ATRS is closed for the Thanksgiving holiday on Thursday, November 28th and Friday, November 29th. It has been a very rewarding year serving as the executive director of ATRS. I would like to thank the ATRS Board of Trustees for giving me the chance to serve ATRS in this capacity. Thank you to the Board, the ATRS staff, Arkansas educators, the Arkansas Legislature, the Governor’s Office, and countless others for their support and encouragement this past year.
Thanks to Joint Committee on Public Retirement & Social Security Programs (JRC) for hosting the statewide meetings this fall. The JRC has been traveling the state (11 cities) to collect and share information regarding the status of the Arkansas public pension plans. These meetings allowed me, the other leaders of the Arkansas pension systems, and the members of the JRC to meet face to face with our members and listen to their concerns and questions. It was also a great opportunity for building productive relationships between the pension agency staff and legislators.
At these statewide meetings, the chairs of the retirement committee have answered a recurring question in the negative about “rumors” that there would be an attempt to merge the State’s retirement systems. They have assured the attendees that the systems are distinct, separate and must be maintained so. The Arkansas Teacher Retirement System (ATRS) was created by law in 1937 and was specifically designed to handle the retirement needs of educators and others devoted to education. There have been no bills to merge the State’s retirement systems discussed, drafted, or introduced nor are there plans to do so. In fact if anyone tells you otherwise you are encouraged to call your State Senator or Representative. Any rumors out there about the merging of the retirement systems are just that, rumors.
These meetings were attended by a total of over 2,000 people. About half of those who attended were members of ATRS. Thanks to all of you that were able to attend. If you were not able to attend, I have summarized the material presented below.
ATRS is administered by a 15 member board of trustees. 11 of those trustees are elected by the members of the ATRS system. There has been a lot of support at the statewide meetings, both from ATRS members and legislators, in maintaining the ATRS member elected board as it currently stands. Since the majority of the ATRS Board are also ATRS members, when they need to adjust the system they are also affected.
ATRS is currently in good financial shape. As of June 30, 2018, the system is 80% funded, which is well above the median 72% funding level on a national basis. ATRS has over $17 billion in assets which are invested to produce the income needed to pay retiree benefits. Currently there are around 50,000 retirees receiving annual benefits of about $1.2 billion. That $1.2 billion is spread out all over the state of Arkansas and is an important economic driver for local communities. Since ATRS benefits are paid for an entire life-time, ATRS retirees will not "out live" their benefits. That means they are free to spend those benefits in their local restaurants, grocery stores, and theaters.
One of the reasons ATRS is in good shape is that back in 2017 some difficult decisions had to be made. In 2017 ATRS received bad news from our actuaries. They told us that our retirees are living longer than had been expected. This is good news if you are a retiree, but it is bad news to a system that has to pay life-time benefits. Also the actuaries told us that we could not expect to make an 8% return on our investments in the future. So after getting this update, ATRS worked with the Arkansas legislature to give the ATRS trustees a set of tools to adjust member benefits so that the system could get the unfunded liabilities reduced to a responsible level.
The member benefit adjustments were made in a way to be spread out among all ATRS members. The only adjustment that affected the existing ATRS retirees was an adjustment of the monthly benefit stipend. When the benefit stipend was first introduced it was $50 per month. As the financial stability of the system improved, it was increased to $75 per month. In 2017 the benefit stipend was set back to the original amount of $50 per month. This adjustment was a one time thing that occurred this past July. The benefit stipend will remain at $50 per month for the foreseeable future. The cost of living adjustment (COLA) has NOT changed. It is still a simple 3% COLA that takes affect each July. There are NO plans to make any adjustments to the ATRS COLA at this time.
ATRS currently has no plans to further adjust member benefits beyond the 2017 adjustments. We are currently in the process of implementing the 2017 adjustments. ATRS is in a "wait and see" phase to give the adjustments time to work in reducing the unfunded liabilities.
Here is the link to the ATRS slide presentation used for the 2019 Fall statewide meetings: Link to ATRS Statewide Meeting Presentation
Thank you to AETN for taking the time to video record the statewide meeting that was held in Bentonville. If you were not able to come to one of the meetings, you may enjoy watching Bentonville meeting here: Link to Video of Bentonville Meeting
Stay in Touch with ATRS and View YOUR Account Information
The ATRS website allows members to have direct access to specific member account information. Now, approximately 20,000 members have direct account access to individualized account information. Here is the link to the instructions to sign up: www.artrs.gov/registration.
You can also sign up to obtain these executive director updates through your private email address. Updates are made throughout the year such as at retirement season and other times when information needs to be shared. Now, over 20,000 people have signed up to receive this executive director update by direct email delivery. It is always a great pleasure for ATRS staff to learn of more ways to provide information to ATRS members, employers, beneficiaries, government officials, and the public. The ATRS Board is committed to providing a system that is member friendly and transparent. Remember that ATRS is here to serve you.
Best regards,
Clint Rhoden
Executive Director ATRS
Office: (501) 588-4367
Mobile: (501) 291-1623
clintr@artrs.gov