§ 24-2-402 — Retirement eligibility - Calculation of reciprocal service using deferred service credit

Arkansas § 24-2-402

• Jurisdiction: Arkansas
• Title: 24

Text

(a) (1) A member who maintains deferred service credit in one (1) or more reciprocal systems may combine the deferred service credit with service credit earned under a reciprocal system to meet the separate eligibility requirements for receiving a monthly retirement benefit under each reciprocal system. (2) The combined service credit calculated under subdivision (a)(1) of this section shall: (A) Be used for the purpose of establishing the eligibility of a member to receive a retirement benefit from a retirement system; and (B) Not be used to calculate the monthly retirement benefit for service credit earned by a member under each retirement system. (b) (1) To establish the eligibility of a member to receive a monthly retirement benefit from each retirement system, the credited service under all reciprocal systems shall be totaled, and the total credited service shall be used to determine the eligibility of a member to receive a retirement benefit from each retirement system according to the eligibility requirements of that retirement system. (2) (A) The separate retirement system's eligibility requirements for receiving a monthly retirement benefit, the calculation of a monthly retirement benefit, or a deferred retirement option plan, if available, under one (1) retirement system shall not apply to the eligibility requirements for receiving a monthly retirement benefit or a deferred retirement option plan, if available, under a reciprocal system. (B) Any interest credited to the deferred retirement account shall be paid to the member's account under the deferred retirement option benefit program in effect for that retirement system. (c) (1) Once a member meets the eligibility requirements to receive a retirement benefit, the monthly retirement benefit received by the member from a reciprocal system shall be limited to the member's service credit under the reciprocal system and calculated separately under the retirement benefit formula of that reciprocal system. (2) A retirement system shall not use a member's service credit from a reciprocal system to calculate or increase the monthly retirement benefit of the member. (d) (1) Service credit earned by a member under a retirement system shall not be combined with service credit earned by the member under a reciprocal system if the member withdraws his or her employee contributions from either the retirement system or the reciprocal systems. (2) Service credit may be combined under this section if: (A) A member withdraws his or her employee contributions from a retirement system; and (B) After the withdrawal of his or her employee contributions from the retirement system, the member reestablishes service credit by depositing the amount required in accordance with the law applicable to the retirement system from which the employee contributions were withdrawn. (e) (1) The final average compensation used to determine a monthly retirement benefit payable to a member by a reciprocal system shall be the final average compensation calculated for credited service under the reciprocal system as provided by the law applicable to the reciprocal system. (2) (A) A retirement system is not required to calculate a monthly retirement benefit based on the final highest salary or final average compensation under the reciprocal system in which the member has service credit. (B) If a retirement system uses the highest final average compensation of the reciprocal system to determine a monthly benefit payable to a member, the final average compensation shall be computed as prescribed by the law of the reciprocal system. (3) Compensation and salary earned in the Arkansas Judicial Retirement System shall not be used to determine the final highest salary of a member who has service credit in both the Arkansas Judicial Retirement System and a reciprocal system under this section. (4) (A) A member who has earned service credit in more than one (1) reciprocal system on or before June 30, 2021, shall have his or her monthly benefit calculated by using the highest final average compensation the member has earned from any reciprocal system, excepting compensation and salary earned under subdivision (e)(3) of this section. (B) The final average compensation under subdivision (e)(4)(A) of this section shall be computed as prescribed by the law of each reciprocal system at the time of the member's retirement. (f) Each reciprocal system that has a minimum benefit provision in the plan of the reciprocal system shall pay only a proportionate share of the minimum benefit amount based on the ratio of service credit in the reciprocal system to the total service in all reciprocal systems. (g) (1) This section does not prohibit providing the same death-in-service benefits to a member that would have been payable had the member died while an active member of a reciprocal system. (2) A member who dies in service while a member of one (1) reciprocal system shall be considered as currently employed by all reciprocal systems in which the member retains credited service. (3) If a member has accrued credited service under the provisions of this subchapter but dies before retirement or before becoming eligible to retire, then the benefits payable shall be those provided by the reciprocal system in which the member has deferred service, with the reciprocal system being responsible for the payment of the death-in-service benefits provided by the applicable provisions of the reciprocal system's retirement laws. (4) If death-in-service benefits are payable by more than one (1) reciprocal system to eligible survivors of a deceased member, the survivors shall not receive more, as a percentage of the deceased member's final pay or as a minimum dollar amount, than the largest amount payable by any single reciprocal system. (5) Each reciprocal system that has a minimum benefit provision in its plan shall pay only a proportionate share of that minimum amount based on the ratio of service in that reciprocal system to the total service in all reciprocal systems. (6) If the reciprocal system is an alternate retirement plan as defined in § 24-7-202 , death-in-service benefits shall be contingent on death-in-service benefits having been provided by the alternate retirement plan and having been selected by the member as a benefit. (h) (1) Both service in the Arkansas Public Employees' Retirement System as a member of the General Assembly and service in another reciprocal system during the same period of time may be counted to meet the service requirements for benefits from the reciprocal system. (2) The benefit payable by a reciprocal system shall be based on the credited service in the reciprocal system and the final average compensation under the reciprocal system. (i) (1) If the reciprocal system is the Arkansas Judicial Retirement System and the member's benefits are determined under § 24-8-201 et seq., the benefit payable by the Arkansas Judicial Retirement System shall be determined by multiplying the benefit provided by § 24-8-218 by the following fraction: (A) The numerator shall be the number of the actual years of service credited in the Arkansas Judicial Retirement System as a justice of the Supreme Court or judge of the circuit or chancery courts or the Court of Appeals; and (B) The denominator shall be fourteen (14) years. (2) In no instance shall the benefit payable by the Arkansas Judicial Retirement System exceed the benefit provided by § 24-8-218 . (j) (1) In accordance with the law applicable to a retirement system, the board of trustees of each retirement system shall establish the eligibility requirements for a member to receive a monthly retirement benefit or deferred retirement option plan, if available, for service credit earned under their respective retirement system. (2) The board of trustees of each reciprocal system shall promulgate rules necessary to coordinate the retirement benefits of the reciprocal system with any other reciprocal system. (k) If the reciprocal system is an alternate retirement plan as defined in § 24-7-202 , the benefits payable shall be in accordance with terms specified in the written alternate retirement plan document for purchasing the insurance policies or annuity contracts, both fixed and variable in nature, for the participants.

Legislative History

Amended by Act 2023, No. 107,§ 6, eff. 7/1/2023. Amended by Act 2023, No. 107,§ 5, eff. 7/1/2023. Amended by Act 2021, No. 711,§ 2, eff. 7/1/2021. Amended by Act 2019, No. 315,§ 2845, eff. 7/24/2019. Amended by Act 2019, No. 315,§ 2844, eff. 7/24/2019. Acts 1965, No. 488, § 2; 1967, No. 310, § 1; 1971, No. 579, §§ 1, 2; 1975, No. 611, § 2; 1977, No. 663, § 5; 1979, No. 127, § 1; 1979, No. 493, § 1; 1979, No. 821, § 4; 1983, No. 679, §§ 1, 2; A.S.A. 1947, § 12-2538; Acts 1987, No. 357, § 3; 1987, No. 737, § 1; 1991, No. 381, § 1; 1995, No. 949, § 2; 1997, No. 485, § 2; 1997, No. 857, § 2; 1997, No. 927, § 2; 1999, No. 537, §§ 2, 5; 2001, No. 151, § 4; 2005, No. 1022, §§ 2, 3; 2007, No. 177, §§ 8, 9; 2009, No. 742, § 1.