Arkansas Administrative Code
Agency 088 - Arkansas Teacher Retirement System
Rule 088.00.94-001 - Rules and Regulations

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.

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.

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.

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.

A. Dates

B. Election Materials

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.

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:

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.

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.

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.

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.

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.

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.

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:

3. The following disbursements may be made from the bank funds:

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.

II. PROCEDURES FOR INVESTMENT COUNSEL

III. PROCEDURES - PURCHASING AND SELLING OF CORPORATE BONDS AND STOCKS

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:

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:

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:

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:

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.

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:

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.

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.

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.

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.

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:

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:

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:

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.

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.

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.

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.

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.

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.

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:

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.

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. (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)

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.

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.

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:

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.

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:

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.

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.

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:

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.:

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.

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.

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.

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:

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

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

FREE MILITARY SERVICE UNDER RECIPROCITY

POLICIES

CREDITING OF MILITARY SERVICE UNDER ACT 793

POLICIES

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

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

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

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

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

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

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

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.

RECIPROCITY (Act 611 of 1975)

DEFINITIONS

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:

POLICIES

PART I

COLLEGE ALTERNATE (ACT 436 OF 1967)

DEFINITIONS

POLICIES

PART II

COLLEGE ALTERNFITE (Act 1075 of 1975)

DEFINITIONS

PART III

COLLEGE M.TERNATE (Act 545 of 1983)

POLICIES

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

DEFINITIONS

POLICIES

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

ERRONEOUS MEMBERSHIP

DEFINITIONS

POLICIES

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

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