§ 24-7-706 — Annuity options

Arkansas § 24-7-706

• Jurisdiction: Arkansas
• Title: 24

Text

(a) (1) Before the date the first payment of his or her annuity becomes due, a member may elect to receive his or her annuity as a straight life annuity, or he or she may elect to receive the actuarial equivalent, at that time, of his or her straight life annuity in a reduced annuity payable throughout his or her life. (2) The member may designate one (1) or more beneficiaries, in accordance with one (1) of the following options: (A) Option A - 100% Survivor Annuity. (i) Under Option A, upon the death of a retiree, his or her reduced annuity shall be continued throughout the life of and paid as provided under subdivision (a)(4) of this section to the persons that he or she nominates by written designation executed and filed with the Board of Trustees of the Arkansas Teacher Retirement System before the date the first payment of his or her annuity becomes due. (ii) (a) The designated beneficiary or beneficiaries of a retiree shall be either: (1) The retiree's spouse; (2) One (1) or more of the retiree's children who qualify as a dependent child under subdivision (a)(2)(A)(ii) (c) of this section; or (3) Both the retiree's spouse and one (1) or more of the retiree's children who qualify as a dependent child under subdivision (a)(2)(A)(ii) (c) of this section. (b) The spouse of a retiree may be designated as the retiree's beneficiary if the retiree has been married to the spouse for at least one (1) year immediately preceding the first annuity payment due date. (c) A child of a retiree qualifies as a dependent child and may be designated as an Option A beneficiary of the retiree if the child has been adjudged physically or mentally incapacitated by a court of competent jurisdiction; (B) Option B - 50% Survivor Annuity. (i) Under Option B, upon the death of a retiree, one-half (½) of his or her reduced annuity shall be continued throughout the life of and paid as provided under subdivision (a)(4) of this section to the persons that he or she nominates by written designation executed and filed with the board before the date the first payment of his or her annuity becomes due. (ii) (a) The designated beneficiary or beneficiaries of a retiree shall be either: (1) The retiree's spouse; (2) One (1) or more of the retiree's children who qualify as a dependent child under subdivision (a)(2)(B)(ii) (c) of this section; or (3) Both the retiree's spouse and one (1) or more of the retiree's children who qualify as a dependent child under subdivision (a)(2)(B)(ii) (c) of this section. (b) The spouse of a retiree may be designated as the retiree's beneficiary if the retiree has been married to the spouse for at least one (1) year immediately preceding the first annuity payment due date. (c) A dependent child of a retiree may be designated as an Option B beneficiary of the retiree if the dependent child has been adjudged physically or mentally incapacitated by a court of competent jurisdiction; or (C) Option C - Annuity for Ten (10) Years Certain and Life Thereafter. (i) Under Option C, a retiree shall receive a reduced annuity payable throughout his or her life with the provision that if he or she dies before he or she has received one hundred twenty (120) monthly annuity payments, the payments shall be continued for the remainder of the period of one hundred twenty (120) months and paid to such persons in equal shares as the retiree has nominated by written designation executed and filed with the board. (ii) If the designated beneficiaries predecease the retiree, the retiree may nominate successor beneficiaries or may elect to return to his or her single lifetime benefit equivalent by written designation executed and filed with the board, to be effective the month following receipt of his or her election by the Arkansas Teacher Retirement System. (iii) (a) If the designated beneficiary is the spouse of the retiree and the marriage ends in divorce or other marriage dissolution, the retiree may: (1) Nominate a successor beneficiary; or (2) Elect to return to his or her single lifetime benefit equivalent. (b) The nomination or election made under subdivision (a)(2)(C)(iii) (a) of this section shall be in writing, executed by the retiree, and filed with the board, to be effective the month following receipt of his or her election by the system. (iv) If no designated beneficiary survives the retiree, the annuity reserve for the remainder of the annuity payments shall be paid to the retiree's estate. (v) If the last designated beneficiary receiving annuity payments dies before all annuity payments are made, the annuity reserve for the remainder of the annuity payments shall be paid to the beneficiary's estate. (vi) Effective the month following completion of the one-hundred-twenty-month period, the retiree's annuity shall return to his or her single lifetime benefit equivalent. (3) In addition to the persons eligible to be designated as a beneficiary under either Option A or Option B in subdivision (a)(2) of this section, the board may promulgate rules concerning the addition of classes of eligible persons to be designated as a beneficiary under this section and for the rights of option beneficiaries of deceased disability retirees under § 24-7-704 . (4) (A) (i) Upon the death of a retiree, if both a spouse and one (1) dependent child are designated as the retiree's Option A beneficiaries, the retiree's reduced annuity shall be paid in equal shares to the spouse and the dependent child. (ii) Upon the death of a retiree, if both a spouse and more than one (1) dependent child are designated as the retiree's Option A beneficiaries, the spouse shall receive fifty percent (50%) of the retiree's reduced annuity and the remaining fifty percent (50%) of the retiree's reduced annuity shall be paid in equal shares to the dependent children. (iii) Upon the death of a retiree, if more than one (1) dependent child is designated as the retiree's Option A beneficiary and a spouse is not designated as the retiree's Option A beneficiary, the retiree's reduced annuity shall be paid in equal shares to each dependent child designated as the retiree's Option A beneficiary. (B) (i) Upon the death of a retiree, if both a spouse and one (1) dependent child are designated as the retiree's Option B beneficiaries, one-half (½) of the retiree's reduced annuity shall be paid in equal shares to the spouse and the dependent child. (ii) Upon the death of a retiree, if both a spouse and more than one (1) dependent child are designated as the retiree's Option B beneficiaries, the spouse shall receive fifty percent (50%) of one-half (½) of the retiree's reduced annuity and the remaining fifty percent (50%) of one-half (½) of the retiree's reduced annuity shall be paid in equal shares to the dependent children. (iii) Upon the death of a retiree, if more than one (1) dependent child is designated as the retiree's Option B beneficiary and a spouse is not designated as the retiree's Option B beneficiary, the retiree's reduced annuity shall be paid in equal shares to each dependent child designated as the retiree's Option B beneficiary. (5) If both a spouse and one (1) or more dependent children are designated as the Option A or Option B beneficiaries of a retiree and annuity payments to either the spouse or one (1) or more of the dependent children have begun, the following shall apply: (A) A dependent child's portion of the annuity shall not revert to the spouse or any other dependent children if the dependent child: (i) Predeceases the spouse or any other dependent children; or (ii) Otherwise becomes ineligible to continue receiving annuity payments; and (B) The spouse's portion of the annuity shall not revert to any dependent child if the spouse: (i) Predeceases one (1) or more dependent children; or (ii) Otherwise becomes ineligible to continue receiving annuity payments. (b) (1) (A) If a member's marital status changes after retirement due to the death of the member's spouse, or a divorce or marriage dissolution from the member's spouse who is also the member's designated beneficiary, then the member may elect to cancel any optional plan designating the former spouse as a beneficiary. (B) A member's election under subdivision (b)(1)(A) of this section shall cause the member to return to his or her lifetime benefit equivalent, to be effective the month following the system's receipt of the approved form. (2) A retiree who is receiving a single lifetime benefit and who marries after retirement may elect to cancel his or her single lifetime benefit and may elect an annuity providing continuing lifetime benefits to his or her spouse under rules promulgated by the board. (c) If a member fails to elect an option, his or her annuity shall be paid to him or her as a straight life annuity. (d) (1) Notwithstanding anything contained in this section to the contrary, the residue beneficiary under § 24-7-709 may elect to cancel the form of annuity in effect and elect Option A - 100% Survivor Annuity upon the death of a retiree on or after July 1, 1989, if: (A) The retiree died within one (1) year following the effective date of retirement; (B) The retiree was receiving a straight life annuity; and (C) The residue beneficiary otherwise qualifies for an Option A - 100% Survivor Annuity. (2) The election to change may be made only one (1) time and shall be on a form approved by the system. (3) The election form must be received by the system within one hundred twenty (120) days of the death of the retiree. (4) A surviving spouse who is eligible to receive an annuity under this section may elect to receive a lump-sum distribution of the retiree's residue in lieu of the spousal annuity if: (A) The retiree did not designate one (1) or more dependent children as a beneficiary; and (B) The surviving spouse files a written waiver of his or her right to the spousal annuity with the system. (5) If a residue beneficiary elects the Option A - 100% Survivor Annuity under this subsection and is the surviving spouse of a disability retiree, the same procedures used under § 24-7-710 to determine when an active member's surviving spouse is entitled to begin receiving benefit payments shall be used to determine when the residue beneficiary is entitled to begin receiving benefit payments. (e) (1) Notwithstanding anything in this section to the contrary, a retiree who retired on or after July 1, 1994, may elect to cancel his or her election made at retirement for receiving an annuity and elect another option, provided that he or she: (A) Does so within one (1) year after July 1, 1995, or within one (1) year of retirement; (B) Files with the system a new election form approved by the system; and (C) (i) Repays to the system the difference between the amount of the annuity received when he or she retired and the new annuity due as a result of the election change, plus interest from July 1, 1994, or his or her retirement date, whichever is later, to the date of payment in full. (ii) The difference shall be calculated retroactively to July 1, 1994, or his or her retirement date, whichever is later. (2) The election to change shall be made only one (1) time. (3) The election change shall be effective retroactively to the effective date of his or her annuity. (f) The board shall: (1) Promulgate rules as necessary to administer this section; and (2) Institute fair procedures for members of the system, including without limitation: (A) Requirements for designating a beneficiary; and (B) Spousal election. (g) A retiree's effective retirement date and the date when survivor benefits under this section are payable shall be determined by the law in effect at the time of the retiree's death.

Legislative History

Amended by Act 2023, No. 170,§ 5, eff. 7/1/2023. Amended by Act 2023, No. 170,§ 4, eff. 7/1/2023. Amended by Act 2023, No. 170,§ 3, eff. 7/1/2023. Amended by Act 2023, No. 170,§ 2, eff. 7/1/2023. Amended by Act 2023, No. 170,§ 1, eff. 7/1/2023. Amended by Act 2023, No. 107,§ 41, eff. 7/1/2023. Amended by Act 2017, No. 293,§ 5, eff. 2/28/2017. Amended by Act 2015, No. 375,§ 2, eff. 3/11/2015. Amended by Act 2015, No. 375,§ 1, eff. 3/11/2015. Amended by Act 2015, No. 301,§ 8, eff. 3/4/2015. Acts 1973, No. 427, § 9; 1977, No. 541, § 5; 1979, No. 681, § 7; 1983, No. 619, § 10; 1983, No. 665, § 10; A.S.A. 1947, § 80-1443; Acts 1991, No. 51, § 1; 1995, No. 528, § 1; 1999, No. 395, §§ 1, 2; 1999, No. 866, § 7; 2005, No. 385, § 7; 2007, No. 97, § 12; 2011, No. 137, § 2; 2011, No. 557, § 1.