Bill Summary – FastDemocracy

Stricken language would be deleted from and underlined language would be added to present law.
                                           Act 427 of the Regular Session
 State of Arkansas                    As Engrossed:       H3/8/21
 93rd General Assembly                        A Bill
 Regular Session, 2021                                                             HOUSE BILL 1275
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 By: Representative S. Smith
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                                   For An Act To Be Entitled
                AN ACT CONCERNING RECIPROCAL SERVICE CREDIT AS IT
                RELATES TO THE ADMINISTRATION OF MONTHLY BENEFITS;
                CONCERNING THE DEFINITIONS OF "ALTERNATE RETIREMENT
                PLAN" AND "ALTERNATIVE RETIREMENT PLAN"; TO DECLARE
                AN EMERGENCY; AND FOR OTHER PURPOSES.
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                                               Subtitle
                         CONCERNING RECIPROCAL SERVICE CREDIT AS
                         IT RELATES TO THE ADMINISTRATION OF
                         MONTHLY BENEFITS; CONCERNING THE
                         DEFINITIONS OF "ALTERNATE RETIREMENT
                         PLAN" AND "ALTERNATIVE RETIREMENT PLAN";
                         AND TO DECLARE AN EMERGENCY.
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 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS:
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        SECTION 1.       Arkansas Code  24-7-202, concerning definitions applicable
 to the Arkansas Teacher Retirement System, is amended to add an additional
 subdivision to read as follows:
                (44)     "Alternate retirement plan" means a retirement plan based
 on the purchase of contracts providing retirement and death benefits for
 employees under  24-7-801 et seq. or  24-7-901 et seq.
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        SECTION 2.       Arkansas Code  24-7-601(e), concerning credited service
 generally and reciprocal service under the Arkansas Teacher Retirement
 System, is amended to add an additional subdivision to read as follows:
                (7)(A)     Except as otherwise provided under this subdivision,
     *JNL087*                                                                     03-08-2021 11:05:24 JNL087
     As Engrossed:    H3/8/21                                                      HB1275
 reciprocal service earned from participation in an alternate retirement plan
 shall be used only if the member's contributions to the alternate retirement
 plan have not been withdrawn in full or in part from the alternate retirement
 plan by the member.
                      (B)   The following shall not prevent a member from
 establishing reciprocal service in an alternate retirement plan:
                             (i)    A withdrawal made by the member from the
 alternate retirement plan after the member attains fifty-nine and one-half
 (59 1/2) years of age; and
                             (ii)   An eligible rollover transaction under the
 Internal Revenue Code.
                      (C)   In order to restore the use of reciprocal service, a
 member may repay to an alternate retirement plan a withdrawal made from the
 alternate retirement plan by the member before the member attained fifty-nine
 and one-half (59 1/2) years of age if allowed by the alternate retirement
 plan.
                      (D)   A salary earned from participation in an alternate
 retirement plan shall not be used in the final average salary calculated by
 the system.
                      (E)   The board may promulgate rules for the administration
 of reciprocal service under an alternate retirement plan, including without
 limitation rules for salaries, withdrawals, and rollover eligibility under
 this subdivision.
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         SECTION 3.   Arkansas Code  24-7-909 is amended to read as follows:
         24-7-909. Extension of group insurance coverage by dependents of
 deceased eligible employee.
         Upon the death of an insured eligible employee of an institution of
 higher education or of an insured eligible employee who is a member of the
 alternate retirement plan for employees of the Career Education and Workforce
 Development Board or of a person retired and receiving benefits under the
 alternate retirement plan, the dependents of the deceased person shall have
 the same option to extend the group insurance coverage of the dependents
 under the state group insurance plan as is afforded dependents of other
 deceased insured employees and retirants retirees.
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     As Engrossed:       H3/8/21                                                       HB1275
      SECTION 4.       Arkansas Code  24-7-1601(b)(4), concerning the legislative
 history and findings regarding optional participation by employees of
 institutions of higher education in the Arkansas Teacher Retirement System,
 is amended to read as follows:
               (4)    The general intent of the early legislation was to allow
 those institutions of higher education employers to offer their employees the
 option to participate in an alternative alternate retirement plan, the
 Arkansas Teacher Retirement System retirement plan, or the Arkansas Public
 Employees' Retirement System retirement plan.
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      SECTION 5.       Arkansas Code  24-7-1602(1) and (2), concerning the
 definitions of "alternative retirement plan" and "benefits-eligible" as they
 apply to the optional participation of employees of institutions of higher
 education in the Arkansas Teacher Retirement System, is amended to read as
 follows:
               (1)    Alternative retirement plan means an optional retirement
 plan based on the purchase of contracts providing retirement and death
 benefits for a benefits-eligible employee of a post-secondary or higher
 education employer;
               (2)    Benefits-eligible means a class of employees, determined
 at the discretion of a post-secondary or higher education employer, eligible
 to participate in the Arkansas Teacher Retirement System, an alternate
 retirement plan, or the Arkansas Public Employees' Retirement System;
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      SECTION 6.       Arkansas Code  24-7-1603(a)(1), concerning the effect of
 the subchapter on other law, is amended to read as follows:
      (a)(1)     This subchapter controls any inconsistent provision of any
 other law regarding the enrollment and coverage of an employee of a PSHE
 employer in either the Arkansas Teacher Retirement System retirement plan or
 an alternative alternate retirement plan that is offered by a PSHE employer.
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      SECTION 7.       EMERGENCY CLAUSE.       It is found and determined by the
 General Assembly of the State of Arkansas that the operations of a state
 public retirement system are complex; that the Arkansas Teacher Retirement
 System must be able to meet the needs of its members as anticipated by the
 General Assembly; that certain provisions of  24-7-201 et seq. are in need
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     As Engrossed:    H3/8/21                                                  HB1275
 of immediate revision and updating to conform with sound public pension
 policy and actuarial requirements; that there are conflicts in the law
 applicable to the Arkansas Teacher Retirement System concerning reciprocal
 service in alternate retirement plans; that member benefits will be at risk
 if the conflicts in the law concerning reciprocal service in alternate
 retirement plans remain unresolved; that this act resolves the conflicts in
 the law concerning reciprocal service in alternate retirement plans; that
 such revision and updating is of great importance to members of the Arkansas
 Teacher Retirement System and to other citizens of this state; and that this
 act is necessary in order to maintain an orderly system of benefits for the
 members of the Arkansas Teacher Retirement System and reciprocal systems.
 Therefore, an emergency is declared to exist, and this act being immediately
 necessary for the preservation of the public peace, health, and safety shall
 become effective on:
            (1)    The date of its approval by the Governor;
            (2)    If the bill is neither approved nor vetoed by the Governor,
 the expiration of the period of time during which the Governor may veto the
 bill; or
            (3)    If the bill is vetoed by the Governor and the veto is
 overridden, the date the last house overrides the veto.
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                                   /s/S. Smith
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                                APPROVED: 3/23/21
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Statutes affected: 
Old version HB1275 Original - 1-26-2021 01:12 PM: 24-2-101, 24-2-402, 24-2-408, 24-7-801, 24-7-901, 24-4-706, 24-6-401, 24-8-201, 24-8-218
Old version HB1275 V2 - 3-8-2021 11:06 AM: 24-7-202, 24-7-601(e), 24-7-909, 03-08-2021, 24-7-1601(b), 24-7-1602(1), 24-7-1603(a)
HB 1275: 24-7-202, 24-7-601(e), 24-7-909, 03-08-2021, 24-7-1601(b), 24-7-1602(1), 24-7-1603(a)
Act 427: 24-7-202, 24-7-601(e), 24-7-909, 03-08-2021, 24-7-1601(b), 24-7-1602(1), 24-7-1603(a)
Old version of HB 1275 - 03-08-21: 24-7-202, 24-7-601(e), 24-7-909, 03-08-2021, 24-7-1601(b), 24-7-1602(1), 24-7-1603(a)
Old version of HB 1275 - 01-26-21: 24-2-101, 24-2-402, 24-2-408, 24-7-801, 24-7-901, 24-4-706, 24-6-401, 24-8-201, 24-8-218