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

Executive Director Update: Who Runs ATRS + Updates on Tax Forms and Cybersecurity

Did you know that you control the Arkansas Teacher Retirement System?

I’ve discovered that many of our members don’t realize that they have the ultimate say in how ATRS is run. Although the staff and I manage the day-to-day affairs, we answer to the ATRS Board of Trustees. Of the 15 members of the Board, 11 of them are directly elected by you the members. You can find the list of all the current Board members here. 

The Board has positions dedicated to each type of ATRS member. There are four positions reserved for teachers actively employed in Arkansas public schools, and two positions for active school administrators. Three positions are reserved for retired members. One position is reserved for active non-certified school employees, and one position represents our minority members.

The Board members are accountable to you because you elect them, but they are also legally accountable as fiduciaries. This is a fancy legal term that means they must be loyal to the members of ATRS and make decisions in our members’ best interests. 

I’m explaining all this because we have an election coming up soon. In March, our retired members will be receiving ballots to vote on Position #11, which is a Retired Trustee position.

It is very important that our retired members complete and return their ballots, so that they have their say in the future of ATRS. But it is also important to demonstrate to legislators and elected officials how committed our members are to the future of ATRS. 

Retired members can expect to receive their ballot in the mail sometime after March 15. Those ballots will be due back to ATRS by April 15, and the results should be announced shortly thereafter. If your address has changed recently, please contact us to update your personal information, so that we can send your ballot to the correct address.

UPDATES FOR RETIREES

We recently mailed check stubs to our members who received payments from ATRS last year. If you itemize your tax deductions, you will want to keep that check stub. It documents how much was withheld from your ATRS benefits for medical insurance premiums last year.

And in the next few weeks, if you received payments from ATRS last year, you should receive a copy of your IRS Form 1099 in the mail. That's the form we report to the IRS showing how much ATRS distributed to you last year. You can also view your 1099 Form through the Member Portal on our website.

If you don’t receive a 1099 Form by February 19 and need it for your taxes, please let us know. You can always email us at info@artrs.gov or call us at (501) 682-1517 for assistance. 

PROTECTING THE SECURITY OF OUR MEMBERS

If you ever receive a message from someone seeking your personal information or claiming to represent ATRS, you can always email or call us directly to verify that the inquiry is legitimate.

Phishing scams are everywhere these days, unfortunately. I know I get calls, texts, or emails at least once a week from scammers trying to get my information. If someone claims to be from ATRS, don’t be afraid to tell them you’ll get back with them later, and then call or email us to verify that they are legitimate.

The good news is that we have not heard of any recent attempts to impersonate ATRS to our members. But we want you to always be on your guard. You can find additional tips and advice on how to avoid phishing scams at this link:

https://consumer.ftc.gov/articles/how-recognize-and-avoid-phishing-scams

If you have an account on our Member Portal, we’ve added a new option to give you even better security for your information. You can now add Multi-Factor Authentication (or MFA) to secure your ATRS Portal account.

MFA means that when you log in to the ATRS Member Portal, you must confirm your identity with a code that is sent to your registered email address or generated by an authenticator app. It helps prevent scammers from logging in to your account even if they somehow obtain your ATRS username and password.

I recently added MFA to my own ATRS Portal account using Google Authenticator, and I found it to be quite easy. You can find detailed instructions for setting up MFA for your own Portal account here:

https://www.artrs.gov/mfa

And if you don’t have an ATRS Portal account yet, I encourage you to set one up. With the Portal you can access or update your personal information, get forms, or calculate benefit estimates at your convenience. You can register and set up an account here:

https://www.artrs.gov/registration

 

Thank you for everything you have done for Arkansas public schools. I wish you all the best for this coming year.

 

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