Current through Register Vol. 49, No. 9, September, 2024
ATRS Rule 9 RETIREMENT AND BENEFITS
A.C.A. §§
24-7-202, 24-7-205, 24-7-502, 24-7-701
- 24-7-707, 24-7-709, 24-7-710, 24-7-727, 24-4-732, Act 808 of 1987
I.
Definitions
A. "Act 808 Employee" means an employee of a
state agency who, on April 8, 1987, was an active member of the Arkansas
Teacher Retirement (ATRS) 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 Arkansas Public Employees Retirement (APERS) and have
their credited service in ATRS transferred to APERS.
B. "Annuity options" means the member's
election at retirement of an annuity that shall be paid throughout the
retiree's lifetime in accordance with A.C.A. §
24-7-706.
C. "Effective Retirement Date" means, for
purposes of ATRS retirement benefits, the 1st day of the month in which the
member requests to receive retirement benefits and for which the member has
submitted a timely retirement application.
D. "Marriage dissolution" means a final
decree of divorce, separate maintenance, or annulment duly executed by a court
of competent jurisdiction and filed of record in the Office of the Ex Officio
Recorder.
E. "Medical committee"
means the committee of three (3) physicians appointed by the Board under A.C.A.
§
24-7-303 for the purpose of evaluating disability retirement
applications.
F. "Option
beneficiary" means a person(s) nominated by the member, in writing at
retirement, who, if eligible, will receive annuity payments under the annuity
option selected by the member after the member's death.
G. "Person" for purposes of Rule 9 means an
individual, corporation, partnership or other legal entity.
H. "Participating employer" means an employer
who participates in ATRS whose employees are eligible for membership under
A.C.A. §
24-7-501, A.C.A. §
24-7-202, or other applicable
law.
I. "Residue" means the
member's accumulated contributions, including regular interest standing in the
member's credit at the time of his/her retirement.
J. "Residue beneficiary" means a person(s)
nominated by the member to receive the residue, if any, under A.C.A. §
24-7-709.
K. "Receivable" means
monies due to ATRS from a member, former member, participating employer,
contributor, retiree, beneficiary, or alternate payee under a qualified
domestic relations order as a result of an overpayment of any payment or
benefit by ATRS.
L. "Retiree" means
a retired member who is receiving an annuity from the ATRS.
II.
Age And
Service Retirement Eligibility
A. If
eligible, an active or inactive member who attains age sixty (60) and has five
(5) or more years of actual and reciprocal service credit may voluntarily
retire upon written application filed with ATRS.
B. If eligible, an active or inactive member
who has not reached age sixty (60) and has twenty-five (25) or more years of
actual and reciprocal service credit, including purchased or free credited
service, may voluntarily retire upon written application filed with the
ATRS.
C. In order to be eligible, a
member must comply with the following requirements:
1. Satisfy the credited service requirements
under one of the ATRS' retirement statutes, A.C.A. §§
24-7-701
-707;
2. Be credited with all
required employer and member contributions in the member's deposit account,
with no amounts owed to ATRS;
3.
Pay all amounts owed to ATRS for underpayments or purchase service accounts;
and
4. Terminate employment with
all participating employers, or have reached age sixty-five (65) or
older.
III.
Benefits
A. Benefits Formula
The retirement benefits payable shall be the total number of
contributory years of credited service, multiplied by a factor between 1.75%
and 2.15% of the final average salary as set by the board, plus the total
number of noncontributory years of credited service multiplied by a factor
between .5% and 1.39% of the final average salary, as set by the board. The
board shall modify the factor for credited service as necessary to maintain
actuarial soundness. (A.C.A. §
24-7-705).
B. Effective Date of Retirement Benefits
(A.C.A. §
24-7-701)
1. If a member
meets all eligibility requirements for retirement and is approved for
retirement, annuity benefits shall be effective the month proposed by the
member in their application. If the member does not file an application at
least one calendar month prior to the proposed effective retirement date, then
that proposed retirement effective date cannot be used, and the member's
effective retirement date shall be the following month. If a member has signed
an employment contract for the fiscal year and has been paid in full without
providing service for the full period of the employment contract, the member's
retirement effective date shall not be prior to July 1 of the subsequent fiscal
year.
2. If a member has accrued a
full year of service credit equal or greater to one hundred and sixty (160)
days in a fiscal year, the member's retirement date shall not begin earlier
than July 1 of the subsequent fiscal year.
C. Compound Cost of Living Adjustment (A.C.A.
§
24-7-727)
The Board by resolution may reverse a compound cost of living
adjustment as needed to maintain the actuarial soundness of the ATRS. A
reversal may be phased in as the Board determines appropriate.
D. Last Benefit Payment Upon Death
Benefits are payable through the month in which the retiree's death occurs.
E. Change of Marital Status
If the marriage of the retiree member legally ends for any
reason, the member may choose to cancel the designation of the former spouse as
the designated beneficiary. If the member so chooses, the member must file a
change of option beneficiary on an ATRS approved form, and any change in the
benefit amount shall become effective the month after receipt by ATRS of the
approved form.
IV. A member age 65 or older may apply for
retirement benefits without terminating employment and may begin drawing
benefits with no effect on the member's retirement benefit.
V. In addition to a complete retirement
application, the following documents are mandatory documents and shall be
submitted to ATRS within six (6) months of the effective date of retirement
unless an extension is granted by ATRS:
A.
Member elects a straight life annuity:
1.
Proof of member's birthdate from a birth certificate or other authenticating
documents.
2. Proof of member's
taxpayer identification number from a Social Security card or other
authenticating documents.
B. Member elects Option A or Option B benefit
with Spouse as the beneficiary:
1. Proof of
member's birthdate from a birth certificate or other authenticating
documents.
2. Proof of member's
taxpayer identification number from a Social Security card or other
authenticating documents.
3 Proof
of spouse's birthdate from a birth certificate or other authenticating
documents.
4. Proof of spouse's
taxpayer identification number from a Social Security card or other
authenticating documents.
5. Proof
of marriage between the member and spouse from a marriage license or
equivalent, marriage license recording document, or other legally acceptable
proof of the existence of the marriage.
C. Member elects Option A or Option B benefit
with incompetent child as the beneficiary:
1.
Proof of member's birthdate from a birth certificate or other authenticating
documents.
2. Proof of member's
taxpayer identification number from a Social Security card or other
authenticating documents.
3.
Adequate proof of the existence of a guardianship due to the incapacity of the
member's child that preexists the member's official retirement date.
Authenticating documents may include the order appointing guardianship of the
person, letters of guardianship, or other adequate proof of the existence of
the guardianship.
4. Proof of
child's taxpayer identification number from a Social Security card or other
authenticating documents.
D. Member elects Option C annuity:
1. Proof of member's birthdate from a birth
certificate or other authenticating documents.
2. Proof of member's taxpayer identification
number from a Social Security card or other authenticating documents.
E. If the member elects an
alternative residual beneficiary or beneficiaries in lieu of their spouse, the
member shall submit the names of the alternative residual beneficiary or
beneficiaries along with the alternative residual beneficiary's or
beneficiaries' birthdate from a birth certificate or other authenticating
document approved by ATRS, on a form provided and approved by ATRS. The
selection of an alternative residual beneficiary or beneficiaries allows the
member's residue from T-DROP and/or the member's contributions to be paid in a
lump sum to the alternative residual beneficiary or beneficiaries and a monthly
retirement annuity shall not be paid.
F. The failure to submit a complete
retirement application and any mandatory documents within a six-month period
from the member's effective retirement date plus any extension granted by ATRS
shall result in the retirement application being voided and the application
shall have no effect. This rule on required documents applies to all retirement
applications including retirement based upon age retirement, service
retirement, early retirement, and disability retirement.
VI.
State Employee Transfers to APERS
(Act 808) Rules
A. The Act 808 employee
will make the election to transfer to APERS on a form furnished by
ATRS.
B. The transfer from the ATRS
to APERS will become effective on the date of retirement.
C. ATRS will certify to APERS a record of the
Act 808 employee's service credit in ATRS.
D. At the time of retirement, if the Act 808
employee is a non-contributory member of ATRS, he will retire under the
non-contributory provisions of Act 187 of 1987 and shall be entitled to a
refund of Act 808 employee contributions made since January 1, 1978, to
ATRS.
E. At the time of retirement,
if the Act 808 employee was a contributory member of ATRS, he will retire under
the contributory provisions of Act 187 of 1987.
F. For any Act 808 employee who elects to
transfer to APERS, APERS will pay the monthly benefits.
G. APERS will certify monthly to ATRS the
amount of monthly benefits paid and ATRS will transfer it's pro-rata portion to
APERS.
H. Upon receipt of a death
certificate from APERS for a retiree who chose straight life annuity and has a
balance remaining in his account, ATRS will transfer the remaining balance in
the retiree's account to APERS for refunding to the designated beneficiary or
beneficiaries.
VII.
Disability Retirement Rules
A.
1. If the member is eligible under A.C.A.
§
24-7-704 and these Rules, and the Medical Committee determines a
disability exists for the member, then disability retirement benefits shall
commence the month the member files a written application with ATRS if at the
time the member files the application the member is no longer employed by an
ATRS covered employer.
2. If the
member is still employed by an ATRS covered employer at the time the member
files the application for disability retirement, then, once approved, the
disability retirement will commence the month following the last day of covered
employment.
B.
1. Termination of active membership for
disability retirement benefits shall be the last date of any employer payment
to the member due to the end of the employee/employer relationship.
2. The member is considered active if they
are using earned sick leave, Family Medical Leave Act (FMLA) leave, annual
leave, and catastrophic leave. Worker's compensation, which may or may not
include the use of leave granted by the employer, is not considered leave by
which a member is considered active, nor does it extend the date of active
membership.
C.
1. The following criteria and deadlines,
applied to the individual member circumstances, affect eligibility for
continued disability payments for a member who has been approved by ATRS for
disability retirement, based upon the date of the first ATRS disability
retirement check. The deadlines may be extended under the provisions of this
Rule and A.C.A. §
24-7-704.
a. If the
first disability retirement check to the member is dated before July 1, 2015,
and the member is under fifty-seven (57) years before July 1,2015, the member
shall submit to ATRS a Social Security Administration (SSA) determination
letter dated before July 1, 2018, that finds that the member is disabled. In
the absence of a SSA determination letter, the member's disability retirement
payments will cease on June 30, 2018.
b. If the first disability retirement check
to the member is dated July 1, 2015, or after, and the member is under
fifty-seven (57) years on the date of the first disability retirement check,
member shall submit to ATRS a Social Security Administration (SSA)
determination letter dated within thirty-six (36) months from the date of the
first disability retirement check that finds that the member is disabled. In
the absence of a SSA determination letter, the member's disability retirement
payments will cease thirty-six (36) months from the date of the first
disability retirement check. For example:
- Date of 1st ATRS disability retirement check: January 2017,
then
- Social Security Administration determination letter finding
dated by: December 2019; or
- Date of last disability retirement check if no SSA
determination letter: December 2019
2. ATRS will grant an extension to the above
deadlines if the member can provide documentation to ATRS that:
a. The SSA disability claim was properly
filed and remained active for at least twenty-four (24) months prior to the
deadline above; and
b. An active
SSA disability claim is still under review by the SSA with no voluntary
dismissal or withdrawal.
3. Once the member who is receiving
disability retirement reaches sixty (60) years of age, the member thereafter
will receive regular retirement benefits as if voluntarily retired under A.C.A.
§
24-7-701 and no Social Security Administration determination letter is
required.
4. A member may apply for
an additional review of a disability claim within three (3) months of
disability benefits ceasing due to a denial letter and finding by the Social
Security Administration that the member is not disabled. The member's
disability claim review will follow the procedure set forth in A.C.A. §
24-7-704.
D.
1. A member under the age of sixty (60) may
be employed by an ATRS covered employer and also receive ATRS disability
retirement if the member performs less than eighty (80) days of actual service
during a fiscal year.
2. A member
shall not receive disability retirement if the member indirectly performs work
for an ATRS covered employer as described in A.C.A. §
24-7-704(a)(4)(B).
3. If a member
is approved for disability retirement but continues to work either directly or
indirectly for the covered employer, the member shall terminate employment with
the covered employer or indirect employer by the proposed disability retirement
effective date, or, if the member is finalizing work for the employer, then the
employee may terminate employment up to two (2) full calendar months after the
Medical Committee meets.
4. If the
member does not terminate employment under these Rules and the termination
requirement under A.C.A. §
24-7-502, the application is rescinded and the
member can reapply.
5. After
receiving an ATRS disability retirement a member may choose to return to
regular employment with an ATRS covered employer and relinquish their
disability retirement. In this instance, the member would no longer receive
disability retirement and would be an active member and shall comply with
A.C.A. §
24-7-738 (Act 549 of 2017).
E. If the application for disability
retirement benefits is denied and the member elects and otherwise qualifies for
voluntary retirement, the effective date for retirement shall be determined by
the date the disability retirement application is filed.
F. If the member dies after the disability
application is received by ATRS but before disability retirement is approved,
then ATRS shall consider the member to have died in "active" service and
survivor benefits under A.C.A. §
24-7-710 shall be paid, unless the member
has designated an alternative residual beneficiary or beneficiaries.
G. The annuity formula for computing
disability retirement benefits is the same as for voluntary age and service
retirement.
H.
1. For all disability retirement applications
approved by the Medical Committee after May 31, 2011, the Board shall allow a
disability retiree at the time of retirement to designate an Option A or Option
B beneficiary. Option C beneficiaries shall not be available to disability
retirees. A.C.A. §
24-7-706(a)(3),
2. If a disability retiree designates an
Option A or Option B spouse beneficiary, and the disability retiree dies before
reaching age sixty (60), then the same rules that apply to active member option
beneficiaries shall apply to the disability Option A and Option B beneficiaries
under A.C.A. §
24-7-710(b).
3.
If a disability retiree designates an Option A or Option B incapacitated child
beneficiary, and the disability retiree dies before reaching age sixty (60),
then the same rules that apply to an active member surviving child shall apply
to the disability Option A or Option B beneficiary under A.C.A. §
24-7-710(c) until the disability retiree would have turned age sixty (60), then
the Option A or Option B incapacitated child beneficiary shall receive the
greater of the surviving child annuity under A.C.A. §
24-7-710(c) or the
Option A spouse annuity under A.C.A. §
24-7-710(a).
I. Disability retirees who are disapproved
for further disability annuities due to a medical examination reviewed by the
Medical Committee shall be removed from ATRS' retiree payroll the earlier of
six months following the review date or the first of the month following the
return to covered employment.
J. If
a member applies for disability retirement and is disapproved, he/she has the
right to file a new disability application submitting additional information
for review as long as the member remains active.
VIII.
Annuity Options and Disposition
of Residue After Retirement Rules
Before the date the first benefit payment of an annuity becomes
due, a member retiring with age or service may elect an option to receive an
annuity payable as provided in one of the following. (Disability retirement
option rights are set forth in Rule 9.VII.H. above):
A.
Option 1: A straight life
annuity payable monthly for the life of the retiree. Upon the retiree's death,
if the retiree has not received payments equal to the residue amount, the
residue remaining, if any, shall be paid to the residue beneficiary. If no
residue beneficiaries survive the retiree, the residue will be paid to the
retiree's estate.
B.
Effect
of Option 1 Retiree's Death within the First Year of Retirement
If an Option 1 retiree dies within one year of retirement, and
his or her spouse qualifies for Option A benefits, the spouse may elect to
cancel the Option 1 annuity in effect and elect Option A (100% survivor
annuity) at that time.
The election shall become effective the first day of the month
following receipt of the election form by ATRS. If the spouse elects Option A,
the residue, if any, will not be paid until the Option A beneficiary's
death.
C.
Persons
Eligible as Option A or Option B Beneficiaries at the Time of Retirement
In order to be nominated as an Option A or B beneficiary, the
person must be one of the following:
1. The retiree's spouse (if the retiree has
been married to the spouse for at least one (1) year prior to the first annuity
payment being paid to the retiree);
2. A dependent child (regardless of age) who
has been ruled physically or mentally incapacitated by a court of competent
jurisdiction.
D.
Eligibility of a Spouse to Become an Option A or Option B Beneficiary
after a Member's Retirement
If a member was married to his or her spouse for less than one
(1) year upon his or her effective retirement date or the member marries after
his or her effective retirement date, then the member may elect to cover the
spouse after being married for one (1) year. Upon meeting the one (1) year
marriage requirement, the member shall have six (6) months to file an election
to cover his or her spouse under either Option A or Option B. The written
election must be filed on a form approved by ATRS.
E.
Emancipation of Incapacitated Child
Option Beneficiary
If an incapacitated child, who has been adjudged physically or
mentally incapacitated by a court of competent jurisdiction, is nominated as an
Option A or Option B beneficiary, and a court has determined that the
incapacity issue no longer indicates incapacitation, or the incapacitated
person is emancipated through marriage or dies, then the member may request
ATRS to remove the incapacitated child from the member's account. Proof of the
court's decision shall be by a copy of the court order, proof of emancipation
shall be by a copy of the child's marriage license, or proof of death shall be
by the death certificate.
Once proof is provided, the member may elect to return to Option
1 at that time, or if the member is married, the member shall have six months
to designate the member's spouse as the member's option beneficiary. The
election shall become effective the first day of the month following receipt of
the election form by ATRS.
F.
Residue Paid Upon Death of Option
Annuitant
If after a retiree dies, an option annuity becomes payable, but
the option beneficiary dies prior to the retiree and the option beneficiary
receiving annuity payments equal to the residue amount, the residue, if any,
shall be paid to member's residue beneficiary. If no residue beneficiary is
nominated or survives upon the death of the option beneficiary, the residue
remaining, if any, shall be paid to the last surviving option beneficiary's
estate.
G.
Final
Benefit Check
Benefits are payable through the month in which the last option
beneficiary's death occurs. If the option beneficiary dies prior to receiving
the last check, ATRS will pay the final check in the normal manner paid prior
to death. If payment of the final check in the normal course becomes
impossible, the final option beneficiary's annuity check will be returned to
the ATRS.
H.
Eligible
Residue Beneficiaries
Any "person" as defined in this policy is eligible to be
designated by the member to receive the residue, if any, payable upon the
member's death including individuals, trusts, estates, corporations, and other
legally recognized entities.
IX.
Error Corrections and Collection of
Overpayments Rules
A. If a change or
error in ATRS' records discovered during the ATRS look back period results in
either an overpayment or underpayment to ATRS, the Board authorizes ATRS to
correct the error in the records and to adjust any benefit or adjust any other
amount payable to the corrected amount and take all necessary action as the
circumstances may require, including the options allowed under A.C.A. §
24-7-205(b).
B. If a benefit
participant under a qualified domestic relations order pursuant to A.C.A.
§§
9-18-101 -103, is paid any benefit or payment by ATRS to which the
benefit participant is not entitled, and it is discovered during the ATRS look
back period, then a receivable is created and the Board or its designee(s), may
collect the amount due to ATRS as set forth in A.C.A. §
24-7-205.
C. Before making an
adjustment of benefits or pursuing any other collection action, a notice shall
be provided to the person who is the subject of the adjustment. The notice will
state the amount determined to be a receivable and the reasons underlying the
determination. The notice shall also suggest alternate methods for payment of
the receivable.
D. Appeals to
dispute collections shall be made according to the procedures and requirements
of ATRS Rule 13. During the appeal process, retirement benefits may continue to
be paid.
E. Actions that affect
rights on benefits cannot be corrected or adjusted further than a 5 year "look
back" period unless a manifest injustice has occurred or an exception exists
under A.C.A. §
24-7-205.
F.
The board or its designee may also make adjustments to the employer, member,
and ATRS records beyond the look-back period if the board determines that the
time limitation imposed by the lookback period will result in a manifest
injustice in a specific case. See Rule 17 - Manifest Injustice.
G. The Board authorizes the Executive
Director to waive interest on required contributions in an amount not to exceed
$5,000. Any request to excuse an interest amount exceeding $5,000 shall be
submitted to the ATRS Board for review. The Executive Director shall report to
the Board any amounts excused under this section.
H. If required, a receivable under this
section that is found by the Board or its designee to be uncollectible or for
which adjustment or payment has been waived will be submitted to the Chief
Fiscal Officer of the state for abatement pursuant to A.C.A. §§
19-2-301 --307.
I. A determination
by ATRS of a manifest injustice in a particular instance due to a technical
error or error in judgment is always discretionary and governed by the
provisions in A.C.A. §
24-7-205.
X.
Retirement Application Rules
A. A copy of the ATRS retirement application
can be downloaded from the
ATRS website or requested from ATRS.
B. In order for a retirement application to
be timely filed, there is a three (3) month "window" to apply for retirement
benefits.
For active members currently employed, the window for filing your
retirement application is:
1. No
sooner than four (4) months prior to your Effective Retirement Date;
and,
2. No later than one (1) month
before your Effective Retirement Date.
C. For an inactive, vested, immediately
eligible-to-retire member, retirement benefits are payable the month after the
retirement application is received.
D. The procedure for handling received
retirement applications is as follows:
1. If a
retirement application is received by ATRS before the three (3) month window
begins for the member's anticipated Effective Retirement Date, the application
is not timely filed, and ATRS will reject the application and notify the member
of the dates that their retirement application can be filed timely and the
procedure to do so.
2. If a
retirement application is received after the three (3) month window ends for
the member's anticipated Effective Retirement Date, the retirement application
is not timely filed and the member will receive a new Effective Retirement Date
beginning on the 1st day of the next month.
E. This Rule does not apply to an application
for disability retirement or survivor benefits.
The following table shows examples of the "windows" for filing a
retirement application:
|
EXAMPLE OF RETIREMENT FILING DATES
|
|
Effective Date of Retirement
|
Retirement Application Must be Filed In:
|
Last Date of Employment
|
First Retirement Check
|
|
January 1
|
September, October or November
|
December 31
|
End of January
|
|
February 1
|
October, November or December
|
January 31
|
End of February
|
|
March 1
|
November, December or January
|
Feb 28/29 (Leap year)
|
End of March
|
|
April 1
|
December, January or February
|
March 31
|
End of April
|
|
May 1
|
January, February or March
|
April 30
|
End of May
|
|
June 1
|
February, March or April
|
May 31
|
End of June
|
|
July 1
|
March, April or May
|
June 30
|
End of July
|
|
August 1
|
April, May or June
|
July 31
|
End of August
|
|
September 1
|
May, June or July
|
August 31
|
End of September
|
|
October 1
|
June, July or August
|
September 30
|
End of October
|
|
November 1
|
July, August or September
|
October 31
|
End of November
|
|
December 1
|
August, September or October
|
November 30
|
End of December
|
The following table is the only "window" for filing a T-DROP
application:
|
Effective Date of Retirement
|
Retirement Application Must be Filed In:
|
|
July 1
|
March, April or May
|
Summary of Proposed Rule Change REVISED
3/13/2020
Arkansas Teacher Retirement System Rule 9 - Retirement and
Benefits SUBSTANTIVE CHANGES:
* ATRS reformated and reorganized seven (7) current ATRS rules
into one rule for consistency and professionalism, and added language where
necessary to incorporate changes from the 2019 General Assembly Acts.
* Although technically a "new" rule because the original rule has
been renumbered and renamed, the language of the new rule is substantially
transcribed verbatim from existing language in current ATRS Rules 9-01, 9-02,
9-03, 9-04, 9-07, 9-08, and 9-09.
* For ease in identifying changes, language in the new rule
that remains the same as the current rules is underlined and
appears as blue font. Any language that
is added or amended, or has been relocated from its
original order in the existing rules, is underlined and italicized, and
appears as black font.
* Reflects language of Act 595 of 2019, which
allowed that if a member has accrued a full year of service credit for a fiscal
year, the member's retirement benefit will not begin before July 1 of the
subsequent fiscal year.
* Reflects language of Act 209 of 2019 to allow that
an ATRS disability retiree may work for a covered employer and still receive
disability retirement if employed less than eighty (80) days, and removed the
"waiver" requirement.
* Adds definition of "808 Employee" for clarity in the rule, to
delineate employees affected by the Early Retirement Incentive Law of 1987 (Act
808 of 1987), which refers to a particular group of employees who may elect to
have credited service in ATRS transferred to APERS.
NON-SUBSTANTIVE CHANGES:
* Correct formatting issues, renumbering, grammar, and spelling,
where appropriate.
CHANGES AS A RESULT OF PUBLIC COMMENTS:
* Correct typographical errors.
* Clarify paying agency and cost-sharing of payments to Act 808
employees who elect to transfer to APERS.
* Clarify that a member may not draw ATRS disability and work
indirectly for an ATRS covered employer.
