ATRS is a defined benefit plan for public school and other public education employees. It is administered as a "qualified" retirement plan under the provisions of IRS § 401(a). The state statutes contain the benefit provisions for our members at Arkansas Code §§ 24-7-201 et. seq., which are supplemented by ATRS Rules and Regulations.

As a member works for a participating employer, he or she accrues service credit and salary in the plan. Service credit is the length of participation in ATRS. For each 40 days the participant works for the participating employer each year, he or she receives service credit in quarterly (.25) increments. After completing 160 days or more of service in a fiscal year (July 1 - June 30), a member will be credited with one (1) full year of service credit. Salary is the total amount of income paid by the participating employer to a member in a given fiscal year. ATRS uses a member's three highest salary years to calculate the retirement annuity payable at retirement.

If a participant is a member of the contributory plan, he or she contributes 6% of his or her salary received from the participating employer, pretax as a payroll deduction. Employee contributions are credited to the member and earn interest. However, if a member withdraws the employee contributions and interest, the retirement benefits associated with the service is cancelled.

Both contributory and noncontributory members are "vested" when five (5) years of service is credited. If a member is vested, he or she is eligible for a lifetime annuity at retirement from ATRS payable at age 60 or with a minimum of 25 years of service credit if other criteria are met. A member receives a lifetime, monthly annuity from ATRS based on the following formula:

Years of Service Credit x Final Average salary (3 highest salary years) x Multiplier (currently 1.39% noncontributory / 2.15% contributory) = Annual Annuity
 
Annuity is paid when the member retires and begins drawing benefits.