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 elect to have their annuity or benefit payments made to a special needs trust that complies with specific federal regulations under 42 U.S.C. 1396p(d)(4)(A) or 42 U.S.C. 1396p(d)(4)(C), as they existed on January 1, 2025. This option is available to both the member and the legal guardians of eligible beneficiaries.

The bill also outlines conditions under which the Arkansas Teacher Retirement System will pay benefits directly to the individual if a special needs trust has not been established or cannot be identified at the time of payment. It clarifies that the system is not required to establish or verify the compliance of any trust with state or federal laws. Additionally, the Board of Trustees is granted the authority to create rules for the administration of this new provision. The act is set to take effect on July 1, 2026.