March 4, 2021 - Executive Director Update: Week Number Eight of the Legislative Session

The 93rd General Assembly

Joint Public Retirement & Social Security Committee (JRC)

The Joint Retirement Committee (JRC) met on Monday, March 1st. Representative Les Warren and I re-presented bill HB1326. Senator Bill Sample presented bill SB174. The next Joint Retirement Committee meeting will be held on Monday, March 8, 2021 at 8:30 a.m.

HB1326 was passed out of the House and the Senate this week. It is on the Governor’s desk to sign. Thank you to Representative Les Warren for presenting this bill on the House floor this week. Thank you to Senator Kim Hammer for presenting this bill on the Senate floor this week.

SB174 was passed out of the House and the Senate this week. It is on the Governor’s desk to sign. Thank you to Senator Larry Teague for presenting this bill on the Senate floor this week. Thank you to Representative Les Warren for presenting this bill on the House floor this week. In spite of the confusion caused by this bill, I would like to assure you that this is a member friendly bill that is helpful to the Teacher Retirement System. This bill does not affect the existing eligibility requirements for full retirement. A Teacher Retirement member must have 28 years of service or have attained the age of 60 in order to receive full retirement benefits. This bill does not change those requirements. This bill only removes the one-month separation period required for members with 38 years of service as long as they are at least 60 of age.

HB1279 has been signed by Governor Hutchinson and is now Act 223. Act 223 will clarify the disability retirement process and add a second review process for some additional fairness for our members. I want to express my appreciation to Representative Stu Smith for sponsoring this bill.

HB1319 has been signed by Governor Hutchinson and is now Act 221. Act 221 will lower the current requirements for using a higher reciprocal final salary in calculating ATRS retirement benefits. I want to express my appreciation to Representative John Maddox for sponsoring this bill.

HB1320 has been signed by Governor Hutchinson and is now Act 220. Act 220 will require ATRS employers to submit contributions electronically and will add administrative efficiency for the contribution collection process. I want to express my appreciation to Representative John Maddox for sponsoring this bill.

HB1339 has been signed by Governor Hutchinson and is now Act 189. Act 189 will repeal some obsolete language and allow ATRS to treat all members the same in regard to including compensation for accumulated sick leave in the final average salary. I want to express my appreciation to Representative Brian Evans for sponsoring this bill.

HB1340 has been signed by Governor Hutchinson and is now Act 190. Act 190 will add fairness to the process that ATRS uses to resolve errors involving unreported service. I want to express my appreciation to Representative Brian Evans for sponsoring this bill.

House Bill 1169 - Public School Employees Heroes Act

HB1169, sponsored by Representative David Tollett, could be presented as early as the March 15^th  JRC meeting. This bill has been amended. 

As amended it gives ATRS members, who are employed by a public school for the full 2020-2021 school year, an option to retire early with 27 years of service with only a 5% reduction. Currently this level of early retirement has a 10% reduction.

This bill will increase ATRS unfunded liabilities by about $10 million and increase the amortization period by about 3 months.

House Bill 1275 - Reciprocity under an Alternate Retirement Plan

HB1275, sponsored by Representative Stu Smith, could be presented as early as the March 15^th  JRC meeting. This bill is in the process of being amended. 

A Teacher Retirement member may establish reciprocal service by participating in an alternate retirement plan established by an Arkansas university or vocational school. Currently, ATRS prevents these members from establishing reciprocal service if the member makes any withdrawal from the alternate retirement plan. This is the case even for withdrawals that are not penalized by the Internal Revenue Code.

Examples of these non-penalized withdrawals are:

• withdrawals made after the age of 59 ½; or
• eligible rollover transactions to Individual Retirement Accounts

This bill establishes the basic rule that all funds must remain in the alternate retirement plan in order to establish reciprocal service. However, exceptions for withdrawals made after the member reaches the age of 59 ½ and eligible rollover transactions under the Internal Revenue Code are allowed.

This bill is needed to add fairness to the system for members that have served Arkansas at both the higher-education level and the secondary level. If the IRS does not penalize certain withdrawals from an alternate retirement plan, then they should not be penalized by ATRS. This bill will allow some members to become eligible for retirement benefits in keeping with the spirit of our reciprocity laws.

We are waiting on the official actuarial cost analysis.

Senate Bill 232 - Contract for 185 Days or more and Contributory Designation

SB232, sponsored by Senator Greg Leding, could be presented as early as the March 15^th  JRC meeting. This bill is in the process of being amended. 

Currently a Teacher Retirement member employed under a contract for 181 days or more is required to make contributions on their salary to ATRS. This current law was adopted in the 1990’s. At that time the typical school teacher contract was for 181 days. Now, the typical teacher contract is for 190 days. 

The purpose of this bill is to allow ATRS members who are still in noncontributory status to be able to accept contracts up to 184 days and not be forced into the contributory designation. This is an increase of 4 days. Since the typical teacher contract has increased from 181 days to 190 days, it makes sense to increase the number of contract days that forces the contributory designation.

This bill is needed to allow for better recruitment of employees who work only on the days that students are present at a school. A specific example involves paraprofessionals that work with special education students. They typically work for 179 days, but there are some training requirements of a few extra days. That pushes their contracts up beyond the 180 days thus forcing them into the contributory designation. This bill simply aligns the required contributory designation with current length of the school year.

We are waiting on the official actuarial cost analysis.

Monitoring Teacher Retirement Related Legislation

Now that the deadline for filing bills that directly impact one of the Arkansas public retirement plans has passed, ATRS is monitoring other bills as they are filed to determine if they could indirectly impact ATRS. As these bills are identified, we will add them to the ATRS Legislation page on the website. These bills will start in the “ATRS Monitoring” status. As more information is gathered about the purpose, intent, or actuarial cost of the bills, the status could change to “ATRS Opposes” or “ATRS Supports”.

As a reminder, the Joint Retirement Committee (JRC) meeting will be video streamed over the Internet each Monday morning during the session. Just visit the Arkansas Legislative Meetings and Events web page on Monday at 8:30 a.m. Look for the item “PUBLIC RETIREMENT & SOCIAL SECURITY PROGRAMS-JOINT” and click on the “video” icon. The agenda for the meeting will be posted here at least 18 hours before the start of the meeting.

Here is the link to the full procedures for public access to the committee meetings: Committee Procedures and Public Access for 2021 Regular Session

ATRS will try to keep its members informed about the bills that impact ATRS, its members and employers. For more information regarding the ATRS Bill Package and Bills that may Impact ATRS visit the Legislation page on our website.

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 24,200 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 25,900 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

February 25, 2021 - Executive Director Update: Week Number Seven of the Legislative Session

The 93rd General Assembly

Joint Public Retirement & Social Security Committee (JRC)

The Joint Retirement Committee (JRC) met on Monday, February 22nd. Representative Les Warren, Representative John Maddox, Representative Brian S. Evans, Representative Stu Smith, and I presented the bills in the ATRS Legislative Package. The next Joint Retirement Committee meeting will be held on Monday, March 1, 2021 at 8:30 a.m. Due to a minor timing issue regarding the engrossing of the amendment, HB1326 will be re-presented to the JRC.

HB1279 was passed out of the House and the Senate this week. It is on the Governor’s desk to sign. Thank you to Representative Stu Smith for presenting this bill on the House floor this week. Thank you to Senator Kim Hammer for presenting this bill on the Senate floor this week.

HB1319 and HB1320 were passed out of the House and the Senate this week. They are on the Governor’s desk to sign. Thank you to Representative John Maddox for presenting these bills on the House floor this week. Thank you to Senator Kim Hammer for presenting these bills on the Senate floor this week.

HB1339 and HB1340 were passed out of the House and the Senate this week. They are on the Governor’s desk to sign. Thank you to Representative Brian S. Evans for presenting these bills on the House floor this week. Thank you to Senator Lance Eads for presenting these bills on the Senate floor this week.

Senate Bill 174

It is possible that SB174, sponsored by Senator Larry Teague, will be presented at Monday’s JRC meeting. A Teacher Retirement member must have 28 years of service or have attained the age of 60 in order to receive full retirement benefits. This bill does not change those requirements. 

This bill has been amended. As amended it will still remove the one-month separation period while essentially maintaining the “status quo” in regard to members that have 38 years of service. The "Rule of 100" logic was dropped. Now the definition of “normal retirement age” will include members with 38 years of service who are at least age 60 and members that are age 65 or older. This amendment will help teachers that started teaching right out of college at age 22. For example, if they teach for 28 years and then do 10 years in T-DROP they would be age 60 and meet the requirements for the “normal retirement age”. A member that has attained the “normal retirement age” is able to draw full retirement benefits and remain employed without separating from employment. The system’s actuary found that the amended bill would have little or no cost effect on ATRS.

Monitoring Teacher Retirement Related Legislation

Now that the deadline for filing bills that directly impact one of the Arkansas public retirement plans has passed, ATRS is monitoring other bills as they are filed to determine if they could indirectly impact ATRS. As these bills are identified, we will add them to the ATRS Legislation page on the website. These bills will start in the “ATRS Monitoring” status. As more information is gathered about the purpose, intent, or actuarial cost of the bills, the status could change to “ATRS Opposes” or “ATRS Supports”.

As a reminder, the Joint Retirement Committee (JRC) meeting will be video streamed over the Internet each Monday morning during the session. Just visit the Arkansas Legislative Meetings and Events web page on Monday at 8:30 a.m. Look for the item “PUBLIC RETIREMENT & SOCIAL SECURITY PROGRAMS-JOINT” and click on the “video” icon. The agenda for the meeting will be posted here at least 18 hours before the start of the meeting.

Here is the link to the full procedures for public access to the committee meetings: Committee Procedures and Public Access for 2021 Regular Session

ATRS will try to keep its members informed about the bills that impact ATRS, its members and employers. For more information regarding the ATRS Bill Package and Bills that may Impact ATRS visit the Legislation page on our website.

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 23,900 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 25,800 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