This bill amends the Arkansas Teacher Retirement System laws to allow for the payment of annuities or benefits owed to individuals to be directed to a special needs trust established for their benefit. Specifically, it introduces a new section, 24-7-739, which permits members of the retirement system to designate a special needs trust as the recipient of their annuity or benefit payments. This option is available for beneficiaries under specific sections of the Arkansas Code, and it aligns with federal regulations under 42 U.S.C. 1396p(d)(4)(A) and 42 U.S.C. 1396p(d)(4)(C) as they existed on January 1, 2025.

Additionally, the bill outlines the conditions under which the Arkansas Teacher Retirement System will pay benefits directly to individuals if a special needs trust has not been established or cannot be identified. It clarifies that the system is not required to establish or act as a trustee for these trusts, nor is it responsible for verifying their compliance with state or federal laws. The bill also grants the Board of Trustees the authority to create rules for administering this new provision. The act is set to take effect on July 1, 2026.