Bill Summary – FastDemocracy

Stricken language would be deleted from and underlined language would be added to present law.
                                           Act 105 of the Regular Session
 State of Arkansas                    As Engrossed:       H2/9/23
 94th General Assembly                        A Bill
 Regular Session, 2023                                                             HOUSE BILL 1193
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 By: Representative Warren
 By: Senator K. Hammer
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                                   For An Act To Be Entitled
                AN ACT TO AMEND TITLES OF MEMBERS OF THE BOARD OF
                TRUSTEES OF THE ARKANSAS STATE HIGHWAY EMPLOYEES'
                RETIREMENT SYSTEM TO CONFORM TO THEIR CORRESPONDING
                POSITIONS; TO AMEND THE LAWS REGARDING SURVIVOR
                BENEFITS UNDER THE ARKANSAS STATE HIGHWAY EMPLOYEES'
                RETIREMENT SYSTEM; AND FOR OTHER PURPOSES.
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                                               Subtitle
                         TO AMEND TITLES OF MEMBERS OF THE BOARD
                         OF TRUSTEES OF THE ARKANSAS STATE HIGHWAY
                         EMPLOYEES' RETIREMENT SYSTEM; AND TO
                         AMEND THE LAWS REGARDING SURVIVOR
                         BENEFITS UNDER THE ARKANSAS STATE HIGHWAY
                         EMPLOYEES' RETIREMENT SYSTEM.
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 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS:
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        SECTION 1.       Arkansas Code § 24-5-104(b)(1)(D), concerning the role of
 the Chief Engineer of the Department of Transportation as a member of the
 Board of Trustees of the Arkansas State Highway Employees' Retirement System,
 is amended to read as follows:
                         (D)   The Chief Engineer — Operations of the Arkansas
 Department of Transportation;
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        SECTION 2.        Arkansas Code § 24-5-116 is amended to read as follows:
        24-5-116.        Benefits — Death of member or retirant.
     *LHR045*                                                                    02-09-2023 09:31:31 LHR045
     As Engrossed:       H2/9/23                                                      HB1193
      (a)(1)     In the case of death of a member prior to retirement or of a
 member's beneficiary whose benefits have been deferred or who for any other
 reason has not withdrawn the member's contributions, the member's accumulated
 contributions and any life insurance policy proceeds shall become payable to
 the designated beneficiary or to the estate of the person having the deferred
 benefits if a beneficiary has not been designated or is deceased.
               (2)(A)(i)       The designated beneficiary may be changed by the
 member or member's beneficiary in the manner prescribed by the Board of
 Trustees of the Arkansas State Highway Employees' Retirement System, but the
 designated beneficiary shall have no legal claim on any contribution made by
 the state with a view to the retirement of the member or member's
 beneficiary. The designated beneficiary of a member who has not completed
 five (5) years of creditable service at the time of the member's death, or
 the member's estate if there is no designated beneficiary, is eligible to
 receive the member's accumulated contributions and life insurance proceeds.
                                (ii)   The designated beneficiary of a member who has
 not completed five (5) years of creditable service at the time of the
 member's death, or the estate if there is no designated beneficiary, is not
 eligible to receive any additional benefits described in this section other
 than the benefits set forth in subdivision (a)(2)(A)(i) of this section.
                       (B)(i)     A member may change his or her designated
 beneficiary in the manner prescribed by the Board of Trustees of the Arkansas
 State Highway Employees' Retirement System.
                                (ii)   A member may designate different persons to be
 the beneficiaries for a member's retirement and for his or her life insurance
 policy in the manner prescribed by the board.
               (3)    Unless otherwise elected in accordance with § 24-5-
 116(a)(4), the surviving spouse of a member with five (5) or more years of
 creditable service who was married to the member at least one (1) year
 immediately preceding the member's death may elect an annuity that is
 computed in the same manner in all respects as if the member had retired on
 the date of his or her death with entitlement to an annuity provided for in §
 24-5-115 and the member elected:
                       (A)     An Option A annuity provided for in § 24-5-118(a)(1);
                       (B)     An Option B annuity provided for in § 24-5-118(a)(2)
 with payments to begin when the deceased member would have reached age and
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     As Engrossed:       H2/9/23                                                        HB1193
 service requirements for eligibility to retire; or
                        (C)(i)     A one-time lump sum payment of all the member's
 accumulated contributions.
                                 (ii)   A person reimbursed under subdivision (a)(2)(C)
 of this section shall have no legal claim to any contributions made by the
 state with a view to the retirement of the member or member's beneficiary.
               (4)(A)     A member with five (5) or more years of creditable
 service may designate a beneficiary other than the member's current spouse.
                        (B)    A member's non-spousal beneficiary may elect an
 annuity computed in the same manner in all respects as if the member had
 retired on the date of his or her death with entitlement to an annuity
 provided for in § 24-5-115 and the member elected:
                                        (i)   An Option A annuity provided for in § 24-
 5-228(a)(1); or
                                        (ii)(a)     A one-time lump sum payment of all the
 member's accumulated contributions.
                                              (b)    A person reimbursed under
 subdivision (a)(4)(B)(ii) of this section shall have no legal claim to any
 contributions made by the state with a view to the retirement of the member
 or member's beneficiary.
      (b)(1)     If a retired member with a straight life annuity dies before he
 or she has been paid benefits equivalent to his or her contributions to the
 Arkansas State Highway Employees' Retirement System, the difference between
 the benefits received and his or her contributions while an active member of
 the system, together with any other balance to his or her credit in the
 system, shall be paid to his or her designated beneficiary.
               (2)    In the event there is no designated beneficiary, refund of
 the unpaid balance shall be paid to his or her estate.
               (3)(A)     Payment of the refund shall be made in full or in
 installments, as determined by the board.
                        (B)    The benefits may be paid directly to a curator or
 guardian, to an administrator or to an executor authorized to receive such
 payments, wherever such representative may be, without the appointment of a
 representative in this state.
               (4)    For retired members who elected one of the annuity options
 in § 24-5-118, the available death benefits are as described in that section.
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     As Engrossed:       H2/9/23                                                   HB1193
      (c)(1)     The system shall provide life insurance in the amount of
 fifteen thousand dollars ($15,000) for the benefit of each of its actively
 employed members.
               (2)    The insurance shall remain in force during the life of each
 member until his or her retirement and shall be paid for by the system.
               (3)    The system may offer a similar or lesser amount of life
 insurance coverage on the lives of the member's spouse and his or her
 dependents with the member bearing the costs of any additional coverage.
      (d)   The effective date of the benefits provided for in this section
 shall in no event be prior to the first day following the member's death.
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      SECTION 3.       Arkansas Code § 24-5-118(a)(1)(C)-(D), concerning the death
 of a retirant during the first 120 months of retirement under the Arkansas
 State Highway Employees' Retirement System, is amended to read as follows:
                       (C)     If the beneficiary does not survive the retirant, the
 retirant may name another beneficiary, or failing to name a beneficiary, the
 annuity reserve for the annuity for the remainder of the one-hundred-twenty-
 month period shall be paid to the retirant's estate.
                       (D)     If the beneficiary survives the retirant but dies
 before the end of the one-hundred-twenty-month period, the annuity reserve
 for the annuity for the remainder of the one-hundred-twenty-month period
 shall be paid to the beneficiary's designated beneficiary; or
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      SECTION 4.       Arkansas Code § 24-5-118(b)-(d), concerning the benefits
 payable to a surviving spouse under the Arkansas State Highway Employees'
 Retirement System, are repealed.
      (b)   If an active member with five (5) or more years of credited
 service, including credited service for the year immediately preceding his or
 her death, dies in employer service before retirement, the applicable
 benefits provided in this section shall be paid upon written application to
 the board. It is the intent of this section to include all surviving spouses
 or beneficiaries, regardless of the time of the death of the member.
      (c)   The effective date of the benefits provided in this section shall
 in no event be prior to the first day succeeding the member's death.
      (d)   A member's surviving spouse who was married to the member at least
 the one (1) year immediately preceding his or her death shall receive an
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     As Engrossed:     H2/9/23                                                       HB1193
 annuity computed in the same manner in all respects as if the member had:
             (1)    Retired the date of his or her death with entitlement to an
 annuity provided for in § 24-5-115;
             (2)    Elected the Option A survivor annuity provided for in
 subdivision (a)(1) of this section; and
             (3)    Nominated his or her spouse as joint beneficiary provided
 for in subdivision (a)(2)(A) of this section.
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      SECTION 5.     EMERGENCY CLAUSE.       It is found and determined by the
 General Assembly of the State of Arkansas that certain provisions of the law
 applicable to the Arkansas State Highway Employees' Retirement System are in
 urgent need of revision to bring the operations of the system into
 conformance with sound public pension policy; that amendments to the law in
 this act are of great importance to the citizens of this state; that a July
 1, 2023 effective date is necessary to allow the provisions within this act
 to begin on the first day of the fiscal year to provide for the proper
 administration of the procedures referenced in this act; and that this act is
 necessary to maintain an orderly system of benefits for the members of the
 system.   Therefore, an emergency is declared to exist, and this act being
 necessary for the preservation of the public peace, health, and safety shall
 become effective on July 1, 2023.
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                                     /s/Warren
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                                 APPROVED: 2/21/23
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Statutes affected: 
Old version HB1193 Original - 2-3-2023 08:38 AM: 24-5-104(b), 24-5-116, 24-5-115, 24-5-118(a), 24-5-118, 24-5-118(b)
Old version HB1193 V2 - 2-9-2023 09:32 AM: 24-5-104(b), 24-5-116, 02-09-2023, 24-5-115, 24-5-118(a), 24-5-118, 24-5-118(b)
HB 1193: 24-5-104(b), 24-5-116, 24-5-115, 24-5-118(a), 24-5-118, 24-5-118(b)
Act 105: 24-5-104(b), 24-5-116, 02-09-2023, 24-5-115, 24-5-118(a), 24-5-118, 24-5-118(b)