Bill Summary – FastDemocracy

Stricken language would be deleted from and underlined language would be added to present law.
                                             Act 536 of the Regular Session
 State of Arkansas                     As Engrossed:       H3/13/23
 94th General Assembly                          A Bill
 Regular Session, 2023                                                               HOUSE BILL 1260
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 By: Representatives L. Johnson, Hawk, Maddox, Vaught
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                                     For An Act To Be Entitled
                  AN ACT TO AMEND THE LAW CONCERNING ANNUITIES UNDER
                  THE ARKANSAS LOCAL POLICE AND FIRE RETIREMENT SYSTEM;
                  TO DECLARE AN EMERGENCY; AND FOR OTHER PURPOSES.
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                                                 Subtitle
                         TO AMEND THE LAW CONCERNING ANNUITIES
                         UNDER THE ARKANSAS LOCAL POLICE AND FIRE
                         RETIREMENT SYSTEM; 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 § 24-10-404(b)(2), concerning the
 contribution for a member whose employment is not also covered by Social
 Security or whose employment meets certain other requirements under the
 Arkansas Local Police and Fire Retirement System, is amended to read as
 follows:
                  (2)(A)     Beginning July 1, 2009 July 1, 2023, the contribution for
 covered members defined in subdivision (b)(1) of this section shall be eight
 and one-half percent (8.5%) nine and one-half percent (9.5%) of his or her
 pay.
                           (B)   Beginning July 1, 2009 July 1, 2023, the contribution
 for paid service members not defined in subdivision (b)(1) of this section
 shall be two and one-half percent (2.5%) three and one-half percent (3.5%) of
 his or her pay.
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          SECTION 2.       Arkansas Code § 24-10-602(a)(1) and (a)(2), concerning the
     *LHR087*                                                                      03-13-2023 10:00:12 LHR087
     As Engrossed:       H3/13/23                                                       HB1260
 annuity available to a retired member of the Arkansas Local Police and Fire
 Retirement System, is amended to read as follows:
               (1)    Benefit Program 1.
                       (A)   For each year of paid service resulting from
 employment:
                                (i)     In a position not also covered by Social
 Security, two and ninety-four hundredths percent (2.94%) three percent (3%)
 of his or her final average pay; and
                                (ii)    In a position also covered by Social Security,
 one and ninety-four hundredths percent (1.94%) two percent (2%) of his or her
 final average pay.
                       (B)(i)(a)        In addition, if the member is retiring as
 provided in § 24-10-604, § 24-10-605, § 24-10-606, or § 24-10-607, and if the
 member's age at retirement is less than Social Security's minimum age for an
 immediate unreduced retirement benefit, then the member shall receive a
 temporary annuity equal to one percent (1%) of his or her final average pay
 for each year of paid service resulting from employment in a position also
 covered by Social Security.
                                        (b)   The provisions of this section that allow
 a member who retires as provided in § 24-10-607, whose employment was also
 covered by Social Security, and who is thereby eligible for a temporary
 annuity shall be applied retroactively to all persons who retired under those
 circumstances on or after October 1, 1989.
                                (ii)    The temporary annuity shall terminate at the
 end of the calendar month in which the earlier of the following events
 occurs:
                                        (a)   The member's death; or
                                        (b)   His or her attainment of Social Security's
 minimum age for an immediate unreduced retirement benefit.
                                (iii)    Any member who has had a temporary annuity
 terminated because of an award of disability retirement under the Social
 Security Act, 42 U.S.C. § 301 et seq., shall have that temporary annuity
 restored;
               (2)    Benefit Program 2.
                       (A)   For each year of paid service rendered on or after the
 election date of the Benefit Program 2 and before the election is rescinded:
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     As Engrossed:   H3/13/23                                                        HB1260
                            (i)     In a position also covered by Social Security,
 two and ninety-four hundredths percent (2.94%) three percent (3%) of the
 member's final average salary; and
                            (ii)    In a position not covered by Social Security,
 three and twenty-eight hundredths percent (3.28%) three and thirty-four
 hundredths percent (3.34%) of the member's final average salary.
                   (B)(i)     For each year of paid service rendered before the
 election date of the Benefit Program 2 or after the election is rescinded:
                                    (a)   In a position also covered by Social
 Security, one and ninety-four hundredths percent (1.94%) two percent (2%) of
 the member's final average salary; and
                                    (b)   In a position not covered by Social
 Security, two and ninety-four hundredths percent (2.94%) three percent (3%)
 of the member's final average salary.
                            (ii)    A member who has paid service rendered before
 the election date of Benefit Program 2 or after the election is rescinded and
 subsequently readopted may have the paid service rendered on or after July
 28, 1995, treated as though the paid service had been rendered after the
 election date of Benefit Program 2 by paying to the system the actuarial cost
 of the increased benefit by a single contribution or by an agreement to pay
 an increased rate of contributions if approved by the Board of Trustees of
 the Arkansas Local Police and Fire Retirement System.
                            (iii)    As used in subdivision (a)(2)(B)(ii) of this
 section, “actuarial cost” means an amount that is the actuarial equivalent of
 the value of the credited service to be purchased at the time of the
 purchase, as determined by the system's actuary.
                   (C)(i)(a)        In addition, if the member is retiring as
 provided in § 24-10-604, § 24-10-605, § 24-10-606, or § 24-10-607, and if the
 member's age at retirement is less than Social Security's minimum age for an
 immediate unreduced retirement benefit, then the member shall receive a
 temporary annuity equal to one percent (1%) of his or her final average pay
 for each year of paid service rendered before the election date of Benefit
 Program 2 and resulting from employment in a position also covered by Social
 Security.
                                    (b)   The provisions of this section that allow
 a member who retires as provided in § 24-10-607, whose employment was also
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     As Engrossed:   H3/13/23                                                         HB1260
 covered by Social Security, and who is thereby eligible for a temporary
 annuity shall be applied retroactively to all persons who retired under those
 circumstances on or after October 1, 1989.
                            (ii)    The temporary annuity shall terminate at the
 end of the calendar month in which the earlier of the following events
 occurs:
                                    (a)   The member's death; or
                                    (b)   His or her attainment of Social Security's
 minimum age for an immediate unreduced retirement benefit.
                            (iii)    Any member who has had a temporary annuity
 terminated because of an award of disability retirement under the Social
 Security Act, 42 U.S.C. § 301 et seq., shall have that temporary annuity
 restored;
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      SECTION 3.   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 Local Police and Fire
 Retirement System must be able to meet the needs of its members as
 anticipated by the General Assembly; that certain benefit provisions under
 the laws of the Arkansas Local Police and Fire Retirement System need
 revision and updating to bring them into conformance with sound public
 pension policy and actuarial requirements; that the revisions and updates are
 of great importance to members of the Arkansas Local Police and Fire
 Retirement System and to other citizens of the State of Arkansas; that an
 effective date of July 1, 2023, is necessary in order to allow for a
 structured and proper administration of the procedures referenced in this
 act; that the updates and revisions contained in this act are of great
 importance for actuarial purposes and for the improvement and protection of
 member benefits under the Arkansas Local Police and Fire Retirement System;
 and that an effective date of July 1, 2023, is necessary in order to maintain
 an orderly system of benefits for the members of the Arkansas Local Police
 and Fire Retirement 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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                                     APPROVED: 4/11/23
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Statutes affected: 
Old version HB1260 Original - 1-25-2023 05:02 PM: 24-10-602(a)
Old version HB1260 V2 - 3-13-2023 10:00 AM: 24-10-404(b), 24-10-602(a), 03-13-2023
HB 1260: 24-10-602(a)
Act 536: 24-10-404(b), 24-10-602(a), 03-13-2023