not executed an election form,
and returns to active service during any fiscal year after July 1, 1986, shall
be considered a new member.
4. Ail
service rendered before July 1, 1986, is contributory service. Active members
do not become eligible for a refund of contributions made before July 1, 1986,
by signing a non-contributory election form.
5. The Executive Director will make the final
decision in accepting forms where an apparent error was made by the member by
sending the wrong form or when forms are received after the deadline through no
fault of the member.
6. Effective
July 1, 1991, a new member shall not make member contributions, unless he
elects, by written election filed with the system before the preparation of the
payroll containing his first salary payment, to make contributions. An election
to make contributions may be reversed one (1) time, on any July 1 after it has
been in effect for at least one full year.
7. For purposes of administration of Act 14
of 1991, any person who is hired after July 1, 1991, and who has never been a
member of the Teacher Retirement System, shall be considered a new
member.
8. Beginning July 1, 1993,
a member may change his election once each fiscal year, to be effective the
July 1 following the filing of the election in the system office.
9. Beginning July 1, 1993, regardless of his
former status with the system, a former active member who returns to employment
in a covered position will be a non-contributory member. A change to
contributory status must be made before the preparation of the payroll
containing his first salary payment.
PROOF OF YEARS OF SERVICE
DEFINITION
Teaching service or other duties performed pertaining to one's
occupation must be made in affidavit form or on special forms drafted by the
System. A year of service beginning with the establishment of the System will
be from one day to 120 days, from July 1 to June 30 of a fiscal school year as
set forth by the following policies established by law and the Board of
Trustees of the Teacher Retirement System-
POLICIES ON SERVICE AFFIDAVITS
Membership
1. 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 folder.
"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.
2. Sixty (60) days in a
fiscal year is a year of service when rendered and proved between the period of
February 11, 1949 and July 1, 1957.
3. Eighty-five (85) days in a fiscal year is
a year of service when proved subsequent to July 1, 1957. (1957-71)
4. One hundred twenty (120) days in a fiscal
year is a year of service beginning July 1, 1971 to present.
5. Service rendered and proved prior to July
1, 1957 can be combined to count as a year of service provided:
a. The minimum number of days combined is
85.
b. The maximum number of fiscal
years to be combined is three (3) and the years do not have to be
consecutive.
c. The minimum number
of days in a fiscal year to be counted is 30.
6. Service rendered subsequent to July 1,
1957 and proved before July 1, 1971 (1957-71) can be combined to count as a
year of service provided:
a. The minimum
number of days to be combined is 85.
b. The maximum number of fiscal years to be
combined is two (2).
c. The fiscal
years combined must be consecutive years.
d. The minimum number of days in one fiscal
year is forty (40).
7.
Fractional Years of Service Policy - Beginning July 1, 1971 for teaching
service rendered in any one fiscal school year shall be determined in
accordance with the following table:
|
1-29 days
|
None
|
|
30 - 59 days
|
1/4 year
|
|
60 - 89 days
|
1/2 year
|
|
90 - 119 days
|
3/4 year
|
|
120 days or over
|
1 year
|
8. Four hours
shall be required as the minimum for a "day of service" for all
employees.
9. If the Retirement
System has made a commitment to a member that he may purchase service not
previously established, the commitment must be honored if partial or full
payment has been accepted.
10. 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.
PRIOR SERVICE
DEFINITION
Teaching service performed before July 1, 1937 is considered prior
service. Such service must have been proved by affidavits and filed with the
System before July 1, 1959. Credit was allowed under the following
provisions:
1. Proof of service
rendered prior to 1937 is considered prior service. Such service must have been
proved by affidavits and filed with the System before July 1, 1959, to be
counted as credited service unless marked otherwise or correspondence in folder
so states. The 1937-38 year may be proved at any time at no cost to the member
and counted as membership year, except withdrawn contributions, if any, for
1937-38 must be repaid.
2. Prior
service proved prior to July 1, 1955, is acceptable if affidavit was signed by
father, mother, brother, sister, former co-worker, neighbor etc. and notarized
- unless affidavit was signed by a school official. In that case, signature did
not have to be notarized.
3. Prior
service proved after July 1, 1955 must be signed by a school official where
service was rendered or by country school supervisor where service was
rendered. Form should indicate number of days or months of service
rendered-
4. Unless proof is
otherwise marked and number of months is not indicated, we will assume it is a
year of service.
5. If proof does
not meet the above specifications but was filed prior to July 1, 1959, we will
give the member an opportunity to submit an acceptable proof. If proof filed
does not meet these specifications but correspondence indicates member has been
given credit for prior service, we will not take it away from him.
6. Upon re-entrance, subsequent service for
120 days and repayment of withdrawn service, a member's microfilmed proof of
prior service is sufficient for service credit.
MEMBERSHIP SERVICE
DEFINITION
Service rendered and contributions paid on salary, received after July
1, 1938.
POLICIES
1. After July 1, 1971 for the purpose of
establishing service based on back contributions, the number of days required
to establish a year of service since 1937 is 120 days.
2. Fractional years of credit may also be
established only for service rendered after July 1, 1971.
SALARY DETERMINATION FOR RETIREMENT SYSTEM PURPOSES
DEFINITIONS
1. "Salary" means the recurring remuneration
paid an employee for personal services rendered by the employee in a position,
or positions, covered by the system. It includes remuneration received from all
covered employers during a school fiscal year.
2. "Covered salary" means the portion, or
all, of an employee's salary which is covered by the system. For each member
who first became a member before July 1, 1971 his covered salary for each year
after June 30, 1969 is the first $7,800 of this total annual salary for all
covered employment unless he has elected to make contributions to the system on
his full salary. For each member who first became a member after June 30, 1971
or who has elected to make contributions on full salary, his covered salary is
his full salary for all covered employment.
3. "Covered Employer" means each employer for
whom a member renders service in a covered position.
POLICIES
1. In determining "salary" no consideration
shall be given to (a) any non-recurring single sum payment paid by an employer
or (b) any employer contributions to any employee benefit plan except cafeteria
plans as defined in A.C.A. 21-5-901 or (c) any other unusual or non-recurring
remuneration except that money which is in lieu of remuneration and which is
used by an employer to purchase a qualified tax sheltered annuity or a life
insurance policy for an employee shall be considered as "salary" for system
purposes.
2. An employee who is
receiving remuneration under both a regular contract and a purchased contract
or under both a regular contract and a contract won through litigation shall
have only the greater of the two amounts considered as "salary" for System
purposes.
3. Should an employee
make a charitable donation, or return any part of his salary, to his employer,
the amount of his recurring remuneration otherwise useable as "salary" shall be
reduced by such amount or amounts to arrive at his "salary" for System
purposes.
4. The system will not
knowingly accept contributions that have been withheld from payments that do
not meet the criteria for salary in policies 1-3- In case of doubt, the facts
will be determined and the Board will decide whether or not payments reported
as salary can be accepted as salary for retirement purposes. Contributions
based on payments that are not salary for retirement purposes will be refunded
as promptly as possible.
5. If a
member is making contributions to the system on a covered salary of $7,800
rather than his full salary, 6% of his pay for each pay period must be withheld
until withholding amounts to 6% of $7,800 ($468). withholding of this amount
shall not be spread over a longer time than it takes to withhold 6% of
$7,800.
6. If an eligible employee
of a government entity, as defined in Act 810 of 1987, elects to participate in
a cafeteria plan which meets the requirements of the Federal Internal Revenue
Code, the amount which such employee's salary is reduced pursuant to a salary
reduction agreement, as defined in Act 810 of 1987, shall continue to be
included as condensation for the purpose of computing retirement benefits.
Employees participating in the contributory plan will pay 6% of the total
salary earned before such reductions are made, and employers will report the
total salary earned before reductions.
AGE AND SERVICE RETIREMENT
ELIGIBILITY
1. Any active member who attains age 60 years
and has 10 or more years of credited service may voluntarily retire upon his
written application filed with the Board of Trustees. Benefits are effective
the first day of the calendar month next following one month after the receipt
of his application, provided his employment has terminated; i.e., his
application must be filed by May 31 if his retirement is to be effective July
1.
2. Any active member who has 30
or more years of credited service but has not attained age 60 years may
voluntarily retire without reduction in benefits upon his written application
filed with the Board. Said annuity shall begin under the same provisions as
stated in Item 1 above.
3. Any
inactive member who has 30 or more years of credited service may also
voluntarily retire without reduction in benefits upon his written application
filed with the Board. Said annuity shall begin the first of the month following
the date of application.
4. An
inactive member with 25 or more years of credited service who attains or has
attained age 55 but has not attained age 60 may volunntarily retire early on a
reduced annuity upon his written application filed with the Board of Trustees.
The reduction is the lesser of the member's age to 60 or his years of credited
service to 30. Said annuity shall begin the later of: the first of the month
following his attainment of age 55; or the first of the month following the
date the application is received.
5. Any active member who has 25 or more years
of credited service but has not attained age 60 may voluntarily retire early on
a reduced annuity upon his written application filed with the Board of
Trustees. The reduction is the same as stated in Item 4.
6. 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.
7. Effective August 13, 1993, 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 retire on 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 shall 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 July 1.
Minimum Benefits
Any member retiring after June 30, 1965, but before July 1, 1986, and
who has 10 or more years of credited service shall receive not less than $1,800
per annum. Any member retiring July 1, 1986, or later 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
non-contributory service; and a monthly amount prorated between $94.00 and
$150.00 if the member has a combination of contributory and non-contributory
service.
Beginning July 1, 1993, if a member has at least ten (10) years of
contributory service, regardless of his number of years of non-contributory
service, his monthly annuity shall not be less than one hundred fifty dollars
($150.00).
Benefits Formula
Annual Annuity Formula - 1.8% of the first $6,600 of the final average
salary multiplied by the years of credited service rendered before July 1,
1969, but not less than benefits in accordance with provisions in force before
July 1, 1971; plus 1.8% of the final average salary multiplied by the years of
credited service rendered after July 1, 1977; provided if a member contributed
on only the first $7,800 of each annual salary after June 30, 1969, each annual
salary used in computing his final average salary shall be limited to a maximum
of $7,800.
For payment periods July 1, 1991 through June 30, 1992, total benefits
payable under the above formula shall not be less than the total number of
years of credited service multiplied by 1.85% of his final average salary
except that benefits shall be 1.17% of his final average salary multiplied by
his number of years of credited service rendered after June 30, 1986, for which
no member contributions were made, as provided in A.C.A. Sec. 24-7-406.
For payment periods July 1, 1992 through June 30, 1993, the total
benefits payable under the above formulas shall not be less than the total
number of years of credited service multiplied by 1.95% of his final average
salary, except that benefits shall be 1.23% of his final average salary
multiplied by his number of years of credited service rendered after June 30,
1986, for which no member contributions were made.
For payment periods July 1, 1993, 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 2.05% of his final average salary, except
that benefits shall not be less than 1.29% 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.
Built-in Cost of Living Increase
Beginning July 1, 1983, and each year thereafter, all retirants 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 rolls,
provided the increase on the Consumer Price Index for the calendar year
immediately preceding July 1 has increased by as much as 3%. If the increase in
the Consumer Price Index is less than 3%, the percentage increase in retirement
benefits shall be the same as the percentage increase in the Consumer Price
Index.
Fractional Years of Service Credit
Board policy allows fractional years of credit for service rendered
after July 1, 1971, as follows:
|
0-29 days---
|
None
|
|
30 - 59 days---
|
1/4 year
|
|
60 - 89 days ---
|
1/2/year
|
|
90 - 119 days -
|
3/4 year
|
|
120 days 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 his 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, his 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.
POLICIES
1. 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.
2. Errors or changes
not affecting computation of benefits - 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 of
at least $5.00, we will transfer the contributions from the Members Deposit
Account to the Employer's 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, we will recompute benefits and
make the necessary changes in the member's records.
3. A member 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 signing of the Final Retirement Contract.
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.
4. Terminal 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. A lump sum terminal leave payment does not constitute salary or
wages and such payment may not be included in reporting total salary or days of
service and is not subject to Teacher Retirement deductions (Attorney General's
Opinion #76-144).
5. Benefits are
payable through the month in which the retirant's death occurs.
6. Annuity Options: Prior to the date the
first payment of an annuity becomes due, but not thereafter, except as provided
under item 7, a member retiring on age and service or disability may elect to
receive his annuity provided in one of the following options:
Option 1: He may elect his annuity as straight
life annuity payable as long as he lives- upon his death the difference, if
any, between his accumulated contributions, plus interest, and the amount paid
in benefits, shall be paid to the beneficiary, if living; otherwise it will be
paid to the estate,
Option A: He may elect the actuarial
equivalent of his straight life annuity in a reduced annuity payable throughout
his life and, upon his death, his reduced annuity shall be continued throughout
the life of, and paid to, such person as he shall have nominated by written
designation duly executed and filed with the Board of Trustees prior to the
date of the first payment of his annuity becomes due. Such person must either
be his spouse for not less than one year immediately preceding such first
payment due date or another person, aged 40 years or older, receiving more than
one-half support from the retirant for not less than one year immediately
preceding such first payment date, provided the age 40 requirement shall not
exclude designation as beneficiary a dependent child who has been ruled
physically or mentally incompetent by an Arkansas court of competent
jurisdiction (or by the Board).
Option B: He may elect the actuarial
equivalent of his straight life annuity in a reduced annuity payable throughout
his life and, upon his death, one-half of his reduced annuity shall be
continued throughout the life of, and paid to, such person as he shall have
nominated by written designation duly executed and filed with the Board of
Trustees prior to the date the first payment of his annuity become due. Such
person must be either his spouse for not less than one year immediately
preceding such first payment due date, or another person, age forty (40) years
or older, receiving more than one-half support from the retirant for not less
than one year immediately preceding such first payment due date, provided that
the age 40 requirement shall not exclude designation as beneficiary a dependent
child who has been ruled physically or mentally incompetent by an Arkansas
court of competent jurisdiction (or by the Board).
If a retirant who elected Option A or B and his beneficiary both die
before he has received an annuity equal to the accumulated contributions
standing to the retirant's credit in the Member's Deposit Account at the time
of his retirement, the difference between his said accumulated contributions
and the said total amount of annuities received by him shall be paid to such
person or persons as the retirant shall have nominated by written designation
duly executed and filed with the Board of Trustees. If no such designated
person survives the retirant and his surviving beneficiary, such difference, if
any, shall be paid to the estate of the survivor of the retirant and his
beneficiary.
Option C: He may elect a reduced annuity
payable throughout his life with the provision that if he dies before he has
received 120 monthly annuity payments, the payments will be continued for the
remainder of the period of 120 months and paid to each person or persons, in
equal shares, as the retirant shall have nominated by written designation duly
executed and filed with the Board of Trustees. If such designated beneficiary
or beneficiaries predecease the retirant, the retirant may nominate a successor
beneficiary or beneficiaries by written designation duly executed and filed
with the Board. If no such designated beneficiary survives him, the annuity
reserve for the remainder annuity payments shall be paid to the retirant's
estate.
Prior to the signing of the Final Retirement Contract, the retiree
shall name a beneficiary or beneficiaries and may name a contingent beneficiary
or beneficiaries.
The attorney General has ruled that a beneficiary of a retiree may not
name a beneficiary to succeed him should he not survive to draw the remaining
120 payments under Option C. All beneficiaries or contingent beneficiaries must
have been named by the retiree; otherwise, the money will be payable only to
the estate of the retiree or survivor, whichever is applicable.
7. The death of a spouse or divorce or other
marriage dissolution following retirement shall, at the written election of the
retirant, cancel any optional plan elected at retirement to provide continuing
lifetime benefits to such beneficiary and return the retirant to his single
lifetime benefit equivalent, to be effective the month following receipt of his
election by the system. A retirant who is receiving a single lifetime benefit
and who marries after retirement may elect to cancel his single lifetime
benefit and elect Option B providing continuing lifetime benefits to his
spouse, provided such election is on a form approved by the system and is
received by the system not earlier than the date of such marriage and not later
than six months after such date; such election shall be effective the first day
of the month following such receipt.
8. Effective February 7, 1991, the designated
beneficiary of a retiree who chose Option 1 (straight life annuity) may elect
to cancel the form of annuity in effect and elect Option A - 100% Survivor
Annuity upon the death of a retirant on or after July 1, 1989, if the retirant
died within one year following the effective date of retirement and the
retirant was receiving a straight life annuity. Such election to change may be
made only once and must be on a form approved by the system. The election form
must be received by the system within thirty (30) days after the effective date
of Act 51 of 1991, or within thirty (30) days of the death of the retiree,
whichever is later. Such election change shall become effective the first day
of the month following receipt of the election form by the system.
9. Authorization of the use of postmark date
as the official date of a transaction: The 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.
10. 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 deternine
the effective date of disability retirement under the provisions of the law.
EARLY INCENTIVE LAW (Act 808 of 1987)
DEFINITION - fin employee of a state agency
who, on April 8, 1987, was an active member of the Teacher Retirement System
and qualified to retire before January 1, 1988, under the Early Retirement
Incentive Law of 1987 (Act 187 of 1987), could elect to become a member of the
Public Employees Retirement System and have his credited service in the Teacher
Retirement System transferred to the Public Employees Retirement System.
POLICIES
1. The employee will make the election to
transfer to the Public Employees Retirement System on a form furnished by the
system.
2. The transfer from the
Teacher Retirement System to the Public Employees Retirement System will become
effective on the date of retirement,
3. The Teacher Retirement System will certify
to the Public Employees Retirement System a record of the employee's service
credit in the Teacher Retirement System.
4. at the time of retirement, if the employee
is a non-contributory member of the Teacher Retirement System, he will retire
under the non-contributory provisions of Act 187 of 1987 and shall be entitled
to a refund of employee contributions made since January 1, 1978, to the
Teacher Retirement System.
5, at the time of retirement, if the employee was a contributory member
of the Teacher Retirement System, he will retire under the contributory
provisions of Act 187 of 1987.
6. For any employee who elects to transfer to
the Public Employees Retirement System, that system will pay the monthly
benefits.
7. The Public Employees
Retirement System will certify monthly to the Teacher Retirement System the
amount of monthly benefits paid and the Teacher Retirement System will transfer
that amount to the Public Employees Retirement System.
8. Upon receipt of a death certificate from
the Public Employees Retirement System for a retirant who chose straight life
annuity and has a balance remaining in his account, the Teacher Retirement
System will transfer the remaining balance in the retirant's account to the
Public Employees Retirement System for refunding to the designated beneficiary
or beneficiaries.
DISABILITY RETIREMENT
DEFINITION
Upon the written application by a member, or upon written application
by his employing authority on behalf of the member, filed with the Board of
Trustees, a member in employer service who has ten (10) or more years of
credited service, and who has become or becomes totally and permanently
physically or mentally incapacitated to perform the duties of his position
covered by the Teacher Retirement System, as a result of a personal injury or
disease, may be retired by the Board of Trustees; provided, that after a
medical examination of said member made by or under the direction of the
Medical Board, the Medical Board reports by majority opinion in writing to the
Board of Trustees, that such member is:
(1) Physically or mentally totally
incapacitated for the further performance of duty,
(2) That such incapacity will probably be
permanent, and
(3) That such member
should be retired or
(4) That such
member should be retired under temporary disability retirement to be
reconsidered at a specified time.
Such disability retirement shall be effective the first day of the
month following the later of: his termination of active membership; or six
months prior to the date written application is filed with the Board.
The annuity formula for computing disability retirement benefits is the
same as for age and service retirement.
The Board of Trustees may require any disability retirant who has not
attained age 60 to undergo a medial examination to be made by or under the
direction of the Medical Board at least once each year during the first five
(5) years following a member's retirement, and at least once in each three-year
(3) period thereafter.
If a disability retirant becomes employed as a full time employee by an
employer whose employees are covered by a State supported system or the
University of Arkansas, his disability retirement shall terminate. His credited
service and accumulated contributions at the time of his disability retirement
shall be restored to his credit in the members deposit account, and he shall
immediately again become a member of the System, if eligible. In no event shall
a member be given service credit for the period in which he received a
disability annuity. (Act 541 of 1977)
POLICIES
1. (Deferred provision under old law) -
Disability protection continues for deferred members with 27 years of service
if deferred status was effective before July 1, 1971.
2. (Deferred Provision) - Disability
protection continues for deferred members, provided applicant's physician can
present medical information to substantiate approval by the Medical Board that
disability occurred while last employed in a position covered by the
System.
3. (Active Membership) -
The member must be an active member of this System when the disability occurs -
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.
4. (Death of an active member) - In the case
of an active member who has made application for disability retirement and dies
before he has signed his Final Retirement Contract, determination must be made
by the System, on an individual basis, as to whether survivor benefits or
disability benefits would be payable.
5. (Effective date of benefits) - In
determining the date to be used for tennination of active membership, as
applied to the effective date of disability benefits, the last date of teaching
is to be used. Paid sick leave, if any, would be included to extend the date of
active membership and would be included to determine the days of service to be
credited.
6. (Date of application)
- 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
benefits under the provisions of the law.
7. (Refunded service) - An active member of
the System who applies for disability retirement is eligible to repay any
refunded service, provided that the member repays to the System the amount
withdrawn, plus interest, from the date of withdrawal to the date of final
payment. (See repayment of refund section).
8. (Back Contributions) - An active member of
the System who applies for disability retirement is eligible to pay
contributions, and employer costs, plus interest, on service rendered in a
covered position after July 1, 1937, on which no applicable contributions and
employer costs have been paid and on which no service has been credited,
provided he completes all requirements. (See Back Contributions
section)
9. (Military service) - An
active member of the system who applies for disability retirement is eligible
to file proof of military service provided he completes the requirements
established for military service. (See Military Service section)
10. (Reciprocal service)
(a) If a member has ten (10) or more years of
creditable service in two or more reciprocal systems, he is eligible to apply
for disability benefits from each reciprocal system,
(b) Eligibility for disability benefits is
determined under the rules and regulations of each respective reciprocal
system.
(c) He shall be eligible
for a refund of his accumulated contributions plus interest, if any, from any
reciprocal system in which he does not qualify for disability benefits. Such
refund shall not alter his eligibility for benefits from any other reciprocal
system.
(d) His annuity for
disability retirement payable by the preceding system shall begin the first day
of the calendar month next following the month he filed his application for
same with the preceding system but not prior to the date he leaves the employ
of his last State employer.
11. (Minimum Benefits)* - & disability
retirant shall not receive less than (1800.00 per year (contributory option) or
$1128.00 (non-contributory option).
12. Disability retirees who are approved for
only one year shall be reviewed one year from the effective date of benefits.
Disability retirees who are disapproved for further disability annuities shall
be removed from the payroll the earlier of: six months following the review
date (one year from effective date of benefits) or the first of the month
following return to full time employment.
13. If a member is approved for disability
retirement but continues to work, he/she must terminate employment at the end
of the school year. If service is not terminated at that time, a new
application must be submitted and Medical Board approval must be given, based
on the new application.
14. If a
disability retirant returns to full-time employment and receives credited
service but dies before he completes 120 days of creditable service, a
determination must be made as to whether survivor or disability benefits will
be payable.
15. If a member applies
for disability retirement and is disapproved, he/she has the right to appeal
that decision. If a new application has been filed for the appeal and is
approved, the effective date of benefits will be determined by the date of the
filing of the original application.
Amended September 20, 1979 pursuant to Acts 656 and 766 of 1979.
DEFERRED RETIREMENT
DEFINITION
fin inactive member with 10 or more years of credited service may
retire upon or after attaining age 60, provided he is not employed in a
position covered by another retirement plan which is supported wholly or in
part by state contributions.
fin inactive member with 25 or more years of credited service may
retire at age 55 with a reduction in benefits. The reduction shall be as
provided in A.C.A. 24-7-702 as amended.
Benefits are effective the first of the month following the later of:
the date the member's application is received in the Teacher Retirement System
office or the deferred annuity age. Deferred annuity
age is age 55 for members terminating active membership with 25 or
more years of credited service and age 60 for all other members eligible for a
deferred annuity.
The member shall receive, or shall have paid on his behalf, benefits in
accordance with the benefit program in effect at the time of retirement.
POLICIES
1. A.C.A. 24-7-712 applies to anyone who has
qualified for service retirement and who does not re-enter service again before
he applies for benefits.
2.
Deferred members acquire survivor, disability and early retirement privileges
after rendering one year of service credit subsequent to re-entering the
Teacher Retirement System.
3. A
person who leaves a position covered by the Teacher Retirement System and is
employed by a reciprocal system and files a reciprocal service agreement
becomes a deferred (inactive) member and is entitled to the benefit formula in
effect at the time of retirement, exclusive of any minimum amounts. Benefits
shall be based on the highest final average salary furnished by the respective
reciprocal systems involved.
EASLY RETIREMENT
DEFINITION
Early retirement with a reduction in the benefit formula allows an
active member who has at least 25 years of credited service but who has not
attained age 60 to retire early on a reduced annuity.
Early retirement (deferred) allows an inactive member with 25 or more
years of credited service to retire with a reduction. Effective date of
benefits for inactive member is the first of the month following the later of:
the date the member's application is received in the Teacher Retirement office
or age 55.
DEATH AND SURVIVOR BENEFITS
DEFINITIONS
1. Lump-sum death benefits of the deceased
member' s contributions plus interest are payable if no survivor benefits are
payable. If the spouse is qualified for survivor benefits, he may request the
lump-sum payment rather than monthly benefits, provided no dependent children
qualify for monthly benefits from the account. Survivor benefits are payable to
certain dependents upon the death of an active member with five (5) or more
years of credited service including credited service for the year immediately
preceding his death.
2. A dependent
child shall be defined as:
(A) A natural child
of the member;
(B) A child that has
been made a dependent of the member by adoption or other court action prior to
the time of the death of the member; or,
(C) A child under the permanent care of the
member prior to and at the time of death of the member, which permanent care
status shall be determined by evidence satisfactory to the Board.
3. Fifty per cent (50%) dependency
for survivor benefits for parent is defined: If the annual income of the parent
(parents) was not greater than the amount contributed by the deceased member
for his support, the parent is considered 50% dependent for financial
support.
POLICIES
1. 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.
2. 50% Dependency: If the surviving parent
did not have income exceeding the amount contributed to his support by the
deceased member during the preceding calendar year, then for the purpose of the
plan, he would be considered 50% dependent.
3. Specifics in the law dealing with the
rights of the spouse are construed to take precedence over designated
beneficiaries; provided that 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 paragraph has filed with the system a signed waiver of his
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 regular interest, may be made to any beneficiary or
beneficiaries so designated by the member before death.
4. Dependent child: Under part 2 (C) of the
definition of a dependent child, the Board recpires that the child must:
(A) Meet requirements and qualify for
survivor benefits under social security;
(B) Have been claimed as a dependent by the
deceased member on his federal income tax for the immediately preceding
calendar year; and
(C) 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.
(D) 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 the age 18 maximum shall be extended as long as
the child continues uninterruptedly being a full time student at an accredited
secondary, or post secondary school (vocational technical school) or college or
university, but not beyond his attainment of age 23; or as amended by Act 549
or 1975 [A.C.A. 24-7-710 (c)]. A full time student is defined as one carrying
12 semester hours (eight trimester hours) in college or four hours per day in a
secondary or post secondary school.
5. If a surviving dependent child, who has
obtained or passed age 18 (and drawing benefits) becomes temporarily physically
or mentally incompetent, 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.
6. Certification of
attendance is 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).
7. 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 he signs his Final Retirement
Contract, 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.
8. 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 maximum.
9. 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. A lump sum
terminal leave payment does not constitute salary or wages and such payment may
not be included in reporting total salary or days of service and is not subject
to Teacher Retirement deductions.
10. 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.
11. 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 mininum 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.
12. 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.
REPORTING
DEFINITIONS
1. "Salary" means the recurring remxineration
paid an employee for personal services rendered by the member in a position, or
positions, covered by the system. It includes remuneration received from all
covered employers during a school fiscal year.
2. "Covered salary" means the portion, or
all, of an employee's salary which is covered by the system. For each member
who first became a member before July 1, 1971, his covered salary for each year
after June 30, 1969 is the first $7,800 of his total annual salary for all
covered employment unless he has elected to make contributions to the system on
his full salary. For each member who first became a member after June 30, 1971,
or has elected to make contributions on full salary, his covered salary is his
full salary for all covered employment.
3. "Covered Employer" means each employer for
whom a member renders service in a covered position.
POLICIES
1. In determining "salary," no consideration
shall be given to (a) any non-recurring single sum payment paid by an employer
or (b) any employer contributions to any employee benefit plan, except
cafeteria plans a defined in A.C.A. 21-5-90, or (c) any other unusual or
non-recurring remuneration or stipends paid by an employer or other educational
agency which are five hundred dollars ($500) or less in amount, but not
cumulative, concept that money which is in lieu of remuneration and which is
used by an employer to purchase a qualified tax sheltered annuity or a life
insurance policy for an employee shall be considered as "salary" for system
purposes. If an eligible employee of a government entity, as defined in Act 810
of 1987, elects to participate in a cafeteria plan which meets the requirements
of the Federal Internal Revenue Code, the amount by which such employee's
salary is reduced pursuant to a salary reduction agreement, as defined in Act
810 of 1987, shall continue to be included as compensation for the purpose of
computing retirement benefits. Employees participating in the contributory plan
will pay 6% of the total salary earned before such reductions are made, and
employers will report the total salary earned before any reductions.
2. An employee who is receiving remuneration
under both a regular contract and a purchased contract or under both a regular
contract and a contract won through litigation shall have only the greater of
the two amounts considered as "salary" for system purposes.
3. Should an employee make a charitable
donation or return any part of his salary to his employer, the amount of his
recurring remuneration otherwise useable as "salary" shall be reduced by such
amount or amounts to arrive at his "salary" for system purposes.
4. The system will not knowingly accept
contributions that have been withheld from payments that do not meet the
criteria for salary in policies 1-3. In case of doubt, the facts will be
determined and the board will decide whether or not payments reported as salary
can be accepted as salary for retirement purposes. Contributions based on
payments that are not salary for retirement purposes will be refunded as
pronptly as possible.
5. If a
member is making contributions to the system on a covered salary of $7,800
rather than his full salary, 6% of his pay for each pay period must be withheld
until withholding amounts to 6% of $7,800 ($468). Withholding of this amount
shall not be spread over a longer time than it takes to withhold 6% of
$7,800.
6. A member who left
covered employment before July 1, 1985, and who had annual compensation of
$7800 or less, shall upon return to covered employment, have full salary
considered for retirement purposes.
7. In order that each member of the Teacher
Retirement system may receive credit for his days of service, his covered
salary and his contributions on a timely basis, each employer shall report to
the System on the following schedule:
|
Form No.
|
Title of Report
|
Data & Enclosures Required
|
Date Due
|
|
D-1
|
Employees Monthly Remittance Report
|
(1) Name and account no. of employing unit
(2) Date Payroll period ended
(3) Total employee contributions due System
(4) List and total of checks enclosed
|
From Public Schools 15th day of the following month
From colleges and state agencies -15 days after end of each pay
period
|
|
D-1a
|
Employers Monthly Remittance Report
|
(1) Name and account no. of employing unit
(2) Type of employer and source of funding
(3) Date Payroll period ended
(4) No. of employees in positions covered by TRS
(5) Total assessable salaries
(6) Total employer contributions
(7) List and total of checks
|
For Public Schools 15th day of the following month
For colleges and state agencies 15 days after end of each pay
period
|
|
D-2a
|
Quarterly
|
(1) Social Security No. of each member employed during
quarter
(2) Name of each member
(3) Salary of each member by source for quarter
(4) Total salaries of each member
(5) Days worked during quarter by each member
|
15 days of the following month
|
8. Each of the
above reports must be on forms that are either furnished by the Teacher
Retirement System or approved by the System.
9. The employer's cost for the local school
district with Federal Programs, institutions of higher learning, and other
State agencies, shall be the State's percent of the next preceding fiscal year
to be applied to the assessable salary for the current fiscal year.
10. Four hours shall be required as the
minimum for a "day of service" for all employees. For part-time employees who
do not work full days, total the number of hours or periods worked in a school
year and divide by four (4) to determine the number of days to be credited as a
year of service or as a fraction of a year.
11. Kindergarten teachers who are employed by
a school district shall be compulsory members of the Teacher Retirement System.
The local school district will be responsible for employer contributions on
salaries paid kindergarten teachers when the salaries are financed from any
source other than the Public School fund allocation.
12. Should an overpayment or an underpayment
of contributions be reported from the local level in an amount of more or less
than $5.00, it shall be handled in the following manner by this office.:
(a) If the underpayment of less than $5.00
was reported from the local level, contributions will be credited to the
member's contribution account, and no attempt will be made to collect the
difference of this underpayment.
(b) Should an overpayment of contributions of
less than $5,00 be reported from the local level, no refund of this amount will
be made to the member, except upon written request from the member. The total
amount reported by the employing authority shall be credited to
contributions.
13.
Should an employer fail at any time to report the salary of a member and remit
the contributions to the system, the system shall have the right to collect
from the employee and the employer the contributions due, if any, from each,
together with regular interest beginning with the subsequent fiscal year;
provided further, in no case shall a member be given credit for service
rendered until any contributions and interest due from each are paid in
full.
14. For each fiscal year
beginning July 1, 1993, or later, the dollar amount of state employer
contributions to be paid during the fiscal year shall be the lesser of the
result of multiplying the applicable percent of active member payroll for the
fiscal year by the total covered salaries during the fiscal year, including any
required prior year reported salaries of members whose positions are financed
by the State Public School Fund, taking the result to the nearest dollar, or
the amount appropriated by the General Assembly during each biennium.
Penalties for Late Remittances
1. Effective July 1, 1993, any participating
employer failing to remit required moneys to the system by the fifteenth (15th)
day of the month in which due shall have a penalty of six percent (6%) interest
annually imposed on the moneys due-
2. Effective July 1, 1993, any participating
employer failing to file with the system by the fifteenth (15th) day of the
month in which due the required reports shall have imposed a penalty of
$150.00.
3 The moneys and
retirement reports due shall not be considered late if received by the
fifteenth (15th) day of the month or are postmarked no later than the
fourteenth (14th) day of the month in which due.
4 If the penalties are not received by the
last business day of the month in which due, the amounts due shall be
transferred from any moneys due the participating employer from the State
Treasurer and Department of Education as provided in Sec. 19-5-106(a)(5) of the
Arkansas Code.
REFUNDS
DEFINITIONS
1. "Accumulated Contributions" means the
total of all amounts contributed by a member and standing to his credit in his
individual account in the members deposit account, together with regular
interest credited thereon.
2.
"Regular Interest" means such rate or rates per annum, compounded annually, as
the Board shall from time to time adopt.
POLICIES
1. Should an overpayment of contributions of
less than $5.00 be reported from the local level, no refund of this amount will
be made to the member, except upon the written request from the member. The
total amount reported by the employing authority shall be credited to
contributions.
2. On refunded
contributions, the rate for all interest credited before June 30, 1984 is three
percent, compounded annually, after the first year of contributions. The rate
of interest credited on and after June 30, 1984 is six percent, compounded
annually, after the first year of contributions. Interest shall be computed on
each member's individual account as of June 30 each year by multiplying the
balance in the member' s individual account as of July 1 (including all
contributions and interest credit from previous years) plus one-half his
contributions for the year ending on June 30 by three percent.
3. Interest is not paid on contributions made
in the year in which a refund is paid.
4. On and after June 30, 1984, the Board of
Trustees shall annually set the rate of interest during the first quarterly
meeting of the Board; based on the reports of the actuary and the investment
counsel.
5. any members receiving a
refund, who have previously received a refund and repaid the contributions
shall be refunded the 6% purchased interest paid on such refund. This same
policy shall be applicable to interest paid on purchase of in-state service,
out-of-state service, and military service.
6. Effective Hay 19, 1992, refunds of
contributions will be made within six months from the date of receipt of the
written application in the Teacher Retirement System office.
7. Certification of the amount of
contributions to be refunded may be made to a lending agency (bank, etc.) upon
written request by the members. Refunds must be made to the member as payee,
but may be sent to the lending agency if authorized by the member.
8. Employers are responsible for the accuracy
of information on salaries and contributions that they certify to the system on
refund applications. If information certified by an employer causes the system
to overpay a refund, and if the system is unable to secure reimbursement of the
overpayment from the member receiving the refund, the employer shall reimburse
the system the amount of such overpayment.
9. A refund of contributions forfeits
credited military service. Repayment of the refund plus interest reestablishes
the forfeited military service. If military service was not credited a member
prior to the refund of his contributions, repayment of the refund is not
necessary to establish military service credit, provided the member meets the
requirements listed above.
10.
Beginning January 1, 1993, should a member, or spouse, if the member is
deceased, become eligible to receive a refund of contributions and elect to
make a direct rollover of a distribution to an eligible retirement plan of all
or part of his eligible reollover distribution, the amount shall be paid to the
trustee of the eligible retirement plan.
PART
I
MILITARY SERVICE RENDERED PRIOR TO JULY 1, 1973 WWIT, KOREAN,
VIETNAM
DEFINITION
"Compulsory military service" means active military duty rendered
between July 1, 1937, and July 1, 1973, by a member who was not active member
at the time of entry into such Armed Forces but was a member at the time proof
of service was filed, who completed 10 years of credited service exclusive of
any credits for military service.
POLICIES
Military service rendered before teaching service shall be subject to
the following limitations:
1. Military
service was rendered not earlier than July 1, 1937, and entry date was not
later than June 30, 1973.
2.
Military service for credit shall not exceed 5 years and the years to be
credited shall be closest to teaching service.
3. A member who entered the Armed Forces of
the United States during any period of compulsory military service is only
eligible for credited service based on his initial enlistment. Any military
service rendered by virtue of re-enlistment or voluntary extension of original
enlistment is not considered compulsory and shall not be allowed as credited
service.
4. Certification
Form M-1 for proof of military service filed after July 1, 1969,
stipulates that military service can be established provided the member is not
receiving, or eligible to receive, retirement benefits for active duty,
excluding disability, from any other source. The member will be required to
recertify this statement at the time he retires.
5. Such period of military service credit
shall be based on 120 days of service rendered during a fiscal year, July 1
through June 30, Fractional years of service cannot be credited until after
July 1, 1971. as specified in fractional years of service as discussed in the
Membership Section. (See Membership)
6. For military service, 30 days shall be
considered a month. For borderline cases, the actual number of days in the
month shall be counted.
7. A refund
of contributions forfeits credited military service. Repayment of the refund,
plus interest, re-establishes the forfeited military service. If military
service was not credited a member prior to the refund of his contributions,
repayment of the refund is not necessary to establish military service credit,
provided the member meets the requirements listed under Items 1 through 6
above.
8. If a member who has been
given credit after July 1, 1986, for free military service retires with both CP
and NCP service credit, his military service credit shall be divided between
the CP and NCP at retirement in the same proportion that his CP service and his
NCP service bear to total active service, not withstanding the fact that some
of the military service shall be credited as non-contributory service before
July 1, 1986.
9. Military service
may be established at any time after entrance into the Teacher Retirement
System but official crediting shall be after completion of 10 years of
membership credit, excluding military service credit.
10. If mandated by federal law, armed service
not otherwise creditable shall be creditable, provided the member pays the
employee and employer contributions required by the System, plus regular
interest from the date of discharge from active duty until paid in
full.
11. Military service rendered
prior to July 1, 1971 can be combined to count as a year, provided:
a) The minimum number of days to be combined
is 120.
b) The maximum number of
fiscal years to be combined is two (2).
c) The fiscal years combined must be at the
beginning and the end of the creditable military service and a part of that
tour of active duty.
d) The
combined military service must have been during fiscal years in which the
member did not receive credit for a year of teaching service-
e) Such military service shall be credited in
accordance with Teacher Retirement policies and procedures.
PART II
MILITARY SERVICE THAT INTERRUPTS TEACHING SERVICE
DEFINITION
Compulsory military service credit for a member means military service
rendered beginning July 1, 1937, through June 30, 1973; provided, he returns to
the System the amount, if any, he may have withdrawn when he entered or while
in such armed service, plus interest, from the date of withdrawal to the date
of repayment.
POLICIES
1. Compulsory Military Service - Any duty
served as military obligation, including active duty service in the National
Guard or Reserve.
2. A member whose
military service interrupted teaching service is not required to be an active
member of the System at the time he files proof of his military
service.
3. A member who entered
the Armed Forces of the United States during any period of military service is
only eligible for credited service based on his initial enlistment. Any
military service rendered by virtue of re-enlistment or voluntary extension of
original enlistment is not considered compulsory and shall not be allowed as
credited service.
4. An active
member who did not withdraw his contributions and enters military service may
receive credit for such military service up to five years and his teaching
(membership) service credit and his military service credit shall be
immediately reactivated upon such return to membership. If such member did
receive a refund of contributions, his refund must be repaid in full before
refunded service and military service may be credited. A member must have 10
years of Arkansas credited membership service before his military service may
be used in the confutation of benefits.
5. Military service after July 1, 1971, can
be credited in fractions of years in the same manner as teaching service. (See
Membership)
6. Certification
Form M-1 for proof of military service filed after July 1, 1969,
stipulates that military service can be established provided the member is not
receiving, nor is he eligible to receive, any military service retirement
pension for active duty, excluding disability payments, from any other source.
Members must certify this statement at the time credit for military service is
established, and he must recertify the same at the time he retires.
PART III
PURCHASE OF MILITARY SERVICE UNDER ACT 573 OF 1975 AS AMENDED BY ACT
1098 OF 1993
DEFINITION
Effective August 13, 1993, any person who is a member or former member
of a state-supported retirement system may purchase up to five (5) years of
credited service in the System for military service prior to becoming a member
of the state-supported retirement system.
For the purpose of purchasing military service credit - Military
service rendered is defined to be any active duty service as military
obligation including active duty service in the National Guard or
Reserve.
POLICIES
1. Military service rendered prior to July 1,
1971, will not be credited unless it is for a full year as defined in terms of
the number of days necessary to receive credit for a year of membership service
(120 days rendered during a fiscal year - July 1 through June 30. Thirty (30)
days shall be considered a month). Military service after July 1, 1971, can be
credited in fractions of years in the same manner as membership
service.
2. Effective August 13,
1993, the computation for the purchase of military service under Act 573 of
1975, as amended by Act 1098 of 1993, shall be the rate of employee
contributions required on the salary earned, or the maximum assessable salary,
for the first year of membership service credit, mind the rate of employer
contributions in effect at the time first eligible to purchase the military
service, excluding refunded service. Interest will be figured from the
eligibility date (six (6) months after completion of ten (10) years of
membership service credit) or January 1, 1976, whichever is later.
3. A person may contract to purchase one (1)
year at a time if he so chooses. The year or years to be purchased shall be
closest to member service. He may make partial payments if the amount due is
$300 or greater.
4. Eligibility to
purchase military service credit shall be subject to the following conditions:
a) Any person who is now or was in the past a
member of a reciprocal system and has ten (10) years of combined credited
membership service, or
b) A member
of the Teacher Retirement System with ten (10) years of membership service
credit.
c) Must have received an
honorable discharge.
d) No more
than five (5) years may be purchased.
e) Total military service credit, including
purchased military service, cannot exceed five (5) years.
f) Member cannot purchase identical service
in more than one retirement system.
g) There will be no interest on these
contributions if the service is purchased:
1)
Before January 1, 1976, or
2)
Within six (6) months after he becomes eligible.
h) Member must pay employee and employer
contributions and interest.
i) The
member is not receiving and will not be eligible to receive federal military
service retirement pay (other than disability) based upon nineteen (19) or more
years of active duty.
5.
Effective July 1, 1986, all purchased military service credit shall be counted
as contributory service and benefits based on this service shall be computed as
contributory service.
6. Effective
January 1, 1988, all purchases and payments shall be made in the following
manner:
On amounts totaling less than $300 a lump sum payment shall be
required.
Purchases and payments totaling at least $300, but less than $1,000 may
be made in five equal payments of at least 20 percent of the beginning
balance.
Purchases and payments totaling $1,000 or more may be made in ten equal
payments of at least ten percent of the beginning balance.
Effective July 1, 1992, for a total payment amount greater than $300.00
but less than $5,000.00, the member may elect to follow the present minimum
payment schedule of ten (10) equal payments or pay a minimum of $150.00 each
time until the account is paid in full.
For total payment amounts due of $5,000.00 or greater, the member may
elect to follow a minimum payment schedule of 20 equal payments or pay a
minimum of $250.00 each time until the account is paid in full.
A contract to complete payment shall exist upon acceptance of the
initial payment.
PURCHASED MILITARY AND RECIPROCITY
POLICIES
1. The cost to purchase military service is
based on the member's contributions at the time he received credit for a full
year of service in the system, plus the employer contribution rate in effect at
the time he first became eligible to purchase the military service.
2. If the member purchasing military service
has reciprocal service, the cost is based on the salary and contribution rate
in effect at the time he joined the system in which he is purchasing the
military credit, plus the employer contribution rate in effect at the time he
first became eligible to purchase the military service.
3. If the member has 10 years of reciprocal
service, he may purchase military service with the system of his
choice.
4. all monies paid for the
purchase of military service shall be credited to the member's deposit
account.
5. any member not
receiving federal military service retirement pay, excluding disability, based
upon nineteen (19) or more years of active duty is eligible to purchase his
military service.
6. Military
service purchased while a non-contributory member will be considered
contributory service and will be figured in the computation of benefits as
contributory service.
FREE MILITARY SERVICE UNDER RECIPROCITY
POLICIES
1. The policies covering free military
service credit to a member of the Teacher Retirement System apply to free
military service credit under reciprocity.
2. Crediting free military service when
Teacher Retirement is the preceding system:
a)
Military service credit can be restored if it was credited while the applicant
was a member of the Teacher Retirement system and he repays his refunded
service in full.
b) Military
service can be credited in the Teacher Retirement System if it interrupted
teaching service provided he has 10 years of credited service in the
System.
3. Military
service credit can be purchased under Act 573 of 1975, as amended, provided the
applicant does not have military service credit under another retirement
system.
4. Military service credit
may be used in the computation of benefits if the member does not have military
service credit rinder another retirement system.
5. Recertification of military service credit
will be required for all service credited after 1969.
CREDITING OF MILITARY SERVICE UNDER ACT 793
POLICIES
1. Active members of the TRS may establish
military service credit in the TRS under the same regulations listed in the
Policy Manual regarding military service, provided they do so before they
transfer membership to the PERS. Once membership is transferred, they are no
longer eligible to do this.
2. If a
member transfers membership before completing the ten-year requirement, he
would be disqualified from establishing free military service credit.
3. If a member has at least ten years of
combined service, military service can be purchased in PERS.
4. If a member who has established free
military service credit has fewer than ten (10) years of credited membership
service remaining in the Teacher Retirement System after transferring
membership to the Public Employees Retirement System under Act 793, his free
military service credit shall be cancelled.
REPAYMENT OF REFUNDS
DEFINITION
"Repayment of refund" means repayment to the system of contributions
that have been withdrawn. Withdrawal of contributions forfeits credited
service. Service credit can be restored by repayment of a refund.
POLICIES
1. To be eligible to repay a refund, a person
must be an active member of the system. A person who has received a refund may
re-establish active membership by rendering one or more years of credited
service after receipt of his refund.
2. To repay a refund requires repayment of
the entire amount withdrawn, plus 6% regular interest from the date of
withdrawal to the date of final payment. If a member has received more than one
refund, repayment must be made in inverse order.
3. Effective January 1, 1988, all purchases
and payment shall be made in the following manner:
On amounts totaling less than $300 a lump sum payment shall be
required.
Purchases and payments totaling at least $300, but less than $1,000.
may be made in five equal payments of at least 20 percent of the beginning
balance.
Purchases and payments totaling $1,000 or more may be made in ten equal
payments of at least ten percent of the beginning balance.
Effective July 1, 1992, for a total payment amount greater than $300.00
but less than $5,000.00, the member may elect to follow the present minimum
payment schedule of ten (10) equal payments or pay a minimum of $150.00 each
time until the account is paid in full.
For total payment amounts due of $5,000.00 or greater, the member may
elect to follow a minimum payment schedule of 20 equal payments or pay a
minimum of $250.00 each time until the account is paid in full.
A contract to complete payment shall exist upon acceptance of the
initial payment.
BACK CONTRIBUTIONS
DEFINITION
Back Contributions - Contributions payable by an active member for
service rendered in a covered position after July 1, 1937 on which no
applicable contributions have been paid and on which no service has been
credited.
POLICIES
1. Back Contributions - after July 1, 1971,
the number of days required to establish a year of service since 1937 is 120
days. Fractional credit may also be established only for service rendered after
July 1, 1971.
2. Credit for back
service established before July 1, 1984, may be purchased by the member paying
to the system the employee contributions, plus regular interest, from the time
the service was rendered until contributions are paid in full.
3. Effective July 1, 1984, back service
credit may be established only be paying both the employee and employer
contributions, plus regular interest, than the time the service was rendered
until contributions are paid in full.
4. Policies 2 and 3 shall be applicable to:
a) Service credit being established by a
person who has elected to exclude himself from membership under A.C.A.
24-7-501(b)(1).
b) Any other
eligible service for which no service credit has been established.
c) A member who is making contributions on
the first $7,800 of his salary may elect to change to full salary under the
following conditions: If such election is made between July 1, 1973 and June
30, 1984, the member must pay to the system the difference plus regular
interest between full salary contributions and contributions based on $7,800
retroactive to July 1, 1969 or the actual date of employment, whichever is
later. If such election is made July 1, 1984 or later, the member must pay to
the system both the added member contributions and the added employer
contributions which would have been paid to the system had the member' s full
salary always been covered, plus regular interest from the dates the added
contributions would normally have been received by the system to the date of
such actual payment.
5.
Effective July 1, 1988, all purchases and payments shall be made in the
following manner:
On amounts totaling less than $300 a lump sum payment shall be
required. Purchases and payments totaling at least $300, but less than $1,000
may be made in five equal payments of at least 20 percent of the beginning
balance.
Purchases and payments totaling $1,000 or more may be made in ten equal
payments of at least ten percent of the beginning balance.
Effective July 1, 1992, for a total payment amount greater than $300.00
but less than $5,000.00, the member may elect to follow the present minimum
payment schedule of ten (10) equal payments or pay a minimum of $150.00 each
time until the account is paid in full.
For total payment amounts due of $5,000.00 or greater, the member may
elect to follow a minimum payment schedule of 20 equal payments or pay a
minimum of $250.00 each time until the account is paid in full.
A contract to complete payment shall exist upon acceptance of the
initial payment.
6. No back
contributions will be billed on service before July 1,1971 unless payment of
such contributions will add to a member's service credit,
7. For service established June 1, 1989, or
after, no back contributions will be billed on service unless payment of such
contributions will add to a member's service credit.
8. If a member does not purchase at one time
all of his back service credit, he must purchase the remainder in inverse
order,
PURCHASE OF OUT-OF-STATE SERVICE
DEFINITION
Out-of-state service means service rendered in any state except
Arkansas in a position which would have been covered by the System had the
service been rendered in the State of Arkansas.
POLICIES
1. Before July 3, 1989, in order to purchase
out-of-state service, such service rendered in any state except Arkansas must
have been for a minimum of 120 working days in a fiscal year. In computing the
cost to purchase out-of-state service, 19.50% of the annual salary earned for
the first full year of Arkansas teaching service will be used, together with
regular interest from the end of that year of service to the date of final
payment.
On and after July 3, 1989, an active member who had both in-state and
out-of-state service in one (1) school year may contract with the Board for one
(1) year of service to be credited as service in the same manner as provided
for out-of-state service credited before July 3, 1989, if the service meets the
following additional requirements:
a)
The combination of in-state and out-of-state service rendered in the fiscal
school year was not fewer than one hundred twenty (120) days; and
b) The person had not less than thirty (30)
days of out-of-state teaching service in the school year and not less than
thirty (30) days in-state teaching service in the fiscal school year.
2. A year of out-of-state service
shall be for a minimum of 120 days, except that for out-of-state service
purchased on or after July 3, 1989, in-state and out-of-state service rendered
in the same fiscal year may be combined to reach the required 120 days,
provided the member had at least 30 days of both in-state and out-of-state
service credit. Twenty (20) days shall be considered a month.
3. Salaries for purchased out-of-state
service are not recorded. In computing final average salary, only Arkansas
salaries shall be used in the determination of five highest years.
4. Purchased out-of-state service shall be
credited to the year in which it was rendered and cannot be purchased if prior
to 1937-38.
5. Effective July 1,
1986, all purchased out-of-state service shall be counted as contributory
service.
6. Effective January 1,
1988, all purchases and payments shall be made in the following manner:
On amounts totaling less than $300 a lump sum payment shall be
required.
Purchases and payments totaling at least $300, but less than $1,000 may
be made in five equal payments of at least 20 percent of the beginning
balance.
Purchases and payments totaling $1,000 or more may be made in ten equal
payments of at least ten percent of the beginning balance.
Effective July 1, 1992, for a total payment amount greater than $300.00
but less than $5,000.00, the member may elect to follow the present minimum
payment schedule of ten (10) equal payments or pay a minimum of $150.00 each
time until the account is paid in full.
For total payment amounts due of $5,000.00 or greater, the member may
elect to follow a minimum payment schedule of 20 equal payments or pay a
minimum of $250.00 each time until the account is paid in full.
A contract to complete payment shall exist upon acceptance of the
initial payment.
7. If a
member does not purchase, or is not eligible to purchase, all of his
out-of-state service, he must purchase the remainder in inverse order.
8. Beginning July 1, 1991, an
active member may purchase service rendered outside the state during a period
of employment with an education coordinating council.
9. From July 1, 1991, until December 31,
1991, an active member of the Public Employees Retirement System who was an
active member of the Teacher Retirement System prior to January 1, 1978, and
who became a member of the Public Employees Retirement System within thirty
(30) days of departure from the Teacher Retirement System may establish
reciprocity between the two systems and purchase out-of-state service rendered
prior to January 1, 1978, in accordance with the provisions and conditions
contained in A.C.A. Sees. 24-7-601 and 24-7-603.
PURCHASE OF OVERSEAS SERVICE
DEFINITION
Overseas service means service rendered in an American-type overseas
school sponsored and approved by either the United States Department of State
or the Department of Defense.
POLICIES
1. In order to purchase overseas service,
such service must be for a minimum of 120 working days in a fiscal year. In
computing the cost to purchase overseas service, both employee and employer
costs must be paid on the salary earned in the overseas school. This total cost
may be paid by the member or by a combination of the member and his employer.
If contributions were not paid to the system promptly, regular interest shall
be added to the delayed contributions from the date of service to the date of
payment in full.
2. A year of
overseas service shall be for a minimum of 120 days. Twenty days shall be
considered a month. The maximum overseas service which may be credited to a
member is ten years.
3. Salaries
for purchased overseas service will be recorded for the years being purchased.
If these salaries are among the highest five salaries, they may be used in the
computation of retirement benefits.
4. Purchased overseas service shall be
credited to the year in which it was rendered.
5. Effective July 1, 1986, all purchased
overseas service shall be counted as contributory service and benefits based on
this service shall be confuted as contributory service.
6. Effective January 1, 1988, all purchases
and payments shall be made in the following manner:
On amounts totaling less than $300 a lump sum payment shall be
required.
Purchases and payments totaling at least $300, but less than $1,000 may
be made in five equal payments of at least 20 percent of the beginning
balance.
Purchases and payments totaling $1,000 or more may be made in ten equal
payments of at least ten percent of the beginning balance.
Effective July 1, 1992, for a total payment amount greater than $300.00
but less than $5,000.00, the member may elect to follow the present minimum
payment schedule of ten (10) equal payments or pay a minimum of $150.00 each
time until the account is paid in full.
For total payment amounts due of $5,000.00 or greater, the member may
elect to follow a minimum payment schedule of 20 equal payments or pay a
minimum of $250.00 each time until the account is paid in full.
A contract to complete payment shall exist upon acceptance of the
initial payment.
7. If a
member does not purchase, or is not eligible to purchase, all of his overseas
service, he must purchase the remainder in inverse order.
SABBATICAL, LEAVE
DEFINITION
"Sabbatical leave" means leave of absence from a school from and after
June 28, 1985, in order to obtain an advanced degree at an institution of
higher learning, or to fulfill the requirements of a scholarship or
grant.
POLICIES
1. In order to purchase sabbatical leave
service such service must be for a minimum of 120 working days in a fiscal
year. In computing the cost to purchase sabbatical leave service, the highest
annual salary earned at the time of purchase and the total of the member and
employer contributions in effect during that fiscal year, plus regular interest
from the beginning of the fiscal year in which the leave is taken until payment
is made in full, will be used.
2. A
year of sabbatical leave service shall be for a minimum of 120 days. Twenty
days shall be considered a month.
3. Purchased sabbatical leave service shall
be credited to the year in which it was rendered.
4. If a member does not purchase, or is not
eligible to purchase, all of his sabbatical leave service, he must purchase the
remainder in inverse order.
5.
Effective January 1, 1988, all purchases and payments shall be made in the
following manner:
On amounts totaling less than $300 a lump sum payment shall be
required.
Purchases and payments totaling at least $300, but less than $1,000 may
be made in five equal payments of at least 20 percent of the beginning
balance.
Purchases and payments totaling $1,000 or more may be made in ten equal
payments of at least ten percent of the beginning balance.
Effective July 1, 1992, for a total payment amount greater than $300.00
but less than $5,000.00, the member may elect to follow the present minimum
payment schedule of ten (10) equal payments or pay a minimum of $150.00 each
time until the account is paid in full.
For total payment amounts due of $5,000.00 or greater, the member may
elect to follow a minimum payment schedule of 20 equal payments or pay a
minimum of $250.00 each time until the account is paid in full.
A contract to complete payment shall exist upon acceptance of the
initial payment.
PURCHASE OF PRIVATE SCHOOL SERVICE
Definition
Private school service means service rendered in any private school or
agency which is recognized by the State Department of Education for the
issuance of teaching certificates.
Policies
1. From and after January 1, 1990, an active
member may contract with the Board for the purchase of private school service
under the following conditions:
a) Service
credit shall be limited to service for which no benefit could be paid by
another system similar in purpose to this system, except social security, if
the member left on deposit his contributions to that system.
b) Service credit shall be limited to three
(3) years.
2. The member
shall pay to the system for each year of service credit being granted nineteen
and one-half percent (19.5%) of the annual salary received by him for his first
full year of state teaching service, together with regular annual interest from
the end of that year of state teaching service to the date of payment. If the
payment is not made in a single sum at the time the contract is made, regular
interest shall be added from the date of the contract to the date of payment.
The payment shall be credited to the member' s account in the member' s deposit
account and shall be in addition to regular member contributions
thereto.
3. The private school
service shall not become credited service under this system until ;
a) The member payments have been paid in
full; and
b) The member has
established ten (10) or more years of credited service exclusive of private
school service. Should a member cease to be an active member before the private
school service has been established as system credited service, the member
payments contributed shall be refundable, together with regular interest
thereon.
4. an active
member who had both public and private school service in one (1) school year
may contract with the Board for one (1) year of service to be credited as
service, if the service meets the following additional requirements:
a) The combination of public and private
school service rendered in the fiscal school year was not fewer than one
hundred twenty (120) days; and
b)
The person had not less than thirty (30) days of private school teaching
service in the school year and not less than thirty (30) days public teaching
service in the fiscal school year.
5. a year of private school service shall be
for a minimum of one hundred twenty (120) days, except as outlined in #4 above.
Twenty (20) days shall be considered a month-
6. All private school service shall be
counted as contributory service.
7.
Effective January 1, 1988, all purchases and payments shall be made in the
following manner:
On amounts totaling less than $300 a lump sum payment shall be
required.
Purchases and payments totaling at least $300, but less than $1,000 may
be made in five equal payments of at least 20 percent of the beginning
balance.
Purchases and payments totaling $1,000 or more may be made in ten equal
payments of at least ten percent of the beginning balance.
Effective July 1. 1992, for a total payment amount greater than $300.00
but less than $5,000.00, the member may elect to follow the present minimum
payment schedule of ten (10) equal payments or pay a minimum of $150.00 each
time until the account is paid in full.
For total payment amounts due of $5,000.00 or greater, the member may
elect to follow a minimum payment schedule of 20 equal payments or pay a
minimum of $250,00 each time until the account is paid in full.
A contract to complete payment shall exist upon acceptance of the
initial payment.
8. If a
member does not purchase, or is not eligible to purchase all of his private
school service, he must purchase the remainder in inverse order.
RETIRANTS RETURN TO SERVICE
Rescission of Retirement (Act 39 of 1989)
DEFINITION
A retirant under Arkansas Code 24-7-201 through Arkansas Code 24-7-713,
and any amendments thereto, who has not attained age seventy-two (72) may
rescind his decision to terminate active membership and may become an active
member upon reemployment.
POLICIES
1. A retirant rescinding his decision to
terminate active membership shall file a written rescission on a form furnished
by the Board.
2.
a) For any school year in which a retirant
takes a position in a public school, the rescission form shall be filed with
the Teacher Retirement System office on or before June 30 of the previous
year.
b) Should a retirant fail to
meet the deadline set out in 2(a), the school district may file an appeal for a
waiver of the required filing date.
3. The rescission shall become effective the
first day of the calendar month next following the date the written rescission
is received by the Board.
4. Any
annuity benefit formerly due from the System shall be terminated upon the
effective date of the rescission.
5. Upon rescission, the former retirant shall
be considered an active member who shall accrue additional credited service
subject to the following conditions:
a) If
reemployment terminates before the end of the fiscal year in which the former
retirant has accumulated at least three (3) years of credited service, the
former retirant shall become a retired member and the payment of annuity shall
resume upon such termination. The former retirant shall be entitled to receive
any member contributions which may have been made during the reemployment
period.
b) If reemployment
terminates after the end of the fiscal year in which the former retirant has
accumulated at least three (3) years of credited service, upon termination of
reemployment, the former retirant shall become a retired member and receive an
annuity which has been recalculated according to the benefit formula in effect
at the time of such termination of reemployment.
6. Effective July 1, 1993, if a retirant has
previously rescinded his decision to terminate active membership and become cin
active member by reemployment, but after becoming a retirant and before
rescinding had been employed in a position covered by the System, as an active
member he shall be eligible to purchase such previous service by:
a) Fulfilling the requirements set out in
Sec. 24-7-717(e)(2);
b) Returning
to the System all retirement benefits received during such employment, together
with regular interest from the date of receipt of such payments to the date of
repayment in full; and
c) Paying to
the System both member and employer contributions for the previous service
rendered after becoming a retirant but before rescinding, plus regular interest
from the date of reemployment to the date of payment in full.
Conditions Under Which A Retirant Hay Return To Teaching Or Other
Employment Other than By Rescinding His Retirement Under Act 39 of 1989
AGE AND SERVICE RETIRANT:
1.
If a retirant returns to service without rescinding his retirement under Act 39
of 1989, benefits may continue to be paid up to certain limits. The amount a
retirant may earn and still collect full benefits depends upon whether he is
age 65 to 69 or under age 65.
a) Effective
July 1, 1992, a retirant who is age 65 to 69 may earn up to twice the Social
Security earnings limitation amount without affecting his ATRS benefits. If his
ATRS covered earnings exceed that amount, $1 in benefits will be deducted for
each $3 earned above the earnings limitation amount.
b) Effective July 1, 1992, a retirant who is
under age 65 may earn up to twice the Social Security earnings limitation
amount without affecting his ATRS benefits. If his ATRS covered earnings exceed
that amount, $1 in benefits will be deducted for each $2 earned above the
earnings limitation amount.
c)
Employers will report quarterly all retirants who have returned to full- or
part-time employment in an ATRS covered position, and who have not rescinded
their retirement. The reporting form will be furnished by ATRS.
d) Unless the system is directed otherwise in
writing, the benefits of those retirants exceeding the earnings limitations
will be reduced in the proper amount in the fiscal year following the fiscal
year in which the earnings limitation is exceeded. A retirant may direct ATRS
to reduce benefits within the same fiscal year the earnings limitation is
expected to be exceeded.
2) In the event that both the employee and
his employer fail to notify the Teacher Retirement System of a retiree's return
to service and benefits are paid illegally due to such lack of notice, the
Teacher Retirement System shall delay restoration of benefits until all funds
paid illegally have been recovered either through direct payment by the retiree
or through delay in restoration of benefits by the System.
3) Effective July 1, 1991, an age and service
retiree may be employed by a private employer or in a position covered by a
state-supported retirement system other than the Teacher Retirement System
without any effect on his annuity.
4) During any period of employment not
covered by Act 39 of 1989, an age and service retiree shall not accrue
additional service credit, nor shall he contribute to the Arkansas Teacher
Retirement System.
DISABILITY RETIRANT:
Under the provisions of the Teacher Retirement law a disability retiree
is permitted, should he regain his health and should he be employed under
contract in a position covered by the Arkansas Teacher Retirement System to
establish a year or more of service credit and have his benefits recomputed at
a time of retirement either or age and service or disability as the case must
be.
1. Disability Retiree Employed
Full-Time
When a disability retiree is employed under contract in a position
covered by the Teacher Retirement System as a full-time employee in a regular
or special position on a fiscal year basis, the Teacher Retirement System is
required to remove him from the disability payroll. It is the responsibility of
the employing agency to report such employment to the retirement office
immediately. Unless the retiree was a member of the non-contributory plan, it
is also the responsibility of the employing agency to withhold 6% of applicable
salary. If the retiree completes a minimum of 120 days or more during a fiscal
year in Arkansas, thus adding a year's service credit, he can then again make
application for disability or age and service retirement and his benefits will
be recomputed based on the additional year or years of service credit. A
disability retiree shall not be permitted to establish service credit when
employed in a part-time position,
2. Disability Retiree Employed Part-Time
A disability retiree employed part-time will be subject to the same
earnings limitation policy as age and service retirees.
RECIPROCITY (Act 611 of 1975)
DEFINITIONS
1.
Reciprocal System
means the Teacher Retirement System of arkansas in operation June 30, 1957, and
continued by Act 93 of 1957, as amended; or the Arkansas State Highway
Employees Retirement System, established by Act 454 of 1949, as amended; or the
Arkansas Public Employees Retirement System established by Act 177 of 1957, as
amended or the Arkansas State Police Retirement System established by Act 311
of 1951, as amended-
2.
State Employer means the public employer whose
employees are covered under the Teacher Retirement System of Arkansas; or the
public employer whose employees are covered under the Arkansas State Employees
Retirement System, or the public employer whose employees are covered under the
Arkansas Public Employees Retirement System, or the public employer whose
employees are covered by the Arkansas State Police Retirement System.
SUMMARY OF RECIPROCAL SERVICE ACT 611 OF
1975
If a member leaves the employ of a State employer whose position is
covered by any of these four (4) retirement systems and enters the employ of
another State employer whose position is covered by any of these four (4)
retirement systems, he shall be entitled to a deferred annuity payable from the
preceding system subject to the following conditions:
1. Age & Service
a) He has credited service acquired in the
employ of the preceding State employer.
b) He does not withdraw his contributions, or
if he has withdrawn, he repays the amount withdrawn, plus interest, while he is
an active member of a reciprocal system.
c) He qualifies for age and service
retirement in the succeeding reciprocal system by using his credited service in
force with the preceding reciprocal system plus his credited service acquired
in the employ of the succeeding State employer to meet the minimum service
requirements of the succeeding system. This would also qualify him for benefits
in the preceding system-
d) His
deferred annuity payable by the preceding reciprocal system shall be determined
by the annuity formula in effect at the time of retirement in the preceding
system, exclusive of any minimum amounts.
e) If the Teacher Retirement System is the
preceding system, his annuity begins the first day of the month next following
the month he filed his application or after his attainment of age 60 years,
whichever is later. However, should he have combined service of at least 25
years, the age limitation shall not apply. In no case shall his deferred
annuity begin prior to the date he retires from the employ of his last state
employer.
2. Disability
a) If he has ten (10) or more years of
combined creditable service in two (2) or more reciprocal systems, he is
eligible to apply for disability benefits from each reciprocal system in which
he has credited service.
b)
Eligibility for disability benefits is determined under the rules and
regulations of each respective system.
c) He shall be eligible for a refund of his
accumulated contributions plus interest, if any, from any reciprocal system in
which he does not qualify for disability benefits. Such refund shall not alter
his eligibility for benefits from any other reciprocal system.
d) His annuity for disability retirement
payable by the preceding reciprocal system shall begin the first day of the
calendar month next following the month he filed his application for same with
the preceding system, but not prior to the date he leaves the employ of his
last State employer.
POLICIES
1. A person who leaves a position covered by
the Teacher Retirement System and is employed by a reciprocal system and files
a reciprocal service agreement become a deferred (inactive) member and is
entitled to the benefit formula in effect at the time of retirement, exclusive
of any minimum amounts.
2. The
final average compensation used in computing benefits payable by the preceding
system shall be that of the reciprocal system furnishing the highest final
average salary at the time of retirement. To determine the final average
salary, only service credit and salaries earned in a system will be used, even
if the service does not total five years,
3. The provisions of policy number 2 shall
not be applicable to a person who elects to contribute on a maximum salary of
$7,800 unless he shall have changed to full salary and shall have paid the
difference between 6% of 7,800 and 6% of full salary retroactive to July 1,
1969.
4. Benefits will not be paid
under reciprocity from the Teacher Retirement System as the preceding system
until the member has ceased to be in the employ of a State employer.
5. Benefits will not be paid under
reciprocity from the Teacher Retirement System as the preceding system earlier
than age 50 unless he has 25 or more years of combined service.
6. No minimum benefits apply under Act 488 as
amended for reciprocal service unless the Teacher Retirement System is the
succeeding system and the member has 10 or more years of credited service in
the Teacher Retirement System.
7.
If the 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 payable by a single reciprocal system. The Teacher Retirement System
will prorate minimum benefits payable with other reciprocal systems that have a
minimum benefit provision in their plans. Each reciprocal system shall pay only
a proportionate share of such minimum amount based on the ratio of such service
in such system to the total service in all reciprocal systems.
8. If an employee of the Department of Human
Services who becomes a member of the Public Employee's Retirement System under
the provisions of Act 793 of 1977 as amended leaves employment with the
Department of Human Services and becomes employed in another position covered
by the Teacher Retirement System, his benefits for service, both before and
after his service under Act 793, shall be subject to the benefit provisions of
the Teacher Retirement law. Such member shall be eligible to establish
reciprocity under the provisions of Act 488 of 1965 as amended.
9. If a member has reciprocal service during
the same fiscal year with both the Teacher Retirement System and the Public
Employees Retirement System and if, under the two systems' methods of credited
service, the combined service amounts to more than one full year of service
credit, the ATRS will credit service as follows:
a) If credit by PERS is less than three (3)
months, ATRS will credit service for the full year.
b) If credit by PERS is three (3) or more
months but less than six (6) months, ATRS will credit service for three-fourths
(3/4) year.
c) If credit by PERS is
six (6) or more months but less than nine (9) months, ATRS will credit service
for one-half (1/2) year.
d) If
credit by PERS is for nine (9) months but less twelve (12) months, ATRS will
credit service for one-fourth (1/4) year.
10. A member who has established reciprocity
with the Teacher Retirement System as the succeeding system and has at least
ten (10) years of service credit with the Teacher Retirement System will be
eligible for the minimum amounts for retirement benefits. He or she will not
receive less than $1,800 per year (contributory option) or $1,128
(non-contributory option) or a proration of the two.
11. Effective January 1, 1988, all purchases
and payment shall be made in the following manner:
On amounts totaling less than $300 a lump sum payment shall be
required.
Purchases and payments totaling at least $300, but less than $1,000 may
be made in five equal payments of at least 20 percent of the beginning
balance.
Purchases and payments totaling $1,000 or more may be made in ten equal
payments of at least ten percent of the beginning balance.
Effective July 1, 1992, for a total payment amount greater than $300.00
but less than $5,000,00, the member may elect to follow the present minimum
payment schedule of ten (10) equal payments or pay a minimum of $150.00 each
time until the account is paid in full.
For total payment amounts due of $5,000.00 or greater, the member may
elect to follow a minimum payment schedule of 20 equal payments or pay a
minimum of $250.00 each time until the account is paid in full.
A contract to complete payment shall exist upon acceptance of the
initial payment.
12. From
July 1, 1991, until December 31, 1991, an active member of the Public Employees
Retirement System who was an active member of the Teacher Retirement System
prior to January 1, 1978, and who became a member of the Public Employees
Retirement System within thirty (30) days of departure from the Teacher
Retirement System may establish reciprocity between the two systems and
purchase out-of-state service rendered prior to January 1, 1978, in accordance
with the provisions and conditions contained in A.C.A. Sees. 24-7-601 and
24-7-603.
13. Effective July 1,
1993, for a ninety- (90) day period, employees of the arkansas Rehabilitation
Services may transfer from the Public Employees Retirement System to the
Teacher Retirement System, any employee making the change will establish
reciprocity between the two systems and act 793 shall no longer apply-
PART I
COLLEGE ALTERNATE (ACT 436 OF 1967)
DEFINITIONS
1. "Staff Member" means both teachers and
administrative officers eligible for membership in the Teacher Retirement
System.
2. "Alternate Retirement
Plan" means a retirement plan based on purchase of contracts providing
retirement and death benefits for teachers and Administartive
officers.
3. Any staff member
employed after the establishment of the Alternate Retirement Plan shall
participate in such plan or in the Teacher Retirement Plan.
4. Any staff member employed prior to July 1,
1969, who is a member of the Teacher Retirement System shall continue such
membership or shall participate in the Alternate Plan.
5. Eligibility to participate in the
Alternate Retirement Plan is as follows, except that on or after July 1, 1993,
until December 31, 1993, any staff member employed or appointed by a college or
university who has less than ten (10) years of member service in the retirement
system and who has not already so elected, may elect to terminate his
membership in the retirement system and participate in the alternate retirement
plan established by the employing college or university:
a) An employee of a State supported
institution of higher learning covered by the Arkansas Teacher Retirement
System who is a compulsory member of the System may elect, within one year from
the date of his employment, to participate in the Alternate Retirement Plan of
the institution. Such election shall be in writing and filed with the Teacher
Retirement System and the institution. All accumulated contributions made by
the member shall be refunded.
b)
Any staff member who does not make the election within one year after he
becomes eligible must remain a member of the Teacher Retirement System until
such time as he completes 10 years of membership service. At that time, he
again becomes eligible to elect to participate in the Alternate Plan. He may
leave his contributions in the System or he may withdraw. Such election shall
be writing and filed with (1) TRS and (2) the college. If the member chooses to
leave contributions in the System, the effective date of such elections shall
be the July 1 next following the date the election is filed.
6. Any staff member with 10 or
more years who elects or has elected to participate in the Alternate Plan and
has left his contributions in the Teacher Retirement System shall qualify for
vested annuity on or after attaining age 60 as determined by the benefit
formula in effect at the time of retirement, subject to earnings limitations as
provided by the law.
POLICIES
1. Service for the year in which a member
changes to the College Alternate Retirement Plan will be adjusted by Data
Processing of Teacher Retirement as follows:
|
Service Reported D-2A for such year
|
Service Credit allowed by TRS
|
Converted to Computer Days
|
|
0-44 days
|
0 year
|
0-29 days
|
|
45 - 89 days
|
1/4 year
|
30 - 59 days
|
|
90 - 134 days
|
1/2 year
|
60-89 days
|
|
135 - 179 days
|
3/4 year
|
90 - 119 days
|
|
180 - days
|
1 year
|
120 - days
|
2. After a
person makes the election to participate in the College alternate Plan, he may
not again become an active participant in the Teacher Retirement System unless
he becomes employed in a position covered by the System, but not covered by the
College alternate Plan.
3. Benefits
for a deferred, inactive member who is participating in the College Alternate
Retirement Plan can become effective the first of the month after he files his
Application for Teacher Retirement Annuity form, provided:
a) He has attained age 60
b) He has terminated employment in a covered
position.
PART
II
COLLEGE ALTERNFITE (Act 1075 of 1975)
DEFINITIONS
1. Act 1075 of 1975 is an act to amend Act
512 of 1971 and Act 9 of 1971 to permit an option regarding participation in
retirement plans,- and for other purposes.
2. Legislative Acts 521 and 9 of 1971
provided that those employees of the University of Arkansas at Pine Bluff
(Arkansas AM&N College at Pine Bluff) and the University of Arkansas at
Monticello (Arkansas AM&N College at Monticello) who continued in
employment at the University of Arkansas after the appropriate merger dates
would continue in certain retirement plans.
3. An employee of the University of Arkansas
at Pine Bluff prior to July 1, 1972 who had continued his employment without
interruption since that date shall have the option to elect to participate in
the Alternate Retirement Plan on or before July 1, 1976.
4. An employee of the University of Arkansas
at Monticello prior to July 1, 1971 who had continued his employment without
interruption since that date shall have the option to elect to participate in
the Alternate Retirement Plan on or before July 1, 1976.
5. Such election to participate in the
Alternate Retirement Plan shall be subject to the following:
a) An employee with less than 10 years of
membership service may elect to participate in the Alternate Plan. A refund of
contributions is mandatory.
b) An
employee with 10 or more years of membership service may elect to participate
in the Alternate Plan and:
1) Freeze his
Teacher Retirement contributions. If the member chooses deferred retirement,
the effective date of such election shall be the July 1 next following the date
the election is filed.
2) Receive a
refund of all contributions.
c) If an employee with 10 or more years
elects to participate in the Alternate Retirement Plan and leaves his
contributions in the Teacher Retirement System, he will qualify for a deferred
(vested) annuity on or after attaining age 60 and after retirement from covered
employment, to be determined by the formula in effect at the time of his
retirement.
d) If an employee fails
to make an election by July 1, 1976, he is frozen in the Teacher Retirement
System until such time as he again becomes eligible to make the election to
transfer to the Alternate Plan and (1) freeze his contributions in TRS or (2)
receive a refund of all contributions.
e) Such election shall be in writing and
filed with the Chief Fiscal Officer of the campus where the person is employed
on or before July 1, 1976. Such Fiscal Officer shall then forward a copy of all
elections to the Retirement System.
f) act 288 of 1981 amended Act 1075 to
provide that a teacher or adninistrator at the University of Arkansas at Pine
Bluff or the University of Arkansas at Monticello who has elected to
participate in an alternate retirement plan must be retired from covered
employment to qualify for Teacher Retirement benefits.
PART III
COLLEGE M.TERNATE (Act 545 of 1983)
1. All persons except those who are eligible
for membership in either the Teacher Retirement System or the College Alternate
Plan under Act 436 of 1967, employed by Arkansas State University; Arkansas
State University, Beebe; the University of Central Arkansas; Henderson
University: Southern Arkansas University, El Dorado; Southern Arkansas
University, Technical Branch, Camden; or a state supported community college on
or after March 19, 1983, shall be members of the Public Employees Retirement
System unless, at the time of employment, they are already member of the
Teacher Retirement System due to previous employment with an employer covered
by said Teacher Retirement System.
2. All non-teaching employees of the above
named institutions who were members on March 19, 1983, of the Teacher
Retirement System have the option of remaining members of the Teacher
Retirement System or terminating membership in that system and enrolling in the
Public Employees Retirement System, provided that election to change was made
on or before July 30, 1986.
3.
Employees of the above named institutions who were employed before March 19,
1983 and who were not members of a state retirement system on or before March
19, 1983, may become members of the Teacher Retirement System after March 19,
1983. The Teacher Retirement System will not credit back service with the above
named institutions to persons who are not active members of the Teacher
Retirement System.
ARKANSAS TECHNICAL AND COMMUNITY COLLEGE SYSTEM (Act 1244 of
1991)
DEFINITIONS
1. "Community college" means an institution
of higher education established or to be established under Act 1244 of 1991
dedicated primarily to the educational needs of the service area offering a
comprehensive program including, but without limitation, vocational, trade and
technical specialty courses and programs, college transfer courses, and courses
in general adult education.
2.
"Branch campus of a community college" means an institution with facilities
located apart from the community college campus but within the community
college district.
3. "Satellite
college" means an institution located within a service area of a technical or
community college but not located within a community college
district.
4. "Technical college"
means an institution of higher education established under Act 1244 of 1991
dedicated primarily to the educational needs of the service area offering a
conprehensive program including, but without limitation, vocational, trade and
technical specialty courses and programs, courses in general adult education
and courses comparable in content and quality to freshman and sophomore courses
which may carry transfer credit to a four-year institution in a chosen course
of study.
POLICIES
1. Effective July 1, 1991, the following
institutions are designated as technical colleges and become part of the
Arkansas Technical and Community College System under the coordination of the
State Board of Education:
a) Black River
Vocational Technical College, Pocahontas
b) Cossatot Vocational Technical College, De
Queen
c) Gateway Vocational
Technical College, Batesville
d)
Mid-South Vocational Technical College, West Memphis
e) Oil Belt Vocational Technical College, El
Dorado
f) Ozarka Vocational
Technical College, Melbourne
g)
Petit Jean Vocational Technical College, Horrilton
h) Pines Vocational Technical College, Pine
Bluff
i) Pulaski Vocational
Technical College, North Little Rock
j) Red River Vocational Technical College,
Hope
k) Twin Lakes Vocational
Technical College, Harrison
2. As provided in Act 1244 of 1991 or upon
approval of the State Board of Vocational Education, the board of trustees of
the receiving institution. The State Board of Higher Education and the North
Central Association - Commission on Institutions of Higher Education
thereafter, a state-stuported vocational-technical institution may be
consolidated with a four-year institution or a two-year branch campus of a
four-year institution.
3. Following
approval by the North Central Association - Commission on Institutions of
Higher Education, and upon approval of the board of trustees of the receiving
institution, the following state-supported vocational-technical institutions
and four-year institutions or two-year branch campuses of a four-year
institution shall be consolidated: White River Vocational Technical School with
Arkansas State University - Beebe Campus.
4. Except as provided below, effective July
1, 1991, the Mountain Home Education Center (postsecondary only) (Baxter
County) shall be designated as a technical college. However, the advisory board
of the Mountain Home Education Center (Baxter County) may, by resolution prior
to July 1, 1991, elect not be a technical college.
5. If approved by majority vote of the
qualified electors of Boone County voting in a special election before July 1,
1991, then effective July 1, 1991, Twin Lakes Technical College shall become a
candidate for merger with North Arkansas Community College, However, if the
voters of Boone County do not approve the measure, then Twin Lakes Technical
College shall continue to be a technical college.
6. All employees who are employed by
state-supported postsecondary vocational-technical schools converting to an
institution under the Technical and Community College System or those employees
of a two-year branch campus of a four-year institution converting to a
technical or conmunity college, shall become employees of the technical or
community college, brcinch campus of the community college or satellite campus
of the community college and shall continue their terms of employment and shall
have all rights and benefits of employment, including retirement benefits, that
they had when employed by the state-supported postsecondary
vocational-technical schools or by the two-year branch campus of the four-year
institution.
7. Each instructor and
administrative staff member of a state-supported postsecondary
vocational-technical school employed on July 1, 1991, shall within ninety (90)
days following the transfer to the Technical and Community College System or
upon transfer to the system with the approval of the board, elect either to
continue membership in the retirement plan in which he or she was enrolled
prior to that date or transfer to the Teacher Retirement System or any
alternate retirement plan currently established for the institution into which
it is being merged or consolidated. Once such election is made, the election is
irrevocable during the tenure of employment with the system.
8. Each instructor and administrative staff
member of a two-year campus of a four-year institution which is later converted
to a technical college or community college shall within ninety (90) days
following the appointment of the local board elect either to continue
membership in the retirement plan in which he or she was enrolled prior to the
conversion or to transfer membership to the Teacher Retirement System. Once
such election is made, the election is irrevocable during the tenure of
employment with the system.
9. Any
other employees of an institution transferring to the system under this act or
under the approval of the board, shall remain a member of the retirement system
to which they were enrolled prior to the transfer.
VOCATIONAL EDUCATION ALTERNATE PLAN (Act 480 of 1983)
DEFINITION
"Alternate Retirement Plan" means a retirement plan based on the
purchase of contracts providing retirement and death benefits for instructors
and administrative staff of the post-secondary vocational technical school of
the State of Arkansas and the staff of the Vocational and Technical Education
Division and which has been approved by the board.
"School" means any post-secondary vocational technical school
established pursuant to Section 3 of Act 328 of 1957 for the vocational
training of students -
"Board" means the State Board of Vocational Education.
"Staff members" means both instructors and administrative staff of a
post-secondary vocational technical school and the staff of the Vocational and
Technical Education Division who are eligible for membership in the Retirement
System.
"Division" means the Vocational and Technical Education Division,
Arkansas Department of Education.
"Director" means the Director, Vocational and Technical Education
Division, Arkansas Department of Education.
POLICIES
1. On or after July 1, 1983, the Board may
establish and maintain an Alternate Retirement Plan which shall authorize the
purchase of contracts providing retirement and death benefits for staff
members. Under such plan, staff members shall contribute, to the extent
authorized or required, toward the purchase of such contracts which shall be
issued to and become the property of, the participants. This Alternate
Retirement Plan shall be administered by the Board pursuant to a written
Alternate Retirement Plan document, which shall be formally adopted by the
Board prior to the establishment of the Alternate Retirement Plan.
2. All staff members shall participate in
either the Retirement System or an Alternate Plan or both, but participation in
both shall be limited to the circumstances described in number 3
below.
3. Any staff member who has
become fully vested in the Retirement system may elect to discontinue
contributing to the Retirement System, thus becoming an "inactive member," and
participate instead in an Alternate Retirement Plan. Such election shall be in
writing and shall be filed with both the Retirement System and the Director
within 90 days after establishment of the Alternate Retirement Plan and prior
to the staff member' s participation in an Alternate Retirement Plan. Under
such circumstances, the staff member would be both an "inactive member" of the
Retirement System and an "active member" of the Alternate Retirement
Plan.
4. Any staff member who has
become fully vested in the Retirement System may elect to participate in an
Alternate Retirement Plan and receive all accumulated contributions to the
credit of such staff member in the member's deposit account and have such
member's credited service under the Retirement System cancelled.
5. Notwithstanding the foregoing provisions,
any staff member who has participated in the Retirement System for a period
which is insufficient to allow for full vesting of that staff member' s
Retirement system benefits may elect to (1) continue as an " active member" in
the Retirement System, (2) discontinue membership in the Retirement System and
transfer from the Retirement System into his or her account with the alternate
Retirement Plan; i.e., roll over all contributions which the staff member has
previously made to the Retirement System, or (3) participate in the Alternate
Retirement Plan and receive all accumulated contributions to the credit of such
staff member in the member's deposit account. A refunds cancels such member's
credited service under the Teacher Retirement System.
6. No staff member may participate in an
Alternate Retirement Plan without giving prior written notice of his or her
election to participate in the Alternate Retirement Plan. Such notice of
election shall be made within 90 days of the date on which the Alternate
Retirement Plan goes into effect, provided such election was made by September
1, 1985, or, for new staff members, 90 days after the staff member's date of
employment. Such notice of election shall be in writing on a form established
by the Division and filed with both the Director and the Retirement
System-
7. No staff member who
elects to change from participation in the Teacher Retirement System to
participation in the Alternate Retirement Plan, but continues employment in a
position covered by the Retirement System, shall receive a year's service
credit for less than a full year of contributions. The provision for crediting
a year's service credit for only 120 days work is applicable only to members
whose employment is terminated during a fiscal year.
8. Service for the year in which a member
changed to the Vocational Education Alternate Retirement Plan will be adjusted
by Data Processing of Teacher Retirement as follows:
|
Service Reported on D-2A for Such Year
|
Service Credit Allowed by TRS
|
Converted to Computer Days
|
|
0-44 days
|
0 year
|
0-29 days
|
|
45 - 89 days
|
1/4 year
|
30 - 59 days
|
|
90 - 134 days
|
1/2 year
|
60 - 89 days
|
|
135 - 179 days
|
3/4 year
|
90 - 119 days
|
|
180 - days
|
1 year
|
120 - days
|
9, Effective July 1, 1993, staff members who elect under Act 480 of
1983 to participate in an alternate retirement plan may elect to become members
of the retirement system. Service credit forfeited while a member of an
alternate retirement plan cannot be established in the retirement system. The
election to withdraw from the alternate retirement plan and become a member of
the retirement system shall be made by December 31, 1993, and notice of the
election shall be made in writing to the Director and the retirement system by
December 31, 1993.
10.
Service for the year in which a member changed to the retirement system shall
be credited as follows:
|
Transfer made to TRS
|
Credit received in TRS
|
|
7-1-93
|
120 days
|
|
8-1-93
|
120 days
|
|
9-1-93
|
90 days
|
|
10-1-93
|
90 days
|
|
11-1-93
|
60 days
|
|
12-1-93
|
GO days
|
ARKANSAS TECHNICAL AND COMMUNITY COLLEGE SYSTEM (Act 1244 of
1991)
DEFINITIONS
1. "Community college" means an institution
of higher education established or to be established under act 1244 of 1991
dedicated primarily to the educational needs of the service area offering a
comprehensive program including, but without limitation, vocational, trade and
technical specialty courses and programs, college transfer courses, and courses
in general adult education.
2.
"Branch campus of a community college" means an institution with facilities
located apart from the community college campus but within the connunity
college district.
3. "Satellite
college" means an institution located within a service area of a technical or
community college but not located within a community college
district.
4. "Technical college"
means an institution of higher education established under act 1244 of 1991
dedicated primarily to the educational needs of the service area offering a
comprehensive program including, but without limitation, vocational, trade and
technical specialty courses and programs, courses in general adult education
and courses comparable in content and quality to freshman and sophomore courses
which may carry transfer credit to a four-year institution in a chosen course
of study.
POLICIES
1. Effective July 1, 1991, the following
institutions are designated as technical colleges and become part of the
arkansas Technical and Community College System under the coordination of the
State Board of Education:
a) Black River
Vocational Technical College, Pocahontas
b) Cossatot Vocational Technical College, De
Queen
c) Gateway Vocational
Technical College, Batesville
d)
Mid-South Vocational Technical College, West Memphis
e) Oil Belt Vocational Technical College, El
Dorado
f) Ozarka Vocational
Technical College, Melbourne
g)
Petit Jean Vocational Technical College, Morrilton
h) Pines Vocational Technical College, Pine
Bluff
i) Pulaski Vocational
Technical College, North Little Rock
j) Red River Vocational Technical College,
Hope
k) Twin Lakes Vocational
Technical College, Harrison
2. As provided in Act 1244 of 1991 or upon
approval of the State Board of Vocational Education, the board of trustees of
the receiving institution. The State Board of Higher Education and the North
Central Association - Commission on Institutions of Higher Education
thereafter, a state-supported vocational-technical institution may be
consolidated with a four-year institution or a two-year branch campus of a
four-year institution.
3. Following
approval by the North Central association - Commission on Institutions of
Higher Education, and upon approval of the board of trustees of the receiving
institution, the following state-supported vocational-technical institutions
and four-year institutions or two-year branch campuses of a four-year
institution shall be consolidated: White River Vocational Technical School with
Arkansas State University - Beebe Campus.
4. Except as provided below, effective July
1, 1991, the Mountain Home Education Center (postsecondary only) (Baxter
County) shall be designated as a technical college. However, the advisory board
of the Mountain Home Education Center (Baxter County) may, by resolution prior
to July 1, 1991, elect not be a technical college.
5. If approved by majority vote of the
qualified electors of Boone County voting in a special election before July 1,
1991, then effective July 1, 1991, Twin Lakes Technical College shall become a
candidate for merger with North Arkansas Community College. However, if the
voters of Boone County do not approve the measure, then Twin Lakes Technical
College shall continue to be a technical college.
6. All employees who are employed by
state-supported postsecondary vocational-technical schools converting to an
institution under the Technical and Community College System or those employees
of a two-year branch campus of a four-year institution converting to a
technical or community college, shall become employees of the technical or
community college, branch campus of the community college or satellite campus
of the community college and shall continue their terms of employment and shall
have all rights and benefits of employment, including retirement benefits, that
they had when employed by the state-supported postsecondary
vocational-technical schools or by the two-year branch campus of the four-year
institution.
7. Each instructor and
administrative staff member of a state-supported postsecondary
vocational-technical school employed on July 1, 1991, shall within ninety (90)
days following the transfer to the Technical and Community College System or
upon transfer to the system with the approval of the board, elect either to
continue membership in the retirement plan in which he or she was enrolled
prior to that date or transfer to the Teacher Retirement System or any
alternate retirement plan currently established for the institution into which
it is being merged or consolidated. Once such election is made, the election is
irrevocable during the tenure of employment with the system.
8. Each instructor and administrative staff
member of a two-year campus of a four-year institution which is later converted
to a technical college or community college shall within ninety (90) days
following the appointment of the local board elect either to continue
membership in the retirement plan in which he or she was enrolled prior to the
conversion or to transfer membership to the Teacher Retirement System. Once
such election is made, the election is irrevocable during the tenure of
employment with the system.
9. Any
other employees of an institution transferring to the system under this act or
under the approval of the board, shall remain a member of the retirement system
to which they were enrolled prior to the transfer.
ACT 793 of 1977
DEFINITION
Employees of the Department of Human Services who are members of the
Teacher Retirement System and have met the requirements of Section 3.02b of act
793 of 1977 by making contributions to the System based on full salary since
July 1, 1969 or since initial enrollment in membership of the Teacher
Retirement System, if later than July 1, 1969, are eligible to elect coverage
under the non-contributory benefit provisions of Act 793 of 1977, provided such
election is made on or before June 30, 1991.
POLICIES
1. Employees of the Department of Human
Services who have elected coverage under Act 793 will qualify for benefits
under the Act 793 formula for all their years of credited service, including
service as a member of the Teacher Retirement System.
2. The effective date of transfer of active
membership from the Teacher Retirement System to the Public Employees
Retirement System shall be January 1, 1978.
3. For employees who elect coverage under Act
793, the Teacher Retirement System will refund both employee and employer
contributions based on service after January 1, 1978.
4. In computing its liability for benefits
for employees of the Department of Human Services retiring under the provisions
of Act 793, the Teacher Retirement System will allow one-half (1/2) year of
credited service for the 1977-78 fiscal year (July 1, 1977 - December 31,
1977).
5. The Teacher Retirement
System will be liable for funding of benefits for credited service established
with the System prior to January 1, 1978. When a member of the Public Employees
Retirement System who has credited service with the Teacher Retirement System
retires from employment with the Department of Human Services under the
provisions of Act 793, the Teacher Retirement System's liability for his
benefits will be computed:
a) By using the
retiring member's final average salary at the time of retirement as defined by
Act 793 and certified by the Public Employees Retirement System.
b) By using the Teacher Retirement System
benefit provisions in effect January 1, 1978, to compute his monthly annuity
guaranteed by Teacher Retirement.
c) On and after January 1, 1993, for benefit
amounts based upon employment before January 1, 1978, Division of
Rehabilitation Services employees who are still active employees on January 1,
1993, shall have benefits computed in accordance with current benefit
provisions in effect for the Teacher Retirement System at the time of their
retirement.
6. Monthly
benefits will be paid in the name of the retired member to the Public Employees
Retirement System, except that on and after August 13, 1993, Arkansas Public
Employees Retirement System shall certify monthly the total amount of benefits
paid and the Teacher Retirement System shall immediately transfer such amount
from its benefit account to the proper account designated by the Arkansas
Public Employees Retirement System.
7. Employees of the Department of Human
Services who have elected coverage under Act 793 are eligible to establish
reciprocity between the Teacher Retirement System and the Public Employees
Retirement System and repay a refund or establish prior service. (Attorney
General's Opinion #84-154).
8. From
July 1, 1991, until December 31, 1991, an active member of the Public Employees
Retirement System who was an active member of the Teacher Retirement System
prior to January 1, 1978, and who became a member of the Public Employees
Retirement System within thirty (30) days of departure from the Teacher
Retirement System may establish reciprocity between the two systems and
purchase out-of-state service rendered prior to January 1, 1978, in accordance
with the provisions and conditions contained in A.C.A. Sees. 24-7-601 and
24-7-603.
ERRONEOUS MEMBERSHIP
DEFINITIONS
1. "Erroneous Membership" means an employee
was enrolled in a State retirement system in which he was not eligible for
membership and both employee and employer contributions have been accepted by
the "System of Record."
2.
"Retirement System of Record" means the system that holds an erroneous
membership.
3. "Eligible retirement
system" means the retirement system in which the employee is eligible for
membership.
4. "Employer" means an
employing state agency or employing school district.
POLICIES
1. Employees erroneously enrolled in a state
retirement system on or after January 1, 1979, may elect to remain a member of
the system of record or may become a member of the eligible retirement
system.
2. With the exception of
erroneously enrolled persons who choose to remain in the system of record, the
Teacher Retirement System will notify ail employers that the following persons
should be enrolled in the Teacher Retirement System:
a) Any person employed by a school for the
purpose of giving instruction and whose employment requires state
certification-
b) any other person
first employed by a school on or after July 1, 1989, in a regular or special
position.
c) Any person first
employed on or after July 1, 1989, by any of the following organizations or
agencies:
State School for the Blind; State School for the Deaf; Arkansas
activities association; a local school board; Chief County School Officers;
State Board of Education; Regional Educational Cooperatives; the State Surplus
Property Program; the Teacher Retirement System; Arkansas Rehabilitation
Service; the Division of Rehabilitation Services for the Blind.
d) any person employed in a
position with an area Vocational Technical School, except those employees who
have elected to participate in an Alternate Retirement Plan established by Act
480 of 1983; or the Arkansas Educational Television Commission.
e) Any person employed in a covered position
with a technical college, except those employees who elect under Set 1244 of
1991 to remain in the retirement plan in which he or she was enrolled prior to
July 1, 1991, or any alternate retirement plan currently established.
f) Any person employed in a position with the
Arkansas Rehabilitation Services for the Blind or the Youth Services Division,
except those employees who have elected coverage under Act 793 of 1977;
provided, however, that any employee hired by Youth Services after July 1,
1977, is ineligible for membership in the Teacher Retirement System (Attorney
General's opinion #77-249).
3. After July 1, 1979, the Teacher Retirement
System will make no further effort to correct the retirement system membership
of persons who were erroneously enrolled in another state retirement system
before January 1, 1979. The Teacher Retirement System will not accept as
members persons who were erroneously enrolled in another state retirement
system before January 1, 1979, unless that person's contributions were refunded
prior to July 1, 1979.
4. If an
employee was erroneously enrolled in the Teacher Retirement System before
January 1, 1979, and if his contributions were not refunded prior to July 1,
1979, he shall continue to be a member of the Teacher Retirement System. He
shall receive service credit for all paid membership service in the System and
any free service which is creditable under Act 427 of 1973 as amended. He shall
also be entitled to reciprocal service credit as provided by Act 488 of 1965 as
amended.
5. If it is discovered by
the Teacher Retirement System that an employee became erroneously enrolled in a
state retirement system on or after January 1, 1979, the Teacher Retirement
System will notify both the employer and employee that the membership is
erroneous and that it may be corrected as prescribed by Act 13 of
1991.
6. If a person who is
employed before July 1, 1989, as a school janitor, bus driver or cafeteria
worker is enrolled in the Public Employees Retirement System under the
provision of Act 63 of 1965, and later is promoted to a position of school
maintenance worker or supervisor, bus mechanic or transportation supervisor, or
cafeteria manager, respectively, he shall continue to be a member of the Public
Employees Retirement System as long as he is employed in one of these
respective capacities.
7. If it is
discovered by the Teacher Retirement System that an employee became erroneously
enrolled in a state retirement system on and after January 1, 1979, the Teacher
Retirement System will notify both the employer and employee that the
membership is erroneous and that it should be corrected as prescribed by A.C.A.
24-2-304.
QUALIFIED DOMESTIC RELATIONS ORDERS FOR ACTIVE MEMBERS
(Act 1143 of 1993)
DEFINITIONS
"Alternate payee" means a spouse, former spouse, child or other
dependent of a participant under Arkansas law.
POLICIES
1 Qualified domestic relations orders issued
by a chancery court of the State of Arkansas and which apply to a participant
of the Teacher Retirement System (retirement plan) shall be accepted by the
system, subject to the following restrictions:
(a) Benefits to the alternate payee shall
begin when the participant retires, or ceases employment in a covered position
and receives a refund of contributions.
(b) participants receiving disability
benefits, as defined in Section 24-7-704 of the Arkansas Code of 1987,
Annotated, from the retirement plan shall not be subject to qualified domestic
relations orders.
(c) Pursuant to
Act 1143 of 1993, a model qualified domestic relations order is added as
Addendum A to these policies. Any qualified domestic relation order issued by a
chancery court must comply with the content of and substantially follow the
form set out in the addendum.
(d)
When a qualified domestic relations order is received by the retirement plan.
(1) the plan administrator shall promptly
notify the participant and the alternate payee of the receipt of such order,
and
(2) within a reasonable time
after receipt of the order, determine whether the order is a qualified domestic
relations order as set out in Addendum A to these policies and notify the
participant and the alternate payee of such determination.
(e) Qualified domestic relations orders
received prior to a participant's retirement or cessation of employment will be
handled as set out in (d) above, but any amounts payable to the alternate payee
will be held in the participant's account until due to be paid.
(f) Nothing contained in the qualified
domestic relations order shall be construed to require the retirement plan to
provide an alternate payee any type or form of benefit or option not otherwise
available to the participant; to provide the alternate payee actuarial benefits
not available to the participant; or to pay an benefits to the alternate payee
which are required to be paid to another alternate payee under a previous
qualified domestic relations order.
(g) Should the alternate payee die prior to
the receipt of benefits under the qualified domestic relations order, the
entire amount due the alternate payee shall revert to the
participant.
(h) Should the
participant die prior to retirement, the alternate payee shall receive the same
percentage of the participant' s contributions, if any, as was awarded by the
court in dividing the marital property. In no case shall be the alternate payee
receive monthly benefits from the retirement plan.
(i) Monthly benefits paid the alternate payee
shall be computed on the benefit formula in effect at the time of the
participant' s retirement, but shall include only service credit earned by the
participant during the marital relationship.
(j) The retirement plan shall have the right
to make any necessary correction to the monthly benefit amount paid both to the
participant and the alternate payee and to recover from either, or both, any
overpayments made.
(k) If the
alternate payee fails at any time to notify the retirement plan of any mailing
address change, the retirement plan shall not be eligible for failure to make
the payments as due.
(l) Should the
retirement plan determine that the alternate payee' s monthly benefits are less
than $20.00, the participant shall be paid the total benefit due and shall be
responsible for paying the alternate payee the amount due.
(m) Qualified domestic relations order
received by the retirement plan before the effective date of Act 1143 of 1993
may be honored but only if the participant or the alternate payee notifies the
plan, and it is determined that the order is a qualified order as set out in
Addendum A.
QUALIFIED DOMESTIC RELATIONS ORDERS FOR RETIRED MEMBERS (Act 1143 of
1993)
DEFINITIONS
"Alternate payee" means a spouse, former spouse, child or other
dependent of a participant under Arkansas law.
POLICIES
1. Qualified domestic relations orders issued
by a chancery court of the State of Arkansas and which apply to a participant
of the Teacher Retirement System (retirement plan) shall be accepted by the
system, subject to the following restrictions:
(a) Participants receiving disability
benefits, as defined in Section 24-7-704 of the Arkansas Code of 1987,
Annotated, from the retirement plan shall not be subject to qualified domestic
relations orders.
(b) Pursuant to
Act 1143 of 1993, a model qualified dometic relations order is added as
Addendum A to these policies. Any qualified dometic relation order issued by a
chancery court must comply with the content of and substantially follow the
form set out of the addendum.
(c)
When a qualified domestic relations order is received by the retirement plan,
(1) the plan administrator shall promptly
notify the participant, and the alternate payee of the receipt of such order,
and
(2) within a reasonable time
after receipt of the order, determine whether the order is a qualified domestic
relations order as set out in Addendum A to these policies and notify the
participant and the alternate payee of such determination.
(d) Nothing contained in the qualified
domestic relations order shall be construed to require the retirement plan to
provide an alternate payee any type or form of benefit or option not otherwise
available to the participant; to provide the . alternate payee actuarial
benefits not available to the participant; or to pay an benefits to the
alternate payee which are required to be paid to another alternate payee under
a previous qualified domestic relations order.
(e) Should the alternate payee die prior to
the receipt of benefits under the qualified domestic relations order, the
entire amount due the alternate payee shall revert to the
participant.
(f) Should the
participant die prior to retirement, the alternate payee shall receive the same
percentage of the participant' s contributions, if any, as was awarded by the
court in dividing the marital property. In no case shall be the alternate payee
receive monthly benefits from the retirement plan.
(g) The retirement plan shall have the right
to make any necessary correction to the monthly benefit amount paid both to the
participant and the alternate payee and to recover from either, or both, any
overpayments made.
(h) If the
alternate payee fails at any time to notify the retirement plan of any mailing
address change, the retirement plan shall not be liable for failure to make the
payments as due.
(i) Should the
retirement plan determine that the alternate payee's monthly benefits are less
than $20.00, the participant shall be paid the total benefit due and shall be
responsible for paying the alternate payee the amount due.
(j) Qualified domestic relations order
received by the retirement plan before the effective date of Act 1143 of 1993
may be honored but only if the participant or the alternate payee notifies the
plan, and it is determined that the order is a qualified order as set out in
Addendum A.
(k) During any period
while it is being determined if the order is a qualified domestic relations
order, the plan administrator shall separately account for the amounts which
would have been payable to the alternate payee during that time.
