Executive Director Update: Updates for Members + Survey Request

This month, I have several updates I want to pass along. One update is important for all of our members who are reading this; one is important for members who are considering retirement this year; and the last two are important for members who are already retired.

For all members:

ATRS is conducting a survey of all of our members. We are asking for your feedback to let us know how we are doing, and to help us understand the best ways to communicate with you. The survey is short and should take no more than 3 or 4 minutes of your time.

Your participation would be a big help to us -- and we're asking everyone to participate, both our retired members and our actively-employed members who aren't retired yet.

If you saw the survey link on social media or in an email from ARTA and have already taken the survey, thank you!

If you have not taken the survey yet, you can access it at this link: https://www.surveymonkey.com/r/ArkansasTRS

For all members who participate in the survey, you can enter your email address at the end of the survey to be entered in a drawing for a $100 gift card. Thank you in advance for your help!

For members who are considering retirement this year:

As of March 1, members can begin submitting applications to retire or enter T-DROP this summer. If you are thinking about retiring, I urge you to also consider entering T-DROP -- the Teacher Deferred Retirement Option Plan.

When you enter T-DROP, you continue working in your job, but you accumulate cash benefits in a T-DROP account. You can continue to work in T-DROP for up to 10 years, and when you do finally retire, you will have a cash balance to use and rely on. That cash balance can be rolled over to another retirement account, or you can receive it directly as a lump sum (after considering the tax consequences). Or you can use that balance to increase the amount of your monthly retirement benefits for the rest of your lifetime.

While you continue to work and remain in T-DROP, your health insurance and other employment benefits will continue unchanged through your current employer. And you will no longer be contributory, meaning you will save the 7% of your salary you may be contributing to ATRS now.

Applications to enter T-DROP are due May 31st. Please email us at info@artrs.gov or call us at (501) 682-1517 to ask questions and learn more about T-DROP. And you can find out more on our website at this link: https://www.artrs.gov/teacher-deferred-retirement-option-t-drop

For retired members:

Ballots were mailed on March 15 to all retired members for this year's Board of Trustees Election. We have one position on the ballot: Position #11, Retiree Trustee. All retired ATRS members are eligible to vote in this election.

When you receive your ballot, please fill it out and mail it back to us. By participating in the Board Election, you will be signaling to legislators and others that you value the independence of our System. The more of our members who vote, the stronger the case will be to the Legislature that we should remain independent with a member-elected Board.

If you are a retired ATRS member and you do not receive a ballot by March 25, please send me an email with your name and mailing address to markw@artrs.gov.

All completed ballots must be received back by us no later than April 15. Please complete and return your ballot as quickly as you can, to allow time for the mail to reach us. If you have any questions about the election process, please let me know.

Also, if you are a retired member receiving monthly benefits from ATRS, you should have already received your IRS Form 1099 for 2023. If you did not receive it, please let us know. And if you have an account on our member portal, you can download a copy of your Form 1099 directly from the portal.

For all our members -- but especially for our active teachers -- I hope you have a restful and wonderful Spring Break.

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

Executive Director Update: Our System's Financial Health + Retirement Application Deadlines

Last week, we provided the Board of Trustees with our actuarial valuation reports for the 2023 school year. Admittedly they can be pretty dry reading, but they make some important points about the financial health of ATRS.

Every pension system like ours is built on a promise to pay lifetime retirement benefits to both our retired members and our active working members. Our ability to meet that promise for generations to come depends on many different factors – the health of the national economy, the performance of our investment portfolio, our members’ life expectancy, and increases in teacher pay that affect benefits and contributions, just to name a few examples.

Our actuaries’ job is to take all those variables into account, project what it will cost to pay those decades’ worth of retirement benefits, and then evaluate how prepared our system is to keep that promise. They update their projections and evaluations every year, so that we can make course corrections as necessary.

Our actuaries are with the firm of Gabriel, Roeder, Smith & Company (GRS). They are a national firm and work with many other pension systems around the country. Their firm has a long history with ATRS – they have been preparing the ATRS actuarial valuations for more than 60 years!

We are grateful for our long partnership with GRS. You can find out more about them at their website here: https://www.grsconsulting.com/

ATRS Financial Health

These latest valuation reports find that ATRS is 100% funded as to future benefit payments for all of our current retirees and beneficiaries. In other words, ATRS has enough assets on hand to fully pay out monthly benefits for life for every retired member. This is a goal that ATRS has consistently met every year since 1980.

When we zoom out to also consider the future benefits that will be owed to our members who are still working, ATRS is 82.1% funded. In other words, even if ATRS closed up shop and did nothing but send out checks to all of our members for the benefits they’ve already earned, we have enough funds on hand to pay 82.1% of those benefits.

This is a good, healthy number; pension systems are generally considered healthy if their funded position is 80% or greater. The reason why it doesn’t have to be 100% is that this number is a very conservative estimate. It doesn’t account for the member and employer contributions that ATRS will continue to collect in the coming years. It assumes a conservative investment return, and historically ATRS has earned returns larger than that assumed rate over time.

But it’s also important to remember that this 82.1% number is only a snapshot of a single moment. What’s more important is the trend over time and whether that funded position is stable. And when you look at our history, our position is stable. Over the last 20 years our funded position has ranged between 71% and 85%, and it has been trending up for several years.

What this means is that ATRS is financially strong, and that we are prepared to keep the promise of lifetime retirement benefits for all of our members.

Interesting Facts & Figures

The actuarial valuation reports also provide some interesting information on our System and its members during the 2023 school year:

• ATRS paid retirement benefits to 56,646 retirees and surviving beneficiaries, totaling nearly $1.347 billion. That’s about a 4% increase over 2022.
• The average member retirement benefit was $24,653 annually.
• We have 908 retirees who are age 90 to 94, and 246 retirees who are 95 or older.
• The average age of an ATRS retiree is 72, and the average age of an active employee is 44.
• About 77% of our members are female and 23% are male.
• Schools and our other covered employers reported 75,495 employees, receiving a total payroll of $3.492 billion.
• We have 832 active members still working who are 70 or older.

You can find our actuarial valuation reports and read them for yourself at this link: https://www.artrs.gov/publications

Retirement Season is Coming

I know some of you are starting to seriously plan for retirement at the end of this year. For those of you who intend to retire effective July 1, the application window will open March 1 and close May 31. And if you intend to enter T-DROP this year, your application must be received by ATRS between March 1 and May 31.

Please remember that you are responsible for sending us your retirement or T-DROP application. Never assume that your school business office will send the application for you, because that’s not their job.

In the coming weeks we will be distributing our 2024 Retirement Planner, applications, and other information to help you in making decisions and preparing your retirement application. If you have any questions, or if you would like to get benefit estimates to help you plan, please contact one of our counselors by emailing us at info@artrs.gov or calling (501) 682-1517.

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