§ 24-7-705 — Life annuity

Arkansas § 24-7-705

• Jurisdiction: Arkansas
• Title: 24

Text

(a) (1) (A) (i) For a member who is retired or who is in the Teacher Deferred Retirement Option Plan as of June 30, 2013, the multipliers used at the time of retirement or entry into the Teacher Deferred Retirement Option Plan shall remain the multipliers used to calculate the member's retirement benefits for retirement or the Teacher Deferred Retirement Option Plan. (ii) For all service earned through June 30, 2013, by a member who is active or inactive on June 30, 2013, he or she shall receive a straight life annuity equal to his or her number of years of credited service for which member contributions were made as provided in § 24-7-406 multiplied by two and fifteen-hundredths percent (2.15%) of his or her final average salary, or a straight life annuity equal to his or her number of years of credited service rendered after June 30, 1986, for which no member contributions were made as provided in § 24-7-406 multiplied by one and thirty-nine hundredths percent (1.39%) of his or her final average salary, or a combination of both. (B) (i) The multipliers in this section shall be determined in accordance with this chapter and the rules and resolutions of the Board of Trustees of the Arkansas Teacher Retirement System as is actuarially appropriate for the Arkansas Teacher Retirement System. (ii) Before increasing a benefit as provided in this section, the board shall file relevant information concerning the actuarial appropriateness of the action with the Joint Committee on Public Retirement and Social Security Programs. (2) (A) For a member contributing on only the first seven thousand eight hundred dollars ($7,800) of each annual salary after June 30, 1969, each annual salary used in computing his or her final average salary shall be limited to a maximum of seven thousand eight hundred dollars ($7,800). (B) The limit shall apply to his or her total credited service. (3) For a member retiring with benefits to be computed on both contributory and noncontributory service under this subsection and free military service first credited after July 1, 1986, under § 24-7-602 , the amount of military service to be used in the computation of benefits under this subsection shall be prorated on the ratio of membership service under each plan to his or her total membership service, notwithstanding the fact that some of the military service shall be credited as noncontributory service before July 1, 1986. (4) All purchased military service, all out-of-state service credited under § 24-7-603 , and all overseas service credited under § 24-7-604 shall be counted as contributory service, and benefits based on this service shall be computed using the contributory percent of final average salary set forth in this subsection. (b) (1) The multiplier on service credit earned shall remain two and fifteen hundredths percent (2.15%) for contributory service and one and thirty-nine hundredths percent (1.39%) for noncontributory service unless the rates are adjusted by the board. (2) The board may adjust the multiplier for contributory service rendered after June 30, 2013, as follows: (A) The multiplier rate for contributory service set by the board shall remain in effect unless adjusted by the board; (B) The multiplier rate for contributory service shall not be less than one and seventy-five hundredths percent (1.75%) or higher than two and fifteen hundredths percent (2.15%); (C) An increase or decrease to a multiplier rate for contributory service shall apply to a complete fiscal year; (D) The multiplier rate for contributory service may be adjusted by resolution adopted by the board at a board meeting; (E) Once a multiplier rate for contributory service is earned in a fiscal year, the multiplier rate may be subject to an increase but not a decrease if adopted by the board; (F) The board may leave the multiplier rate for contributory service earned in previous years in effect even if the multiplier rate for contributory service is increased for future years; (G) The board may set a special contributory multiplier rate for the first ten (10) years of service credit as follows: (i) The multiplier rate for contributory service used for the first ten (10) years of service shall not be less than one and seventy-five hundredths percent (1.75%) or more than two and fifteen hundredths percent (2.15%); and (ii) After a member earns ten (10) years of credited service, the board may increase the multiplier rate earned in the first ten (10) years to the standard multiplier rate for contributory service for all or part of the first ten (10) years of service. (3) The board may adjust the multiplier rate for noncontributory service for all service rendered after June 30, 2013, as follows: (A) The multiplier rate for noncontributory service set by the board shall remain in effect unless adjusted by the board; (B) The multiplier rate for noncontributory service shall not be less than five-tenths of one percent (0.5%) or higher than one and thirty-nine hundredths percent (1.39%); (C) An increase or decrease to a multiplier rate for noncontributory service shall apply to a complete fiscal year; (D) The multiplier rate for noncontributory service may be adjusted by resolution adopted by the board at a board meeting; (E) Once a multiplier rate for noncontributory service is earned in a fiscal year, the multiplier rate may be subject to an increase but not a decrease if adopted by the board; (F) The board may leave the multiplier rate for noncontributory service earned in previous years in effect even if the multiplier rate for noncontributory service is increased for future years; (G) The board may set a special noncontributory multiplier rate for the first ten (10) years of service credit as follows: (i) The multiplier rate for noncontributory service used for the first ten (10) years of service shall not be less than five-tenths of one percent (0.5%) or more than one and twenty-five hundredths percent (1.25%); and (ii) After a member earns ten (10) years of credited service, the board may increase the multiplier rate earned in the first ten (10) years to the standard multiplier rate for noncontributory service for all or part of the first ten (10) years of service. (4) A lower multiplier rate set by the board for contributory service and noncontributory service earned in the first ten (10) years of service shall not be retroactively applied. (5) The board shall not reduce the multiplier rate for contributory service earned after the first ten (10) years of service unless the: (A) System's actuary certifies to the board that the amortization period to pay the unfunded liabilities of the system exceeds eighteen (18) years; and (B) Board determines that a reduction in the multiplier rate for contributory service is prudent to maintain actuarial soundness. (c) For all service credit earned by a member after June 30, 2013, he or she shall receive a straight life annuity equal to his or her number of years of credited service multiplied by his or her final average salary as follows: (1) Credited service for which member contributions were made under § 24-7-406 shall be multiplied by the contributory multiplier in effect for each fiscal year; (2) Credited service rendered after June 30, 1986, for which no member contributions were made under § 24-7-406 shall be multiplied by the noncontributory multiplier in effect for each fiscal year; and (3) If the member has accrued both contributory service and noncontributory service, the member's service shall be combined after calculating each amount under this subsection. (d) Upon a member's retirement, as provided in this act, he or she shall have the right to elect an option provided for in § 24-7-706 . (e) A member retiring before July 1, 1987, shall receive an annuity in accordance with provisions of law in force before July 1, 1987.

Legislative History

Amended by Act 2023, No. 63,§ 2, eff. 7/1/2023. Amended by Act 2023, No. 63,§ 1, eff. 7/1/2023. Amended by Act 2017, No. 551,§ 1, eff. 3/21/2017. Amended by Act 2017, No. 293,§ 4, eff. 2/28/2017. Amended by Act 2013, No. 966,§ 1, eff. 7/1/2013. Acts 1973, No. 427, § 9; 1975, No. 549, §§ 6-13; 1977, No. 541, §§ 5-8; 1977, No. 640, §§ 1, 2; 1977, No. 727, § 1; 1979, No. 681, §§ 5-12; 1979, No. 776, §§ 1, 2; 1981, No. 14, § 1; 1981, No. 365, §§ 6, 7; 1981, No. 435, § 2; 1983, No. 17, § 2; 1983, No. 127, § 2; 1983, No. 619, §§ 9-11; 1983, No. 665, §§ 9-11; 1985, No. 504, § 3; A.S.A. 1947, § 80-1443; Acts 1987, No. 802, § 1; 1989, No. 652, § 9; 1991, No. 44, §§ 1, 2; 1993, No. 435, § 7; 1995, No. 542, § 6; 1997, No. 992, § 3; 1997, No. 1053, § 7; 1999, No. 221, § 1; 1999, No. 396, § 1; 2003, No. 853, § 1.