Executive Director Update: ATRS Updates on ESG Legislation + 2024 Retirements

May 31^st was the deadline to apply for an effective July 1 retirement or T-DROP participation date, and as expected we received a lot – more than 1,300 retirement and T-DROP applications from members. Just in the month of May, your ATRS staff:

• Received 5,440 phone calls from members
• Met in-person with 336 members at our Little Rock office
• Responded to 1,825 emails from members

I am very proud of our ATRS staff and all that they do to serve you, our members. We are already discussing ways we can improve our service level to make next year’s retirement season even more seamless for our members and for our staff. If you have a suggestion or idea for how we can better serve you, please email me at MarkW@artrs.gov. And if you or someone you know had a bad experience of any kind, please let me know about that as well.

 

Report on the ESG Oversight Committee

Just as we are closing out retirement season for this year, we also recently closed the book on an investment matter that came up between the Legislature and the state’s retirement systems last year. Because we have now resolved the issue, I wanted to give you a final update.

You may remember the ESG investment discussions that took place during last year’s legislative session. ESG is an acronym for “Environmental, Social, Governance” and refers to how some corporations and investors make decisions that are not based on profit alone, but also on political, societal, ideological, or moral principles. Arkansas legislators have pushed back on ESG investing, because they believe that investment decisions should be based solely on a financial basis. In other words, an investment should be chosen based on how much profit it will return, and not whether it meets certain political goals.

The Legislature approved several bills last year related to ESG, one of which was House Bill 1307. It proposed setting up an ESG Oversight Committee tasked with identifying financial service providers that discriminate against the energy, fossil fuel, firearm, or ammunition industries. It then directed the state’s retirement systems not to invest with the providers that discriminate against these industries.

The Legislature passed HB 1307, but not without opposition. I know that some of you were concerned about how this legislation would impact ATRS and the other retirement systems. From the time I joined ATRS last year, I have been cautiously optimistic but focused on securing the best result for our System. We have now completed the process set up by HB 1307, and I am happy to report to you that ATRS will not suffer any financial harm or loss as a result of it.

The ESG Oversight Committee set up by HB 1307 made its decisions and identified a number of financial service providers that ATRS and the state’s other retirement systems can no longer do business with. You can find that list on the State Treasurer's website. ATRS has a few small investments with only three of these providers, and the investments are all publicly-traded securities that can easily be sold.

I attended all but one of the meetings of the ESG Oversight Committee. I was impressed with the diligence and the nuanced understanding that the Committee members brought to their task. They recognized that in some cases, these financial service providers are only doing what their clients are asking for, in that some clients want an investment portfolio focused on ESG. The Committee carved these providers out of their final list, and in doing so they protected some much larger ATRS investments.

By the end of this calendar year, we will have sold all of the investments we hold from the providers on the list. I expect they will represent less than 0.08% of our System’s assets. We should see a net gain from the sale, and we can easily transfer those funds to other investments with similar or better returns.

The ESG Oversight Committee has now finished meeting and cannot meet again unless the Governor calls them back. We will closely monitor next year’s legislative session, and if we see any bills that may significantly impact the System, we will alert you. But as for HB 1307, you can rest easy that it has not and will not harm our System.

I want to express my appreciation to the legislators who sponsored HB 1307 for their hard work and cooperation. When the bill was first filed, ATRS staff and others approached them with concerns. These legislators negotiated in good faith and made several amendments to the bill that greatly improved it. Because they listened and worked with ATRS staff to improve the bill, ATRS members remain secure.

And one last point on this issue – even without the legislation, I know that your ATRS Board of Trustees is fully committed to making every investment decision on the basis of what is in your best interests financially. They do not let politics or ideology affect their decision-making.

As always, if you ever have a question about your retirement options or need information or advice, please reach out to our counselors by calling (501) 682-1517 or emailing info@artrs.gov. And if you have any concerns or questions about the System as a whole, please contact me at the email address or phone numbers below.

Mark White
Executive Director, ATRS
MarkW@artrs.gov
Office: (501) 621-8853
Cell: (501) 541-2057

Executive Director Update: 2024 Retirement Planner + ATRS Election Results

I have an important update for you on the recent Trustee Election, but first I want to let you know that our 2024 Retirement Planner is now available.

Each year, we publish this Planner to assist our members who are considering retirement or T-DROP. The Planner has important information for you to know whether you are eligible to apply for retirement or T-DROP, and to walk you through the application process. 

You can find the Planner, our memo to ATRS Employers, and this year’s Contribution Rates & Multipliers at these links:

• Retirement Planner
• Employer Memo
• Contribution Rates & Multipliers for 2024

You can also find additional information in the Retirement and T-DROP frequently asked questions located on the ATRS Frequently Asked Questions web page.

Applications to retire effective July 1 or to enter the T-DROP program in 2024 are being accepted now. May 31 is the deadline to file an application to become a July 1st retiree or a 2024 T-DROP participant.

I know that making the decision to retire, or the decision to enter the T-DROP program, can be an emotional and even stressful decision. We want to give you all the information you need to make the decision that is best for you and your family. If you would like to talk through your options, get exact benefit estimates, and consider the financial impact of retiring or remaining employed, please give us a call at (501) 682-1517.

Board of Trustees Election

As I explained in an update earlier this year, ATRS is overseen by an independent Board of Trustees that is elected by the members of ATRS. Altogether, 11 of the 15 Board positions are elected positions. The remaining four positions are Ex Officio Trustees.

It is my privilege to announce the results of the 2024 System Election. One position was contested this year, Position #11, which is a Retired Trustee position. Congratulations to Mr. Danny Knight on being re-elected to the Board. Mr. Knight currently serves as Chair of the Board.

Only retired ATRS members are eligible to vote for this position, and more than 12,000 of you participated in this election. Thank you to all of you who returned your ballots. The election was conducted by an independent election vendor, and their certified results will be presented to the Board in the June meeting.

Two other positions were filled this year, both of them incumbent members who had no opposition. Congratulations to Ms. Keri Hamilton who was elected to a full term as Member Trustee for the 4th Congressional District, and to Mr. Kelsey Bailey who was elected to a full term as Non-Certified Member Trustee.

You can find the full list of our Board members, along with their contact information, at the following link: https://www.artrs.gov/trustees

Legislative Fiscal Session

Earlier this month, the Arkansas Legislature convened for the 2024 Fiscal Session. In a Fiscal Session, legislators primarily consider only appropriation bills and related budget issues. They can consider other legislation, but only with a supermajority vote.

The appropriation bill for ATRS was filed as Senate Bill SB48. I am pleased to report that our appropriation bill passed out of the House and Senate last week without opposition, and on Friday the Governor signed our bill into law. This will give us spending authority to continue System operations for the next fiscal year, which runs July 1, 2024, through June 30, 2025.

The Fiscal Session will continue for several more days, but I do not expect them to consider any substantive legislation affecting ATRS or our members.

As always, if you ever have a question about your retirement options or need information or advice, please reach out to our counselors by calling (501) 682-1517 or e-mailing info@artrs.gov. And if you have any concerns or questions about the System as a whole, please contact me at the email address or phone numbers below.

Mark White
Executive Director, ATRS
MarkW@artrs.gov
Office: (501) 621-8853
Cell: (501) 541-2057