Bill Summary – FastDemocracy

Stricken language would be deleted from and underlined language would be added to present law.
                                           Act 107 of the Regular Session
 State of Arkansas                    As Engrossed:       H2/7/23
 94th General Assembly                        A Bill
 Regular Session, 2023                                                             HOUSE BILL 1201
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 By: Representative Warren
 By: Senator K. Hammer
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                                   For An Act To Be Entitled
                AN ACT TO ENACT THE ARKANSAS TEACHER RETIREMENT
                SYSTEM’S GENERAL OMNIBUS ACT; TO CORRECT CERTAIN
                REFERENCES TO “ALTERNATE RETIREMENT PLAN”, “COVERED
                EMPLOYER”, “CREDITED SERVICE”, “RETIRANT”, “SERVICE
                CREDIT”, AND “THE SYSTEM”; TO AMEND AND ADD CERTAIN
                DEFINITIONS APPLICABLE TO THE ARKANSAS TEACHER
                RETIREMENT SYSTEM; TO CLARIFY THE LAW CONCERNING
                BENEFIT INCREASES AND COMPUTATION, DEADLINES, SYSTEM
                ASSETS, TERMINATION SEPARATION PERIOD, SERVICE
                CREDIT, SECOND REVIEWS OF DISABILITY RETIREMENT
                APPLICATIONS, A MEMBER’S RESIDUE, CONTRACT BUYOUT
                SETTLEMENT AGREEMENTS, THE DE MINIMIS AMOUNT, AND
                OTHER VARIOUS PROVISIONS APPLICABLE TO THE ARKANSAS
                TEACHER RETIREMENT SYSTEM; TO DECLARE AN EMERGENCY;
                AND FOR OTHER PURPOSES.
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                                               Subtitle
                         TO ENACT THE ARKANSAS TEACHER RETIREMENT
                         SYSTEM’S GENERAL OMNIBUS ACT; 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 § 21-5-411(a)(1)(A)(v), concerning the
 eligibility of certain retired employees to participate in the State and
 Public School Life and Health Insurance Program, is amended to read as
     *LHR037*                                                                    02-07-2023 09:19:08 LHR037
     As Engrossed:   H2/7/23                                                    HB1201
 follows:
                           (v)    An alternate retirement plan of a qualifying
 institution under as defined in § 24-7-801 24-7-202; and
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      SECTION 2.   Arkansas Code § 24-2-302(3)(D), concerning the
 classification under the Arkansas Teacher Retirement System of a person
 employed in a position requiring professional training or certification with
 an area vocational-technical school or employed by the Arkansas Educational
 Television Commission, is amended to read as follows:
                   (D)     Any person employed in a position requiring
 professional training or certification with an area vocational-technical
 school or employed by the Arkansas Educational Television Commission, except
 that employees of area vocational-technical schools and the Division of
 Career and Technical Education, the Adult Education Section, and the Office
 of Skills Development, who have elected to participate in an alternate
 retirement plan established by §§ 24-7-901 and 24-7-903 — 24-7-908 § 24-7-901
 et seq. shall be active members of the alternate retirement plan; and
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      SECTION 3.   Arkansas Code § 24-2-401(3)(F), concerning the definition
 of "reciprocal system" that is applicable to public employee retirement
 plans, is amended to read as follows:
                   (F)     An alternate retirement plan for:
                           (i)    A college, university, or the Division of Higher
 Education provided for under § 24-7-801 et seq.; or
                           (ii)   A vocational-technical school or the Division
 of Career and Technical Education, the Adult Education Section of the
 Division of Workforce Services, the Division of Higher Education, and the
 Office of Skills Development, with respect to plans provided for under § 24-
 7-901 et seq. as defined in § 24-7-202; or
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      SECTION 4.   Arkansas Code § 24-2-401(4)(D), concerning the definition
 of "state employer" that is applicable to public employee retirement plans,
 is amended to read as follows:
                   (D)     A public employer who is:
                           (i)    A college, university, or the Division of Higher
 Education whose employees are covered by an alternate retirement plan
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     As Engrossed:    H2/7/23                                                   HB1201
 provided for under § 24-7-801 et seq.; or
                            (ii)   A vocational-technical school or the Division
 of Career and Technical Education, the Adult Education Section, and the
 Office of Skills Development, whose employees are covered by an alternate
 retirement plan provided for under § 24-7-901 et seq. that has an alternate
 retirement plan as defined in § 24-7-202;
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      SECTION 5.    Arkansas Code § 24-2-402(g)(6), concerning death-in-service
 benefits as to an alternate retirement plan, is amended to read as follows:
            (6)    If the reciprocal system is an alternate retirement plan
 under § 24-7-801 et seq. or § 24-7-901 et seq. as defined in § 24-7-202,
 death-in-service benefits shall be contingent on death-in-service benefits
 having been provided by the alternate retirement plan and having been
 selected by the member as a benefit.
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      SECTION 6.    Arkansas Code § 24-2-402(k), concerning the payment of
 payable benefits in accordance with terms specified in a written alternate
 retirement plan document, is amended to read as follows:
      (k)   If the reciprocal system is an alternate retirement plan for a
 college, a university, or the Division of Higher Education provided for under
 § 24-7-801 et seq., or for a vocational-technical school or the Department of
 Career Education provided for under § 24-7-901 et seq. as defined in § 24-7-
 202, the benefits payable shall be in accordance with terms specified in the
 written alternate retirement plan document for purchasing the insurance
 policies or annuity contracts, both fixed and variable in nature, for the
 participants.
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      SECTION 7.    Arkansas Code § 24-4-901(a)(1)(F), concerning credited
 service and reciprocity under the Arkansas Public Employees' Retirement
 System and the amount of annuity awarded to a member employed by an alternate
 retirement plan, is amended to read as follows:
                    (F)     An alternate retirement plan under § 24-8-101 et seq.
 or § 24-9-201 et seq. as defined in § 24-7-202; or
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      SECTION 8.    Arkansas Code § 24-4-901(a)(3)(B), concerning credited
 service and reciprocity under the Arkansas Public Employees' Retirement
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     As Engrossed:    H2/7/23                                                   HB1201
 System and the computation of final average compensation for credited service
 in the Arkansas Judicial Retirement System or an alternate retirement plan,
 is amended to read as follows:
                    (B)     Compensation for credited service in the Arkansas
 Judicial Retirement System or an alternate retirement plan under § 24-8-101
 et seq. or § 24-9-201 et seq. as defined in § 24-7-202 shall not be used to
 determine final average compensation.
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      SECTION 9.     Arkansas Code § 24-4-901(b)(1)(F), concerning credited
 service and reciprocity under the Arkansas Public Employees’ Retirement
 System and what criteria an annuity is determined from when a member of an
 alternate retirement plan retires due to disability or dies in service, is
 amended to read as follows:
                    (F)     An alternate retirement plan under § 24-8-101 et seq.
 or § 24-9-201 et seq. as defined in § 24-7-202; or
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      SECTION 10.     Arkansas Code § 24-4-901(b)(4), concerning credited
 service and reciprocity under the Arkansas Public Employees’ Retirement
 System and the contingency of disability and death-in-service benefits being
 awarded if provision of the benefits were provided to the alternate
 retirement plan and were selected by the member as a benefit, is amended to
 read as follows:
            (4)     If a member has service credit in an alternate retirement
 plan under § 24-8-101 et seq. or § 24-9-201 et seq. as defined in § 24-7-202,
 disability and death-in-service benefits shall be contingent on provision of
 those benefits having been provided by the alternate retirement plan and
 having been selected by the member as a benefit.
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      SECTION 11.     Arkansas Code § 24-4-901(d)(6), concerning credited
 service and reciprocity under the Arkansas Public Employees’ Retirement
 System and the provision of reciprocal service credits between contributory
 and noncontributory members of an alternate retirement plan, is amended to
 read as follows:
            (6)     An alternate retirement plan for a college, university, or
 the Division of Higher Education provided for under § 24-8-101 et seq. or for
 a vocational-technical school or the Division of Career and Technical
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     As Engrossed:       H2/7/23                                                     HB1201
 Education, the Adult Education Section, and the Office of Skills Development,
 provided for under § 24-9-201 et seq. as defined in § 24-7-202; and
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       SECTION 12.      Arkansas Code § 24-7-202(6), concerning the definition of
 "alternate retirement plan" applicable to the Arkansas Teacher Retirement
 System, is amended to read as follows:
               (6)    "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. § 24-7-801 et seq.,
 § 24-7-901 et seq., or § 24-7-1001 et seq.;
       SECTION 13.      Arkansas Code § 24-7-202(7), concerning the definition of
 "annuity" applicable to the Arkansas Teacher Retirement System, is amended to
 read as follows:
               (7)    “Annuity” means an amount payable to a retirant retiree each
 fiscal year by the Arkansas Teacher Retirement System in equal monthly
 installments;
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       SECTION 14.      Arkansas Code § 24-7-202(14), concerning the definition of
 "credited service" applicable to the Arkansas Teacher Retirement System, is
 amended to read as follows:
               (14)    “Credited service” means service which is creditable
 credited as service by the Arkansas Teacher Retirement System;
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       SECTION 15.      Arkansas Code § 24-7-202(19)(D)(iii), concerning the
 definition of "employment with a school" applicable to the Arkansas Teacher
 Retirement System, is amended to read as follows:
                               (iii)    Each education-related agency or organization
 shall be:
                                       (a)   Approved Be approved according to rules
 established by the board Board of Trustees of the Arkansas Teacher Retirement
 System;
                                       (b)   Considered an employer under subdivision
 (18) of this section Become a covered employer at the time that an employee
 elects to become or remain a member of the Arkansas Teacher Retirement
 System; and
                                       (c)   Be considered a covered employer only for
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     As Engrossed:   H2/7/23                                                    HB1201
 each employee who elects to become or remain a member of the Arkansas Teacher
 Retirement System; and
                                 (d)   Responsible Be responsible for all
 required employer contributions;
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      SECTION 16.    Arkansas Code § 24-7-202(21)(B), concerning the definition
 of "inactive member" applicable to the Arkansas Teacher Retirement System, is
 amended to read as follows:
                    (B)    Not a retirant retiree;
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      SECTION 17.    Arkansas Code § 24-7-202(28), concerning the definition of
 "normal retirement age" applicable to the Arkansas Teacher Retirement System,
 is amended to read as follows:
            (28)    “Normal retirement age” means:
                    (A)    Sixty-five (65) years of age if the member has at
 least five (5) years of actual service or reciprocal service; or
                    (B)    At least sixty (60) years of age if the member has a
 combined total of thirty-eight (38) years or more of credited service in the
 Arkansas Teacher Retirement System, Teacher Deferred Retirement Option Plan,
 or reciprocal service in another eligible state retirement system Sixty (60)
 years of age or older if the member’s age and the member’s combined years of
 credited service in the Arkansas Teacher Retirement System, Teacher Deferred
 Retirement Option Plan, or reciprocal service in another eligible state
 retirement system total ninety-eight (98);
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      SECTION 18.    Arkansas Code § 24-7-202(32), concerning the definition of
 "retiree" or "retirant" under the Arkansas Teacher Retirement System, is
 amended to read as follows:
            (32)    “Retiree” or “retirant” means a member receiving an
 Arkansas Teacher Retirement System annuity;
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      SECTION 19.    Arkansas Code § 24-7-202, concerning definitions
 applicable to the Arkansas Teacher Retirement System, is amended to add
 additional subdivisions to read as follows:
            (45)(A) “Benefit enhancement” means any change to the current
 benefit policy for a retired, active, or inactive member of the Arkansas
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     As Engrossed:       H2/7/23                                                  HB1201
 Teacher Retirement System or T-DROP participant that increases the
 amortization period by one (1) year or more.
                       (B) Benefit enhancement does not include any change that is
 required to comply with federal law, prevent a manifest injustice, correct an
 error, avoid an unintended consequence of an existing statutory provision, or
 prevent undue hardship on any benefit participant or class of benefit
 participants.
               (46)    “Employment with a covered employer” means the employment
 of an employee that would require a covered employer to pay employer
 contributions to the system; and
               (47)    "Residue" for the purposes of § 24-7-701 et seq. means the
 difference between the accumulated contributions and regular interest
 credited to the retirement reserve account as of the member's effective date
 of retirement and the total amount of retirement annuities paid.
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      SECTION 20.       Arkansas Code § 24-7-207 is amended to read as follows:
      24-7-207. Increase in benefit amount.
      (a)(1)     The Board of Trustees of the Arkansas Teacher Retirement System
 is authorized by this act to raise the level of benefits provided to the
 current retirants retirees and other beneficiaries of the Arkansas Teacher
 Retirement System to a comparable level increase to match the increase in
 benefits that would accrue to active members as a result of any reduction of
 the calculation of “final average salary” to not less than a three-year
 period nor more than the five-year period in accordance with any rules the
 board might promulgate.
               (2)    The board may raise the level of benefits to a comparable
 level increase that matches the increase in benefits that would accrue to
 active members as a result of any reduction caused by setting the applicable
 number of years used in computing final average salary for retirement
 benefits at not less than three (3) years and not more than five (5) years in
 accordance with any rules that the board may promulgate.
      (b)   The amount of any increase for retirants retirees and other
 beneficiaries shall also be determined in accordance with the rules of the
 board as is actuarially appropriate for the system.
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      SECTION 21.       Arkansas Code § 24-7-301(4) and (5), concerning the
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     As Engrossed:       H2/7/23                                                   HB1201
 membership of the Board of Trustees of the Arkansas Teacher Retirement System
 and the election thereof, are amended to read as follows:
               (4)(A)     Three (3) retirants retirees shall be elected retirant
 retiree trustees by the retirees of the system.
                        (B)    Each retirant retiree trustee shall be a retirant
 retiree with an annuity being paid by the system at the beginning of his or
 her term of office;
               (5)    The member and retirant retiree trustees shall be elected in
 accordance with rules as have been adopted by the board to govern the
 elections; and
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      SECTION 22.        Arkansas Code § 24-7-302(a)(2)(B), concerning the
 ineligibility of a retirant trustee to serve on the Board of Trustees of the
 Arkansas Teacher Retirement System after becoming active, is amended to read
 as follows:
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