24 CAR Part 10 — Arkansas Teacher Retirement System Rules

Chapter III

Subchapter A

Subpart 1

24 CAR § 10-101 Information for public guidance {#sec-24-car-10-101 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-101}

24 CAR § 10-101. Information for public guidance.

(a)(1) This subpart provides general rules for the organization and operation of the Arkansas Teacher Retirement System.

(2) Additional and more specific information on the policies and rules of the system may be found under the Administration tab on the system’s website at https://www.artrs.gov/administration, or obtained by contacting the office of the Executive Director of the Arkansas Teacher Retirement System at 501-682-1517.

(b) The system is located at 1400 West Third Street, Little Rock, AR, 72201.

(c) A member of the public may obtain information about the system and make submissions or requests to the system by:

(1) Visiting the system’s website (www.artrs.gov);

(2) Emailing the system at info@artrs.gov;

(3) Phoning the system at 501-682-1517; or

(4) Sending a fax to the system at 501-682-2359.

(d)(1) Visits to the system may be made between the business hours of 8:00 a.m. and 4:30 p.m., Monday through Friday, except on holidays.

(2) Appointments are not required, but are encouraged.

(e)(1) The system maintains a list of persons holding certain responsibilities for handling Freedom of Information Act of 1967, Arkansas Code § 25-19-101 et seq., requests and requests by the public, so that the public may obtain information about the system or make submissions or requests.

(2) This list is available to the public.

(3) The names, mailing addresses, telephone numbers, and electronic addresses can be obtained from the system office or the system’s website.

(f) The system’s policies, rules, and official forms may be obtained from the system’s office or from the system’s website, if operational.

24 CAR § 10-102 Description of the system {#sec-24-car-10-102 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-102}

24 CAR § 10-102. Description of the system.

(a) The Arkansas Teacher Retirement System is a cost-sharing, multiple-employer, defined benefit pension plan established on March 17, 1937, by authority of the General Assembly under Arkansas Code § 24-7-101 et seq.

(b) The system is operated as a qualified trust under 26 U.S.C. § 401(a) of the Internal Revenue Code.

(c) The system is a component unit of the State of Arkansas.

(d) The General Assembly is responsible for setting benefits and contributions and amending plan provisions.

(e)(1) Ultimate authority, general administration, and responsibility for the proper operation of the system, and for making effective the provisions of Arkansas Code § 24-7-201 et seq., are vested in the fifteen-member Board of Trustees of the Arkansas Teacher Retirement System.

(2) Eleven (11) members are elected and four (4) members serve as ex officio members by virtue of their positions in state government.

(3) The board appoints the Executive Director of the Arkansas Teacher Retirement System who serves as the chief executive officer of the system.

(f) The board promulgates rules as it deems necessary in the transaction of its business and in administering the system.

(g) For administrative purposes, the executive director may organize the system in a manner that he or she determines is most efficient for the operation of the system.

24 CAR § 10-103 Organization and operation of the board {#sec-24-car-10-103 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-103}

24 CAR § 10-103. Organization and operation of the board.

(a) The officers of the Board of Trustees of the Arkansas Teacher Retirement System are the chair and vice chair.

(b) The election of officers is held in odd numbered years at the first regular meeting of the board after the beginning of the fiscal year.

(c) The officers perform the duties prescribed by Robert’s Rules of Order and the law, rules, and policies applicable to the Arkansas Teacher Retirement System.

(d)(1) The business of the system is conducted in public meeting pursuant to Robert’s Rules of Order.

(2) All meetings are conducted in conformity with the Freedom of Information Act of 1967, Arkansas Code § 25-19-101 et seq.

(3) Regular meetings are held at least quarterly.

(4) Special meetings may be held on the call of the chair or as scheduled by action of the board in a regular meeting.

(5) A quorum for the transaction of business is a majority of the number of voting members of the board.

(e)(1) The board may create standing and ad hoc committees the membership of which is determined by the chair.

(2) A quorum for the transaction of committee business is a majority of the number of voting members of the committee.

(f)(1) The Executive Director of the Arkansas Teacher Retirement System prepares the agenda for regular and special meetings of the board.

(2) The agenda is distributed to the board and made available to the public in advance of the meeting.

(3) The agenda may be amended by appropriate motion.

(g)(1) Trustees, members, and other individuals who wish to have a matter placed as an additional item on an agenda for a regular meeting of the board should submit a request to the executive director to have the matter placed on the agenda.

(2) The request should be submitted to the executive director before the regular meeting of the board at which the matter will be included as an agenda item.

24 CAR § 10-104 Rulemaking {#sec-24-car-10-104 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-104}

24 CAR § 10-104. Rulemaking.

(a) The Board of Trustees of the Arkansas Teacher Retirement System is authorized by the General Assembly to promulgate rules.

(b) The Arkansas Teacher Retirement System follows the requirements of the Arkansas Administrative Procedure Act, Arkansas Code § 25-15-201 et seq., and in particular Arkansas Code §§ 25-15-203 and 25-15-204.

(c) The system is required to abide by Arkansas Code § 10-3-309, which establishes a method for continuing legislative review and approval of agency rules.

(d)(1) The board or the system’s staff may request the initiation of the rulemaking process, which includes adopting a new rule or amending or repealing an existing rule.

(2) Persons outside the system may petition for the issuance, amendment, or repeal of any rule.

(3) However, staff of the system shall not proceed with the rulemaking process for a rule unless the rule is approved by the board.

Subpart 2

24 CAR § 10-201 General rules for candidacy and voting in trustee elections — Definitions {#sec-24-car-10-201 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-201}

24 CAR § 10-201. General rules for candidacy and voting in trustee elections — Definitions.

(a) An undefined term in the rules of the Arkansas Teacher Retirement System shall have the same meaning as provided in Arkansas Code § 24-7-202.

(b) As used in this subpart:

(1) “Active member”, for the purposes of eligibility for the active member trustee position and voting, means:

(A) An active member as defined in Arkansas Code § 24-7-202; or

(B) A member who:

(i) Participates in T-DROP;

(ii) Is employed by a covered employer; and

(iii) Receives T-DROP plan deposits;

(2) “Administrator”, for the purposes of eligibility for the administrator trustee position and voting for an administrator trustee position, means a person who has a current administrator’s license and is either:

(A) An employee of a covered employer who is employed in one (1) of the following positions:

(i) Public school superintendent, assistant superintendent, principal, or vice principal;

(ii) Higher education president, chancellor, or director; or

(iii) Director, president, or vice president of a community college, vocational or technical school, or educational cooperative; or

(B) An employee who is:

(i) An employee of an education-related agency participating in the system;

(ii) An active member of the system through his or her employment with the education-related agency; and

(iii) Employed in a GS13 grade position, its equivalent, or above;

(3) “Licensure”, for the purposes of eligibility for the licensed trustee position or voting for the licensed trustee position, means a person who is not an administrator and is employed either in:

(A) A position requiring a state teaching license; or

(B) An education institution GS09 – GS12 grade position of its equivalent; and

(4) “Nonlicensed”, for the purposes of eligibility for the nonlicensed trustee position and voting for the nonlicensed trustee position, means a person who is:

(A) Employed in a position with a covered employer that does not require a state teaching license;

(B) Employed in a position with an education-related agency in a position that:

(i) Does not require a state teaching license; and

(ii) Is no higher than a GS08 grade position or its equivalent; and

(C) Not an administrator as that term is defined in Arkansas Code § 24-7-202 and this subpart.

24 CAR § 10-202 Membership and authority of the board {#sec-24-car-10-202 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-202}

24 CAR § 10-202. Membership and authority of the board.

(a)(1) The general administration and proper operation of the Arkansas Teacher Retirement System is vested in the Board of Trustees of the Arkansas Teacher Retirement System.

(2) The board shall consist of eleven (11) elected members and four (4) ex officio members.

(b) In accordance with Arkansas Code § 24-7-301, the board shall adopt rules for the election of a trustee and a vacancy on the board.

24 CAR § 10-203 Candidacy and voting in trustee elections — Generally {#sec-24-car-10-203 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-203}

24 CAR § 10-203. Candidacy and voting in trustee elections — Generally.

(a) A candidate who is employed in more than one (1) position with a covered employer shall have his or her eligibility determined based on his or her primary position for which he or she receives the greater percentage of covered salary.

(b)(1) Only members of the Arkansas Teacher Retirement System shall vote in a trustee election.

(2) Guardians, attorneys-in-fact, or others shall not vote on behalf of a member.

(c)(1) An employee of the system shall not be elected or appointed to the Board of Trustees of the Arkansas Teacher Retirement System.

(2) An employee of the system shall not be a candidate for election or appointment to the board.

24 CAR § 10-204 Qualifications and voter eligibility for elected trustee positions — Active member trustee positions one – four {#sec-24-car-10-204 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-204}

24 CAR § 10-204. Qualifications and voter eligibility for elected trustee positions — Active member trustee positions one – four.

(a) The Arkansas congressional district boundaries as defined on the first day of the fiscal year in which an election for an active member trustee position occurs shall be used to determine:

(1) Whether a person is qualified to become a candidate for an active member trustee position; and

(2) The eligibility of a member to vote in an election for an active member trustee position.

(b) There shall be four (4) active member trustees each of whom shall represent one (1) of the four (4) congressional districts in Arkansas.

(c) A person is qualified to become a candidate for an active member trustee position if the person is:

(1) An active member with at least five (5) years of actual service credit in the Arkansas Teacher Retirement System;

(2) Employed by a covered employer located in the congressional district for which he or she is seeking election; and

(3) Employed in a position requiring state teaching licensure or the equivalent under this subpart.

(d) A member is eligible to vote in an election for an active member trustee if the member is:

(1) An active member, regardless of credited service;

(2) Employed by a covered employer located in the congressional district for which the active member trustee election is being held; and

(3) Otherwise eligible to be a candidate under this subpart.

24 CAR § 10-205 Qualifications and voter eligibility for elected trustee positions — Active administrator trustee positions five – six {#sec-24-car-10-205 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-205}

24 CAR § 10-205. Qualifications and voter eligibility for elected trustee positions — Active administrator trustee positions five – six.

(a) There shall be two (2) active member trustees each of whom shall be employed as an administrator as defined in this subpart.

(b) A person is qualified to become a candidate for an active administrator trustee position if the person is:

(1) An active member with at least five (5) years of actual service credit in the Arkansas Teacher Retirement System; and

(2)(A) Employed in a position requiring an administrator’s license.

(B)(i) As provided in Arkansas Code § 24-7-301, at least one (1) of the administrators serving as an active administrator trustee shall be employed by a covered employer as a school superintendent or educational cooperative director.

(ii) If there is an open administrator active member trustee position and the other filled administrator active member trustee position is held by a person who is not a superintendent or an educational cooperative director:

(a) A candidate for the open administrator active member trustee position shall be a superintendent or an educational cooperative director; and

(b) The notice of election shall state that a candidate for the open administrator active member trustee position is required to be a superintendent or an educational cooperative director.

(c) A member is eligible to vote in an election for an active administrator trustee position if the member is:

(1) An active member, regardless of the amount of credited service that the member has in the system; and

(2) Employed as a licensed administrator in a position requiring an administrator’s license.

24 CAR § 10-206 Qualifications and voter eligibility for elected trustee positions — Nonlicensed trustee position seven {#sec-24-car-10-206 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-206}

24 CAR § 10-206. Qualifications and voter eligibility for elected trustee positions — Nonlicensed trustee position seven.

(a) A person is qualified to become a candidate for the nonlicensed trustee position if the person is:

(1) An active member with at least five (5) years of actual service credit in the Arkansas Teacher Retirement System; and

(2) Employed in a position that does not require state licensure.

(b) A member is eligible to vote in an election for the nonlicensed trustee position if the member is:

(1) An active member, regardless of the amount of credited service that the member has in the system; and

(2) Employed by a covered employer in a nonlicensed position.

24 CAR § 10-207 Qualifications and voter eligibility for elected trustee positions — At-large active or retired trustee position eight {#sec-24-car-10-207 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-207}

24 CAR § 10-207. Qualifications and voter eligibility for elected trustee positions — At-large active or retired trustee position eight.

(a) There shall be one (1) at-large member trustee who is an active or retired member of the Arkansas Teacher Retirement System.

(b) A person is qualified to become a candidate for the at-large active or retired trustee position if the person is either a retired member or an active member of the system with at least five (5) years of actual service credit in the system.

(c) A member is eligible to vote in an election for the at-large active or retired trustee position if the member is a retired member or an active member, regardless of the amount of credited service that the member has in the system.

History

• History: Ark. R. 2025-30 (eff. December 5, 2025) Authority: Arkansas Code § 24-7-305

24 CAR § 10-208 Qualifications and voter eligibility for elected trustee positions — At-large retired member trustee positions nine – eleven {#sec-24-car-10-208 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-208}

24 CAR § 10-208. Qualifications and voter eligibility for elected trustee positions — At-large retired member trustee positions nine – eleven.

(a) There shall be three (3) retired member trustees who shall be retirees as defined by Arkansas Code § 24-7-202.

(b) A person is qualified to become a candidate for a retired member trustee position if the person is a retiree and a resident of the State of Arkansas.

(c) A member is eligible to vote in an election for a retired member trustee position if the member is a retiree, regardless of his or her present employment status or residency.

24 CAR § 10-209 Elected trustee nominations — Scheduling and notice of election {#sec-24-car-10-209 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-209}

24 CAR § 10-209. Elected trustee nominations — Scheduling and notice of election.

(a) The Arkansas Teacher Retirement System may publish electronically any public notice required by this subpart.

(b)(1) During December in a year in which an elected trustee position is subject to a regular or special election, the system shall publish public notice of the upcoming trustee position election in a statewide newspaper for at least five (5) consecutive days.

(2) The notice will also be sent to each person or group that requests notice of a trustee vacancy.

(3) The notice shall also be posted on the system’s website from December until the closing of the nomination period.

24 CAR § 10-210 Elected trustee nominations — Candidate petitions and verification of member signatures {#sec-24-car-10-210 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-210}

24 CAR § 10-210. Elected trustee nominations — Candidate petitions and verification of member signatures.

(a)(1) For all elected positions, a candidate must submit a petition signed legibly by at least twenty-five (25) Arkansas Teacher Retirement System members who are eligible to vote for the trustee position for which the member is seeking nomination.

(2) The petition shall include the last four (4) digits of each signatory's Social Security number for verification of the member's eligibility to vote for the position.

(3)(A) The original petitions shall be submitted to the Executive Director of the Arkansas Teacher Retirement System no later than January 10.

(B) Actual delivery shall be made by January 10, regardless of postmark date or other methods used to attempt delivery.

(C) Upon receipt of a petition, the system shall confirm receipt of the petition and verify the eligibility of the candidate for the trustee position.

(D) The system shall verify the signature of each member who signs the petition as an eligible voter.

(b) The system shall:

(1) Notify each candidate who submits a petition of whether or not his or her petition has been accepted; and

(2) Provide each candidate who submits a petition with a list of other candidates who were certified to participate in the election for the trustee position for which the candidate sought nomination.

24 CAR § 10-211 Elected trustee nominations — Ballots {#sec-24-car-10-211 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-211}

24 CAR § 10-211. Elected trustee nominations — Ballots.

(a) Before ballots are mailed, the Arkansas Teacher Retirement System or its designee shall conduct a random drawing for ballot positions.

(b) At least two (2) independent witnesses shall witness and certify the drawing of the ballot positions.

(c) The system shall notify each candidate who was certified to participate in election for the trustee position of the order in which the candidate will be listed on the ballot.

24 CAR § 10-212 Elected trustee nominations — Campaign materials {#sec-24-car-10-212 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-212}

24 CAR § 10-212. Elected trustee nominations — Campaign materials.

(a) Upon request of a candidate who is certified to participate in the election for the trustee position, the Arkansas Teacher Retirement System shall provide a list of mailing addresses of all eligible voters for the distribution of a candidate's campaign materials.

(b) The candidate's message shall not contain information that:

(1) Would constitute defamation of another candidate; or

(2) Claims or appears to claim the endorsement of the system or the Board of Trustees of the Arkansas Teacher Retirement System.

(c) Campaign materials shall be mailed by the election vendor from the election vendor’s place of business.

(d) All postage for campaign materials shall be paid for by the candidate distributing the campaign materials.

24 CAR § 10-213 Trustee elections {#sec-24-car-10-213 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-213}

24 CAR § 10-213. Trustee elections.

(a) The Arkansas Teacher Retirement System shall employ an independent election vendor to conduct the trustee elections.

(b)(1) The system shall publish ballots and submit the published ballots to the election vendor to be mailed by March 15 to the address of record of each member who is eligible to vote in the election.

(2)(A) A completed ballot shall be counted if it is received by the election vendor on or before April 15, regardless of postmark date or other methods used to attempt delivery.

(B) Only ballots that are correctly completed shall be counted.

(c) If any position receives only one (1) nomination and the position is uncontested, the Board of Trustees of the Arkansas Teacher Retirement System, at its next regular or special meeting, may certify the nomination and declare the candidate duly elected as a trustee before the trustee’s term begins.

(d) The election vendor shall certify the results for positions not subject to a runoff election to the system by April 20.

(e)(1) A run-off election shall be held between the two (2) candidates who receive the highest number of votes for a trustee position if:

(A) The election vendor certifies the outcome of the trustee election; and

(B) A single candidate does not receive at least fifty percent (50%) of the votes cast by eligible voters.

(2) The election vendor shall mail runoff ballots to each member who is eligible to vote in the election on or before May 1.

(3) Completed ballots for a runoff election that are received by the election vendor after June 1 shall not be counted.

(4) The election vendor shall certify the results of a runoff election to the system by June 5.

(f)(1) A candidate included on a ballot may challenge the election vendor's certified results for an elected trustee position by submitting a written challenge to the Executive Director of the Arkansas Teacher Retirement System within five (5) calendar days of the date on which the election results are certified by the election vendor.

(2)(A) A written challenge to the election vendor’s certified results for an election shall not be considered if it is submitted more than (5) calendar days after the date on which the election results are certified to the system by the election vendor.

(B) After a written challenge to a certified election result is received by the system, the board shall hold a special meeting to consider the challenge.

(C) The executive director shall issue a recommendation to the board along with the administrative record concerning the certified election results of the position being challenged.

(3) If a candidate challenges the election results:

(A) The election process shall be suspended for the same number of days that the resolution of the challenge requires; and

(B) The remaining election schedule shall be adjusted accordingly.

(g) Upon completion of an election, all elected trustee terms, except for special elections, shall begin on July 1 following the election.

(h) For any fixed date in the election schedule that falls on a holiday or a weekend, the official date shall become the next business day.

24 CAR § 10-214 Unexpired terms of elected trustees {#sec-24-car-10-214 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-214}

24 CAR § 10-214. Unexpired terms of elected trustees.

(a) The Arkansas Teacher Retirement System staff shall notify the Board of Trustees of the Arkansas Teacher Retirement System of a resignation or vacancy by other cause in a trustee position as soon as possible after staff has knowledge of the resignation or vacancy.

(b) The board shall take appropriate action authorized by law to fill the vacancy.

(c)(1) The board by majority vote may appoint a trustee until the next system election.

(2) The appointment of a trustee shall be effective as of the date on which the trustee is appointed by the board.

(d)(1) A special election to fill a trustee position caused by resignation or vacancy by other cause shall be scheduled and held if the board by majority vote determines that the vacancy should be filled by a special election.

(2) If an elected trustee position is declared vacant by the board and the board determines that the vacancy should be filled by a special election, the system shall:

(A) Publish notice that a special election will be held; and

(B)(i) Announce the schedule for the special election.

(ii) The schedule for the special election shall include the following:

(a) The date the vacancy occurred and position being vacated;

(b) The time period for circulating petitions for nominating signatures;

(c) The deadline for filing petitions with the system;

(d) The date the system will verify the validity of petitions;

(e) The date ballots will be sent to eligible voters;

(f) The election date; and

(g) The date the term shall begin.

(3) The system may publish public notices related to a special election in accordance with the rules governing a regular election of the system.

24 CAR § 10-215 Elected and appointed trustee terms {#sec-24-car-10-215 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-215}

24 CAR § 10-215. Elected and appointed trustee terms.

(a)(1) The term of office of each elected trustee shall be six (6) years unless the trustee is elected in a special election.

(2) Each trustee shall continue to serve as trustee until the expiration of his or her term unless he or she resigns or is otherwise ineligible to continue serving as a trustee under this subpart.

(3) In a year in which a six-year term of a trustee expires, the trustee position shall be filled under the regular election schedule provided in this subpart.

(b) A trustee who is elected in a special election shall serve for the remainder of the six-year term of the vacating trustee.

(c)(1) A trustee who is appointed to the Board of Trustees of the Arkansas Teacher Retirement System shall serve until the next election of the Arkansas Teacher Retirement System that is held to fill the trustee position to which the trustee was appointed.

(2) The term of office of the person who is elected to fill the trustee position to which a trustee was appointed shall be six (6) years.

24 CAR § 10-216 Elected trustee vacancies {#sec-24-car-10-216 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-216}

24 CAR § 10-216. Elected trustee vacancies.

(a) An active member trustee shall be ineligible to serve if he or she:

(1) Becomes inactive;

(2) Retires; or

(3) Changes his or her employment category during his or her term of office and the employment category is a requirement of the trustee position.

(b) A retiree member trustee shall be ineligible to serve after becoming an active member.

(c)(1) A trustee vacancy may occur if a trustee is absent from meetings.

(2) The Board of Trustees of the Arkansas Teacher Retirement System or its designee shall notify the trustee after the trustee’s second consecutive absence.

(3) The board by resolution shall vote to declare a position vacant if:

(A)(i) A trustee has three (3) consecutive unexcused absences from regular meetings of the board.

(ii) An absence that is excused by a majority of the members of the board shall not be counted towards a vacancy.

(iii) Attendance on either day of a two-day meeting of the board is sufficient to meet the attendance requirement for the two-day meeting of the board;

(B) A trustee becomes ineligible to serve on the board due to a change in status under Arkansas Code § 24-7-302 that results in the trustee being absent from three (3) consecutive regular meetings of the board before the expiration of the trustee’s term; or

(C) A trustee resigns or dies.

(d)(1) If the board by resolution declares a vacancy as provided under this subpart, the board may vote to hold a special election to fill an unexpired term using the board’s procedures to fill unexpired terms for elected trustees.

(2) If the board does not declare a vacancy by resolution under this section, the vacancy shall be filled during the next regular Arkansas Teacher Retirement System election held after the expiration of the vacating trustee's term.

Subpart 3

24 CAR § 10-301 Definitions {#sec-24-car-10-301 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-301}

24 CAR § 10-301. Definitions.

As used in this subpart:

(1) "Administrator" means:

(A) An employee of a covered employer who is employed in one (1) of the following positions:

(i) Public school superintendent, assistant superintendent, principal, or vice principal;

(ii) Higher education president, chancellor, or director; or

(iii) Director, president, or vice president of a community college, vocational or technical school, or educational cooperative; or

(B) An employee who is:

(i) An employee of an education-related agency participating in the Arkansas Teacher Retirement System;

(ii) An active member of the Arkansas Teacher Retirement System through his or her employment with the education-related agency; and

(iii) Employed in a GS13 grade position, its equivalent, or above;

(2) "Contributory election" means a member's written election to make member contributions to the Arkansas Teacher Retirement System;

(3) "Contributory service" means service on which a member makes or made member contributions to the Arkansas Teacher Retirement System;

(4) "Noncontributory service" means service on which a member does not make member contributions to the Arkansas Teacher Retirement System and for which the member accepts a reduced retirement annuity for the member's years of noncontributory service;

(5) "Nonteacher" means a member who is not employed as a teacher or administrator;

(6) "Organization" means:

(A) A private entity that:

(i) Provides services to a public school district; and

(ii) Has employees who were previously employed by the public school district and members of the Arkansas Teacher Retirement System; or

(B) An educational nonprofit corporation licensed and regulated by the Division of Developmental Disabilities Services of the Department of Human Services;

(7) "Postsecondary higher education plan" or "PSHE plan" means a plan establishing the right of a new employee of a postsecondary or higher education employer to participate in the Arkansas Teacher Retirement System on or after July 1, 2011;

(8) "Preceding system" means a previous reciprocal retirement system of record;

(9) "Reciprocal system" means:

(A) The Arkansas Teacher Retirement System operations as of June 30, 1957, and continued by statutes;

(B) The Arkansas State Highway Employees' Retirement System, established by Arkansas Code § 24-5-103;

(C) The Arkansas Public Employees' Retirement System established by Arkansas Code § 24-4-103;

(D) The State Police Retirement System established by Arkansas Code § 24-6-203;

(E) The Arkansas Judicial Retirement System established by Arkansas Code § 24-8-201;

(F) The Arkansas District Judge Retirement System established by Arkansas Code §§ 24-8-801 – 24-8-824 [repealed];

(G) The Arkansas Local Police and Fire Retirement System provided for under Arkansas Code § 24-10-101; or

(H) An alternate retirement plan as defined by Arkansas Code § 24-7-202 or an alternate retirement plan for an agency that, through a state reorganization or transformation plan, may be assigned the duties under one (1) or more of the agencies listed in subdivisions (9)(A) – (H) of this section;

(10) "State employer" means:

(A) A public employer whose employees are covered under the:

(i) Arkansas Teacher Retirement System;

(ii) Arkansas State Highway Employees' Retirement System (Arkansas Code § 24-5-103);

(iii) Arkansas Public Employees' Retirement System (Arkansas Code § 24-4-103);

(iv) State Police Retirement System (Arkansas Code § 24-6-203);

(v) Arkansas Judicial Retirement System (Arkansas Code § 24-8-201); or

(vi) Arkansas District Judge Retirement System (Arkansas Code §§ 24-8-801 – 24-8-824 [repealed]);

(B) A public employer that has an alternate retirement plan as defined by Arkansas Code § 24-7-202; or

(C) A public employer that is an agency that, through a state reorganization or transformation plan, may be assigned the duties of one (1) or more of the agencies listed in subdivisions (9)(A) – (B) of this section;

(11) "Succeeding system" means the current reciprocal retirement system of record that follows a person's membership in a preceding retirement system; and

(12) "Teacher'' means a person employed by a school for the purpose of giving instruction and whose employment requires state teaching licensure.

History

• Codification Notes: Arkansas Code §§ 24-8-801 – 24-8-824 were repealed by Acts 2009, No. 645, § 2. Authority: Arkansas Code § 24-7-305

24 CAR § 10-302 Confidentiality of member accounts {#sec-24-car-10-302 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-302}

24 CAR § 10-302. Confidentiality of member accounts.

(a) As provided by the Arkansas Teacher Retirement System's Code of Ethics, the system shall keep each member's salary, employment history, retirement account, and other personal data or other information compiled by the system for purposes of establishing and maintaining the member's retirement account confidential.

(b) All member information compiled by the system for the purpose of establishing and maintaining the member's retirement account shall not be disclosed to a third party unless:

(1) The member provides the system with his or her written consent;

(2) A valid legal process requires the disclosure of the member's information;

(3) Disclosure is necessary for the proper operation and administration of the system;

(4) A confidentiality agreement authorizing disclosure to a third-party vendor or other entity needing the information for purposes related to the proper operation and administration of the system has been executed by the system and the third-party vendor or entity that will receive the information; or

(5) Disclosure of the member's information is authorized by statute.

(c) Individual member records that are kept for the purpose of compiling information for a member's retirement or Social Security records shall not be open to the public under Arkansas Code § 24-4-1003.

History

• History: Ark. R. 2025-30 (eff. December 5, 2025) Authority: Arkansas Code § 24-7-305

24 CAR § 10-303 Submission deadlines {#sec-24-car-10-303 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-303}

24 CAR § 10-303. Submission deadlines.

(a) Unless otherwise provided by the law, rules, or policy applicable to the Arkansas Teacher Retirement System, any application, form, or other document that is required to be submitted to the system by a specified deadline shall be accepted as timely submitted if the application, form, or other document is emailed, faxed, or has a postmark that is on or before the submission deadline.

(b) If a deadline to submit an application, form, or other document to the system falls on a Saturday, Sunday, or Arkansas state holiday, the deadline shall be extended to the next business day immediately following the Saturday, Sunday, or Arkansas state holiday.

24 CAR § 10-304 Employee membership in another state retirement system {#sec-24-car-10-304 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-304}

24 CAR § 10-304. Employee membership in another state retirement system.

Excluding service as a member of the General Assembly, an employee who is eligible for membership in the Arkansas Teacher Retirement System is ineligible for membership in another state retirement system while he or she is employed in a position covered by the Arkansas Teacher Retirement System.

24 CAR § 10-305 Erroneous employee membership enrollment {#sec-24-car-10-305 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-305}

24 CAR § 10-305. Erroneous employee membership enrollment.

(a)(1) An employee who was erroneously enrolled in the Arkansas Teacher Retirement System before January 1, 1979, shall continue to be a member of the Arkansas Teacher Retirement System if the employee's contributions were not refunded before July 1, 1979.

(2) The employee shall:

(A) Receive service credit for all paid membership service in the Arkansas Teacher Retirement System and any free service creditable under Acts 1973, No. 427, as amended; and

(B) Be entitled to reciprocal service credit as provided by Arkansas Code §§ 24-7-401 – 24-7-408.

(b) Effective July 1, 1979, the Arkansas Teacher Retirement System shall not:

(1) Be required to correct the state retirement system membership of an employee who was erroneously enrolled in another state retirement system before January 1, 1979; and

(2) Accept an employee who was erroneously enrolled in another state retirement system before January 1, 1979, as a member of the Arkansas Teacher Retirement System unless the employee's contributions were refunded before July 1, 1979.

(c)(1) An employee who is erroneously enrolled in a state retirement system on or after January 1, 1979, may elect to remain a member of the system of record or become a member of the eligible retirement system.

(2) If the Arkansas Teacher Retirement System discovers that an employee is erroneously enrolled in another state retirement system on or after January 1, 1979, the Arkansas Teacher Retirement System shall notify both the state employer and employee that the:

(A) Employee is erroneously enrolled in the state retirement system; and

(B) Error may be corrected as provided by Acts 1991, No. 13, or Arkansas Code § 24-2-302 et seq.

24 CAR § 10-306 Membership eligibility — Janitors, bus drivers, and cafeteria workers {#sec-24-car-10-306 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-306}

24 CAR § 10-306. Membership eligibility — Janitors, bus drivers, and cafeteria workers.

An employee shall continue to be a member of the Arkansas Public Employees' Retirement System if the employee:

(1) Was employed before July 1, 1989, as a school janitor, bus driver, or cafeteria worker;

(2) Was enrolled in the Arkansas Public Employees’ Retirement System under the provision of Acts 1965, No. 63;

(3) Was promoted to a position of school maintenance worker or supervisor, bus mechanic or transportation supervisor, or cafeteria manager, respectively; and

(4) Remains employed in the position to which he or she was promoted.

24 CAR § 10-307 Membership eligibility — Nonteaching service employees {#sec-24-car-10-307 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-307}

24 CAR § 10-307. Membership eligibility — Nonteaching service employees.

(a) Effective July 1, 2001, an employee whose nonteaching service began before July 1, 1989, and is covered or coverable by the Arkansas Public Employees' Retirement System may elect to be covered by the Arkansas Teacher Retirement System.

(b) An employee shall submit his or her election to be covered by the Arkansas Teacher Retirement System before May 31 on a form provided by the Arkansas Teacher Retirement System.

(c) In accordance with Arkansas Code § 24-7-501, an employee's timely submitted election to be covered by the Arkansas Teacher Retirement System is effective on July 1 of the following year.

24 CAR § 10-308 Membership eligibility — College plans {#sec-24-car-10-308 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-308}

24 CAR § 10-308. Membership eligibility — College plans.

(a)(1) A member of the Arkansas Teacher Retirement System who was employed by a nonmandatory employer before July 1, 2011, may continue to participate in the system instead of an alternative program offered by the nonmandatory employer if the member continues providing consistent service to the nonmandatory employer.

(2) A nonmandatory employer shall be considered a postsecondary or higher education employer or PSHE employer if the nonmandatory employer enrolls a new eligible member with the system on or after July 1, 2011.

(3) If an eligible nonmandatory employer college elects to offer participation in the system to its employees, the nonmandatory employer shall report information regularly to the system, on forms approved by the system, as required or permitted by the law applicable to the system.

(b)(1) A PSHE employer may elect to offer participation in the system to its employees by fulfilling the requirements of Arkansas Code § 24-7-1605.

(2) In addition to completing and submitting the standard reporting forms required by the system, a PSHE employer shall provide supplemental reports on any form required, approved, and adopted by the Board of Trustees of the Arkansas Teacher Retirement System.

(c)(1) The participation of new employees hired by a PSHE employer after July 1, 2011, is governed by Arkansas Code § 24-7-1601 et seq.

(2) A new employee of a PSHE employer who is hired after July 1, 2011, may participate in a PSHE plan if:

(A) The employee is benefits-eligible as determined by the PSHE employer;

(B) The employee is either:

(i) A vested member of the system at the time of initial employment; or

(ii) A nonvested member of the system who meets the requirements of a less restrictive PSHE plan adopted by the specific PSHE employer; and

(C) The employee signs an irrevocable PSHE plan participation form provided by the system.

(3) A PSHE plan employee shall remain a member of the system as long as he or she is employed by a PSHE employer.

(4) A PSHE plan employee's election to participate in the system is irrevocable unless the PSHE plan employee obtains a termination refund from the system after his or her election to participate.

24 CAR § 10-309 Employer participation — Review of employer participation {#sec-24-car-10-309 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-309}

24 CAR § 10-309. Employer participation — Review of employer participation.

(a) This section applies to an employer that participates in the Arkansas Teacher Retirement System as provided under Arkansas Code § 24-7-202.

(b) Every five (5) years from the effective start date of an employer's participation in the system, the Executive Director of the Arkansas Teacher Retirement System shall review the employer's participation in the system to ensure that the employer meets both federal and state requirements for participation and continued participation in the system.

(c) The executive director's determination concerning whether or not an employer meets the requirements for continued participation in the system shall be presented to the Board of Trustees of the Arkansas Teacher Retirement System for review and appropriate action by the board.

24 CAR § 10-310 Employer participation — Application for participation {#sec-24-car-10-310 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-310}

24 CAR § 10-310. Employer participation — Application for participation.

(a) An employer that would prefer to participate in and have its employees become members of the Arkansas Teacher Retirement System may submit a written application to the Executive Director of the Arkansas Teacher Retirement System.

(b) An employer's application for participation in the system shall:

(1) Specify a proposed effective date for participation in the system; and

(2) Include the following information and materials:

(A) A certified copy of the articles of incorporation, bylaws, and other organizational documents of employer;

(B) A copy of the employer's:

(i) Most recent three (3) years' annual audited financial statements, including balance sheets, financial statements, and statements of cash flows; or

(ii) If the employer does not have audited financial statements, the year-end compilation reports or internal balance sheets and income statements for the employer;

(C) A copy of the employer's most recent three (3) years' federal and state income tax returns;

(D) A description of the employer's sources of funding, including the percentage of the funds that is provided by the federal or state government and the type of government funding provided;

(E) A description of how the employer's board of directors or board of trustees is selected and whether any governmental agency has input in the selection of the board members;

(F) A description of the types of services provided by the employer; and

(G) A description of each government agency that would be responsible for providing the types of services provided by the employer if the employer did not provide the services.

(c)(1) After the system reviews the employer's application and accompanying information and materials, the system shall:

(A) Determine whether an Internal Revenue Service ruling should be requested concerning whether or not the participation of the employees of the employer jeopardizes the system's status as a governmental plan; and

(B) Request any necessary additional information and statements from the employer if the system determines that an Internal Revenue Service ruling should be requested.

(2) The employer shall provide the system with any additional information and statements requested by the system in relation to the Internal Revenue Service ruling.

(3) The employer shall pay the system three thousand dollars ($3,000) or the actual cost for fees and costs associated with obtaining the Internal Revenue Service ruling if the system determines that an Internal Revenue Service ruling should be requested.

(d)(1) The Board of Trustees of the Arkansas Teacher Retirement System shall consider and vote on an application for employer participation or continued participation.

(2) When considering an application for employer participation, the Board of Trustees of the Arkansas Teacher Retirement System:

(A) Shall consider any relevant constitutional arguments brought to the attention of the executive director concerning the employer's application for employer participation;

(B) Shall consider Rev. Rul. 89-49, 1989-1 C.B. 117; and

(C) May consider any other relevant rulings issued by the Internal Revenue Service or the United States Department of Labor.

24 CAR § 10-311 Employer participation — Education-related agencies or organizations {#sec-24-car-10-311 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-311}

24 CAR § 10-311. Employer participation — Education-related agencies or organizations.

(a) A person who is employed by an education-related agency or organization is eligible to become a member of the Arkansas Teacher Retirement System if:

(1) The following applies to the person:

(A) The person is employed in a position with an education-related agency or organization;

(B) The person's employment is related to:

(i) Training public school employees or school board members;

(ii) Teaching public school students; or

(iii) Adult education programs;

(C) The person's employment is unrelated to private schools;

(D) The person is or has been a member of the system for a minimum of five (5) years; and

(E) The person elects to become or remain a member of the system;

(2) The Board of Trustees of the Arkansas Teacher Retirement System determines that the participation of the employees employed by the education-related agency or organization will not impair the system's legal status, including:

(A) The system's tax-qualified and governmental plan status under the Internal Revenue Code, 26 U.S.C. § 1 et seq.;

(B) The system's governmental plan status under the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq.;

(C) Subject the system to additional federal requirements; and

(D) Have a substantial adverse impact on the system's actuarial soundness; and

(3) The education-related agency or organization:

(A) Elects to participate in the system;

(B) Assumes responsibility for employer contributions;

(C) Assumes responsibility for fees for obtaining Internal Revenue Service rulings or Employee Retirement Income Security Act of 1974 opinions; and

(D) Is approved as a covered employer by the Board of Trustees of the Arkansas Teacher Retirement System.

(b) An education-related agency or organization shall:

(1) Become a covered employer at the time that an employee elects to become or remain a member of the system; and

(2) Be considered a covered employer only for each employee who elects to become or remain a member of the system.

24 CAR § 10-312 Employer participation — Private providers {#sec-24-car-10-312 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-312}

24 CAR § 10-312. Employer participation — Private providers.

Effective July 1, 1997, if a public school district privatizes any of its services, a person who is or was employed by the public school district in one (1) or more of the privatized services and who is or has been a member of the Arkansas Teacher Retirement System may elect to remain a member of the system if the:

(1) Board of Trustees of the Arkansas Teacher Retirement System determines that the participation of employees hired by the private provider will not:

(A) Impair the system's legal status, including:

(i) The system's tax-qualified and governmental plan status under the Internal Revenue Code, 26 U.S.C. § 1 et seq.; and

(ii) The system's governmental plan status under the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq.;

(B) Subject the system to additional federal requirements; or

(C) Have a substantial adverse impact on the system's actuarial soundness; and

(2) Private provider assumes responsibility for:

(A) Required employer contributions; and

(B) Fees for obtaining Internal Revenue Service rulings or Employee Retirement Income Security Act of 1974 opinions.

24 CAR § 10-313 Employer participation — Educational nonprofit corporations {#sec-24-car-10-313 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-313}

24 CAR § 10-313. Employer participation — Educational nonprofit corporations.

Effective July 1, 1997, a person who is employed by a nonprofit corporation is eligible to become a member of the Arkansas Teacher Retirement System if:

(1) The following applies:

(A) The person is employed in a position with an educational nonprofit corporation that is licensed and regulated by the Division of Developmental Disabilities Services of the Department of Human Services;

(B) The person's employment is related to:

(i) Training public school employees or school board members;

(ii) Teaching public school students; or

(iii) Adult education programs; and

(C) The person's employment is unrelated to private schools;

(2) The Board of Trustees of the Arkansas Teacher Retirement System determines that the participation of employees employed by the educational nonprofit corporation will not:

(A) Impair the system's legal status, including:

(i) The system's tax-qualified and governmental plan status under the Internal Revenue Code, 26 U.S.C. § 1 et seq.; and

(ii) The system's governmental plan status under the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq.;

(B) Subject the system to additional federal requirements; or

(C) Have a substantial adverse impact on the system's actuarial soundness; and

(3) Nonprofit corporation:

(A) Elects to participate in the system;

(B) Assumes responsibility for employer contributions;

(C) Assumes responsibility for fees for obtaining Internal Revenue Service rulings or Employee Retirement Income Security Act of 1974 opinions; and

(D) Is approved as a covered employer by the Board of Trustees of the Arkansas Teacher Retirement System.

24 CAR § 10-314 Contributory election {#sec-24-car-10-314 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-314}

24 CAR § 10-314. Contributory election.

(a)(1) A person's initial status as a contributory or noncontributory member of the Arkansas Teacher Retirement System shall be determined by the law in effect at the time the person became a member of the system.

(2) All service rendered before July 1, 1986, is contributory service.

(b)(1) A member's contributory status is irrevocable once the member becomes a contributory member of the system.

(2) A contributory member shall not elect to become a noncontributory member.

(c) A contributory election is valid if the contributory election is:

(1) Made on an election form provided by the system; and

(2) Signed by both the member and the covered employer.

(d)(1) If a member makes a contributory election before the preparation of his or her first salary payment in the fiscal year, the contributory election is effective immediately.

(2) If a member makes a contributory election after the preparation of his or her first salary payment in the fiscal year, the contributory election is effective July 1 of the next fiscal year.

24 CAR § 10-315 Contributory election — Noncontributory members {#sec-24-car-10-315 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-315}

24 CAR § 10-315. Contributory election — Noncontributory members.

(a)(1) A noncontributory member may make a contributory election.

(2) If a noncontributory member makes a contributory election before the preparation of the first salary payment to the noncontributory member in the fiscal year, the contributory election is effective immediately.

(3) If a noncontributory member makes a contributory election after the preparation of the first payroll containing the first salary payment to the noncontributory member in the fiscal year, the contributory election is effective July 1 of the next fiscal year.

(4) All service rendered after a contributory election is filed with the system shall be contributory.

(5) A noncontributory member's contributory election that is filed with the system is irrevocable.

(b) An inactive member shall make contributions on his or her full salary if the inactive member:

(1) Was contributory and earned a maximum salary of seven thousand eight hundred dollars ($7,800); and

(2) Returns to work on or after July 1, 1995.

(c)(1) An inactive member or rescinding retiree may make a contributory election if the inactive member or rescinding retiree:

(A) Was noncontributory; and

(B) Reenters the system after June 30, 2007.

(2) If the inactive member or rescinding retiree does not make a contributory election, the inactive member or rescinding retiree shall be enrolled in the plan that he or she was enrolled in before reentering the system.

24 CAR § 10-316 Contributory election — Member contracts {#sec-24-car-10-316 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-316}

24 CAR § 10-316. Contributory election — Member contracts.

(a) A member who is not under contract may make a contributory election.

(b)(1) A member under contract for one hundred eighty-five (185) days or more shall make contributions to the Arkansas Teacher Retirement System.

(2) A member under contract for one hundred eighty-four (184) days or less may make a contributory election.

(3) If a member enters into a contract with a covered employer after the fiscal year starts, the system may prorate the number of contracted days to determine whether the member should be classified as a contributory member or a noncontributory member who may make an election to become a contributory member of the system.

(c)(1) Regardless of a member's earlier noncontributory election, an active member whose status changes from nonteacher to teacher or administrator under contract for one hundred eighty-five (185) days or more shall make member contributions to the system.

(2) An active member's change of status from noncontributory to contributory due to his or her status change from nonteacher to teacher or administrator is effective on the first day of the next fiscal year if the active member:

(A) Changes status from nonteacher to teacher or administrator during a year in which the active member's service has already been reported as noncontributory; and

(B) Is under contract for one hundred eighty-five (185) days or more.

24 CAR § 10-317 Contributory election — State agency employees {#sec-24-car-10-317 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-317}

24 CAR § 10-317. Contributory election — State agency employees.

(a) A full-time employee of a state agency covered by the Arkansas Teacher Retirement System shall be contributory.

(b)(1) A part-time employee of a state agency covered by the system shall be noncontributory.

(2) A part-time employee of a state agency covered by the system may make a contributory election.

24 CAR § 10-318 Contributory election — Employer reporting errors {#sec-24-car-10-318 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-318}

24 CAR § 10-318. Contributory election — Employer reporting errors.

(a)(1) A member shall be considered to be noncontributory for the first year of service with a covered employer if the member:

(A) Was an inactive member who returned to covered employment as an active member after July 1, 1999; and

(B) Is reported incorrectly as noncontributory by his or her covered employer for his or her first year of service with the covered employer.

(2) The Arkansas Teacher Retirement System shall notify the covered employer of the member's contributory status.

(3) The member shall begin making contributions to the system effective the next July 1 following the member's first year of service with the covered employer.

(b)(1) A member shall be considered to be noncontributory for his or her first year of service with a covered employer if the member is a new member of the system and incorrectly reported as noncontributory by his or her covered employer for the first year.

(2) The system shall notify the covered employer of the member's contributory status.

(3) The member shall begin making contributions to the system effective the next July 1 following the member's first year of service with the covered employer and the covered employer shall correctly report the member as contributory.

24 CAR § 10-319 Reciprocal service credit {#sec-24-car-10-319 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-319}

24 CAR § 10-319. Reciprocal service credit.

(a) A member who leaves a position covered by the Arkansas Teacher Retirement System, becomes employed by a reciprocal system, and files a reciprocal service agreement shall become an inactive member of the Arkansas Teacher Retirement System and may be eligible for an annuity benefit according to the annuity benefit formula in effect at the time of the member's effective retirement date.

(b) Minimum benefits under Acts 1965, No. 488, Arkansas Code § 24-2-402(g)(6), as amended, for reciprocal service shall not apply unless a member has five (5) or more years of credited service in the Arkansas Teacher Retirement System.

(c)(1) If the Arkansas Teacher Retirement System is a member's preceding system, the Arkansas Teacher Retirement System shall not pay annuity benefits to the member under reciprocity unless the member:

(A) Attains the normal retirement age; or

(B) Leaves his or her employment with his or her state employer.

(2) If the Arkansas Teacher Retirement System is a member's preceding system, the member, after attaining the normal retirement age, is eligible to apply for retirement benefits without leaving his or her employment with his or her last state employer.

(3) The member's annuity benefit payments shall begin after the member attains the normal age of retirement or on the first day of the month following the month in which the member's application is filed, whichever occurs last.

(4) The Arkansas Teacher Retirement System shall only consider service credited to the member and salaries earned by the member before the member's effective retirement date to calculate the member's annuity benefit.

24 CAR § 10-320 Reciprocal service credit — Calculation of service credit {#sec-24-car-10-320 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-320}

24 CAR § 10-320. Reciprocal service credit — Calculation of service credit.

If a member of the Arkansas Teacher Retirement System has service credited during the same fiscal year with another reciprocal system and the combined service is greater than one (1) year of service credit, the Arkansas Teacher Retirement System shall credit service as follows:

(1) If credit by the reciprocal system is less than three (3) months, the Arkansas Teacher Retirement System shall credit service for one (1) year;

(2) If credit by the reciprocal system is three (3) or more months but less than six (6) months, the Arkansas Teacher Retirement System shall credit service for three­fourths (3/4) year;

(3) If credit by the reciprocal system is six (6) or more months but less than nine (9) months, the Arkansas Teacher Retirement System shall credit service for one-half (1/2) year; and

(4) If credit by the reciprocal system is for nine (9) months but less than twelve (12) months, the Arkansas Teacher Retirement System shall credit service for one-fourth (1/4) year.

24 CAR § 10-321 Reciprocal service credit — Contributions and repayments {#sec-24-car-10-321 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-321}

24 CAR § 10-321. Reciprocal service credit — Contributions and repayments.

(a) While an employee participates in a reciprocal system, back contributions, additional contributions, and repayment of refund payments made to the Arkansas Teacher Retirement System shall be made in accordance with the payment method provisions of 24 CAR § 10-501 et seq.

(b) Employer pick-up is prohibited while the employee works for an employer that is not a covered employer of the Arkansas Teacher Retirement System.

24 CAR § 10-322 Reciprocal service credit — Concurrent service {#sec-24-car-10-322 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-322}

24 CAR § 10-322. Reciprocal service credit — Concurrent service.

(a) Unless the reciprocal system is the Arkansas Public Employees' Retirement System or an alternate retirement plan, beginning July 1, 2013, the Arkansas Teacher Retirement System shall allow a member who earns concurrent service in both the Arkansas Teacher Retirement System and a reciprocal system to receive full-service credit in the Arkansas Teacher Retirement System without reduction of service credit due to the concurrent service.

(b) The Arkansas Teacher Retirement System shall not recognize concurrent service added to a member's credited service in the Arkansas Teacher Retirement System that, for the purpose of vesting, retirement eligibility, or calculating final average salary, either:

(1) Credits the member with more than one (1) year of credited service for a fiscal year; or

(2) Combines salary earned in the Arkansas Teacher Retirement System and a reciprocal system in a fiscal year.

(c)(1) A member may waive all or part of the concurrent service credited to him or her in the Arkansas Teacher Retirement System and have the concurrent service credited to him or her under a reciprocal system if:

(A) The member acknowledges that the waiver is a voluntary surrender of the member's concurrent service credit in the Arkansas Teacher Retirement System;

(B) The member acknowledges that the waiver cancels his or her concurrent service credit in the Arkansas Teacher Retirement System; and

(C) The member submits to the Arkansas Teacher Retirement System a concurrent service credit waiver form approved by the Arkansas Teacher Retirement System.

(2) If a member waives all or part of the concurrent service credited to him or her in the Arkansas Teacher Retirement System and has the concurrent service credited to him or her under a reciprocal system, the Arkansas Teacher Retirement System may refund the employer-accrued contributions and employee-accrued contributions.

24 CAR § 10-323 Reciprocal service credit — Alternate retirement plans {#sec-24-car-10-323 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-323}

24 CAR § 10-323. Reciprocal service credit — Alternate retirement plans.

(a) A member of the Arkansas Teacher Retirement System may establish reciprocal service credit from an alternate retirement plan if he or she completes and submits a request to establish the reciprocal service credit on a form approved by the system.

(b) Distributions from an alternate retirement plan may prevent reciprocal service from being established if the system is unable to verify that the withdrawals were made without penalty under Internal Revenue Service guidelines concerning rollovers to eligible plans, withdrawals that are not subject to early withdrawal, etc.

24 CAR § 10-324 Reciprocal service credit — Arkansas Public Employees' Retirement System {#sec-24-car-10-324 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-324}

24 CAR § 10-324. Reciprocal service credit — Arkansas Public Employees' Retirement System.

From July 1, 1991, until December 31, 1991, an active member of the Arkansas Public Employees' Retirement System may establish reciprocity between the Arkansas Public Employees' Retirement System and the Arkansas Teacher Retirement System and purchase out-of-state service rendered before January 1, 1978, in accordance with Arkansas Code §§ 24-7-601 and 24-7-603, if the active member:

(1) Was an active member of the Arkansas Teacher Retirement System before January 1, 1978; and

(2) Became a member of the Arkansas Public Employees' Retirement System within thirty (30) days of leaving the Arkansas Teacher Retirement System.

24 CAR § 10-325 Reciprocal service credit — Arkansas Rehabilitation Services {#sec-24-car-10-325 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-325}

24 CAR § 10-325. Reciprocal service credit — Arkansas Rehabilitation Services.

(a) Effective July 1, 1993, for a ninety-day period, an employee of the Arkansas Rehabilitation Services may transfer his or her membership from the Arkansas Public Employees' Retirement System to the Arkansas Teacher Retirement System under Acts 1993, No. 574.

(b) An employee who transfers his or her membership from the Arkansas Public Employees' Retirement System to the Arkansas Teacher Retirement System shall establish reciprocity between the Arkansas Public Employees' Retirement System and the Arkansas Teacher Retirement System and Acts 1977, No. 793, shall not apply to the employee.

24 CAR § 10-326 Reciprocal service credit — Department of Human Services {#sec-24-car-10-326 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-326}

24 CAR § 10-326. Reciprocal service credit — Department of Human Services.

(a) The law applicable to the Arkansas Teacher Retirement System shall be used to determine the annuity benefits to which an employee is entitled for service provided before or after Acts 1977, No. 793, if the employee:

(1) Was an employee of the Department of Human Services and became a member of the Arkansas Public Employees' Retirement System under the provisions of Acts 1977, No. 793, as amended; and

(2) Left employment with the department and became employed in a position covered by the Arkansas Teacher Retirement System.

(b) A member meeting the description of 24 CAR § 10-325(a) may establish reciprocity under Acts 1965, No. 488, as amended.

24 CAR § 10-327 Reciprocal service credit — Effective date of benefits {#sec-24-car-10-327 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-327}

24 CAR § 10-327. Reciprocal service credit — Effective date of benefits.

(a)(1) If the Arkansas Teacher Retirement System is a member's preceding system, the member's annuity benefit payments shall begin after the member attains the normal age of retirement or on the first day of the month following the month in which the member's retirement application was filed, whichever is later.

(2) If the member has combined service of at least twenty-five (25) years, the normal retirement age requirement shall not apply.

(3)(A) Deferred annuity benefit payments to the member shall not begin before the date on which the member leaves employment with his or her last state employer unless the member attains the normal retirement age.

(B) A member is entitled to a deferred annuity benefit if the member:

(i) Leaves his or her state employment in a position that is covered by one (1) of the reciprocal systems; and

(ii) Enters subsequent state employment in a position that is covered by another of the reciprocal systems.

(b)(1) If the Arkansas Teacher Retirement System is the member's preceding system, the member is eligible to apply for retirement benefits without leaving employment with his or her last state employer upon attaining the normal retirement age.

(2) The member's annuity benefit payments shall begin after the member attains the normal retirement age or on the first day of the month following the month in which the member's retirement application is filed, whichever is later.

(3) The Arkansas Teacher Retirement System shall use only service credited to the member and salaries earned by the member before the member's effective retirement date to calculate the member's annuity benefit.

(c)(1) A member is eligible to apply for disability retirement benefits from each reciprocal system in which the member has credited service according to the rules for eligibility promulgated by that reciprocal system.

(2) The member's disability retirement benefits payable by the preceding reciprocal system shall:

(A) Begin the first day of the month following the month in which the member's disability retirement application is filed with the preceding system; and

(B) Not begin before the date on which the member leaves employment with his or her last state employer.

24 CAR § 10-328 Reciprocal service credit — Survivor annuity benefits {#sec-24-car-10-328 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-328}

24 CAR § 10-328. Reciprocal service credit — Survivor annuity benefits.

(a) If survivor annuity benefits are payable by more than one (1) reciprocal system to an eligible survivor of a deceased member, a survivor who receives annuity benefit payments shall not receive, as a percentage of the deceased member's final salary or as a minimum dollar amount, more than the largest amount payable by a single reciprocal system.

(b)(1) The Arkansas Teacher Retirement System shall prorate minimum benefits payable to a survivor with other reciprocal systems that have a minimum benefit provision in their plans.

(2) Each reciprocal system shall pay a proportionate share of the minimum benefit based on the ratio of the member's service in that reciprocal system to the member's total service in all the reciprocal systems.

(c) If the reciprocal system is an alternate retirement plan, survivor annuity benefits shall be contingent on whether the:

(1) Alternate retirement plan provides survivor annuity benefits; and

(2) Member selected survivor annuity benefits as a benefit under the alternate retirement plan.

Contributory and Noncontributory Service Chart by Year of Entry into System

(Elections and Re-entry may affect Individual Member Service Status)

24 CAR § 10-329 Employer Participation – Employers of early childhood workers {#sec-24-car-10-329 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-329}

24 CAR § 10-329. Employer Participation – Employers of early childhood workers.

(a) A person who is employed as an early childhood worker may elect to become a member of the Arkansas Teacher Retirement System if:

(1)(A) The person is an employee of a childcare facility described in subdivision (a)(2) of this section and the person provides teaching, early childhood education, or supervision for one (1) or more children enrolled in the childcare facility.

(B) A person who elects to become a member of the system shall be a contributory member of the system and shall have his or her service credit computed in accordance with the laws and rules applicable to the system;

(2)(A) The childcare provider that employs the person:

(i) Is a childcare facility licensed and regulated under the Childcare Facility Licensing Act, Arkansas Code § 20-78-201 et seq.;

(ii) Is a childcare facility accredited by the Department of Education as an appropriate early childhood program as defined under Arkansas Code § 6-45-103;

(iii)(a) Receives state or federal childcare funding from the department under Arkansas Code § 6-87-101.

(b) A childcare provider that does not receive state or federal funding through the department does not meet the requirements of subdivision (a)(2)(A)(iii)(a) of this section;

(iv) Elects to participate in the system;

(v) Assumes responsibility for employer contributions;

(vi) Assumes responsibility for fees for obtaining Internal Revenue Service rulings or Employee Retirement Income Security Act of 1974 opinions;

(vii) Is approved by the pass-through fiscal agent as eligible for participation in the system; and

(viii) Agrees to reasonably cooperate with the pass-through fiscal agent for the purpose of:

(a) Remitting all required contributions and reports to the system; and

(b)(1) Retaining all records pertaining to the participation of a childcare provider in the system and pertaining to an early childhood worker who is employed by the childcare provider and elects to participate in the system.

(2) Records retained in accordance with subdivision (a)(2)(A)(viii)(b)(1) of this section shall be retained for at least seven (7) years from the effective date of a childcare provider’s participation in the system or as otherwise advised in writing by the system.

(B) A childcare provider with an active subsidy or grant agreement with the department to provide childcare services to children may meet the requirements of subdivision (a)(2)(A)(iii) of this section even if the childcare provider does not currently have enrolled children whose childcare services are partially or wholly paid for through a subsidy or grant agreement with the department.

(C)(i) A childcare provider shall not be eligible for participation or continued participation in the system if the childcare provider fails to meet the requirements of subdivision (a)(2)(A)(i), (ii), or (iii) of this section or, if applicable, has their subsidy or grant agreement with the department terminated.

(ii)(a) An early childhood worker who is employed by a childcare provider that is not eligible for participation or continued participation in the system shall cease to be an active member of the system.

(b) Subdivision (a)(2)(C)(ii)(a) of this section shall not prevent an early childhood worker from becoming an active member of the system again if the early childhood worker is later employed by a childcare provider that meets the requirements of subdivision (a)(2)(A)(i) – (iii) of this section and, if applicable, has an active subsidy or grant agreement with the department.

(D) A childcare provider shall:

(i) Become a covered employer at the time that an employee elects to become or remain a member of the system; and

(ii) Be considered a covered employer only for each employee who elects to become a member of the system; and

(3) The Board of Trustees of the Arkansas Teacher Retirement System:

(A) Approves a single nonprofit fiscal agent to act as a pass-through fiscal agent to facilitate the voluntary participation of an early childhood worker in the system; and

(B) Determines as a general matter that the participation of early childhood workers who meet the requirements of subdivision (a)(1)(A) of this section will not:

(i) Impair the system's tax-qualified and governmental plan status under the Internal Revenue Code, 26 U.S.C. § 1 et seq.;

(ii) Impair the system's governmental plan status under the Employee Retirement Income Security Act of 1974, 26 U.S.C. § 1001 et seq.;

(iii) Subject the system to additional federal requirements or otherwise impair any legal status of the system; or

(iv) Have a substantial adverse impact on the system's actuarial soundness.

(b) The Board of Trustees of the Arkansas Teacher Retirement System may approve a pass-through fiscal agent that agrees to:

(1) Implement an application process for childcare providers that:

(A) Ensures the childcare provider meets the requirements of subdivision (a)(2)(A) of this section; and

(B) Requires the childcare provider to submit for review by the pass-through fiscal agent an application that includes the following information:

(i) A proposed effective date for participation in the system;

(ii) A certified copy of the articles of incorporation, bylaws, and other organization documents of the childcare provider;

(iii)(a) A copy of the childcare provider's:

(1) Most recent three (3) years' annual audited financial statements, including balance sheets, financial statements, and statements of cash flows; or

(2) if the childcare provider does not have audited financial statements, the year-end compilation reports or internal balance sheets and income statements for the childcare provider;

(iv) A copy of the childcare provider's most recent three (3) years’ federal and state income tax returns;

(v) Certification that the childcare provider has an active subsidy or grant agreement with the department;

(vi) A statement acknowledging that the childcare provider shall not be eligible for participation or continued participation in the system if their subsidy or grant agreement with the department is terminated;

(vii) A description of how the childcare provider’s board of directors or board of trustees, if any, is selected and whether any governmental agency has input in the selection of the board members; and

(viii) A description of the types of services provided by the childcare provider;

(2)(A) Assume responsibility for approving childcare providers as eligible for participation in the system.

(B) The Board of Trustees of the Arkansas Teacher Retirement System, in its sole discretion, may deny the participation of a childcare provider approved by the pass-through fiscal agent as eligible for participation in the system;

(3)(A) Assume responsibility for approving for participation in the system only those childcare providers that will not jeopardize:

(i) The system's tax-qualified and governmental plan status under the Internal Revenue Code, 26 U.S.C. § 1 et seq.;

(ii) The system's governmental plan status under the Employee Retirement Income Security Act of 1974, 29 U.S.C. §1001 et seq.; or

(iii) Subject the system to additional federal requirements;

(4) Assume responsibility for remitting contributions and submitting reports and any other documentation that the system requires an employer to provide to the system;

(5) Assume responsibility for verifying with the department annually that each childcare provider approved for participation in the system is licensed, accredited, and has an active subsidy or grant agreement with the department;

(6) Use reasonable and generally acceptable accounting standards to manage and account for contributions required from childcare providers;

(7) Upon the request of the system, submit to the system financial records pertaining to the management and accounting of contributions required from childcare providers;

(8)(A) Submit to the Executive Director of the Arkansas Teacher Retirement System reports providing concise explanations of the pass-through fiscal agent's determination finding a new or current childcare provider eligible for initial or continued participation in the system.

(B) Effective January 1, 2026, the reports required under subdivision (b)(8)(A) of this section shall be submitted at least on a quarterly basis or as otherwise directed by the executive director or his or her designee;

(9) Retain and reasonably ensure that a childcare provider retains all records pertaining to the participation of the childcare provider in the system for at least seven (7) years from the effective date of their participation in the system or as otherwise advised in writing by the system;

(10)(A) Retain and reasonably ensure that a childcare provider retains all records pertaining to an early childhood worker who is employed by the childcare provider and elects to participate in the system.

(B) Records retained in accordance with subdivision (b)(10)(A) of this section shall be retained for at least seven (7) years from the effective date of the childcare provider's participation in the system or as otherwise advised in writing by the system;

(11) Maintain a policy requiring any information pertaining to an early childhood worker who is employed by the childcare provider and who elects to participate in the system to be treated as confidential information and subject to disclosure in a manner that aligns with the laws, rules, and policies applicable to the system;

(12)(A) Ensure that at least every five (5) years from the effective start date of a childcare provider's participation in the system, the pass-through fiscal agent shall review the childcare provider's participation in the system to ensure that the childcare provider meets both federal and state requirements, including the provisions of the Arkansas Code § 24-7-212 and this section, for participation and continued participation in the system.

(B) The pass-through fiscal agent shall comply with subdivision (b)(12)(A) of this section by at a minimum:

(i) Verifying, by attestation of the childcare provider or other reasonably reliable means, that the childcare provider meets the requirements of subdivision (a)(2)(A)(i) – (iii) of this section; and

(ii) Obtaining and reviewing the childcare provider's:

(a) Most recent three (3) years' annual audited financial statements, including balance sheets, financial statements, and statements of cash flows; or

(b) If the childcare provider does not have audited financial statements, the year-end compilation reports or internal balance sheets and income statements for the employer;

(13) Certify that during the past five (5) years there have been no actions, proceedings, or investigations pending against the pass-through fiscal agent that may reasonably be expected to have a material adverse impact on the pass-through fiscal agent or that has resulted in the pass-through fiscal agent or its agents, employees, subsidiaries or affiliates being convicted or found civilly liable for a breach of fiduciary duty or financial crimes; and

(14) Promptly notify the system of any future actions, proceeding, or investigation involving the pass-through fiscal agent that meets the description of subdivision (b)(13) of this section.

History

• Codification Notes: The Employee Retirement Income Security Act of 1974 was enacted by Pub. L. No. 93-406. History: Ark. R. 2025-30 (eff. December 5, 2025) Authorities: Arkansas Code § 24-7-212; Arkansas Code § 24-7-305

Subpart 4

24 CAR § 10-401 Definitions {#sec-24-car-10-401 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-401}

24 CAR § 10-401. Definitions.

As used in this subpart:

(1) "Actual service” means service rendered in a position covered by the Arkansas Teacher Retirement System, not including:

(A) Purchased service credit;

(B) Free service credit; or

(C) Reciprocal service;

(2) “Credited service” means service that is credited as service by the Arkansas Teacher Retirement System;

(3) “Covered employer”, as it relates to outsourcing, means a public school, public educational agency, or other eligible employer participating in the Arkansas Teacher Retirement System, but does not include a nonmandatory employer or a PSHE employer as defined in Arkansas Code § 24-7-1602 or a covered employer that reports through the Arkansas Administrative Statewide Information System;

(4) “Embedded employee” means a person who:

(A) Provides an outsourced service on the premises of a covered employer;

(B) Is employed and paid by an outsource contractor; and

(C) Is not employed by:

(i) A covered employer listed under Arkansas Code § 24-7-202; or

(ii) An employer that offers the Arkansas Teacher Retirement System as an optional retirement plan as of the date of outsourcing;

(5) "Full service year" means employment with a covered employer for one hundred sixty (160) days or more in a fiscal year;

(6) “Participating employer” means a covered employer that outsources and opts for the embedded employees of all of the covered employer’s outsource contractors to become members of the Arkansas Teacher Retirement System;

(7) “Service” means employment rendered as an employee;

(8) “Specialized support position” means a position that:

(A) Requires less than eight (8) working hours per day, including without limitation the positions of:

(i) Bus driver;

(ii) Custodial worker; and

(iii) Cafeteria worker; and

(B) A covered employer certifies as a specialized support position to the Arkansas Teacher Retirement System;

(9) “Surcharge employer” means a covered employer that outsources and pays a surcharge to the Arkansas Teacher Retirement System; and

(10) “Youth participant” means a person:

(A) Who is:

(i) Enrolled in a secondary public school as a student; and

(ii) Employed through his or her participation in a summer work program for a period between the first day of June and the last day of August; and

(B) Whose compensation is disbursed by a covered employer as part of an agreement between the covered employer and an administrator of the summer work program that designates the covered employer as a pass-through fiscal agent.

History

• Codification Notes: “PSHE” means postsecondary or higher education. Authority: Arkansas Code § 24-7-305

24 CAR § 10-402 Service credit {#sec-24-car-10-402 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-402}

24 CAR § 10-402. Service credit.

(a) The Board of Trustees of the Arkansas Teacher Retirement System shall determine the:

(1) Number of years and corresponding fractions for service that may be credited to a member; and

(2) Amount of service to be credited to a member.

(b)(1) A member shall earn one (1) year of credited service if the member completes a full service year.

(2) A member shall not earn more than one (1) year of credited service in a fiscal year.

(3) The Arkansas Teacher Retirement System shall certify proof of a member’s service on forms and with documentation required by the system.

(c)(1) Unless otherwise provided by law, paid or unpaid accrued, unused sick leave shall not be credited as service in the system.

(2) If a member dies during active service on or after July 1, 2013, the member’s unused catastrophic leave and unused donated leave shall not be credited as service.

(d)(1) A member shall not accumulate service credit in the system during the time that payments under a contract buyout agreement, settlement, claim, judgment, arbitration award, decree, or court-ordered payment are paid to the member by a covered employer unless the member continues to work on-site for the covered employer.

(2) A member shall not receive service credit or additional salary from the system under a settlement agreement or court order unless purchased at actuarial cost.

(3) The system shall not permit a member to use unearned future service credit or nonqualified service credit purchased through a contract buyout settlement agreement with a school district to retire under age and service retirement or disability retirement before the member’s employment contract with the school district would naturally have terminated.

(e) Actual service credited to a member with service after July 1, 1971, shall be as follows:

(f) Unless otherwise provided by the law or rules applicable to the system, a member who is employed for less than forty (40) days during a fiscal year is ineligible for credited service or retirement benefits for that fiscal year.

(g)(1) Beginning in the 2011-2012 fiscal year, a contributory member’s service days shall be carried forward from previous fiscal years until at least forty (40) days of service are earned by the member.

(2) Service days shall not be carried forward for a contributory member if the member earns at least forty (40) days of service in a fiscal year by using:

(A) Regular service days;

(B) Accumulated service days; or

(C) Both regular service and accumulated service days.

(h) A member who is employed full-time or employed in a position for which a regular or typical work day includes at least eight (8) working hours shall earn one (1) day of credited service if the member works for at least four (4) hours of the eight-hour working day.

(i)(1) Beginning July 1, 2011, a member employed in a specialized support position shall earn one (1) day of credited service for each day of service provided by the member if the:

(A) Specialized support position is certified as a specialized support position to the system by the covered employer at the time the covered employer first reports the employment of the member to the system; and

(B) Covered employer reasonably determines that the member performed the regular and usual service expected of an employee in that position during the work day.

(2)(A) A member who is employed in a specialized support position and does not have a contract specifying the number of service days shall earn one (1) day of service credit for each day of service provided by the member if the:

(i) Specialized support position is certified as a specialized support position to the system by the covered employer at the time the covered employer first reports the employment of the member to the system; and

(ii) Covered employer reasonably determines that the member performed the regular and usual service expected of an employee in that position during the days worked by the member.

(B) A member described in subdivision (g)(2) of this section shall earn one (1) day of credited service for each day of service provided by the member regardless of whether the member works for less than four (4) hours on a work day.

(3) The credited service earned by a member who is employed in a nonspecialized support position and does not work for at least four (4) hours each working day shall be:

(A) Calculated by totaling the number of hours worked by the member in a fiscal quarter; and

(B) Then dividing the totaled number of hours worked by four (4).

24 CAR § 10-403 Member and employer contributions {#sec-24-car-10-403 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-403}

24 CAR § 10-403. Member and employer contributions.

(a)(1) The Board of Trustees of the Arkansas Teacher Retirement System shall annually set member and employer contribution rates for the following fiscal year.

(2) The Arkansas Teacher Retirement System shall notify annually each covered employer of the contribution rates set by the board.

(3)(A) The board shall not set the member contribution rate at less than six percent (6%).

(B) The board may increase the member contribution rate to maintain actuarial soundness.

(4)(A) A member’s and covered employer’s contributions are due monthly, regardless of the member’s concurrent membership status.

(B) A contributory member shall contribute the percentage of his or her salary that is set by the board.

(b)(1) A covered employer shall remit member contributions by pick-up from the salary earned by each member.

(2) Member contributions shall be treated as employer contributions under the applicable provisions of the Income Tax Act of 1929, Arkansas Code § 26-51-101 et seq., and the Internal Revenue Code of 1986, 26 U.S.C. § 1 et seq.

(3) A covered employer may remit a member’s contributions by implementing a:

(A) Reduction in the cash salary of the member;

(B) Setoff against the member’s future salary increases; or

(C) Both a reduction in the cash salary of the member and a setoff against the member’s future salary increases.

(c)(1) A covered employer’s employer contributions shall be the sum of the current employer contribution rate set by the board for the fiscal year multiplied by the total gross salaries of all the covered employer’s employees.

(2) A public school employer shall pay up to fourteen percent (14%) of the employer contribution rate.

(3) Up to fifteen percent (15%) of any additional employer contributions required from a public school employer shall be paid from additional funds appropriated by the state for the purpose of paying employer contributions to the system.

(d)(1) A covered employer shall pay employer contributions monthly for all employees of the covered employer for whom the Department of Education does not pay employer contributions.

(2) The employer contribution rate shall be the current state contribution percent multiplied by the total covered salaries of the covered employer’s employees in the fiscal year.

(3)(A) In accordance with rules established by the board and the department’s appropriations act, the department shall pay employer contributions due for eligible employees of covered employers, including without limitation the following:

(i) State agencies as allowed under the Transformation and Efficiencies Act of 2019, Acts 2019, No. 910;

(ii) Cooperative education service areas;

(iii) Vocational centers;

(iv) Arkansas Easter Seals; and

(v) A school operated by the Arkansas Correctional School District.

(B) The department shall pay the employer contributions for eligible employees of covered employers from the Public School Fund.

(C) At the close of each quarterly report, the system shall report the amount of employer contributions due from the department.

(D) The employer contributions due from the department shall be based on the salaries of the eligible employees reported to the system by each covered employer.

(e) The board shall annually notify each participating employer of the employer contribution rate established by the board for the upcoming fiscal year.

(f) A surcharge employer’s employer contributions shall be a monthly surcharge applied on the total salaries paid to all the surcharge employer’s embedded employees on an aggregate basis as provided under Arkansas Code § 24-7-506(c).

24 CAR § 10-404 Member and employer contributions — Overpayments, underpayments, and refunds {#sec-24-car-10-404 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-404}

24 CAR § 10-404. Member and employer contributions — Overpayments, underpayments, and refunds.

(a) A conflict in a member’s service history due to concurrent service shall be resolved at the end of the fiscal year and the Arkansas Teacher Retirement System shall issue refunds as appropriate.

(b)(1) The system shall return overpayments of employee contributions and employer contributions resulting from erroneous contribution submissions or incorrect reporting of Salary Option 2 member salaries (first seven thousand eight hundred dollars ($7,800)) to the appropriate covered employer.

(2)(A) The system shall send written notification to a member or covered employer, as appropriate, of a contribution overpayment that is less than the de minimis amount that may be refunded.

(B) The de minimis amount shall:

(i) Be periodically set by the Board of Trustees of the Arkansas Teacher Retirement System; and

(ii) Remain the same amount until adjusted by the board.

(C)(i) A contribution overpayment that is less than the de minimis amount shall not be refunded to the covered employer unless the covered employer submits a written request for a refund to the system within fourteen (14) days of receiving the written notice of the contribution overpayment from the system.

(ii) If a covered employer does not submit a written request for a refund within fourteen (14) days of receiving the written notice of the contribution overpayment from the system, the amount of the contribution overpayment shall be forfeited to the trust assets of the system.

(D)(i) A contribution overpayment that is less than the de minimis amount shall not be refunded to the member unless the member submits a written request for a refund to the system within fourteen (14) days of receiving the written notice of the contribution overpayment from the system.

(ii) If the member does not submit a written request for a refund within fourteen (14) days of receiving the written notice of the contribution overpayment from the system, the amount of the contribution overpayment shall be forfeited to the trust assets of the system.

(3) The total amount of contributions reported by the covered employer shall be credited to contributions.

(c)(1) For refunded contributions, the rate of regular interest compounded annually after the first year of contributions shall be credited as follows:

(2) Payable regular interest shall be computed:

(A) On each member’s individual account on June 30; and

(B) By multiplying the balance in the member’s individual account as of July 1, including contributions and regular interest credit from previous years, plus one-half (1/2) of the contributions for the year ending June 30 by the annual applicable regular interest percentage rate.

(3) The board, by resolution, may change the regular interest rate on refunded contributions for subsequent years by stating:

(A) The new regular interest rate;

(B) The date that the new regular interest rate is effective; and

(C) Any other features necessary for implementing the regular interest rate.

(4) Regular interest shall not be paid on contributions made in the year in which a refund of contributions is paid to a member.

(5) The system shall issue a refund for a member’s contributions that are closed on the system’s books after receiving the member’s properly completed refund application.

(6) If a second refund payment is required to complete the refund of contributions, the second payment shall be made when all quarters of service the member works are closed on the system’s books.

(7) A rollover payment shall be made in one (1) payment when all quarters of service the member works are closed on the system’s books.

(8) A refund is effective on the date on which the system first issues a payment of the refund.

(d) The system shall not collect a contribution underpayment of less than the de minimis amount from a covered employer.

24 CAR § 10-405 Employer reports — Submission requirements {#sec-24-car-10-405 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-405}

24 CAR § 10-405. Employer reports — Submission requirements.

(a) A covered employer shall submit:

(1) Reports and supporting documentation required by the Arkansas Teacher Retirement System on a monthly and quarterly basis; and

(2) Reports and supporting documentation electronically to the system on forms approved by the system.

(b)(1) At the request of the system, a covered employer shall provide the system with a memorandum of understanding, partnership agreement, or another similar document related to the covered employer’s actions as a pass-through fiscal agent for a youth participant in a summer work program.

(2) A covered employer shall provide the system with all documents related to the agreement designating the covered employer as a pass-through fiscal agent before disbursing compensation to a youth participant.

(3) A covered employer that acts as a pass-through fiscal agent shall not report a youth participant as an employee for system purposes.

(c)(1) A covered employer that uses a twenty-six-week payroll system shall report an employee’s salary, contributions, and actual working days through the current fiscal year ending June 30 if the employee is a member of the system and retiring.

(2) If an employee is a member of the system and retiring effective July 1, a covered employer shall not:

(A) Withhold contributions on a salary earned by the member after the close of payroll for the current fiscal year; and

(B) Report any salary paid to the member or actual working days performed by the member after the close of payroll for the current fiscal year.

(3) The system shall refund employee contributions and employer contributions remitted to the system from a salary paid to the employee after the end of the current fiscal year or payroll period for the current fiscal year.

(d) A covered employer may submit a request to the system for a determination on whether a service or position is subject to the provisions of Arkansas Code § 24-7-506.

(e)(1) A surcharge employer shall submit a surcharge report monthly to the system with all other reports required by the system.

(2) A participating employer shall submit a contribution report monthly to the system with all other reports required by the system.

(f) Beginning on July 1, 2022, a covered employer shall:

(1) Electronically report employee contributions and employer contributions made by the covered employer through the system portal; and

(2) Pay employee contributions and employer contributions through electronic transfer.

24 CAR § 10-406 Employer reports — Reporting deadline and penalties {#sec-24-car-10-406 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-406}

24 CAR § 10-406. Employer reports — Reporting deadline and penalties.

(a) A report and supporting documentation submitted by a covered employer shall not be considered untimely if the report and supporting documentation are received by Arkansas Teacher Retirement System on the tenth day of the month in which the report and supporting documentation are due.

(b)(1) A one-hundred-fifty-dollar late fee shall be assessed on a covered employer for each occurrence in which a report and supporting documentation is untimely submitted to the system.

(2) In their discretionary authority, the Board of Trustees of the Arkansas Teacher Retirement System or the Executive Director of the Arkansas Teacher Retirement System may waive any late fees assessed against a covered employer for their untimely submission of a report and supporting documentation to the system if the requirements of Arkansas Code § 24-7-411(c) are met.

(c)(1) If a covered employer does not remit member or employer contributions, including surcharge contributions, by the monthly due date, the system shall assess an interest penalty equal to the system’s actuarially assumed rate of return on investments and daily interest accrual against the covered employer until the member or employer contributions, whichever is applicable, are paid.

(2)(A) In their discretionary authority, the board or the executive director may waive any interest penalty assessed against a covered employer if the requirements of Arkansas Code § 24-7-411(c) are met.

(B) One (1) or more interest penalties assessed against a covered employer shall not be waived if the amount of the interest penalties assessed against the covered employer will exceed one thousand dollars ($1,000) for the fiscal year.

(C) A covered employer may submit an interest penalty waiver request for one (1) or more interest penalties exceeding one thousand dollars ($1,000) for the fiscal year to the board.

(3) The executive director shall report each interest penalty waived under this subpart to the board.

(d)(1) The system may certify the names of each covered employer that fails to timely report and remit member or employer contributions, including surcharge contributions, to the Chief Fiscal Officer of the State.

(2) After receiving the certification from the system, the Chief Fiscal Officer of the State may direct a transfer of funds on deposit in the State Treasury for the payment of delinquent member or employer contributions and an assessed interest penalty.

24 CAR § 10-407 Employer reports — Payments after member’s death {#sec-24-car-10-407 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-407}

24 CAR § 10-407. Employer reports — Payments after member’s death.

(a) A salary earned by a member before the member’s death and paid after the member’s death is subject to deductions by the Arkansas Teacher Retirement System and the member’s covered employer shall report the member’s total salary and days of service in the covered employer’s quarterly report.

(b) Gratuitous payments made by a covered employer to a member after the death of the member shall not be:

(1) Considered the salary of the member;

(2) Subject to contribution requirements; and

(3) Included in the covered employer’s quarterly report to the system.

Subpart 5

24 CAR § 10-501 Definitions {#sec-24-car-10-501 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-501}

24 CAR § 10-501. Definitions.

As used in this subpart:

(1) “Armed forces reserve” means one (1) of the reserve components of the United States Armed Forces;

(2) “Domestic federal service” means service rendered as a teacher or administrator in a school or similar institution located on a military base or installation that is administered by the United States Department of Defense;

(3) “Gap period” means one-quarter (1/4) of a fiscal year:

(A) In which a member was an inactive member and either:

(i) Unemployed; or

(ii) Did not provide qualified service; and

(B) For which the Arkansas Teacher Retirement System may grant the member permissive service credit;

(4) “Out-of-state service” means service performed in a state other than Arkansas and in a position that would have been covered by the Arkansas Teacher Retirement System if the service had been actual service performed in Arkansas and covered by the Arkansas Teacher Retirement System;

(5) “Overseas service” means service in:

(A) An American-related overseas school that is sponsored and approved by either the United States Department of State or the United States Department of Defense; or

(B) The Peace Corps or AmeriCorps VISTA (Volunteers in Service to America);

(6) “Permissive service credit” means service:

(A) That is credited under the Arkansas Teacher Retirement System for the purpose of calculating a member’s benefit;

(B) That has not previously been credited under the Arkansas Teacher Retirement System; and

(C) For which a member contributes or pays the amount necessary to fund the benefit attributable to the service as required by the Arkansas Teacher Retirement System;

(7) "Private school service" means service rendered in a private school or agency that would have been covered by the Arkansas Teacher Retirement System if the:

(A) Service had been rendered in a public school;

(B) Private school or agency;

(C) Has positions that would require the issuance of a teaching license in a public school based on a determination by the Arkansas Teacher Retirement System; or

(D) Is recognized as a private education-related entity by resolution adopted by the Board of Trustees of the Arkansas Teacher Retirement System;

(8) “Qualified service” means the service described in 26 U.S.C. § 415(n)(3)(C)(i) – (iv), as it existed on January 1, 2023; and

(9) “Uniformed services of the United States” means service in the:

(A) United States Armed Forces;

(B) Army National Guard;

(C) Air National Guard when engaged in active duty for:

(i) Training;

(ii) State active duty;

(iii) Inactive duty training; or

(iv) Full-time National Guard duty;

(D) United States Commissioned Corps of the Public Health Service; and

(E) Any other category of persons designated by the President of the United States in time of war or emergency.

History

• History: Ark. R. 2025-30 (eff. December 5, 2025) Authority: Arkansas Code § 24-7-305

24 CAR § 10-502 Free service credit — Military service {#sec-24-car-10-502 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-502}

24 CAR § 10-502. Free service credit — Military service.

(a)(1) A person may establish free military service credit with the Arkansas Teacher Retirement System at any time after becoming a member.

(2) Free military service credit established with the system is effective after the member completes five (5) years of actual service in the system, excluding military service credit.

(b) A member who by draft or voluntary enlistment entered the United States Armed Forces during a period that a federal military draft was in effect and obtained a refund of contributions from the system may establish free military service credit with the system if the member:

(1) Is honorably discharged from the United States Armed Forces; and

(2) Before retirement, repays the system the actuarial equivalent of the member’s refunded service.

(c) A member who by draft or voluntary enlistment entered the United States Armed Forces during any period that a federal military draft was in effect and became an active member after an honorable discharge from the United States Armed Forces is eligible to establish free military service credit with the system, regardless of whether or not the member has five (5) or more years of credited service in the system at the time of the member’s reemployment.

(d) A member who is first employed after serving in the United States Armed Forces during a period of time in which the military draft was in effect is eligible to establish free military service credit with the system if the member:

(1) Completes five (5) or more years of actual service in the system; and

(2) Receives an honorable discharge.

(e) The system shall provide a member with free military service credit after the member:

(1) Applies to establish free military service credit with the system by submitting a completed application form approved by the system; and

(2) Submits official military documentation listing the entry and discharge dates of the member’s first enlistment or induction into the United States Armed Forces.

(f)(1) Free military service credited to a member before July 1, 1986, shall be considered contributory service.

(2) Free military service shall be credited to a member’s account on a prorated basis if the member has both contributory and noncontributory service.

(g) Military service credited to a member shall not exceed five (5) years unless the member is entitled to service credit for service in the uniformed services of the United States.

(h) Military service shall be credited in order of the years that are chronologically closest to the member’s service with a covered employer.

(i) A member shall not receive military service credit for military service years resulting from the member’s reenlistment or voluntary extension of his or her initial enlistment.

24 CAR § 10-503 Purchasable service credit — Military service {#sec-24-car-10-503 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-503}

24 CAR § 10-503. Purchasable service credit — Military service.

(a) A member shall receive service credit for service in the United States Armed Forces that cannot be credited to the member under Arkansas Code § 24-7-602(a) if the member pays the Arkansas Teacher Retirement System the actuarial equivalent for the service credit.

(b)(1) Effective December 12, 1994, a member shall be treated as not having incurred a break in service with a covered employer if the member:

(A) Leaves employment with a school to voluntarily or involuntarily serve in the uniformed services of the United States; and

(B) Returns to employment with a school.

(2) A member described in subdivision (b)(1) of this section shall accrue benefits for the time he or she served in the uniformed services of the United States if:

(A) The member pays the employee contributions as provided in Arkansas Code § 24-7-406; and

(B) Employer contributions are paid for the time the member served in the uniformed services of the United States.

(c) A member’s absence from his or her employment with a school due to his or her service in the uniformed services of the United States shall not exceed five (5) years.

(d) At the member’s request, a member’s payment for United States Armed Forces service credit shall be refunded by the system if the:

(1) Member ceased to be an active member before the United States Armed Forces service credit is established as credited service in the system; or

(2) United States Armed Forces service credit is not otherwise used to establish the member’s eligibility for retirement under the system.

24 CAR § 10-504 Purchasable service credit — National Guard and armed forces reserve {#sec-24-car-10-504 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-504}

24 CAR § 10-504. Purchasable service credit — National Guard and armed forces reserve.

(a) A member may purchase up to five (5) years of service for his or her service in the National Guard or armed forces reserve.

(b) A member shall receive credit for service in the National Guard or armed forces reserve if the member:

(1) Applies to the Board of Trustees of the Arkansas Teacher Retirement System to purchase National Guard or armed forces reserve service credit by submitting a completed application form approved by the Arkansas Teacher Retirement System;

(2) Provides the system with satisfactory proof of his or her service in the National Guard or armed forces reserve;

(3) Pays the system, in full, the actuarial equivalent of the member’s benefits for each year of National Guard or armed forces reserve service credit being purchased; and

(4) Has established at least five (5) years of actual service with the system, excluding National Guard or armed forces reserve service.

(c) The system shall not credit a member with more than five (5) years of service for service in the National Guard or armed forces reserve.

(d) Purchased National Guard or armed forces reserve service credit shall be credited to the year in which the member rendered the service even if the member has concurrent service with a covered employer.

(e) At the member’s request, a member’s payment for National Guard or armed forces reserve service credit shall be refunded by the system if the:

(1) Member ceased to be an active member before the National Guard or armed forces reserve service credit is established as credited service in the system; or

(2) National Guard or armed forces reserve service credit is not otherwise used to establish the member’s eligibility for retirement under the system.

24 CAR § 10-505 Purchasable service credit — Domestic federal service {#sec-24-car-10-505 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-505}

24 CAR § 10-505. Purchasable service credit — Domestic federal service.

(a) Beginning January 1, 2003, a member may purchase up to ten (10) years of domestic federal service that shall be credited if:

(1) The member:

(A) Has contributions left on deposit with another system and the domestic federal service credit being purchased is limited to service for which another system similar in purpose to the Arkansas Teacher Retirement System, except for Social Security, could not pay a benefit;

(B) Pays the Arkansas Teacher Retirement System, in full, the actuarial equivalent of benefits for each year of domestic federal service credit being purchased; and

(C) Has established at least five (5) years of actual service, excluding federal domestic service; and

(2) All other requirements set by rules adopted by the Board of Trustees of the Arkansas Teacher Retirement System are met.

(b) A member may purchase a fraction of a year of domestic federal service that shall be credited if the:

(1) Member has at least one-fourth (1/4) of a year of domestic federal service in a fiscal year; and

(2) Fraction of a year of domestic federal service can be credited in accordance with Arkansas Code § 24-7-601.

(c) At the member’s request, a member’s payment for domestic federal service credit shall be refunded by the Arkansas Teacher Retirement System if the:

(1) Member ceased to be an active member before the domestic federal service credit is established as credited service in the Arkansas Teacher Retirement System; or

(2) Domestic federal service credit is not otherwise used to establish the member’s eligibility for retirement under the Arkansas Teacher Retirement System.

24 CAR § 10-506 Purchasable service credit — Out-of-state service {#sec-24-car-10-506 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-506}

24 CAR § 10-506. Purchasable service credit — Out-of-state service.

(a)(1) Out-of-state service purchased before July 1, 1987, shall be credited as service in accordance with the law in effect before July 1, 1987.

(2) A member may purchase up to fifteen (15) years of out-of-state service if the out-of-state service is purchased on and after July 1, 1987.

(b) Out-of-state service shall be credited if:

(1) The member:

(A) Has contributions left on deposit with another system and the out-of-state service credit being purchased is limited to service for which another system similar in purpose to the Arkansas Teacher Retirement System, except for Social Security, could not pay a benefit;

(B) Pays the Arkansas Teacher Retirement System, in full, the actuarial equivalent of benefits for each year of out-of-state service credit being purchased; and

(C) Has established at least five (5) years of actual service, excluding out-of-state service; and

(2) All other requirements set by rules adopted by the Board of Trustees of the Arkansas Teacher Retirement System are met.

(c) A member may purchase a fraction of a year of out-of-state service that shall be credited if the:

(1) Member has at least one-fourth (1/4) of a year of out-of-state service in a fiscal year; and

(2) Fraction of a year of out-of-state service can be credited in accordance with Arkansas Code § 24-7-601.

(d) At the member’s request, a member’s payment for out-of-state service credit shall be refunded by the Arkansas Teacher Retirement System if the:

(1) Member ceased to be an active member before the out-of-state service credit is established as credited service in the Arkansas Teacher Retirement System; or

(2) Out-of-state service credit is not otherwise used to establish the member’s eligibility for retirement under the Arkansas Teacher Retirement System.

24 CAR § 10-507 Purchasable service credit — Overseas service {#sec-24-car-10-507 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-507}

24 CAR § 10-507. Purchasable service credit — Overseas service.

(a) A member may purchase service credit for service in an overseas school if:

(1) The member:

(A) Has at least five (5) years of service in a position covered by the Arkansas Teacher Retirement System; and

(B) Performs the minimum days of service at the overseas school required for a fiscal year of service credit;

(2) The overseas service credit is limited to service for which another system similar in purpose to the Arkansas Teacher Retirement System, except Social Security, could not pay a benefit; and

(3) The actuarial equivalent of the member’s benefits is paid to the Arkansas Teacher Retirement System.

(b) The Arkansas Teacher Retirement System shall not credit a member with more than ten (10) years of overseas service credit.

(c) A member may be credited with fractions of years of service as provided by Arkansas Code § 24-7-601.

(d) At the member’s request, a member’s payment for overseas service credit shall be refunded by the Arkansas Teacher Retirement System if the:

(1) Member ceased to be an active member before the overseas service credit is established as credited service in the Arkansas Teacher Retirement System; or

(2) Overseas service credit is not otherwise used to establish the member’s eligibility for retirement under the Arkansas Teacher Retirement System.

24 CAR § 10-508 Purchasable service credit — General Assembly {#sec-24-car-10-508 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-508}

24 CAR § 10-508. Purchasable service credit — General Assembly.

(a) A member of the Senate or House of Representatives of the General Assembly who is a member of the Arkansas Teacher Retirement System shall receive credited service and salary in the system for his or her full contract salary if the:

(1) School district requires the member’s salary to be reduced during the member’s attendance at:

(A) Regular or extraordinary sessions of the General Assembly; or

(B) Interim meetings of regular or special committees of the General Assembly;

(2) Member applies for General Assembly service credit by submitting to the system a completed application form approved by the system;

(3) Member pays the system the necessary member contributions; and

(4) Required employer contributions are paid to the system for the amount of the salary reduction during periods of the member’s attendance at regular or extraordinary sessions of the General Assembly or sessions of legislative committees.

(b) A member of the Senate or House of Representatives who currently serves in the General Assembly or has served in legislative committees for any year that is within five (5) years of July 6, 1977, shall receive credited service and salary for his or her full contract if the:

(1) Member applies for General Assembly service credit by submitting to the system a completed application form approved by the system;

(2) Member pays the employee contributions; and

(3) Required employer contributions are paid from the Public School Fund to the system for the portion of the contractual period in which the member’s salary was reduced during the member’s legislative service.

(c) A member of the Senate or House of Representatives of the General Assembly who is an employee and member of the system shall receive credited service and salary for his or her full contract salary if:

(1) Either the member or school district decides it is in the best interest of the member to take a leave of absence for up to one (1) full calendar year at a time in order for the member to attend his or her duties as a member of the General Assembly; and

(2) Both the required employee and employer contributions are paid to the system for the amount of the member’s contract salary during periods in which the member attended sessions of the General Assembly or legislative committees.

(d) At the member’s request, a member’s payment for General Assembly service credit shall be refunded by the system if the:

(1) Member ceased to be an active member before the General Assembly service credit is established as credited service in the system; or

(2) General Assembly service credit is not otherwise used to establish the member’s eligibility for retirement under the system.

24 CAR § 10-509 Purchasable service credit — Advanced degree service {#sec-24-car-10-509 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-509}

24 CAR § 10-509. Purchasable service credit — Advanced degree service.

(a) A member who is a public school teacher or administrator and takes a leave of absence from a school in order to obtain an advanced degree at an institution of higher learning or to fulfill the requirements of a scholarship or grant shall receive credited service for the time of the member’s actual enrollment in the institution if the member:

(1) Applies for advanced degree service credit by submitting to the Arkansas Teacher Retirement System a completed application form approved by the system; and

(2) Pays the actuarial equivalent of the member’s benefits to the system for each year of service credit being purchased.

(b) At the member’s request, a member’s payment for advanced degree service credit shall be refunded by the system if the:

(1) Member ceased to be an active member before the advanced degree service credit is established as credited service in the system; or

(2) Advanced degree service credit is not otherwise used to establish the member’s eligibility for retirement under the system.

24 CAR § 10-510 Purchasable service credit — Private school service {#sec-24-car-10-510 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-510}

24 CAR § 10-510. Purchasable service credit — Private school service.

(a) Employment with a Head Start program shall be considered private school service.

(b)(1) A member may purchase up to fifteen (15) years of private school service to be credited as certified service if:

(A) The member:

(i) Has contributions left on deposit with another system and the private school service credit being purchased is limited to service for which another system similar in purpose to the Arkansas Teacher Retirement System, except for Social Security, could not pay a benefit;

(ii) Pays the Arkansas Teacher Retirement System, in full, the actuarial equivalent of benefits for each year of private school service credit being purchased; and

(iii) Has established at least five (5) years of actual service, excluding private school service; and

(B) All other requirements set by rules adopted by the Board of Trustees of the Arkansas Teacher Retirement System are met.

(2) At the member’s request, a member’s payment for certified private school service credit shall be refunded by the Arkansas Teacher Retirement System if the:

(A) Member ceased to be an active member before the certified private school service credit is established as credited service in the Arkansas Teacher Retirement System; or

(B) Certified private school service credit is not otherwise used to establish the member’s eligibility for retirement under the Arkansas Teacher Retirement System.

(c)(1) A member may purchase up to five (5) years of noncertified private school service that shall be credited as noncertified service if:

(A) The member:

(i) Applies for noncertified private school service credit by submitting to the Arkansas Teacher Retirement System a completed application form approved by the Arkansas Teacher Retirement System;

(ii) Has contributions left on deposit with another system and the noncertified service credit being purchased is limited to service for which another state-supported pension system or system similar in purpose to the Arkansas Teacher Retirement System could not pay a benefit;

(iii) Pays the Arkansas Teacher Retirement System, in full, the actuarial equivalent of benefits for each year of service credit being purchased; and

(iv) Has established at least five (5) years of actual service; and

(B) All other requirements set by rules adopted by the board are met.

(2) At the member’s request, a member’s payment for noncertified private school service credit shall be refunded by the Arkansas Teacher Retirement System if the:

(A) Member ceased to be an active member before the noncertified private school service credit is established as credited service in the Arkansas Teacher Retirement System; or

(B) Noncertified private school service credit is not otherwise used to establish the member’s eligibility for retirement under the Arkansas Teacher Retirement System.

(d)(1) A member may purchase up to five (5) years of private education-related entity private school service that shall be credited as noncertified service if:

(A) The member:

(i) Applies for private education-related entity private school service by submitting to the Arkansas Teacher Retirement System a completed application approved by the Arkansas Teacher Retirement System;

(ii) Has contributions left on deposit with another system and the private education-related entity private school service credit being purchased is limited to service for which another state-supported pension system or system similar in purpose to the Arkansas Teacher Retirement System could not pay a benefit;

(iii) Pays the Arkansas Teacher Retirement System, in full, the actuarial equivalent of benefits for each year of service credit being purchased; and

(iv) Has established at least five (5) years of actual service; and

(B) All other requirements set by rules adopted by the board are met.

(2) At the member’s request, a member’s payment for private education-related entity private school service credit shall be refunded by the Arkansas Teacher Retirement System if the:

(A) Member ceased to be an active member before the private education-related entity private school service is established as credited service in the Arkansas Teacher Retirement System; or

(B) Private education-related entity private school service credit is not otherwise used to establish the member’s eligibility for retirement under the Arkansas Teacher Retirement System.

(e) A member may purchase a fraction of a year of private school service that shall be credited if the:

(1) Member has at least one-fourth (1/4) of a year of private school service in a fiscal year; and

(2) Fraction of a year of private school service can be credited in accordance with Arkansas Code § 24-7-601.

24 CAR § 10-511 Purchasable service credit — Federal retirement service {#sec-24-car-10-511 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-511}

24 CAR § 10-511. Purchasable service credit — Federal retirement service.

(a) An active member may purchase up to ten (10) years of federal retirement service that shall be credited if the:

(1) Federal retirement service being purchased is limited to service for which the federal retirement system could not pay a benefit to the member;

(2) Member applies for federal retirement service by submitting to the Arkansas Teacher Retirement System a completed application form approved by the Arkansas Teacher Retirement System;

(3) Member provides certification of his or her federal retirement service to the Arkansas Teacher Retirement System on a form approved by the Arkansas Teacher Retirement System;

(4) Member pays the Arkansas Teacher Retirement System, in full, the actuarial equivalent of benefits for each year of service credit being purchased; and

(5) Member has established at least five (5) years of actual service, excluding federal retirement service.

(b)(1) A member shall complete at least one hundred sixty (160) working days before the member may establish one (1) year of federal retirement service credit.

(2) One (1) month of federal service shall be considered twenty (20) days of service.

(c) A member may purchase a fraction of a year of federal retirement service that shall be credited if the:

(1) Member has at least one-fourth (1/4) of a year of federal retirement service in a fiscal year; and

(2) Fraction of a year of federal retirement service can be credited in accordance with Arkansas Code § 24-7-601.

(d) Federal retirement service credit shall be considered contributory service.

(e) Purchased federal retirement service shall be credited to the fiscal year in which the service was rendered.

(f) If a member is not an active member before establishing federal retirement service with the Arkansas Teacher Retirement System, the member’s contribution payments and regular interest shall be refunded.

(g) At the member’s request, a member’s payment for federal retirement service credit shall be refunded by the Arkansas Teacher Retirement System if the:

(1) Member ceased to be an active member before the federal retirement service is established as credited service in the Arkansas Teacher Retirement System; or

(2) Federal retirement service credit is not otherwise used to establish the member’s eligibility for retirement under the Arkansas Teacher Retirement System.

(h) Purchase account payments made through employer pick-up are subject to restrictions specified in this subpart, regulations, and the Internal Revenue Code of 1986, 26 U.S.C. § 1 et seq.

24 CAR § 10-512 Purchasable service credit — Gap period service {#sec-24-car-10-512 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-512}

24 CAR § 10-512. Purchasable service credit — Gap period service.

(a) A member may purchase permissive service credit for one (1) or more consecutive or nonconsecutive gap periods if the member:

(1) Has five (5) years of actual service in the Arkansas Teacher Retirement System;

(2) Has left his or her position as a classroom teacher immediately before each nonconsecutive gap period or the initial gap period of consecutive gap periods;

(3) Returns to his or her position as a classroom teacher after one (1) or more gap periods;

(4) Accrues at least one-half (1/2) year of service credit after returning to his or her position as a classroom teacher;

(5) Was inactive during the gap period or gap periods; and

(6) Is ineligible to receive free service credit for each gap period under another provision of the law applicable to the system.

(b)(1) A member shall not:

(A) Purchase more than five (5) years of permissive service credit; or

(B) Purchase one (1) or more gap periods after the member retires from the system.

(2) A member’s purchased permissive service credit shall be credited in accordance with Arkansas Code § 24-7-601.

(c)(1) A member shall purchase permissive service credit for one (1) or more gap periods at the actuarial cost.

(2) At the member’s request, a member’s payment for permissive service credit shall be refunded by the system if the:

(A) Member ceased to be an active member before the permissive service is established as credited service in the system; or

(B) Permissive service credit is not otherwise used to establish the member’s eligibility for retirement under the system.

History

• History: Ark. R. 2025-30 (eff. December 5, 2025) Authority: Arkansas Code § 24-7-305

24 CAR § 10-513 Purchasable service credit — Contract buyouts, settlements, and court-ordered payments {#sec-24-car-10-513 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-513}

24 CAR § 10-513. Purchasable service credit — Contract buyouts, settlements, and court-ordered payments.

(a)(1) A member shall only earn service credit for actual, on-site work performed for a covered employer for the period specified in a contract buyout, settlement, or court-ordered payment unless the member purchases service or salary that would have been received by the member if the member had been successful in his or her legal claim.

(2)(A) If a member is on call with a covered employer and not subject to either a contract buyout, settlement, or court-ordered payment, the salary paid to the member as a regular employee shall be credited to the member.

(B) On-call credit shall not be added to a member’s salary with another covered employer.

(c) The Arkansas Teacher Retirement System shall not adjust a member’s service history until the:

(1) Member or the member’s covered employer provides a copy of the settlement, a file-marked court order, or a certified copy of the contract buyout to the system; and

(2)(A) Actuarial cost to purchase the service has been paid in full to the system.

(B) A member shall purchase service or salary at the actuarial cost for service and salary that the member would have earned if the member had not been terminated.

(d)(1) Service credit purchased under a settlement agreement or court order shall offset service credit that is earned through covered employment with another covered employer during the same period of time covered by the service credit purchased under the settlement agreement or court order.

(2) Service credit purchased under a settlement agreement or court order shall not be applied in a manner that allows a member to earn more than one (1) year of service credit in a fiscal year.

(e)(1) The system shall credit a member with additional salary credit purchased through a settlement agreement or court order only if the:

(A) Additional salary being purchased is being paid to the member in order to resolve a claim of wrongful termination or employment discrimination that culminated in a settlement agreement or court order; and

(B) Additional salary is salary that the member would have been paid but for the employment discrimination.

(2) Only qualifying additional salary credit purchased through a contract buyout may be used in the final average salary calculation.

(f) The system shall not permit a member to use unearned future service credit or nonqualified service credit purchased through a contract buyout settlement agreement with a school district to retire under age and service retirement or disability retirement before the member’s employment contract with the school district would naturally have terminated.

History

• History: Ark. R. 2025-30 (eff. December 5, 2025) Authority: Arkansas Code § 24-7-305

24 CAR § 10-514 Cost of purchased service {#sec-24-car-10-514 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-514}

24 CAR § 10-514. Cost of purchased service.

(a) A member shall purchase service using forms approved by the Arkansas Teacher Retirement System.

(b)(1) A member who purchases service shall receive credit for the purchased service if the actuarial equivalent of both the employee and employer contributions, as calculated by the system, are paid to the system.

(2) Service purchased at the actuarial cost shall be contributory.

(3) The requirement for service to be purchased at the actuarial cost shall not apply to free military service credit established with the system.

(c) The actuarial cost for service to be purchased shall not include adjustments to salary and service that are made in order to properly reflect the member’s mandatory salary and service record.

(d) A salary earned for service purchased at the actuarial cost:

(1) Shall not be used to calculate a member’s final average salary; and

(2) May be used to determine repaid refunds for service that is required to be reported within the refunded service.

(e)(1) A member’s highest salary shall be used as the base year when calculating the actuarial cost for service being purchased by the member.

(2) A member’s base year shall be the member’s highest salary year unless the highest salary year is more than one hundred fifty percent (150%) greater than the next highest salary year.

(3) If a member’s highest salary year is more than one hundred fifty percent (150%) greater than the next highest salary year, the highest two (2) salary years shall be added together and divided by two (2) to determine the base year to be used for calculating the actuarial cost for service being purchased.

(4) If a member does not have enough full service years to determine a base year for the purchase formula, a full year salary shall be used to determine the base year.

(5) A full year salary shall be calculated by dividing each partial year’s service percentage into each partial year’s salary.

24 CAR § 10-515 Purchase accounts {#sec-24-car-10-515 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-515}

24 CAR § 10-515. Purchase accounts.

(a) Purchase account payments shall be applied to the member’s account on the date the payment is received by the Arkansas Teacher Retirement System.

(b)(1) The system shall accept participant rollover contributions and direct rollovers for the purchase of service credit from a qualified retirement plan.

(2) A depository trustee from a qualified retirement plan shall certify to the system that the rollover deposit account is qualified and eligible to receive rollover distributions before a distribution of a member’s account monies.

(3)(A) If the depository trustee is unable to certify the rollover deposit account as qualified and eligible to receive rollover distributions, the system shall accept a certification from a public accountant who has an active certified public accountant’s license.

(B) The system shall not accept a certification from a public accountant that certifies a rollover deposit account as qualified and eligible to receive rollover distributions if the public accountant has an interest in the rollover deposit account as a:

(i) Member;

(ii) Spouse; or

(iii) Designated beneficiary.

(c)(1) If a member with an active purchase account dies, the member’s spouse, beneficiary, or legal representative shall have up to six (6) months from the member’s date of death to pay the balance of the purchase account unless the deadline is extended by the Executive Director of the Arkansas Teacher Retirement System for good cause.

(2) If the member’s purchase account is not paid in full within six (6) months of the member’s date of death, the purchase account shall be closed and payments made towards the purchase account shall be considered as part of the member’s residual account balance.

(d)(1) A purchase account that is paid in full after a final payment has been tendered shall not be cancelled.

(2) A member’s purchase account may be cancelled if:

(A) The member submits a written cancellation request to the system; and

(B)(i) The system approves the cancellation request.

(ii) The system may approve a cancellation request and refund a member’s purchase account if the purchase account:

(a) Is an account that has been paid only with after-tax contributions;

(b) Is an account that has been paid only with employer pick-up contributions and one (1) of the following applies:

(1) All payments on the irrevocable payroll authorization have been completed;

(2) The member terminates employment with the employer; or

(3) The member retires; or

(c) Is an account that has been paid only with rollover or transfer contributions and the rollover or transfer contributions may be rolled over or transferred to another qualified plan or refunded to the member after the deduction and payment of federal taxes.

(iii)(a) If a member’s cancellation request is approved, the system shall refund the balance of the member’s purchase account without interest to the member.

(b) The system shall refund interest to a member if a refund of interest is statutorily mandated under Arkansas Code § 24-7-612 or another applicable provision of the Arkansas Code.

24 CAR § 10-516 Purchase of refunded service {#sec-24-car-10-516 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-516}

24 CAR § 10-516. Purchase of refunded service.

(a) A member shall not purchase refunded service unless he or she purchases the total credited service forfeited by a refund.

(b)(1) A repayment of refunded contributions shall be made in inverse order if the member has received more than one (1) refund of contributions.

(2) The most recent refund account shall be paid in full before a member may purchase a previous refund account.

Subpart 6

24 CAR § 10-601 Definitions {#sec-24-car-10-601 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-601}

24 CAR § 10-601. Definitions.

As used in this subpart:

(1) "Act 808 employee" means an employee of a state agency who:

(A) On April 8, 1987, was an active member of the Arkansas Teacher Retirement System;

(B) Qualified to retire before January 1, 1988, under the Early Retirement Incentive Law of 1987 (Acts 1987, No. 187); and

(C) Could elect to become a member of the Arkansas Public Employees’ Retirement System and have his or her credited service in the Arkansas Teacher Retirement System transferred to the Arkansas Public Employees’ Retirement System;

(2) "Annuity options" means one (1) or more options that:

(A) Concern how an annuity benefit shall be paid, in accordance with Arkansas Code § 24-7-706, to a member for his or her lifetime after the member’s retirement; and

(B) Are available for a member’s election at the time of the member's retirement;

(3) “Application”, for the purposes of retirement eligibility, means an application form and any other documents required by the Arkansas Teacher Retirement System to establish a member’s eligibility to retire;

(4) "Covered employer" or “employer” means an employer:

(A) Who participates in the Arkansas Teacher Retirement System; and

(B) Whose employees are eligible for membership in the Arkansas Teacher Retirement System;

(5) “Dependent child” means a child of a member or retiree who:

(A) Is a minor; or

(B) Has been adjudged physically or mentally incapacitated by a court of competent jurisdiction;

(6) "Effective retirement date" means the first day of the month in which a member requests to receive retirement benefits and for which the member submits a timely retirement application;

(7) “Eligible employee”, for the purposes of salary or compensation limitations concerning the calculation of a final average salary, means a person who was a member of the Arkansas Teacher Retirement System before the first plan year beginning after December 31, 1995;

(8) “Full service year” means employment with a covered employer for one hundred sixty (160) days or more in a fiscal year;

(9) “Incapacitated child” means a child who has been adjudged physically or mentally incapacitated by a court of competent jurisdiction;

(10) "Marriage dissolution" means a final decree of divorce, separate maintenance, or annulment executed by a court of competent jurisdiction and filed of record in the Office of the Ex Officio Recorder;

(11) "Medical committee" means the committee of three (3) physicians appointed by the Board of Trustees of the Arkansas Teacher Retirement System for the purpose of evaluating disability retirement applications;

(12) "Option beneficiary" means a person who:

(A) A member nominates by written designation, before or after the member’s retirement, to receive annuity payments after the member’s death in accordance with the annuity option selected by the member; and

(B) If eligible, shall receive annuity payments after the member’s death in accordance with the annuity option selected by the member;

(13) “Partial service year” means employment with a covered employer for less than one hundred sixty (160) days in a fiscal year;

(14) "Person" means an individual, trust, estate, corporation, partnership, or other legal entity;

(15) "Residue" means a member’s accumulated contributions, including regular interest standing in the member’s credit at the time of his or her retirement;

(16) "Residue beneficiary" means a person who a member nominates by written designation to receive the member’s residue, if any, under Arkansas Code § 24-7-709;

(17) "Receivable" means moneys due to the Arkansas Teacher Retirement System from a member, former member, covered employer, contributor, retiree, beneficiary, or alternate payee under a qualified domestic relations order (QDRO) as a result of an overpayment of any payment or benefit by the Arkansas Teacher Retirement System;

(18) "Retiree" means a retired member who receives an annuity from the Arkansas Teacher Retirement System; and

(19) “Service” means employment rendered as an employee.

24 CAR § 10-602 State employee transfers to the Arkansas Public Employees’ Retirement System {#sec-24-car-10-602 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-602}

24 CAR § 10-602. State employee transfers to the Arkansas Public Employees’ Retirement System.

(a) An Act 808 employee shall make the election to transfer to the Arkansas Public Employees’ Retirement System on a form approved by the Arkansas Teacher Retirement System.

(b) The transfer from the Arkansas Teacher Retirement System to the Arkansas Public Employees’ Retirement System shall be effective on the employee’s effective date of retirement.

(c) The Arkansas Teacher Retirement System shall certify to the Arkansas Public Employees’ Retirement System a record of the Act 808 employee's service credit in the Arkansas Teacher Retirement System.

(d)(1) If an Act 808 employee is a noncontributory member of the Arkansas Teacher Retirement System at the time of his or her retirement, the Act 808 employee shall:

(A) Retire under the noncontributory provisions of Acts 1987, No. 187; and

(B) Be entitled to a refund of his or her Act 808 employee contributions made since January 1, 1978, to the Arkansas Teacher Retirement System.

(2) If an Act 808 employee was a contributory member of the Arkansas Teacher Retirement System at the time of his or her retirement, the Act 808 employee shall retire under the contributory provisions of Acts 1987, No. 187.

(e)(1) The Arkansas Public Employees’ Retirement System shall pay the monthly benefits of an Act 808 employee who elects to transfer to the Arkansas Public Employees’ Retirement System.

(2) The Arkansas Public Employees’ Retirement System shall certify monthly to the Arkansas Teacher Retirement System the amount of monthly benefits paid and the Arkansas Teacher Retirement System shall transfer its pro rata portion to the Arkansas Public Employees’ Retirement System.

(f) Upon receipt of a death certificate from the Arkansas Public Employees’ Retirement System for a retiree who chose a straight life annuity and has a balance remaining in his or her account, the Arkansas Teacher Retirement System shall transfer the remaining balance in the retiree's account to the Arkansas Public Employees’ Retirement System for refunding to the retiree’s designated beneficiary.

24 CAR § 10-603 Retirement eligibility {#sec-24-car-10-603 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-603}

24 CAR § 10-603. Retirement eligibility.

To be eligible for age and service retirement or disability retirement under the Arkansas Teacher Retirement System, a member shall:

(1) Satisfy the credited service requirements under one (1) of the retirement statutes, Arkansas Code §§ 24-7-701 – 24-7-707;

(2) Be credited with all required covered employer and member contributions in the member’s deposit account, with no amounts owed to the system;

(3) Pay all amounts owed to the system for:

(A) Underpayments;

(B) Overpayments; or

(C) Purchase service accounts; and

(4) Terminate employment with each of his or her covered employers or reach the normal retirement age.

24 CAR § 10-604 Age and service retirement — Effective retirement date {#sec-24-car-10-604 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-604}

24 CAR § 10-604. Age and service retirement — Effective retirement date.

(a) For a member who is inactive, vested, and immediately eligible to retire, retirement benefits shall be payable the month after the Arkansas Teacher Retirement System receives the member’s application for age and service retirement.

(b)(1) If a member meets all eligibility requirements for age and service retirement and is approved for retirement, annuity benefits shall be effective on the month proposed in the member’s application.

(2) If the member does not file an application at least one (1) calendar month before the proposed effective retirement date, then the proposed retirement effective date in the member’s application shall not be used, and the member’s effective retirement date shall be the following month.

(c) If a member has signed an employment contract for the fiscal year and has been paid in full without providing service for the full period of the employment contract, the member’s effective retirement date shall not be before July 1 of the subsequent fiscal year.

(d) If a member has accrued a full year of service credit equal or greater to one hundred sixty (160) days in a fiscal year, the member's retirement date shall not begin earlier than July 1 of the subsequent fiscal year. year unless the member:

(1) Has attained the normal retirement age and is not separating from employment; or

(2) Is not licensed or otherwise certified as a classroom teacher and vacating a classroom.

(e)(1) A member who attains the normal retirement age may:

(A) Apply for retirement benefits without terminating employment; and

(B) Begin drawing retirement benefits.

(2) The retirement benefits of a member who attains the normal retirement age shall not be affected if the member applies for and draws retirement benefits.

24 CAR § 10-605 Age and service retirement — Application {#sec-24-car-10-605 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-605}

24 CAR § 10-605. Age and service retirement — Application.

(a) A copy of the age and service retirement application may be downloaded from the Arkansas Teacher Retirement System’s website or requested from the system.

(b)(1) If eligible, an active or inactive member who attains age sixty (60) and has five (5) or more years of actual and reciprocal service credit may voluntarily retire by filing a written application with the system.

(2) If eligible, an active or inactive member who has not reached age sixty (60) and has twenty-five (25) or more years of actual and reciprocal service credit, including purchased or free credited service, may voluntarily retire by filing a written application with the system.

(c)(1) In order for a retirement application to be timely filed, there is a three-month window to apply for retirement benefits.

(2) An active member who is currently employed by a covered employer shall file his or her retirement application:

(A) No sooner than four (4) months before the active member’s effective retirement date; and

(B) No later than one (1) month before the active member’s effective retirement date.

(d) The system’s procedure for handling a retirement application received by the system from a member shall include the following:

(1) If a retirement application is received by the system before the three-month window begins for the member's anticipated effective retirement date, the system shall:

(A) Consider the retirement application untimely;

(B) Reject the retirement application;

(C) Notify the member of one (1) or more dates on which the member may timely file a retirement application; and

(D) Notify the member of the procedure to use in order to timely file a retirement application; and

(2) If a retirement application is received after the three-month window ends for the member's anticipated effective retirement date, the system shall:

(A) Consider the retirement application untimely; and

(B) Provide the member with a new effective retirement date that begins on the first day of the month following the member’s previously anticipated effective retirement date.

(e) Subsections (c) and (d) of this section do not apply to a disability retirement application or an application for survivor benefits.

(f) The following table shows examples of the windows for filing a retirement application:

(g) The following table is the only window for filing a Teacher Deferred Retirement Option Participation application:

24 CAR § 10-606 Age and service retirement — Additional documents {#sec-24-car-10-606 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-606}

24 CAR § 10-606. Age and service retirement — Additional documents.

(a) Unless an extension is granted by the Executive Director of the Arkansas Teacher Retirement System, in addition to a completed application for retirement, a member shall submit the following additional documents to the Arkansas Teacher Retirement System by the end of the sixth full calendar month immediately following the member’s effective retirement date:

(1) For members who elect a straight life annuity:

(A) Proof of the member's birthdate from a birth certificate or other authenticating documents; and

(B) Proof of the member's taxpayer identification number from a Social Security card or other authenticating documents;

(2) For members who elect an Option A or Option B annuity and designate their spouse as the beneficiary:

(A) Proof of the member's birthdate from a birth certificate or other authenticating documents;

(B) Proof of the member's taxpayer identification number from a Social Security card or other authenticating documents;

(C) Proof of the spouse's birthdate from a birth certificate or other authenticating documents;

(D) Proof of the spouse's taxpayer identification number from a Social Security card or other authenticating documents; and

(E) Proof of the marriage between the member and spouse from a marriage license or equivalent, marriage license recording document, or other legally acceptable proof of the existence of the marriage;

(3) For members who elect an Option A or Option B annuity and designate a dependent child as their beneficiary:

(A) Proof of the member's birthdate from a birth certificate or other authenticating documents;

(B) Proof of the member's taxpayer identification number from a Social Security card or other authenticating documents;

(C)(i) Proof of guardianship.

(ii) Adequate proof of the existence of a guardianship due to the incapacity of the member's dependent child that preexists the member's official retirement date.

(iii) Authenticating documents may include the order appointing guardianship of the person, letters of guardianship, or other adequate proof of the existence of the guardianship;

(D) Proof of the dependent child's birthdate from a birth certificate or other authenticating documents; and

(E) Proof of the dependent child's taxpayer identification number from a Social Security card or other authenticating documents; and

(4) For members who elect an Option C annuity:

(A) Proof of the member's birthdate from a birth certificate or other authenticating documents; and

(B) Proof of the member's taxpayer identification number from a Social Security card or other authenticating documents.

(b)(1) Unless an extension is granted by the executive director, a member shall submit by the end of the sixth full calendar month immediately following the member’s effective retirement date all additional documents required by the system in order to begin issuing benefit payments to the member.

(2) If all additional documents required by the system are not submitted by the deadline or any extension granted by the executive director, the member’s retirement application shall be void and without effect.

24 CAR § 10-607 Disability retirement — Application {#sec-24-car-10-607 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-607}

24 CAR § 10-607. Disability retirement — Application.

(a)(1) A member shall submit a completed application for disability retirement and all accompanying documentation required by the Arkansas Teacher Retirement System by the end of the sixth full calendar month immediately following the date of the member’s disability retirement application.

(2) If a member does not submit all accompanying documentation by the end of the sixth full calendar month immediately following the date of the member’s disability retirement application, the system shall:

(A) Submit the disability retirement application to the medical committee for review as complete; or

(B) Withdraw the application at the request of the member unless an extension is granted by the Executive Director of the Arkansas Teacher Retirement System.

(b)(1) Disability retirement benefits shall begin on the first of the month in which a member files a disability retirement application with the system if the:

(A) Member is eligible for disability retirement;

(B) Member is no longer employed by a covered employer at the time he or she files the disability retirement application; and

(C) Medical committee determines that the member has a disability.

(2) If the member is still employed by a covered employer at the time the member files the disability retirement application then, once approved by the medical committee and then the Board of Trustees of the Arkansas Teacher Retirement System, the member’s disability retirement shall begin on the first of the month following the last day of the member’s covered employment.

(c) If a member’s initial application for disability retirement is denied and the member elects and qualifies for age and service retirement, the member’s effective retirement date shall be determined by the date the member’s initial disability retirement application is filed.

(d)(1) A member may request a second review of his or her initial disability retirement application if the:

(A) Member’s initial disability retirement application is denied; and

(B) Member submits additional medical documentation for the medical committee’s consideration.

(2) A member may only request a second review one (1) time.

(3) If a member requests a second review, unless an extension is granted by the executive director, the member has until the end of the sixth full calendar month immediately following the date of the written notice of the medical committee’s denial of the member’s initial application for disability retirement to submit additional medical documentation.

(4)(A) If a member’s initial disability retirement application is denied after the second review, the member may file another subsequent disability retirement application and submit additional information for consideration if the member is active and eligible for disability retirement.

(B) If a member’s initial disability retirement application is denied and the member is ineligible to apply for disability retirement benefits or is inactive, the member may apply for age and service retirement if the member meets the requirements for age and service retirement.

(e) If a member dies after the disability application is received by the system, but before his or her disability retirement application is approved, then the:

(1) Member shall be considered as having died in active service; and

(2) Survivor benefits under Arkansas Code § 24-7-710 shall be paid, unless the member designated one (1) or more alternative residual beneficiaries.

(f)(1) If a disability retirement application is approved by the medical committee after May 31, 2011, the board shall allow the member to designate an Option A or Option B beneficiary at the time of retirement.

(2) An Option C beneficiary shall not be designated by:

(A) A member who applies for disability retirement; or

(B) A disability retiree.

(g)(1) The same rules that apply to an active member’s surviving spouse under Arkansas Code § 24-7-710(b) shall apply to a disability retiree’s surviving spouse if the disability retiree:

(A) Designates his or her spouse as Option A or Option B beneficiary at the time of retirement; and

(B) Dies before reaching sixty (60) years of age.

(2) The same rules that apply to a surviving spouse of an active member under Arkansas Code § 24-7-710(b) shall apply to the surviving spouse of a disability retiree if the disability retiree:

(A) Dies after disability retirement benefit payments to the disability retiree begin;

(B) Does not designate his or her spouse as an Option A or Option B beneficiary; and

(C) Does not designate a residue beneficiary.

(3) The same rules that apply to a surviving spouse of an active member under Arkansas Code § 24-7-710(b)(1)(B) shall apply to the surviving spouse of a disability retiree if the disability retiree:

(A) Dies after disability retirement benefit payments to the disability retiree began;

(B) Does not designate his or her spouse as an Option A or Option B beneficiary; and

(C) Designates his or her spouse as a residue beneficiary.

(4) The same procedures used under Arkansas Code § 24-7-710 that are used to determine when an active member’s surviving spouse is entitled to begin receiving benefit payments shall be used to determine when benefit payments shall begin for a residue beneficiary who is the surviving spouse of a disability retiree and elects an Option A – 100% Survivor Annuity.

(5) If a disability retiree designates his or her dependent child as an Option A or Option B beneficiary, and the disability retiree dies before reaching age sixty (60), then:

(A) The same rules that apply under Arkansas Code § 24-7-710(c) to an active member’s surviving child shall apply to the disability retiree’s Option A or Option B dependent child beneficiary until the date on which the disability retiree would have turned sixty (60) years of age; and

(B) On the date on which the disability retiree would have turned sixty (60) years of age, the Option A or Option B dependent child beneficiary shall receive the greater of the surviving child annuity under Arkansas Code § 24-7-710(c) or the Option A spouse annuity under Arkansas Code § 24-7-710(b).

24 CAR § 10-608 Disability retirement — Disability review {#sec-24-car-10-608 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-608}

24 CAR § 10-608. Disability retirement — Disability review.

(a) A deadline imposed by this subpart may be extended as provided by this section and Arkansas Code § 24-7-704.

(b)(1) A retiree shall submit to the Arkansas Teacher Retirement System a Social Security Administration determination letter that finds the retiree disabled within thirty-six (36) months from:

(A) July 1, 2015, if the retiree’s effective retirement date is before July 1, 2015; or

(B) The retiree’s effective retirement date if the effective date of retirement is on or after July 1, 2015.

(2) A retiree may apply to the system for an extension of the thirty-six-month deadline if the retiree demonstrates through an administrative or judicial confirmation of an active Social Security Administration claim that the claim is:

(A) Still under review;

(B) Part of a continuous claim without voluntary dismissal or withdrawal; and

(C) The Social Security Administration disability claim was filed and remained active for at least twenty-four (24) months before the thirty-six-month deadline.

(c) The system shall suspend disability retirement benefit payments to a retiree if the retiree does not:

(1) Provide the system with a Social Security Administration determination letter finding the retiree disabled within the thirty-six-month deadline;

(2) Receive an extension of the thirty-six-month deadline to provide the system with a Social Security Administration determination letter finding the retiree disabled; or

(3) Apply to the medical committee for a review by the end of the third full calendar month immediately following the system’s suspension of disability retirement benefit payments to the retiree due to the retiree’s failure to provide a Social Security Administration determination letter finding the retiree disabled.

(d)(1) A retiree who attempts and is unable to receive a Social Security Administration determination letter finding the retiree disabled may apply for a review by the medical committee if the member submits either an unfavorable Social Security Administration determination letter finding that the retiree is not disabled or documentation showing that the retiree applied for Social Security Administration benefits before the thirty-six-month deadline to submit a favorable Social Security Administration determination letter finding the retiree disabled expired.

(2) A retiree may apply for a review by the medical committee:

(A) No earlier than three (3) full calendar months before the date on which the retiree’s disability retirement benefit payment would otherwise be suspended; and

(B) No later than by then end of the third full calendar month immediately following the system’s suspension of disability retirement benefit payments to the retiree.

(3) A review performed by the medical committee shall follow the standards and procedures in Arkansas Code § 24-7-704(a)(1)(E).

(4)(A) After a disability review is held due to the Social Security Administration finding that a member is not disabled, the medical committee’s recommendations shall be submitted to the Board of Trustees of the Arkansas Teacher Retirement System for a final order.

(B) If a member is denied further disability benefits after a disability review by the medical committee, the member may:

(i) Offer additional medical information within thirty (30) days of the date of the disability review; and

(ii) Request that the board return the matter to the medical committee for reconsideration.

(C)(i) Disability retirement benefit payments to a member shall resume in the month immediately following the board’s entry of an order finding the member eligible to receive disability retirement benefits if the board had previously entered an order finding the member ineligible to receive disability retirement benefits.

(ii) If the board enters an order finding a member eligible to receive disability retirement benefits, the member shall not be entitled to retroactive back pay of disability retirement benefits if the:

(a) Board had previously entered an order finding the member ineligible to receive disability retirement benefits;

(b) Member did not submit a favorable Social Security Administration determination letter within thirty-six (36) months of his or her effective date of disability retirement; and

(c) Member submits a favorable Social Security Administration determination letter after the board entered the order finding the member ineligible to receive disability retirement benefits.

(e) A member’s option to request a second review of his or her initial disability retirement application does not apply to a retiree who seeks a disability review due to his or her inability to obtain a Social Security Administration determination letter finding him or her disabled.

(f) A retiree shall begin receiving regular retirement benefits as if the retiree voluntarily retired and a Social Security Administration determination letter shall not be required if the retiree:

(1) Attains fifty-seven (57) years of age in the month the retiree’s disability retirement benefits become effective; or

(2) Attains sixty (60) years of age.

24 CAR § 10-609 Disability retirement — Employment after disability retirement {#sec-24-car-10-609 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-609}

24 CAR § 10-609. Disability retirement — Employment after disability retirement.

(a) A member’s disability retirement is effective from the date the member files a disability retirement application with the Arkansas Teacher Retirement System and terminates employment with each of his or her covered employers.

(b)(1) A member is considered active if the member is using earned:

(A) Sick leave;

(B) Family Medical Leave Act leave;

(C) Annual leave; and

(D) Catastrophic leave.

(2) Workers’ compensation, which may or may not include the use of leave granted by an employer, shall not:

(A) Be considered leave by which a member is considered active; and

(B) Extend the date of active membership.

(c)(1) A member shall not receive disability retirement benefit payments if the member indirectly performs work for a covered employer as described in Arkansas Code § 24-7-502.

(2) If a member is approved for disability retirement and continues to work either directly or indirectly for a covered employer, the member shall:

(A) Terminate direct or indirect employment with the covered employer by the proposed disability effective retirement date; or

(B) If the member is finalizing work for the covered employer, terminate employment no later than two (2) full calendar months after the medical committee’s final decision.

(3) If the member does not terminate employment in accordance with system rules and Arkansas Code § 24-7-502:

(A) The member’s disability retirement application shall be considered rescinded; and

(B) The member may reapply for disability retirement if eligible.

(d)(1) A retiree under the age of sixty (60) may be employed by a covered employer and also receive disability retirement benefit payments if the retiree performs less than eighty (80) days of actual service during a fiscal year.

(2)(A) After receiving approval for disability retirement under the system, a retiree may choose to return to covered employment and relinquish his or her disability retirement.

(B) If a retiree chooses to return to covered employment, the member shall:

(i) Not receive disability retirement benefit payments;

(ii) Be considered an active member; and

(iii) Comply with Arkansas Code § 24-7-738 (Acts 2017, No. 549).

(3) A retiree shall become an active member and his or her disability retirement shall be immediately terminated if:

(A) The retiree notifies the system in writing of his or her intent to perform more than eighty (80) days of actual service during a fiscal year; or

(B) The system receives written notification of the retiree’s intent to perform more than eighty (80) days of actual service during a fiscal year through a termination and status sheet, membership data form, or any other reasonably reliable documentation.

(e) A disability retiree shall not be permitted to transfer his or her disability retiree status to that of an age and service retiree.

24 CAR § 10-610 Benefit formula and compound cost of living adjustment {#sec-24-car-10-610 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-610}

24 CAR § 10-610. Benefit formula and compound cost of living adjustment.

(a) The annuity formula for computing disability retirement benefits shall be the same annuity formula used to compute age and service retirement benefits.

(b)(1) The retirement benefits payable to a retiree shall be the total number of contributory years of credited service, multiplied by a factor that is not less than one and seventy-five hundredths percent (1.75%) and not more than two and fifteen hundredths percent (2.15%) of the final average salary as set by the Board of Trustees of the Arkansas Teacher Retirement System, plus the total number of noncontributory years of credited service multiplied by a factor that is not less than five-tenths percent (0.5%) and not more than one and thirty-nine hundredths percent (1.39%) of the final average salary, as set by the board.

(2) The board shall modify the standard multipliers for credited service of ten (10) years as necessary to maintain actuarial soundness.

(c)(1) The board by resolution may reverse a compound cost of living adjustment as needed to maintain the actuarial soundness of the Arkansas Teacher Retirement System.

(2) A reversal may be phased in as the board determines appropriate.

(d)(1) If a covered employer reports additional salary for a member and the additional salary does not cause the member’s annual benefit to increase or decrease by more than the de minimis amount, then the member’s contributions on the additional salary shall be transferred from the member’s deposit account to the employer accumulation account without making any change to the member’s annual benefit.

(2) If the additional salary does increase or decrease the member’s annual benefit by more than the de minimis amount, then the member’s annual benefit shall be recalculated.

24 CAR § 10-611 Final average salary — Salary limitations {#sec-24-car-10-611 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-611}

24 CAR § 10-611. Final average salary — Salary limitations.

(a) The Board of Trustees of the Arkansas Teacher Retirement System may adopt rules to modify the definition of salary for the purpose of calculating retirement benefits available under the Arkansas Teacher Retirement System.

(b) The system shall include the salary received from each of a member’s covered employers when calculating the member’s final average salary.

(c)(1) Regardless of any provision in a state statute, rule, or regulation to the contrary, remuneration, salary, or other compensation that exceeds the limitations set forth provided in the Internal Revenue Code of 1986, 26 U.S.C. § 401(a)(17), as it existed on January 1, 2011, shall not be used for the purposes of calculating the final average salary on which benefits available under the system are based.

(2) The limitation on remuneration, salary, or compensation for an eligible employee shall not be less than the amount that was allowed to be considered by the system as in effect on July 1, 1993.

(d)(1) A salary earned by a member before the member’s death and paid after the member’s death is subject to deductions by the system and the member’s covered employer shall report the member’s total salary and days of service in the covered employer’s quarterly report.

(2) Gratuitous payments made by a covered employer to a member after the death of the member shall not be:

(A) Considered the salary of the member;

(B) Subject to contribution requirements; and

(C) Included in the covered employer’s quarterly report to the system.

(e) The system shall not consider remuneration, salary, or compensation paid by a covered employer to a member as a salary earned by the member if the:

(1) Remuneration, salary, or compensation is paid as an incentive payment, bonus, separation payment, additional salary, or special payment in consideration for the member’s agreement to retire, terminate employment, or not renew a contract with the covered employer;

(2) Offer described in subdivision (d)(1) of this section is extended by the covered employer to two (2) or more members;

(3) Remuneration, salary, or compensation is not offered as an additional salary or payment for the purchase of service credit that is part of a separation agreement resulting from the resolution of a claim of wrongful termination;

(4) Remuneration, salary, or compensation is not payment for accumulated, unused sick leave that:

(A) Accrued in the years immediately preceding the member’s termination of covered employment; and

(B) Were in excess of the number of sick days that the covered employer allowed the member to carry forward;

(5) Covered employer offers a voluntary early retirement incentive plan, staff reduction plan, or buyout plan that would require the member as a participant of the plan to retire or terminate his or her employment with the covered employer; and

(6) Member voluntarily participates in the plan in exchange for the remuneration, salary, or compensation offered by the covered employer.

(f)(1) A covered employer shall not withhold a member’s contributions or pay employer contributions from a remuneration, salary, or compensation paid to a member if the remuneration, salary, or compensation is subject to a salary limitation as provided by this subpart.

(2) A covered employer that offers an early retirement plan, separation, plan, or contract nonrenewal plan and intends to pay remuneration, salary, or compensation that is subject to a salary limitation as provided by this subpart shall notify the system before making a payment under the plan.

(g)(1) At the request of a covered employer, the system shall:

(A) Review a potential plan or payment that may be subject to a salary limitation as provided by this subpart; and

(B) Provide written guidance to the covered employer concerning the applicability of the salary limitation to the plan or payment.

(2) The system’s written determination on the applicability of a salary limitation to a plan or payment shall be treated as a staff determination letter, which may be appealed by the covered employer using the procedures in 24 CAR § 10-1001 et seq.

(3) The law, rules, and policies applicable to the system shall be controlling if a conflict exists between the system’s calculation of final average salary and a covered employer’s laws, rules, or policies concerning the compensation of final average salary.

24 CAR § 10-612 Final average salary — Service years {#sec-24-car-10-612 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-612}

24 CAR § 10-612. Final average salary — Service years.

(a) If a member dies during active service on or after July 1, 2013, the member’s paid or unpaid accrued, unused sick leave, shall be credited as service in the fiscal year of the member’s death for the purpose of determining the member’s retirement eligibility, final average salary, and eligibility for other benefits under the Arkansas Teacher Retirement System.

(b)(1) A partial service year shall be excluded from the calculation of a member’s final average salary unless the:

(A) Partial service year is higher than a full service year; or

(B) Member has less than the required number of years to calculate a final average salary.

(2) Anti-spiking calculations shall not be applied to a partial service year or a fiscal year immediately following a partial service year.

(c)(1) The Board of Trustees of the Arkansas Teacher Retirement System shall set annually the applicable number of years to be used in computing final average salary for retirement benefits at not less three (3) years and not more than five (5) years.

(2) Unless otherwise provided by law, rules, or policies applicable to the Arkansas Teacher Retirement System, effective July 1, 2018, the Arkansas Teacher Retirement System shall calculate a member’s final average salary using the five (5) years in which the member received the highest salary from a covered employer.

(d)(1) If a member has less than the minimum number of years of credited service that would be used to calculate a final average salary, the member’s final average salary shall be the total salary paid to the member for his or her years of credited service divided by the member’s total credited years of service.

(2) If a member does not have full service years for the total years of service used in the calculation of final average salary, the board may establish by rule a fair base salary for a member’s final average salary for purposes of comparing the member’s highest salary years.

(e)(1) For an active member who has three (3) or more full service years as of July 1, 2018, the Arkansas Teacher Retirement System shall:

(A) Treat the active member as if he or she was retiring or entering the Teacher Deferred Retirement Option Plan as of June 30, 2018; and

(B) Determine the benchmark final average salary using the highest salary from the member’s three (3) full service years through fiscal year 2018.

(2) A final average salary calculation using three (3) full service years shall be the benchmark comparison for a five-year final average salary calculation to which the active member may be entitled.

(3) The Arkansas Teacher Retirement System shall calculate the active member’s final average salary using the five (5) years in which the active member received the highest salary from a covered employer if at the time of the active member’s retirement using a five-year calculation of the final average salary is higher than using a three-year calculation.

(4) The Arkansas Teacher Retirement System shall not use a benchmark final average salary for an inactive member unless the inactive member provides the Arkansas Teacher Retirement System with appropriate documentation showing that the inactive member was active in a reciprocal system or alternate retirement plan during the 2018 fiscal year.

(f) For a member with reciprocal service credit, the Arkansas Teacher Retirement System shall use the highest final average salary calculated, at the time of the member’s retirement, by the Arkansas Teacher Retirement System or a reciprocal system in which the member has at least two (2) years of service credit pursuant to Arkansas Code § 24-2-402.

24 CAR § 10-613 Annuity options {#sec-24-car-10-613 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-613}

24 CAR § 10-613. Annuity options.

(a) Before the date the first benefit payment of an annuity becomes due, a member retiring with age or service may elect one (1) of the following annuity options:

(1) Option 1 – straight life annuity, which is a straight life annuity payable monthly for the life of the retiree; or

(2)(A) Option 2 – reduced straight life annuity with option beneficiaries, under which a retiree shall receive the actuarial equivalent of his or her straight life annuity in a reduced annuity payable for the retiree’s lifetime.

(B) Under Option 2, at the time of his or her retirement, a member may designate one (1) or more beneficiaries to receive one (1) of the following annuity options:

(i)(a) Option A – one hundred percent (100%) survivor annuity.

(b) Upon the death of the retiree, the retiree’s reduced annuity shall be continued and paid throughout the life of the retiree’s designated beneficiary.

(c) A member’s eligible spouse, one (1) or more of the member’s children who qualify as a dependent child, or both may be designated as an Option A beneficiary.

(d) If both a spouse and one (1) dependent child are designated as Option A beneficiaries, the retiree’s reduced annuity shall be paid in equal shares to the spouse and the dependent child.

(e) If both a spouse and more than one (1) dependent child are designated as Option A beneficiaries, the spouse shall receive fifty percent (50%) of the retiree’s reduced annuity and the remaining fifty percent (50%) shall be paid in equal shares to the dependent children.

(f) If more than one (1) dependent child is designated as an Option A beneficiary and a spouse is not designated as an Option A beneficiary, the retiree’s reduced annuity shall be paid in equal shares to each dependent child.

(g) A dependent child’s portion of the annuity shall not revert to the spouse or any other dependent children if the dependent child becomes ineligible to continue receiving annuity payments or predeceases the spouse or any other dependent children.

(h) A spouse’s portion of the annuity shall not revert to any dependent child if the spouse becomes ineligible to continue receiving annuity payments or predeceases one (1) or more dependent children;

(ii)(a) Option B – fifty percent (50%) survivor annuity.

(b) Upon the death of the retiree, one-half (1/2) of the retiree’s reduced annuity shall be continued and paid throughout the life of the retiree’s designated beneficiary.

(c) A member’s eligible spouse, one (1) or more of the member’s children who qualify as a dependent child, or both may be designated as an Option B beneficiary.

(d) If both a spouse and one (1) dependent child are designated as Option B beneficiaries, one-half (1/2) of the retiree’s reduced annuity shall be paid in equal shares to the spouse and the dependent child.

(e) If both a spouse and more than one (1) dependent child are designated as Option B beneficiaries, the spouse shall receive fifty percent (50%) of one-half (1/2) of the retiree’s reduced annuity and the remaining fifty percent (50%) of one-half (1/2) of the retiree’s reduced annuity shall be paid in equal shares to the dependent children.

(f) If more than one (1) dependent child is designated as an Option A beneficiary and a spouse is not designated as an Option B beneficiary, one-half (1/2) of the retiree’s reduced annuity shall be paid in equal shares to each dependent child.

(g) A dependent child’s portion of the annuity shall not revert to the spouse or any other dependent children if the dependent child becomes ineligible to continue receiving annuity payments or predeceases the spouse or any other dependent children.

(h) A spouse’s portion of the annuity shall not revert to any dependent child if the spouse becomes ineligible to continue receiving annuity payments or predeceases one (1) or more dependent children; or

(iii)(a) Option C – annuity for ten (10) years certain and life thereafter.

(b) The retiree shall receive a reduced annuity payable throughout the retiree’s life.

(c) If the retiree dies before receiving 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 one (1) or more of the retiree’s designated beneficiaries in equal shares.

(d) A member may designate one (1) or more beneficiaries under Option C.

(b) The following persons are eligible to be designated as an Option A or Option B beneficiary:

(1) The retiree’s spouse if the retiree and his or her spouse have been married to each other for at least one (1) year before the first annuity benefit payment to the retiree; and

(2) A retiree’s dependent child who has been adjudged physically or mentally incapacitated by a court of competent jurisdiction, regardless of the age of the dependent child.

(c)(1) If an Option 1 retiree dies within one (1) year of retirement, and his or her spouse qualifies for Option A benefits, the spouse may elect to cancel the Option 1 annuity in effect and elect Option A, one hundred percent (100%) survivor annuity, by the end of the fourth full calendar month following the retiree’s death.

(2) The election shall be effective the first day of the month following receipt of the election form by the Arkansas Teacher Retirement System.

(3) If the spouse elects Option A benefits, the residue, if any, shall not be paid until the Option A beneficiary’s death.

(4) A spouse who is eligible to elect Option A benefits may elect to receive a lump-sum distribution of the retiree’s residue in lieu of the spousal annuity if:

(A) The spouse waives his or her right to the spousal annuity; and

(B) The retiree did not designate one (1) or more dependent children as a beneficiary.

(d)(1) After his or her retirement, a retiree may designate his or her spouse as an Option A or Option B beneficiary if the retiree:

(A) Has been married to his or her spouse for one (1) year; and

(B) Either:

(i) Was married to his or her spouse for less than one (1) year upon his or her effective retirement date; or

(ii) Marries his or her spouse after his or her effective retirement date.

(2)(A) Upon meeting the one-year marriage requirement, the retiree shall have six (6) months to file a written nomination designating his or her spouse as either an Option A or Option B beneficiary.

(B) The designation shall be filed on a form approved by the system.

(e) After a retiree’s effective retirement date, the retiree may designate an Option A or Option B dependent child beneficiary if the:

(1) Retiree previously designated his or her spouse as the Option A or Option B beneficiary;

(2) Spouse designated as the retiree’s Option A or Option B beneficiary predeceases the retiree; and

(3) Dependent child has been adjudged physically or mentally incapacitated by a court of competent jurisdiction.

(f)(1) A member may request that the system remove an incapacitated child as his or her Option A or Option B beneficiary if:

(A) The member designated the incapacitated child as his or her Option A or Option B dependent child beneficiary; and

(B) One (1) of the following applies:

(i) A court finds that the incapacitated child is no longer incapacitated;

(ii) The incapacitated child is emancipated through marriage; or

(iii) The incapacitated child dies.

(2) The following forms of proof shall be submitted, as appropriate, with the member’s request to remove an incapacitated child as his or her Option A or Option B:

(A) A file-marked copy of the court’s order finding that the incapacitated child is no longer incapacitated;

(B) A copy of the incapacitated child’s marriage license or equivalent, marriage license recording document, or other legally acceptable proof of the existence of the marriage; or

(C) A copy of the incapacitated child’s death certificate.

(3) Once the proof required to remove an incapacitated child as the member’s Option A or Option B beneficiary is submitted to the system, the member may:

(A) Elect to return to an Option 1; or

(B)(i) If the member is married, designate his or her spouse as the Option A or Option B beneficiary within six (6) months of the date on which the system receives the proof required under this section.

(ii) The member’s election shall be effective on the first day of the month following the date on which the system receives the election form.

(g)(1) A member may designate any person as a residue beneficiary.

(2) A retiree’s residue, if any, shall be paid to the retiree’s residue beneficiary if the:

(A) Retiree dies before receiving annuity benefit payments equal to the residue amount; and

(B) Option beneficiary dies before receiving annuity benefit payments equal to the residue amount.

(3) If a residue beneficiary is not nominated or does not survive the death of the option beneficiary, the residue shall be paid to the retiree’s estate.

(4)(A) If a residue beneficiary survives the death of the retiree and the option beneficiary, but dies before payment of the residue can be issued by the system, the residue shall be paid to the residue beneficiary’s estate.

(B) If more than one (1) residue beneficiary survives the death of the retiree and option beneficiary, but all the residue beneficiaries die before payment of the residue can be issued by the system, the residue shall be paid to the estate of the most recently deceased residue beneficiary.

(C) If all residue beneficiaries predecease the retiree, the residue shall be paid to the retiree’s estate.

(h)(1) A member who designates a person or the parent or legal guardian of a person who is designated as a beneficiary of an annuity or benefit under Arkansas Code §§ 24-7-706, 24-7-709, 24-7-711, or 24-7-720 may elect to have the annuity or benefit paid to a special needs trust that meets the requirements of Arkansas Code § 24-7-739(a).

(2) The parent or legal guardian of a person who is eligible to receive an annuity under Arkansas Code § 24-7-710 may elect to have the annuity paid to a special needs trust that meets the requirements of Arkansas Code § 24-7-739(b).

(3) The system shall pay an annuity or benefit directly to a person if at the time that the person is entitled to receive an annuity or a benefit payment:

(A) A special needs trust that meets the requirements of Arkansas Code § 24-7-739(a) or Arkansas Code § 24-7-739(b) has not been established for the benefit of the person; or

(B) A special needs trust that meets the requirements of Arkansas Code § 24-7-739(a) or Arkansas Code § 24-7-739(b) that has been established for the benefit of the person cannot be identified by the system or has ceased to exist.

History

• History: Ark. R. 2025-30 (eff. December 5, 2025) Authorities: Arkansas Code § 24-7-305; Arkansas Code § 24-7-739

24 CAR § 10-614 Change of marital status {#sec-24-car-10-614 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-614}

24 CAR § 10-614. Change of marital status.

(a)(1) If the marital status of a retiree changes due to the death of the retiree’s spouse or a marriage dissolution, the retiree may choose to:

(A) Cancel his or her designation of the former spouse as a beneficiary; or

(B) Designate a dependent child as a replacement beneficiary if the:

(i) Retiree previously designated the former spouse as his or her Option A or Option B beneficiary; and

(ii) Former spouse predeceases the retiree.

(2) If the retiree chooses to cancel the designation of his or her former spouse as his or her Option A or Option B beneficiary or chooses to designate a dependent child as a replacement Option A or Option B beneficiary:

(A) The retiree shall file with the Arkansas Teacher Retirement System a change of option beneficiary on a form approved by the system; and

(B) Any change in the benefit amount shall become effective the month after the system receives the approved form.

(b)(1) If a member designates one (1) or more alternative residual beneficiaries in lieu of his or her spouse, the member shall submit the names of each alternative residue beneficiary to the system on a form approved by the system.

(2) If a member designates one (1) or more alternative residue beneficiaries in lieu of his or her spouse, each alternative residue beneficiary shall receive an appropriate lump-sum payment of the greater of either:

(A) The member’s residue from the Teacher Deferred Retirement Option Plan (T-DROP); or

(B) The member’s contributions.

24 CAR § 10-615 Final benefit check {#sec-24-car-10-615 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-615}

24 CAR § 10-615. Final benefit check.

(a)(1)(A) In the case of a retiree, benefits are payable through the month in which the retiree's death occurs.

(B) If a final benefit payment is not delivered in the normal course of business, the benefit payment shall be sent in the following order until delivered:

(i) To the member’s residue beneficiary, if any;

(ii) To the member’s lump-sum death beneficiary, if any;

(iii) To the member’s estate, if any; or

(iv) To the trust assets of the Arkansas Teacher Retirement System.

(2)(A) In the case of an option beneficiary, benefits are payable through the month in which the last option beneficiary’s death occurs.

(B)(i) If an option beneficiary dies before receiving the last check, the system shall pay the final check in the normal manner paid before death.

(ii) If payment of the final check in the normal course becomes impossible, the final option beneficiary’s annuity check shall be returned the system.

(b) The Board of Trustees of the Arkansas Teacher Retirement System shall direct a benefit payment amount forfeited to the trust assets of the system if the:

(1) Benefit payment cannot be made five (5) years after the benefit payment is due because the location of the member or the identity and location of the member’s beneficiary or personal representative cannot be ascertained by mailing the benefit payment to the last known address of the member, beneficiary, or personal representative in the system’s records; and

(2) Neither the member, beneficiary, or personal representative submitted paperwork or forms approved by the system updating his or her location or last known address to the system before the expiration of five (5) years from when the benefit payment is due.

24 CAR § 10-616 Correction of errors and collection of overpayments {#sec-24-car-10-616 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-616}

24 CAR § 10-616. Correction of errors and collection of overpayments.

(a)(1) If a change or error in the records of the Arkansas Teacher Retirement System is discovered during the look-back period and results in either an overpayment or underpayment to the system, the Board of Trustees of the Arkansas Teacher Retirement System shall authorize the system’s staff to:

(A) Correct the error in the records;

(B) Adjust a benefit or any other amount payable to the corrected amount as far as practicable; and

(C) Take all necessary and appropriate action, including without limitation the options allowed under Arkansas Code § 24-7-205(b).

(2)(A) The board or its designee may adjust the records of the system, a covered employer, and a member beyond the look-back period if the board determines that the time limitation imposed by the look-back period will result in a manifest injustice in a specific case.

(B) Before making an adjustment of benefits that causes a reduction of the benefits or pursuing any other collection action, the system shall provide notice to the person who is the subject of the adjustment and the notice shall:

(i) State the amount determined to be a receivable;

(ii) State the reasons underlying the determination;

(iii) Describe the process for disputing an adjustment of benefits; and

(iv) Suggest alternate methods for payment of the receivable.

(b)(1) The manifest injustice process shall not be used to address a change, omission, or error in the records of the system that may be corrected within the look-back period.

(2) The manifest injustice process may be used to correct a change, omission, or error in the records of the system discovered after the look-back period if the board determines that the time limitation imposed by the look-back period would cause a manifest injustice.

(c) If a member is subject to a qualified domestic relations order and is paid a benefit or payment by the system to which the member is not entitled, and it is discovered during the look-back period, then a receivable is created and the board or its designee, may collect the amount due to the system.

(d)(1) Appeals to dispute collections shall be made according to the procedures in 24 CAR § 10-1001 et seq.

(2) During the appeal process, retirement benefits may continue to be paid.

(3) Actions that affect benefit rights shall not be corrected or adjusted further than a five-year look-back period unless a manifest injustice has occurred or an exception exists under Arkansas Code § 24-7-205(c).

(4) A determination by the system of a manifest injustice in a particular instance due to a technical error or error in judgment is discretionary and governed by Arkansas Code § 24-7-205.

(e)(1) The Executive Director of the Arkansas Teacher Retirement System may waive interest on required contributions in an amount not to exceed five thousand dollars ($5,000).

(2) A request to excuse an interest amount exceeding five thousand dollars ($5,000) shall be submitted to the board for review.

(3) The executive director shall report any amounts excused under this section to the board.

(f)(1) The executive director may approve the correction of a change, omission, or error in the records of the system and implement a resolution that has a direct financial impact to the system of up to five thousand dollars ($5,000) without obtaining board approval.

(2) Board approval shall be required to implement a resolution that has a direct financial impact to the system in excess of five thousand dollars ($5,000).

(g) If required, a receivable under this section that is found by the board or its designee to be uncollectible or for which adjustment or payment has been waived shall be submitted to the Chief Fiscal Officer of the State for abatement pursuant to Arkansas Code §§ 19-2-301 — 19-2-307.

History

• History: Ark. R. 2025-30 (eff. December 5, 2025) Authority: Arkansas Code § 24-7-305

Subpart 7

24 CAR § 10-701 Definitions {#sec-24-car-10-701 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-701}

24 CAR § 10-701. Definitions.

As used in this subpart:

(1) “CBA” means cash balance account;

(2) "Fiscal year" means the operating year for the State of Arkansas that begins on July 1 of each calendar year and ends on June 30 of the next calendar year;

(3) “Plan deposit” means a deposit made to each plan participant's Teacher Deferred Retirement Plan account;

(4) "Plan interest" means one (1) or more interest rates per annum that are adopted by the Board of Trustees of the Arkansas Teacher Retirement System by the end of the first quarter of the fiscal year in which the interest rate shall apply in order for the appropriate interest to be credited to each plan participant’s Teacher Deferred Retirement Option Plan account in the years following the Board of Trustees of the Arkansas Teacher Retirement System adoption of the interest rate;

(5) “Plan participant” means a member who elects to participate in the Teacher Deferred Retirement Option Plan;

(6) "Post 10-year T-DROP interest" means a rate per annum that is compounded annually and adopted by the Board of Trustees of the Arkansas Teacher Retirement System by the end of the first quarter of the fiscal year in which the interest rate shall apply in order for the interest to be credited on June 30 to the T-DROP account of a plan participant who has not retired and whose participation in T-DROP has ended;

(7) "Quarter" means one-fourth (1/4) of a fiscal year as follows:

(A) First quarter: July 1 through September 30;

(B) Second quarter: October 1 through December 31;

(C) Third quarter: January 1 through March 31; and

(D) Fourth quarter: April 1 through June 30;

(8) "Retiree" means a member receiving a retirement annuity from the Arkansas Teacher Retirement System;

(9) "Salary" means the same as defined in Arkansas Code § 24-7-202 and does not include nonmandatory compensation that is taxable by the Internal Revenue Service;

(10) “T-DROP” means the same as defined in Arkansas Code § 24-7-202;

(11) "T-DROP Cash Balance Account" means a financial account established for a plan participant who elects to defer distribution of his or her Teacher Deferred Retirement Option Plan account balance at the time that he or she is eligible to receive a lump-sum distribution of the Teacher Deferred Retirement Option Plan account balance;

(12) "T-DROP Cash Balance Account interest" means the interest rate per annum applicable to a plan participant's T-DROP Cash Balance Account, and compounded monthly into a plan participant's T-DROP Cash Balance Account; and

(13) “Uniformed services of the United States” means service in the:

(A) United States Armed Forces;

(B) Army National Guard;

(C) Air National Guard when engaged in:

(i) Active duty for training, state active duty;

(ii) Inactive duty training; or

(iii) Full-time National Guard duty;

(D) United States Commissioned Corps of the Public Health Service; and

(E) Any other category of persons designated by the President of the United States in time of war or emergency.

History

• Codification Notes: “T-DROP” means Teacher Deferred Retirement Option Plan. Authority: Arkansas Code § 24-7-305

24 CAR § 10-702 Return to service {#sec-24-car-10-702 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-702}

24 CAR § 10-702. Return to service.

(a) Unless otherwise provided by the Office of Personnel Management’s Policy No. 65, effective July 1, 2009, a retiree who terminates employment under Arkansas Code § 24-7-502 or reaches the normal retirement age may:

(1) Accept employment with a covered employer; and

(2) Continue to receive a monthly retirement annuity without a limitation of his or her retirement annuity.

(b)(1) Both a retiree who returns to service with a covered employer and the covered employer who employs the retiree shall report the retiree’s employment to the Arkansas Teacher Retirement System using forms and reports required by the system.

(2) A retiree who receives monthly retirement benefits and is employed by a covered employer shall not:

(A) Pay member contributions;

(B) Be responsible for employer contributions; or

(C) Accrue additional service credit.

(3) A covered employer that employs a retiree shall pay employer contributions on the salary paid to the retiree in an amount equal to the employer contribution rate applicable to an active member.

24 CAR § 10-703 Teacher Deferred Retirement Option Plan — Participation {#sec-24-car-10-703 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-703}

24 CAR § 10-703. Teacher Deferred Retirement Option Plan — Participation.

(a) In lieu of terminating employment and voluntarily retiring:

(1) An active member with at least thirty (30) years of service credit may elect to participate in T-DROP and continue to work for a covered employer; and

(2) An active member with at least twenty-eight (28) years of service credit may elect to participate early in T-DROP and continue to work for a covered employer.

(b) The service credit of a plan participant shall be determined using the same rules that apply for determining the service credit of an active member.

(c) On-call availability shall not be used for:

(1) T-DROP service credit requirements; or

(2) Monthly plan deposits to a plan participant’s T-DROP account.

(d) An active member who elects to participate in T-DROP and continues his or her covered employment defers the receipt of retirement benefits.

(e)(1) Service credit in the Arkansas Teacher Retirement System, a reciprocal system, or a combination of service credit in the Arkansas Teacher Retirement System and the reciprocal system may be counted to meet the minimum service credit requirements for participation under T-DROP and the reciprocal system’s deferred retirement option plan if the reciprocal system offers members of the reciprocal system a deferred retirement option plan.

(2) A retirement benefit payable by a reciprocal system shall be determined according to the law, rules, and regulations applicable to the reciprocal system.

(3)(A) The final average salary of a plan participant with reciprocal service credit shall be the highest final average salary calculated by the Arkansas Teacher Retirement System or a reciprocal system in which the plan participant has at least two (2) years of service credit.

(B) Each reciprocal system shall calculate final average salary in accordance with the law applicable to the reciprocal system.

(C) A salary earned as a member of the Arkansas Judicial Retirement System or an alternate retirement plan shall not be used to calculate final average salary.

(f)(1) A reciprocal system shall credit a deferred retirement option plan account with plan deposits and plan interest according to the deferred retirement option program applicable

(2) The Arkansas Teacher Retirement System shall not pay a monthly plan deposit into a plan participant’s T-DROP account for more than ten (10) consecutive years from the date on which the plan participant enters T-DROP.

History

• Codification Notes: “T-DROP” means Teacher Deferred Retirement Option Plan. Authority: Arkansas Code § 24-7-305

24 CAR § 10-704 Teacher Deferred Retirement Option Plan — Benefits {#sec-24-car-10-704 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-704}

24 CAR § 10-704. Teacher Deferred Retirement Option Plan — Benefits.

(a)(1) A plan participant shall elect an annuity option provided in Arkansas Code § 24-7-706 at the time the plan participant separates from service and either:

(A) Applies for retirement upon reaching the normal retirement age; or

(B) Is granted a monthly retirement benefit.

(2) Upon electing to retire, if a plan participant elects to cash out or annuitize his or her T-DROP account balance, the plan participant shall not be permitted to reenroll in T-DROP after his or her T-DROP account is distributed unless the plan participant cancels his or her election under Arkansas Code § 24-7-1302.

(b)(1) A cost-of-living increase under Arkansas Code § 24-7-713 or Arkansas Code § 24-7-727 shall be applied to the T-DROP benefit that is used to calculate the plan deposit.

(2) A T-DROP benefit and the cost-of-living increase may be modified as provided by this section and the law applicable to the Arkansas Teacher Retirement System.

(c) A plan participant’s T-DROP benefit shall:

(1) Be the monthly straight life annuity benefit that the plan participant would have received if he or she voluntarily retired; and

(2) Not include a monthly benefit stipend otherwise provided under Arkansas Code § 24-7-713.

History

• Codification Notes: “T-DROP” means Teacher Deferred Retirement Option Plan. Authority: Arkansas Code § 24-7-305

24 CAR § 10-705 Teacher Deferred Retirement Option Plan — Plan deposits {#sec-24-car-10-705 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-705}

24 CAR § 10-705. Teacher Deferred Retirement Option Plan — Plan deposits.

(a)(1) During participation in T-DROP, the Arkansas Teacher Retirement System shall credit a plan participant’s T-DROP account with plan deposits and plan interest.

(2) A plan participant’s T-DROP plan deposit may be reduced as provided by the law and rules applicable to the system.

(3)(A) The system shall provide each plan participant with an annual statement of the plan participant’s T-DROP account.

(B) The statement of plan deposits and plan interest shall not be final until the annual accounting has been reconciled for part-time plan participants.

(b) A plan participant’s plan deposit shall be determined as follows:

(1) If a plan participant has at least thirty (30) years of credited service in the system, including combined service with a reciprocal system, the plan deposit shall be the plan participant's T-DROP benefit, as calculated at the plan participant’s entry into T-DROP, reduced by one percent (1%) for each year of credited service, including fractions of a year; or

(2) If a plan participant enters T-DROP early, the plan participant’s plan deposit shall be the plan participant’s T-DROP benefit, as calculated at the plan participant’s entry into T-DROP, reduced by:

(A) One percent (1%) for each year of credited service, including fractions of a year; and

(B) At least an additional one-half percent (0.5%), but no more than one percent (1%), of the initially reduced plan deposit, for each month of credited service under thirty (30) years.

(c)(1) A plan participant’s T-DROP account shall be credited with twelve (12) monthly plan deposits per fiscal year if the:

(A) Plan participant earns at least one hundred sixty (160) days of service credit in a fiscal year and does not terminate employment, retire, or die during the fiscal year; or

(B) Plan participant’s covered employer does not terminate the employer-employee relationship.

(2)(A) If a plan participant earns less than one hundred sixty (160) days of service credit in a fiscal year, the plan deposit shall be made in accordance with the part-time employment schedule as follows:

(i) If a plan participant earns at least fifteen (15) days of service credit in the first or fourth quarter of the fiscal year, the plan participant’s T-DROP account shall be credited with three (3) monthly plan deposits for the quarter;

(ii) If a plan participant earns less than fifteen (15) days of service credit in the first or fourth quarter of the fiscal year, the plan participant’s T-DROP shall not be credited with a plan deposit for the three (3) months of that quarter;

(iii) If a plan participant earns at least twenty-five (25) days of service credit in the second or third quarter of the fiscal year, the plan participant’s T-DROP account shall be credited with three (3) monthly plan deposits for the quarter; and

(iv) If a plan participant earns less than twenty-five (25) days of service credit in the second or third quarter of the fiscal year, the plan participant’s T-DROP shall not be credited with a plan deposit for the three (3) months of that quarter.

(B) If plan participant is required to work at least fifteen (15) days in a quarter in order for the plan participant to receive all three (3) monthly deposits and the plan participant does not complete the quarter due to the termination of the employee-employer relationship, the plan deposit shall be as follows:

(i) The plan participant shall receive one (1) monthly deposit if the plan participant works:

(a) At least one (1) day and terminates employment in the first month of the uncompleted quarter; or

(b) Between one (1) and five (5) days and terminates employment in any of the three (3) months of the uncompleted quarter;

(ii) The plan participant shall receive two (2) monthly deposits if the plan participant works:

(a) At least six (6) days and terminates employment in the second month of the uncompleted quarter; or

(b) Between six (6) and ten (10) days and terminates employment in the second or third month of the uncompleted quarter; and

(iii) The plan participant shall receive three (3) monthly deposits if the plan participant works at least eleven (11) days and terminates employment in the third month of the uncompleted quarter.

(C) If a plan participant is required to work at least twenty-five (25) days in a quarter in order for the plan participant to receive all three (3) monthly deposits and the plan participant does not complete the quarter due to the termination of the employee-employer relationship, the plan deposit shall be as follows:

(i) The plan participant shall receive one (1) monthly deposit if he or she works:

(a) At least one (1) day and terminates employment in the first month of the uncompleted quarter; or

(b) Between one (1) and eight (8) days and terminates employment in any of the three (3) months of the uncompleted quarter;

(ii) The plan participant shall receive two (2) monthly deposits if the plan participant works:

(a) At least nine (9) days and terminates employment in the second month of the uncompleted quarter; or

(b) Between nine (9) and sixteen (16) days and terminates employment in the second or third month of the uncompleted quarter; and

(iii) The plan participant shall receive three (3) monthly deposits if the plan participant works at least seventeen (17) days and terminates employment in the third month of the uncompleted quarter.

History

• Codification Notes: “T-DROP” means Teacher Deferred Retirement Option Plan. Authority: Arkansas Code § 24-7-305

24 CAR § 10-706 Teacher Deferred Retirement Option Plan — Plan interest {#sec-24-car-10-706 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-706}

24 CAR § 10-706. Teacher Deferred Retirement Option Plan — Plan interest.

(a)(1) A plan participant who has not retired shall receive plan interest at the end of each fiscal year.

(2) The plan interest rate shall be based on a:

(A) Fixed interest rate that is adopted by the Board of Trustees of the Arkansas Teacher Retirement System by the end of the first quarter of the fiscal year in which the interest rate shall apply; or

(B) Variable interest rate formula that is based on investment returns and other factors adopted by the board by the end of the first quarter of the fiscal year in which the interest rate shall apply.

(3) The board shall adopt a plan interest rate by the end of the first quarter of the fiscal year in which the plan interest shall apply if a variable interest rate formula is used.

(b)(1) If a plan participant continues covered employment after ten (10) consecutive years from the date of his or her entry into T-DROP, the plan participant’s T-DROP account shall be credited with a post 10-year T-DROP interest rate.

(2) The board shall set the post 10-year T-DROP interest rate:

(A) By the end of the first quarter of the fiscal year in which the interest rate shall apply; and

(B) At the same meeting in which the plan interest rate is set.

(3) The post 10-year T-DROP interest rate shall be credited to a plan participant’s T-DROP account on June 30 of each year, or through the date of retirement, whichever occurs first.

(4) The post 10-year T-DROP interest rate for T-DROP shall be determined by the board and adopted by the end of the first quarter of the fiscal year in which the interest rate shall apply.

(c) In addition to the interest rate for the fiscal year, the board may adopt an incentive rate during the fiscal year if investment returns justify an incentive rate for the fiscal year.

History

• Codification Notes: “T-DROP” means Teacher Deferred Retirement Option Plan. Authority: Arkansas Code § 24-7-305

24 CAR § 10-707 Teacher Deferred Retirement Option Plan — Suspension or cessation of plan deposits and plan interest {#sec-24-car-10-707 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-707}

24 CAR § 10-707. Teacher Deferred Retirement Option Plan — Suspension or cessation of plan deposits and plan interest.

(a) Monthly plan deposits to a plan participant’s T-DROP account shall stop if the plan participant:

(1) Separates from service with a covered employer and is granted a monthly retirement benefit from either the Arkansas Teacher Retirement System or a reciprocal plan;

(2) Reaches normal retirement age and retires without separating from covered employment;

(3) Separates from covered employment and does not apply for retirement benefits; or

(4) Dies.

(b)(1) If a plan participant separates from covered employment and does not apply for retirement benefits, monthly plan deposits into the plan participant’s T-DROP account shall be suspended beginning on the month in which the plan participant separates from covered employment.

(2) The plan participant’s T-DROP account shall not be credited with a plan deposit for the duration of the plan participant’s separation from covered employment.

(3) Monthly plan deposits into a plan participant’s T-DROP account shall resume if the plan participant returns to covered employment before the end of the plan period.

(c) If a plan participant applies for retirement, the retirement benefits shall be paid according to the plan participant’s T-DROP account balance:

(1) At the time of the plan participant’s separation from covered employment; or

(2) In the month before the effective date of the plan participant’s retirement benefits after the plan participant reaches the normal retirement age.

(d) A plan participant shall remain eligible for annual plan interest to be credited to his or her T-DROP account if the member:

(1) Does not separate from covered employment; and

(2) Remains on the covered employer’s payroll without earning sufficient service credit for monthly plan deposits.

History

• Codification Notes: “T-DROP” means Teacher Deferred Retirement Option Plan. Authority: Arkansas Code § 24-7-305

24 CAR § 10-708 Teacher Deferred Retirement Option Plan — Uniformed services of the United States {#sec-24-car-10-708 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-708}

24 CAR § 10-708. Teacher Deferred Retirement Option Plan — Uniformed services of the United States.

(a) A plan participant shall be treated as not having incurred a break in service with a covered employer if the plan participant leaves covered employment to voluntarily or involuntarily serve in the uniformed services of the United States and later returns to covered employment.

(b) A covered employer shall certify to the Arkansas Teacher Retirement System that reemployment of the plan participant complies with Section 4312 of the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA), 38 U.S.C § 430 et seq.

24 CAR § 10-709 Teacher Deferred Retirement Option Plan — Internal Revenue Code {#sec-24-car-10-709 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-709}

24 CAR § 10-709. Teacher Deferred Retirement Option Plan — Internal Revenue Code.

(a) The operation of T-DROP shall comply with Section 415 and other applicable sections of the Internal Revenue Code of 1986, 26 U.S.C. § 1 et seq.

(b) Any provision concerning the operation of T-DROP that conflicts with Section 415 and other applicable sections of the Internal Revenue Code of 1986, 26 U.S.C. § 1 et seq., is invalid.

History

• Codification Notes: “T-DROP” means Teacher Deferred Retirement Option Plan. Authority: Arkansas Code § 24-7-305

24 CAR § 10-710 Teacher Deferred Retirement Option Plan — Distribution election {#sec-24-car-10-710 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-710}

24 CAR § 10-710. Teacher Deferred Retirement Option Plan — Distribution election.

A member may cancel his or her original T-DROP distribution election and elect another distribution option if the member:

(1) Did not elect to receive all or a part of his or her T-DROP account balance rolled over into a qualified retirement plan;

(2) Has not previously changed his or her election;

(3) Cancels his or her election before the end of the second full calendar month immediately following his or her effective retirement date;

(4) Files a new distribution election form with the Arkansas Teacher Retirement System; and

(5) Repays the system any amount that he or she is no longer entitled to have received as a result of changing his or her election.

History

• Codification Notes: “T-DROP” means Teacher Deferred Retirement Option Plan. History: Ark. R. 2025-30 (eff. December 5, 2025) Authority: Arkansas Code § 24-7-305

24 CAR § 10-711 Teacher Deferred Retirement Option Plan — Rollover of account balance {#sec-24-car-10-711 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-711}

24 CAR § 10-711. Teacher Deferred Retirement Option Plan — Rollover of account balance.

(a) A lump-sum distribution of a plan participant’s T-DROP account balance may be rolled over into the plan participant’s qualifying retirement plan.

(b) The Arkansas Teacher Retirement System shall rollover the T-DROP account lump-sum balance into only one (1) qualifying retirement plan.

History

• Codification Notes: “T-DROP” means Teacher Deferred Retirement Option Plan. Authority: Arkansas Code § 24-7-305

24 CAR § 10-712 T-DROP Cash Balance Account Program — Internal Revenue Code {#sec-24-car-10-712 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-712}

24 CAR § 10-712. T-DROP Cash Balance Account Program — Internal Revenue Code.

(a)(1) In lieu of electing a lump-sum distribution of his or her T-DROP account balance, a plan participant may elect to transfer all or a part of his or her T-DROP account balance into a CBA.

(2) If a plan participant elects to have only a part of his or her T-DROP account balance transferred into a CBA, the remaining balance of the T-DROP account shall be annuitized under the Arkansas Teacher Retirement System or paid as a lump-sum distribution.

(3) A CBA shall be credited monthly with T-DROP Cash Balance Account interest and debited monthly for withdrawals and distributions beginning on the month immediately following the establishment of the CBA.

(b) A CBA established on or after July 1, 2021, shall be credited with T-DROP Cash Balance Account interest as follows:

(c) The Board of Trustees of the Arkansas Teacher Retirement System may:

(1) Increase the T-DROP Cash Balance Account interest rate for future fiscal years and on an ad hoc basis;

(2) Consider current market conditions, competing financial offerings to plan participants, bank rates for certificates of deposits, the status of the system’s return on investments, and the current state of participation in the T-DROP Cash Balance Account program when determining the T-DROP Cash Balance Account interest rate;

(3) By resolution periodically authorize a special ad hoc incentive payment for CBAs if the board determines that payment of the special ad hoc incentive is likely to encourage continued participation and increase future participation in the T-DROP Cash Balance Account program; and

(4) By resolution adopt a new T-DROP Cash Balance Account Interest Schedule (schedule) for future CBAs.

(d) An ad hoc increase may be:

(1) Set as a single amount to be applied to each CBA; or

(2) Computed as a graduated amount based on the length of time the CBA has existed.

(e)(1) The T-DROP Cash Balance Account interest rate shall remain in effect until the board adopts a new schedule with lower interest rates for future CBA accounts established by the end of the first quarter of the fiscal year in which the interest rate shall apply.

(2) A CBA established before the effective date of a board resolution adopting a new schedule for future CBAs shall not be subject to the provisions of the new schedule.

(f) If a plan participant dies with a CBA balance, the CBA balance shall be paid as provided under Arkansas Code § 24-7-1310.

(g)(1) If a plan participant’s CBA has a balance, a plan participant may withdraw funds from his or her CBA up to six (6) times per quarter by using forms approved by the system.

(2) A plan participant may make more than six (6) withdrawals in a quarter with the approval of the Executive Director of the Arkansas Teacher Retirement System.

(3) A plan participant may request a recurring monthly distribution of a set amount from his or her CBA until the CBA balance is depleted or the plan participant withdraws his or her request.

(4)(A) Minimum distributions made to a plan participant shall comply with Arkansas Code § 24-7-730 and the Internal Revenue Code of 1986, 26 U.S.C. § 1 et seq.

(B) A retiree who attains the required minimum distribution age and does not cease to be active in the system shall not have required minimum distributions deducted from his or her CBA if the retiree:

(i) Either is a rehired retiree or has continued to work for a covered employer without a break in service; and

(ii) The retiree’s covered employer reports the retiree to the system and pays employer contributions for the retiree.

History

• Codification Notes: “T-DROP” means Teacher Deferred Retirement Option Plan. History: Ark. R. 2025-30 (eff. December 5, 2025) Authority: Arkansas Code § 24-7-305

Subpart 8

24 CAR § 10-801 Definitions {#sec-24-car-10-801 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-801}

24 CAR § 10-801. Definitions.

As used in this subpart:

(1) "Alternate payee" means a spouse, former spouse, child, or other dependent of a member under Arkansas law;

(2) “Application”, for the purpose of retirement eligibility, means an application form and any other documents required by the Arkansas Teacher Retirement System to establish a member’s eligibility to retire;

(3) “Immediately eligible”, for the purpose of survivor annuity benefits, means a survivor of an active member who at the time of his or her death would have been eligible to receive benefits and could have retired from the Arkansas Teacher Retirement System;

(4) “Legal parent” means the biological father or mother of a child or the adoptive father or mother of a child;

(5) "Lump-sum death beneficiary" means one (1) or more persons or entities designated in writing by the member to receive payment of the lump-sum death benefit under Arkansas Code § 24-7-720;

(6) "Lump-sum death benefit" means a monetary amount set by the Board of Trustees of the Arkansas Teacher Retirement System, and paid by the Arkansas Teacher Retirement System to one (1) or more lump-sum death beneficiaries;

(7) "QDRO" means a court order that:

(A) Meets the definition of a qualified domestic relations order under Arkansas Code § 9-18-101; or

(B) Assigns a portion of a member’s retirement benefit to an alternate payee upon the member’s retirement or a refund of the member’s contributions at the request of the member; and

(8) “Qualifying member” means:

(A) For the purposes of eligibility for a lump-sum death benefit, a member or retiree to whom one (1) of the following categories apply:

(i) The member:

(a) Is deceased;

(b) Was an active member of the Arkansas Teacher Retirement System before July 1, 2007; and

(c) Has five (5) or more years of actual service, including actual service for the year immediately preceding his or her death;

(ii) The member:

(a) Is deceased;

(b) Was an active member of the Arkansas Teacher Retirement System on or after July 1, 2007; and

(c) Has ten (10) or more years of actual service, including actual service for the year immediately preceding his or her death;

(iii) The retiree:

(a) Dies before July 1, 2007; and

(b) Has accrued five (5) or more years of actual service, including actual service, for the year immediately preceding his or her death; or

(iv) The retiree:

(a) Dies on or after July 1, 2007; and

(b) Has accrued ten (10) or more years of actual service, including actual service for the year immediately preceding his or her death; or

(B) For the purpose of an eligible survivor qualifying for survivor annuity benefits under Arkansas Code § 24-7-710, a member who:

(i) Is an active member;

(ii) Has at least five (5) years of actual service and reciprocal service, including credited service for the year immediately preceding his or her death; and

(iii) Is active as provided in Arkansas Code § 24-7-710(f) and this subpart.

History

• Codification Notes: “QDRO” means qualified domestic relations order. Authority: Arkansas Code § 24-7-305

24 CAR § 10-802 Survivors {#sec-24-car-10-802 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-802}

24 CAR § 10-802. Survivors.

(a) The law in effect on the date of a qualifying member’s death shall determine the:

(1) Eligibility of a qualifying member’s spouse or child to receive survivor annuity benefits;

(2) Amount of the survivor annuity benefits to be received by an eligible survivor;

(3) The time at which an eligible survivor may begin receiving survivor annuity benefit payments; and

(4) Member’s effective retirement date.

(b)(1) The Arkansas Teacher Retirement System shall send each survivor who is identified by the qualifying member to the system and who may be eligible for a survivor annuity benefit written notice of his or her potential eligibility at the survivor’s last address on file with the system.

(2) Survivor annuity benefits shall not be paid to the survivor of a qualifying member until the survivor provides the system with sufficient proof of his or her eligibility to receive survivor annuity benefit payments.

24 CAR § 10-803 Survivors — Qualifying members {#sec-24-car-10-803 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-803}

24 CAR § 10-803. Survivors — Qualifying members.

(a) A member shall be considered active for the purpose of an eligible survivor qualifying for survivor annuity benefits under Arkansas Code § 24-7-710 if:

(1) The member has at least:

(A) Ten (10) days of service credit in each prior quarter of the fiscal year from the time the fiscal year began or the member was employed by a covered employer, whichever occurs last; and

(B) One (1) quarter with ten (10) days of service; or

(2) Either of the following apply to the member:

(A) The member has earned at least ten (10) days of service credit in the quarter of the member’s death and in each quarter before the member’s death, collectively; or

(B) Less than ten (10) working days have elapsed in the quarter of the member’s death.

(b) A member shall also be considered active for an additional fiscal year following the last fiscal year in which the member renders actual service to a covered employer and obtains at least one-fourth (1/4) of a year of service credit.

24 CAR § 10-804 Survivors — Surviving spouse {#sec-24-car-10-804 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-804}

24 CAR § 10-804. Survivors — Surviving spouse.

(a) An eligible survivor of a qualifying member may receive survivor annuity benefits after the death of the qualifying member.

(b) Unless a qualifying member designates one (1) or more alternative residue beneficiaries by written form approved by the Arkansas Teacher Retirement System, the survivor annuity benefits provided for in Arkansas Code § 24-7-710 shall be paid to the spouse of the qualifying member if the spouse:

(1) Survives the qualifying member; and

(2) Was married to the qualifying member for at least one (1) year immediately before the qualifying member’s death.

(c)(1) A surviving spouse who is eligible to receive surviving spouse annuity benefits may file a waiver of his or her right to the surviving spouse annuity benefits with the system if, at the time of the qualifying member’s death, the qualifying member does not have children who are eligible to receive dependent child survivor annuity benefits.

(2) If the surviving spouse files a waiver of his or her right to receive surviving spouse annuity benefits, then the surviving spouse may receive the qualifying member’s accumulated contributions plus interest, if any, in a lump-sum distribution.

(d)(1) Pursuant to Arkansas Code § 24-7-710, surviving spouse annuity benefits are payable for the surviving spouse's lifetime, regardless of the remarriage of the surviving spouse.

(2) The surviving spouse may defer receipt of the surviving spouse annuity benefits, if applicable, under the deferred retirement provisions of Arkansas Code § 24-7-707.

(3) A surviving spouse shall submit the following documents to the system before a surviving spouse annuity benefit payment is issued to the surviving spouse:

(A) Proof of the qualifying member’s death and date of death from the qualifying member’s death certificate or another legally acceptable document;

(B) Proof of the surviving spouse’s taxpayer identification number from a Social Security card or another authenticating document;

(C) Proof of the surviving spouse's date of birth from a birth certificate or another authenticating document; and

(D) Proof of the marriage between the qualifying member and surviving spouse from:

(i) A marriage license or equivalent;

(ii) A marriage license recording document; or

(iii) Another legally acceptable proof of the existence of the marriage; and

(E) Any additional documentation required by the system.

(4) A surviving spouse who is immediately eligible to receive a monthly survivor annuity benefit after the death of the qualifying member shall receive monthly survivor annuity benefits:

(A) Beginning the month after the death of the qualifying member if the survivor application is filed by the end of the sixth full calendar month following the date of the qualifying member’s death; or

(B) Beginning the month in which the survivor application is filed with the system if at the time of the qualifying member’s death the qualifying member:

(i) Accumulated at least twenty-five (25) years of credited service and was eligible to receive a voluntary retirement or early retirement annuity; or

(ii) Reached sixty (60) years of age and was eligible to receive a deferred retirement annuity.

(5) A surviving spouse who is not immediately eligible to receive a monthly survivor annuity benefit shall receive monthly survivor annuity benefits beginning the later of either the:

(A) Month following the date on which the qualifying member would have been eligible to receive retirement benefits had the qualifying member survived; or

(B) Date on which a survivor application is filed with the system.

History

• History: Ark. R. 2025-30 (eff. December 5, 2025) Authority: Arkansas Code § 24-7-305

24 CAR § 10-805 Survivors — Alternative residue beneficiary {#sec-24-car-10-805 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-805}

24 CAR § 10-805. Survivors — Alternative residue beneficiary.

(a) A member may change his or her alternative residue beneficiary designation and designate his or her spouse as a residue beneficiary under Arkansas Code § 24-7-710 by documenting the change on a form provided and approved by the Arkansas Teacher Retirement System.

(b)(1) A qualifying member may designate one (1) or more alternative beneficiaries, also known as alternative residue beneficiaries, to receive a lump-sum payment of the qualifying member’s residue in lieu of the qualifying member’s surviving spouse by using a beneficiary form provided and approved by the system.

(2) A surviving spouse annuity benefit or any other type of monthly benefit shall not be paid to a qualifying member’s surviving spouse if the qualifying member designates one (1) or more alternative residue beneficiaries to receive a lump-sum payment of the qualifying member’s residue in lieu of the qualifying member’s surviving spouse.

(3) A surviving spouse may elect Option A – 100% Survivor Annuity benefits if:

(A) The qualifying member:

(i) Designates only the surviving spouse as the primary residue beneficiary; and

(ii) Does not designate an alternative residue beneficiary as the primary residue beneficiary; or

(B)(i) The surviving spouse is ineligible for an annuity solely as a result of the qualifying member designating an alternative residue beneficiary and the alternative residue beneficiary waives his or her right to the residue.

(ii) An alternative residue beneficiary’s waiver of his or her right to the residue is not required if the qualifying member does not have a residue with a payable balance.

(c)(1) A member’s designation of his or her former spouse as the member’s alternative residue beneficiary shall not be honored by the system with regard to the former spouse if the:

(A) Member remarries;

(B) Member’s current spouse would be eligible to receive survivor annuity residue beneficiary; and

(C) System receives proof of the member’s remarriage in the manner required by the system before payment of the residue is issued to the former spouse.

(2) A member who remarries and desires to maintain his or her former spouse’s designation as the member’s alternative residue beneficiary shall file with the system a residue beneficiary designation form that:

(A) Designates his or her former spouse as the member’s alternative residue beneficiary; and

(B) Has a signature date of the member that is on or after the date of the member’s remarriage.

(3) The system shall not be obligated to recoup or reimburse a member’s current spouse for any residue amount paid to the member’s former spouse in accordance with a law, rule, or policy applicable to the system.

24 CAR § 10-806 Survivors — T-DROP plan participant {#sec-24-car-10-806 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-806}

24 CAR § 10-806. Survivors — T-DROP plan participant.

(a)(1) A participant in the Teacher Deferred Retirement Option Plan may designate one (1) or more alternative residue beneficiaries to receive a lump-sum payment of his or her T-DROP benefits in lieu of his or her surviving spouse.

(2) A T-DROP plan benefit, surviving spouse annuity benefit, or any other type of monthly benefit shall not be paid to a plan participant’s surviving spouse if the plan participant designates one (1) or more alternative residue beneficiaries to receive a lump-sum payment of his or her T-DROP benefits in lieu of his or her surviving spouse.

(3) A surviving spouse may elect Option A – 100% Survivor Annuity benefits if:

(A) The plan participant:

(i) Designates only the surviving spouse as the primary residue beneficiary; and

(ii) Does not designate an alternative residue beneficiary as the primary residue beneficiary; or

(B)(i) The surviving spouse is ineligible for an annuity solely as a result of the plan participant designating an alternative residue beneficiary and the alternative residue beneficiary waives his or her right to the residue.

(ii) An alternative residue beneficiary’s waiver of his or right to the residue is not required if the plan participant does not have a residue with a payable balance.

(b) A plan participant’s T-DROP residue that otherwise would have been paid pursuant to Arkansas Code § 24-7-709 shall be calculated as the greater of either of the following:

(1) The accumulated contributions and regular interest credited to the retirement reserve account as of the member’s effective retirement date reduced by the total amount of regular annuities paid, further reduced by amounts received from the T-DROP account in the form of a lump-sum or annuity benefit payments; or

(2) The T-DROP account as of the member’s effective retirement date reduced by amounts received from the T-DROP account in the form of a lump-sum or annuity benefit payments.

History

• Codification Notes: “T-DROP” means Teacher Deferred Retirement Option Plan. Authority: Arkansas Code § 24-7-305

24 CAR § 10-807 Survivors — Dependent children {#sec-24-car-10-807 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-807}

24 CAR § 10-807. Survivors — Dependent children.

(a)(1) A child of a qualifying member is eligible to receive a survivor annuity benefit under Arkansas Code § 24-7-710 if the child qualifies as a dependent child.

(2) A qualifying member’s child shall be eligible to qualify as a dependent child or maintain his or her status as a dependent child if:

(A) The qualifying member was the legal parent of the child at the time of the qualifying member’s death; and

(B) The child meets all other requirements to qualify as a dependent child or maintains his or her status as a dependent child.

(b) A child of a qualifying member qualifies as a dependent child if the child is:

(1) Not older than twenty-two (22) years of age; or

(2) Has been adjudged physically or mentally incapacitated by a court of competent jurisdiction.

(c) A qualifying member’s dependent child shall not be eligible to qualify as a dependent child again and shall have his or her dependent child annuity terminated by the system if the dependent child dies or ceases to qualify as a dependent child of the qualifying member.

History

• History: Ark. R. 2025-30 (eff. December 5, 2025) Authority: Arkansas Code § 24-7-305

24 CAR § 10-808 Survivors — Dependent children — Full-time students {#sec-24-car-10-808 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-808}

Codification Notes: 24 CAR § 10-808 was repealed by Ark. R. 2025-30 (eff. December 5, 2025). Authority: Arkansas Code § 24-7-305

24 CAR § 10-809 Survivors — Dependent children — Active military duty or training {#sec-24-car-10-809 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-809}

Codification Notes: 24 CAR § 10-809 was repealed by Ark. R. 2025-30 (eff. December 5, 2025). Authority: Arkansas Code § 24-7-305

24 CAR § 10-810 Survivors — Dependent children — Incapacitated child {#sec-24-car-10-810 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-810}

24 CAR § 10-810. Survivors — Dependent children — Incapacitated child.

A qualifying member’s child who qualifies as a dependent child because he or she has been adjudged physically or mentally incapacitated by a court of competent jurisdiction and for whom a guardian has been appointed shall continue to be eligible to receive a dependent child survivor annuity benefit as long as the incapacity exists, regardless of the age of the child.

24 CAR § 10-811 Survivors — Dependent children — Return to work and disability retirees {#sec-24-car-10-811 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-811}

24 CAR § 10-811. Survivors — Dependent children — Return to work and disability retirees.

(a) A dependent child annuity shall be payable to a surviving child of a disability retiree or a retiree who dies after returning to work if the child:

(1) Qualifies as a dependent child and is eligible for a dependent child annuity under the law and rules applicable to the Arkansas Teacher Retirement System; and

(2) Has not been designated as an option beneficiary of the retiree who dies after returning to work or the disability retiree.

(b) The same rules applicable to the surviving child of qualifying member shall apply to the surviving child of a retiree who dies after returning to work.

History

• History: Ark. R. 2025-30 (eff. December 5, 2025) Authority: Arkansas Code § 24-7-305

24 CAR § 10-812 Survivors — Dependent children — Calculation and payment of survivor annuity {#sec-24-car-10-812 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-812}

24 CAR § 10-812. Survivors — Dependent children — Calculation and payment of survivor annuity.

(a) The amount of the survivor annuity benefit payable to a dependent child shall be the amount provided in Arkansas Code § 24-7-710.

(b) The highest of the following shall be used to calculate a dependent child’s survivor annuity benefit:

(1) The total salary that the qualifying member would have received in the fiscal year in which the qualifying member died; or

(2) The qualifying member’s highest salary in another fiscal year.

(c) The dependent child survivor annuity shall remain at the initial monthly amount, adjusted by an annual cost-of-living adjustment increase, as may be designated by the Board of Trustees of the Arkansas Teacher Retirement System.

(d) If more than one (1) dependent child of a qualifying member receives survivor annuity benefits, each dependent child's survivor annuity benefit shall:

(1) Remain at the initial monthly amount; and

(2) Not be readjusted if the survivor annuity benefit payments to one (1) or more of the dependent children terminates.

(e) A dependent child shall receive monthly survivor annuity benefits:

(1) Beginning the month after the qualifying member’s death if the survivor application is filed with the Arkansas Teacher Retirement System by the end of the sixth full calendar month following the qualifying member’s death; or

(2) If a survivor application is not filed with the system by the end of the sixth full calendar month following the qualifying member’s death, beginning the month in which the survivor application is filed with the system.

(f) A dependent child shall submit the following documents to the system before a survivor annuity benefit payment is issued to the dependent child:

(1) Proof of the qualifying member’s death and date of death from the qualifying member’s death certificate or another legally acceptable document;

(2) Proof of the dependent child’s taxpayer identification number from a Social Security card or other authenticating documents;

(3) Proof that the dependent child is a child of the qualifying member from the dependent child’s birth certificate or another legally acceptable document;

(4) Proof of the dependent child's date of birth from a birth certificate or another authenticating document;

(5) If applicable, a file-marked court order finding the dependent child physically or mentally incapacitated; and

(6) If applicable, proof of enrollment as a full-time student from an accredited:

(A) Secondary school;

(B) College;

(C) University; or

(D) Vocational-technical school.

(g)(1) A deposit account designated to receive a survivor annuity benefit payment for the benefit of a dependent child who is under eighteen (18) years of age shall conform with:

(A) The Arkansas Uniform Transfers to Minors Act, Arkansas Code § 9-26-201 et seq.; or

(B) A court order in a guardianship proceeding for the benefit of the dependent child.

(2) Each survivor annuity benefit payment shall:

(A) Be made as a separate payment to the eligible dependent child in the appropriate deposit account; and

(B) Not be comingled with payments to other family members.

24 CAR § 10-813 Survivors — Disability retirees {#sec-24-car-10-813 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-813}

24 CAR § 10-813. Survivors — Disability retirees.

(a) If a member receives final approval for disability retirement and dies before receiving the first disability retirement benefit payment, the member’s disability retirement benefits shall be paid to one (1) or more option beneficiaries, alternative residue beneficiaries, or other beneficiaries designated by the member.

(b) If a member’s disability retirement application is received by the Arkansas Teacher Retirement System and the member dies before his or her disability application is approved:

(1) The member shall be considered to have died in active service; and

(2) Survivor annuity benefits under Arkansas Code § 24-7-710 may be paid if the member has not designated an alternative residue beneficiary.

24 CAR § 10-814 Survivors — Annuity benefits payable by reciprocal systems {#sec-24-car-10-814 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-814}

24 CAR § 10-814. Survivors — Annuity benefits payable by reciprocal systems.

(a) If survivor annuity benefits are payable by more than one (1) reciprocal system to one (1) or more eligible survivors of a deceased qualifying member, the survivors shall not receive, as a percentage of the qualifying member’s final pay or as a minimum dollar amount, more than the largest amount payable by a single reciprocal system.

(b)(1) The Arkansas Teacher Retirement System shall prorate minimum benefits payable with any other reciprocal system that has a minimum benefit provision.

(2)(A) A reciprocal system shall pay the reciprocal system’s proportionate share of the minimum benefit amount.

(B) A reciprocal system’s proportionate share of the minimum benefit amount shall be based on the ratio of the qualifying member’s service in the reciprocal system to the qualifying member’s total service in all other reciprocal systems.

(c) When a member elects to transfer from the Arkansas Teacher Retirement System to the Arkansas Public Employees’ Retirement System under the provisions of Acts 1977, No. 793, the Arkansas Public Employees’ Retirement System’s law shall govern the survivors’ eligibility for a payment of residue or survivor annuity benefits upon the member’s death.

24 CAR § 10-815 Survivors — Lump-sum death benefit — Qualification {#sec-24-car-10-815 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-815}

24 CAR § 10-815. Survivors — Lump-sum death benefit — Qualification.

(a) A member of the Arkansas Teacher Retirement System who is active, retired, or a T-DROP plan participant and accrues the required amount of actual service at the time of his or her death may qualify for a lump-sum death benefit.

(b) For the purposes of eligibility for a lump-sum death benefit, a member shall be considered active for an additional fiscal year following the last fiscal year in which the member renders actual service to a covered employer and obtains at least a quarter (1/4) of a year of service credit.

History

• Codification Notes: “T-DROP” means Teacher Deferred Retirement Option Plan. Authority: Arkansas Code § 24-7-305

24 CAR § 10-816 Survivors — Lump-sum death benefit — Amount and tax exemption {#sec-24-car-10-816 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-816}

24 CAR § 10-816. Survivors — Lump-sum death benefit — Amount and tax exemption.

(a)(1) The amount of the lump-sum death benefit may be set by a resolution or rules adopted by the Board of Trustees of the Arkansas Teacher Retirement System in an amount of up to ten thousand dollars ($10,000) per member.

(2) The board may adjust the amount of the lump-sum death benefit each year and, as actuarially appropriate, prorate the amount of the lump-sum benefit based on the ratio of the member’s contributory and noncontributory service credit.

(b)(1) Upon a qualifying member’s death, the maximum lump-sum death benefit that the qualifying member qualifies to receive in accordance with the law, rules, and resolutions of the board applicable to the Arkansas Teacher Retirement System shall be paid in equal shares to each person designated as a beneficiary by the qualifying member in the manner required by the system.

(2) If the qualifying member fails to designate a beneficiary or all the designated beneficiaries predecease the qualifying member, the lump-sum death benefit shall be paid to the qualifying member’s estate.

(c)(1) Pursuant to Acts 2009, No. 1323, a lump-sum death benefit distribution made after June 30, 2009, shall be tax exempt, and no federal or state income tax shall be withheld by the system.

(2) After June 30, 2009, a lump-sum death benefit shall not be eligible for a direct rollover.

24 CAR § 10-817 Survivors — Lump-sum death benefit — Beneficiary designations and authorized agents {#sec-24-car-10-817 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-817}

24 CAR § 10-817. Survivors — Lump-sum death benefit — Beneficiary designations and authorized agents.

(a)(1) A member may designate one (1) or more natural persons or a duly formed legal entity, including a corporation, trust, partnership, or other legal entity, as his or her lump-sum death benefit beneficiary.

(2) If a member designates a funeral home as his or her lump-sum death benefit beneficiary and the member is a qualifying member who may receive a lump-sum death benefit at the time of his or her death, the Arkansas Teacher Retirement System shall not be obligated to do any of the following:

(A) Issue payment to the funeral home in an amount that exceeds the:

(i) Lump-sum death benefit amount that the member qualifies to receive in accordance with the laws, rules, and resolutions of the Board of Trustees of the Arkansas Teacher Retirement System; or

(ii) Share of the lump-sum death benefit amount that the funeral home would be entitled to receive if the member designates more than one (1) lump-sum death benefit beneficiary;

(B) Reimburse any person or entity for any amount received by the funeral home that exceeds the cost of the member’s funeral service; or

(C) Recoup or assist any person or entity in recouping any amount received by the funeral home that exceeds the cost of the member’s funeral service.

(3)(A) A member’s designation of his or her former spouse as the member’s lump-sum death benefit beneficiary shall not be honored by the system with regard to the former spouse if the:

(i) Member remarries; and

(ii) System receives proof of the member’s remarriage in the manner required by the system before payment of the lump-sum death benefit is issued to the former spouse.

(B) A member who remarries and desires to maintain his or her former spouse’s designation as the member’s lump-sum death benefit beneficiary shall file with the system a lump-sum death benefit beneficiary designation form that:

(i) Designates his or her former spouse as the member’s lump-sum death benefit beneficiary; and

(ii) Has a signature date of the member that is on or after the date of the member’s remarriage.

(C) The system shall not be obligated to recoup or reimburse a member’s current spouse for any lump-sum death benefit amount paid to the member’s former spouse in accordance with this subpart.

(b)(1) A completed lump-sum death benefit beneficiary form shall not be considered effective if the form is received by the system after the member’s death.

(2) A member’s most recently completed, executed, and filed lump-sum death benefit beneficiary form shall supersede all previous lump-sum death benefit beneficiary forms completed, executed, and filed by the member.

(c)(1) A lump-sum death benefit beneficiary form that is signed by a member’s authorized agent, including an attorney-in-fact, agent under a power of attorney, or any other legally recognized agent, shall not be processed until the document appointing the member’s authorized agent is filed with and accepted by the system.

(2) Only a document that appoints and authorizes the member’s authorized agent to transact retirement plan business on behalf of the member shall be effective for the system’s purposes.

(3) Only a document that specifically authorizes a member’s authorized agent to change the member’s beneficiary designations shall be effective to allow the authorized agent to change a beneficiary designation on the member’s behalf with the system.

(d) A lump-sum death benefit beneficiary form signed by a guardian of the member’s estate or another court-appointed conservator shall not be effective to allow the guardian or court-appointed conservator to change a beneficiary designation on the member’s behalf with the system unless there is an accompanying court order specifically authorizing the guardian or court-appointed conservator to change a beneficiary designation on the member’s behalf.

24 CAR § 10-818 Survivors — Lump-sum death benefit — Distribution, waiver, and assignment {#sec-24-car-10-818 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-818}

24 CAR § 10-818. Survivors — Lump-sum death benefit — Distribution, waiver, and assignment.

(a) A designated beneficiary shall submit the following forms and documents to the Arkansas Teacher Retirement System before a lump-sum death benefit payment is issued to the designated beneficiary:

(1) A written application on a form approved by the system; and

(2) The qualifying member’s death certificate or other acceptable proof of the qualifying member’s death.

(b) A lump-sum death benefit payment shall be made within a reasonable time to a qualifying member’s designated beneficiary after the death of the qualifying member.

(c)(1) A designated beneficiary of a lump-sum death benefit may waive his or her right to receiving a payment of the lump-sum death benefit by submitting a waiver of his or her right to the lump-sum death benefit on a form that is acceptable to the system.

(2) If a designated beneficiary waives his or her right to the payment of a lump-sum death benefit, the system shall pay all or the balance of the lump-sum death benefit, whichever is applicable, to any other remaining designated beneficiaries.

(d) A designated beneficiary shall not assign his or her right to a payment of a lump-sum death benefit to another person or entity.

24 CAR § 10-819 Survivors — Lump-sum death benefit — Overpayments {#sec-24-car-10-819 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-819}

24 CAR § 10-819. Survivors — Lump-sum death benefit — Overpayments.

(a) The Arkansas Teacher Retirement System may deduct and reserves the right to deduct from a qualifying member’s lump-sum death benefit any amount owed to the system by the qualifying member under Arkansas Code § 24-7-205.

(b) The system may collect and reserves the right to collect any overpayment or other amount owed to the system by a designated beneficiary.

24 CAR § 10-820 Survivors — Lump-sum death benefit — Transfers to minors {#sec-24-car-10-820 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-820}

24 CAR § 10-820. Survivors — Lump-sum death benefit — Transfers to minors.

The Arkansas Teacher Retirement System shall comply with all applicable laws relating to the distribution of a lump-sum death benefit including the Arkansas Uniform Transfers to Minors Act, Arkansas Code § 9-26-201 et seq.

24 CAR § 10-821 Qualified domestic relations order {#sec-24-car-10-821 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-821}

24 CAR § 10-821. Qualified domestic relations order.

(a) The model qualified domestic relations order adopted by the Arkansas Teacher Retirement System pursuant to Arkansas Code § 9-18-103(b) shall be used by a member if a court intends to divide the member’s retirement benefits or contributions between the member and an alternate payee.

(b)(1) The system shall promptly notify a member and the alternate payee upon receiving a QDRO.

(2)(A) Upon receiving a QDRO, the system shall determine within a reasonable time after receiving the QDRO whether the QDRO complies with:

(i) The Arkansas Code;

(ii) The system’s rules;

(iii) The system’s model qualified domestic relations order; and

(iv) Other applicable laws.

(B) The system shall notify the member and the alternate payee in writing if the system determines that a QDRO submitted by the member or alternate payee does not comply with:

(i) The Arkansas Code;

(ii) The system’s rules;

(iii) The system’s model qualified domestic relations order; or

(iv) Other applicable laws.

(C) The system shall accept a QDRO issued by a circuit court of the State of Arkansas or other court of competent jurisdiction regarding a member and an alternate payee if the QDRO complies with:

(i) The Arkansas Code;

(ii) The system’s rules;

(iii) The system’s model qualified domestic relations order; and

(iv) Other applicable laws.

History

• Codification Notes: “QDRO” means qualified domestic relations order. Authorities: Arkansas Code § 24-7-305; Arkansas Code § 9-18-103

24 CAR § 10-822 Qualified domestic relations order — Limitations {#sec-24-car-10-822 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-822}

24 CAR § 10-822. Qualified domestic relations order — Limitations.

(a) A QDRO shall not require the Arkansas Teacher Retirement System to:

(1) Provide an alternate payee with any type or form of benefit or option not otherwise available to the member;

(2) Provide an alternate payee actuarial benefits not available to the member;

(3) Pay any benefits to an alternate payee that are required to be paid to another alternate payee under an existing QDRO;

(4) Provide any benefit that is an actuarial cost to the system and is not otherwise contemplated in the law and rules applicable to the system; or

(5) Violate any plan qualification requirement in the Internal Revenue Code of 1986, 26 U.S.C. § 401(a), or otherwise affect the system’s requirement to operate as a governmental plan under the Internal Revenue Code of 1986, 26 U.S.C. § 414(d).

(b) The system shall not accept a QDRO for a member who does not have five (5) years of actual service with the system at the time the QDRO is issued by a court.

(c) No provision in the system’s rules or in a QDRO accepted by the system shall require the system to violate any plan qualification requirement in the Internal Revenue Code of 1986, 26 U.S.C. § 401(a), or otherwise affect the system’s requirement to operate as a governmental plan under the Internal Revenue Code of 1986, 26 U.S.C. § 414(d).

History

• Codification Notes: “QDRO” means qualified domestic relations order. Authorities: Arkansas Code § 24-7-305; Arkansas Code § 9-18-103

24 CAR § 10-823 Qualified domestic relations order — Computation of benefit payments {#sec-24-car-10-823 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-823}

24 CAR § 10-823. Qualified domestic relations order — Computation of benefit payments.

(a)(1) The Arkansas Teacher Retirement System shall compute an alternate payee's monthly annuity benefit under a QDRO accepted by the system by using the benefit formula in effect at the time of the member’s retirement.

(2) When computing an alternate payee’s monthly retirement annuity benefit under a QDRO accepted by the system, the system shall include only service credit earned by the member during the marriage.

(b) If the QDRO issued by the circuit court assigns a marital portion or other part of a member’s interest in his or her T-DROP plan deposits and interest, the benefits in the member’s T-DROP account shall be computed as a separate calculation as provided by the model qualified domestic relations order adopted by the system.

History

• Codification Notes: “QDRO” means qualified domestic relations order."T-DROP" means Teacher Deferred Retirement Option Plan. Authorities: Arkansas Code § 24-7-305; Arkansas Code § 9-18-103

24 CAR § 10-824 Qualified domestic relations order — Eligibility to receive benefits {#sec-24-car-10-824 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-824}

24 CAR § 10-824. Qualified domestic relations order — Eligibility to receive benefits.

(a) The member or the alternate payee may file a QDRO with the Arkansas Teacher Retirement System before the member’s retirement or termination of covered employment.

(b)(1) An alternate payee is eligible to receive benefit payments if the member retires or terminates employment with a covered employer and receives a refund of contributions.

(2) The alternate payee’s portion of the member’s retirement benefits or contributions shall be held in the member’s account until the alternate payee is eligible to receive benefit payments under this subpart.

(c) A benefit enhancement enacted by the General Assembly or the Board of Trustees of the Arkansas Teacher Retirement System after entry of a QDRO:

(1) Shall inure to the benefit of the member; and

(2) Shall not be assigned to the alternate payee.

History

• Codification Notes: “QDRO” means qualified domestic relations order. Authorities: Arkansas Code § 24-7-305; Arkansas Code § 9-18-103

24 CAR § 10-825 Qualified domestic relations order — Enrollment of alternate payee {#sec-24-car-10-825 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-825}

24 CAR § 10-825. Qualified domestic relations order — Enrollment of alternate payee.

(a)(1) The alternate payee shall notify the Arkansas Teacher Retirement System of a change of his or her mailing address and verify annually his or her address with the system beginning one (1) year from the date of the letter notifying the alternate payee of the system’s acceptance of the QDRO.

(2) If an alternate payee’s address changes from the address provided on the QDRO accepted by the system or the address provided by the alternate payee during the system’s enrollment of the alternate payee, the system shall not be obligated to determine the current post office address or any other address of the alternate payee.

(b) If the alternate payee is eligible to receive benefit payments and has not completed and submitted an enrollment form or all other required documents to the system, the following shall apply:

(1) The system shall notify the member in writing that the alternate payee has not completed and submitted an enrollment form or all other documents required in order for the system to issue a payment to the alternate payee;

(2) The system shall pay the alternate payee’s portion of the member’s retirement benefits or contributions to the member;

(3) The member shall hold as constructive trustee the alternate payee’s portion of the member’s retirement benefits or contributions upon receiving the alternate payee’s portion of the member’s retirement benefits or contributions; and

(4) The member shall be responsible for verifying with the system the amount of the alternate payee’s portion of the member’s retirement benefits or contributions to be held by the member as constructive trustee.

(c) If an alternate payee is eligible to receive benefit payments, the system shall:

(1) Not hold the alternate payee’s portion of the member’s retirement benefits or contributions in the member’s account; and

(2) Pay the alternate payee’s portion of the member’s retirement benefits or contributions when payment is due to the:

(A) Alternate payee if the alternate payee has completed and submitted to the system an enrollment form and all other documents required by the system in order to issue the payment; or

(B) Member to be held by the member as constructive trustee.

(d)(1) The system shall pay the member the total retirement benefit if the system determines that the alternate payee’s monthly retirement benefit is less than twenty dollars ($20.00).

(2) The member shall be responsible for paying the alternate payee his or her portion of benefits if the system determines that the alternate payee’s monthly retirement benefit is less than twenty dollars ($20.00).

History

• Codification Notes: “QDRO” means qualified domestic relations order. Authorities: Arkansas Code § 24-7-305; Arkansas Code § 9-18-103

24 CAR § 10-826 Qualified domestic relations order — Benefit payments — Overpayments {#sec-24-car-10-826 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-826}

24 CAR § 10-826. Qualified domestic relations order — Benefit payments — Overpayments.

(a) The Arkansas Teacher Retirement System shall have the right to:

(1) Make any necessary correction to the monthly annuity benefit paid under a QDRO accepted by the system; and

(2) Recover any overpayments owed to the system from either the member or the alternate payee.

(b) If an amount that should not have been distributed to the member or alternate payee under the QDRO accepted by the system is received by the member or alternate payee, the member or alternate payee shall:

(1) Be responsible for holding the amount as a constructive trustee; and

(2) Notify the system immediately that he or she received the amount.

(c) The system shall not make restitution for:

(1) A payment that is issued to the alternate payee before the system receives notice of the alternate payee’s change of address;

(2) A distributed amount that:

(A) The alternate payee is entitled to receive under the terms of a QDRO accepted by the system; and

(B) Is received by the member as constructive trustee;

(3) A distributed amount that:

(A) The member is entitled to receive under the terms of a QDRO accepted by the system; and

(B) Is received by the alternate payee as constructive trustee; or

(4) An amount that was distributed before the system receives a court order voiding the QDRO accepted by the system; or

(5) An amount that is distributed before the system receives a filemarked QDRO that has been approved by the system and entered by a court of competent jurisdiction.

History

• Codification Notes: “QDRO” means qualified domestic relations order. History: Ark. R. 2025-30 (eff. December 5, 2025) Authorities: Arkansas Code § 24-7-305; Arkansas Code § 9-18-103

24 CAR § 10-827 Qualified domestic relations order — Benefit payments — Death of member or alternate payee {#sec-24-car-10-827 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-827}

24 CAR § 10-827. Qualified domestic relations order — Benefit payments — Death of member or alternate payee.

(a)(1) Any benefit that would be due to the alternate payee under a QDRO accepted by the Arkansas Teacher Retirement System shall revert back to the member if the alternate payee dies before receiving the first benefit payment issued to him or her by the system.

(2) An alternate payee’s portion of benefits payable to him or her under a QDRO accepted by the system shall not revert back to the member if the alternate payee dies after receiving the first benefit payment issued to him or her by the system.

(b)(1) If a member dies before retirement and a survivor annuity is not payable, the alternate payee shall receive the same portion of the member’s contributions, if any, as was assigned by the QDRO accepted by the system.

(2) The alternate payee shall not receive monthly retirement annuity benefits from the system if the member has not received his or her retirement annuity at the time of his or her death.

(c) If a member dies after retiring from the system:

(1) The alternate payee shall not be entitled to continue receiving his or her portion of benefits; and

(2) The system shall cease paying the alternate payee his or her portion of benefits in the month immediately following the member’s date of death.

History

• Codification Notes: “QDRO” means qualified domestic relations order. Authorities: Arkansas Code § 24-7-305; Arkansas Code § 9-18-103

24 CAR § 10-828 Qualified domestic relations order — Cancellation of retirement — Order voiding qualified domestic relations order {#sec-24-car-10-828 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-828}

24 CAR § 10-828. Qualified domestic relations order — Cancellation of retirement — Order voiding qualified domestic relations order.

(a)(1) If a member cancels his or her retirement, the Arkansas Teacher Retirement System may recoup any benefits paid to an alternate payee from the member, the alternate payee, or both the member and the alternate payee.

(2) If a member cancels his or her retirement, the system may recoup benefits paid to an alternate payee regardless of whether a court enters an order voiding the QDRO approved by system.

(b)(1) If a member does not cancel his or her retirement, the system shall not be required to:

(A) Reimburse the member for benefits that were paid to an alternate payee before an order voiding the QDRO approved by the system was entered by a court; or

(B) Recoup for the member any benefits that were paid to an alternate payee before an order voiding the QDRO approved by the system was entered by a court.

(2) If a court enters an order voiding a QDRO approved by the system, the alternate payee’s portion of benefits shall revert back to the member as of the date on which the court entered the order voiding the QDRO approved by the system.

History

• Codification Notes: “QDRO” means qualified domestic relations order. Authorities: Arkansas Code § 24-7-305; Arkansas Code § 9-18-103

24 CAR § 10-829 Lost payees and benefit forfeitures {#sec-24-car-10-829 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-829}

24 CAR § 10-829. Lost payees and benefit forfeitures.

(a)(1) Each member and beneficiary of a deceased member is responsible for filing and shall file his or her respective current post office address and any subsequent change of address with the Arkansas Teacher Retirement System.

(2) Communication addressed to a member or beneficiary at the post office address last filed with the system or, if no post office address has been filed with the system, the last post office address indicated on the records of the employer of the member or the beneficiary shall be:

(A) The official post office address used for the system’s communication to the member or beneficiary; and

(B) Binding on the member or beneficiary for all system purposes.

(b) The system shall not be obligated to determine the current post office address or any other address for a member or beneficiary.

(c)(1) Member payments in the possession of the system shall be excluded from the definition of property as provided in the Unclaimed Property Act, Arkansas Code § 18-28-201 et seq.

(2) Arkansas Code § 24-7-734 supersedes any conflict with the Unclaimed Property Act, Arkansas Code § 18-28-201 et seq.

Subpart 9

24 CAR § 10-901 Definition {#sec-24-car-10-901 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-901}

24 CAR § 10-901. Definition.

(a) As used in this subpart, “Internal Revenue Code” means the same as defined in Arkansas Code § 24-7-202.

(b) The definition of “Internal Revenue Code” shall apply to the policies and rules of the Arkansas Teacher Retirement System.

24 CAR § 10-902 Compliance with federal law {#sec-24-car-10-902 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-902}

24 CAR § 10-902. Compliance with federal law.

(a) The Executive Director of the Arkansas Teacher Retirement System is authorized and directed to:

(1) Operate the Arkansas Teacher Retirement System in accordance with the requirements of the Internal Revenue Code of 1986, 26 U.S.C. § 1 et seq., and applicable United States Treasury regulations as may be necessary for the system to maintain its status and continue being operated as a qualified trust under 26 U.S.C. § 401(a); and

(2) Interpret Arkansas Code § 24-7-101 et seq., and the policies and rules of the system in a manner that is consistent with the requirements of the Internal Revenue Code of 1986 and applicable United States Treasury regulations as may be necessary for the system to maintain its status and continue being operated as a qualified trust under 26 U.S.C. § 401(a).

(b)(1) The policies and rules promulgated by the Board of Trustees of the Arkansas Teacher Retirement System shall be consistent with the requirements of the Internal Revenue Code of 1986 and applicable United States Treasury regulations.

(2) Any policy or rule found to be in conflict with an applicable provision of the Internal Revenue Code of 1986 is void.

(3) In accordance with Arkansas Code § 24-7-305, the board by resolution may modify or eliminate a rule of the system if a requirement under the Internal Revenue Code of 1986 becomes unnecessary, immaterial, or obsolete to the maintenance of the system’s status as a qualified trust.

Subpart 10

24 CAR § 10-1001 Definitions {#sec-24-car-10-1001 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-1001}

24 CAR § 10-1001. Definitions.

As used in this subpart:

(1) "Manifest injustice” has the same meaning as provided in Arkansas Code § 24-7-202; and

(2) “Member”, for the purposes of the staff determination and appeal process, means any member of the Arkansas Teacher Retirement System as defined in Arkansas Code § 24-7-202 and includes:

(A) A beneficiary of a member;

(B) A retiree of the system;

(C) A guardian, an administrator, or an executor of a member, retiree, or beneficiary; or

(D) A public school.

24 CAR § 10-1002 Staff determinations — Scope and purpose {#sec-24-car-10-1002 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-1002}

24 CAR § 10-1002. Staff determinations — Scope and purpose.

(a) This subpart governs the practice and procedures of the Arkansas Teacher Retirement System concerning the adjudication of a claim that concerns any retirement plan or program administered by the system and arises as a result of a determination made by the staff or administration of the system.

(b)(1) The system’s staff is responsible for administering the accounts of members of the system and may make determinations based on the law and rules applicable to the system that may be adverse to a member’s claim.

(2) This subpart outlines the procedure for a member to appeal the determination of the system’s staff or administration concerning a claim of the member.

(c)(1) This subpart concerning the staff determination and appeal process should be read in conjunction with the Arkansas Administrative Procedure Act, Arkansas Code § 25-15-201 et seq.

(2) To the extent that this subpart concerning the staff determination and appeal process conflict with the Arkansas Administrative Procedure Act, the terms and provisions of the Arkansas Administrative Procedure Act shall supersede this subpart concerning the staff determination appeal process and control.

(d) This subpart concerning the staff determination and appeal process does not apply to claims or causes of action that the system or the Board of Trustees of the Arkansas Teacher Retirement System may have against a member or any other person or entity, regardless of the origin or nature of the claim.

24 CAR § 10-1003 Staff determinations — Extension of deadlines {#sec-24-car-10-1003 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-1003}

24 CAR § 10-1003. Staff determinations — Extension of deadlines.

(a)(1) The Board of Trustees of the Arkansas Teacher Retirement System and the Executive Director of the Arkansas Teacher Retirement System may extend any deadline applicable to a member's appeal upon a showing of good cause unless a hearing officer has been assigned.

(2) Only the board may extend a deadline after the deadline has passed.

(3) If a hearing officer has been assigned, until the completion of the hearing, only the hearing office may extend a deadline applicable to a member’s appeal upon a showing of good cause.

(b) When compliance with this subpart concerning the staff determination and appeal process is based on delivery having occurred, delivery shall be considered to have occurred on the earlier of either the:

(1) Date of the postmark, if posted with the United States Postal Service; or

(2) Date of actual delivery by one (1) of the following methods:

(A) Hand delivery;

(B) Electronic transmission; or

(C) Delivery service other than United States Postal Service.

24 CAR § 10-1004 Staff determinations — Informal resolutions {#sec-24-car-10-1004 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-1004}

24 CAR § 10-1004. Staff determinations — Informal resolutions.

(a)(1) A member’s claim may be resolved informally through correspondence or conference between the member and the staff of the Arkansas Teacher Retirement System.

(2) All reasonable efforts shall be made to informally resolve a member’s claim with the member.

(b)(1) The Executive Director of the Arkansas Teacher Retirement System may implement a resolution of a member’s claim that has a direct impact to the system of up to five thousand dollars ($5,000).

(2) Board of Trustees of the Arkansas Teacher Retirement System approval shall be required to implement a resolution that has a direct financial impact to the system in excess of five thousand dollars ($5,000).

(c)(1) The system’s staff and the member are strongly encouraged to engage in a good faith attempt to resolve claims informally based upon the proper application of the law, rules, and policies applicable to the system and to the specific facts of the member’s claim.

(2) A member’s claim shall not be resolved in a manner that contravenes the law, rules, and policies applicable to the system.

(d) If a claim is not resolved informally and a staff determination letter adverse to the member’s claim is issued to the member, the member may request a review of the staff determination by the executive director.

(e) The manifest injustice referral process shall not be used with regard to a member if the manifest injustice referral concerns the same questions of law and fact that are at issue in a claim concerning the member that is resolved through the staff determination and appeals process.

24 CAR § 10-1005 Staff determinations — Notice of adverse determination {#sec-24-car-10-1005 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-1005}

24 CAR § 10-1005. Staff determinations — Notice of adverse determination.

(a)(1) If the staff of the Arkansas Teacher Retirement System makes a determination that is adverse to a member’s claim, the system shall send a staff determination letter to the member if the claim involves:

(A) An ambiguity in the interpretation of the specific facts of the member’s claim that would impact the manner in which the law, rules, or policy applicable to the system are applied to the member’s claim;

(B) An ambiguity in the interpretation of the law, rules, or policy applicable to the system; or

(C) An ambiguity concerning the proper application of the law, rules, or policy applicable to the system to the specific facts of the member’s claim.

(2) A staff determination letter shall not be issued to a member unless the staff determination letter has been reviewed and approved by an attorney for the system.

(b) A staff determination letter that is issued to a member shall:

(1) Advise the member of the determination and the reasons for the determination;

(2) Advise the member of the procedure for requesting a review of the staff determination by the Executive Director of the Arkansas Teacher Retirement System;

(3) Advise the member of the deadline to request a review by the executive director; and

(4) Not include findings of fact and conclusions of law, separately stated.

(c) The written determination of system staff concerning an overpayment collection dispute or the applicability of a salary limitation to a plan or payment shall be treated as a staff determination letter.

(d) A staff determination letter is not and shall not be construed as a final decision or order of the system that may be appealed under the Arkansas Administrative Procedure Act, Arkansas Code § 25-15-201 et seq.

(e) The system shall consider a member’s claim as closed if the member does not request a review of the staff determination by the executive director within thirty (30) calendar days of the date of the staff determination letter.

24 CAR § 10-1006 Staff determinations — Review by executive director {#sec-24-car-10-1006 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-1006}

24 CAR § 10-1006. Staff determinations — Review by executive director.

(a)(1) A member shall submit a request for a review of a staff determination by the Executive Director of the Arkansas Teacher Retirement System in writing.

(2) A member shall not be required to resubmit any documents or information with his or her request for a review.

(b)(1) Unless an extension is granted by the Board of Trustees of the Arkansas Teacher Retirement System or the executive director, a member shall not be permitted to request a review of a staff determination by the executive director unless the member’s request is received by the Arkansas Teacher Retirement System within thirty (30) calendar days of the date of the staff determination letter.

(2) If the last day to request a review of a staff determination by the executive director falls on an official state holiday or weekend, the member shall have until the next business day to request a review.

(c)(1) The executive director shall promptly send a letter to the member acknowledging the member's request for a review.

(2)(A) The member may submit for review by the executive director any additional relevant documents or information not previously submitted by the member to the system.

(B) The member shall submit the additional documents and information to the executive director within thirty-five (35) calendar days of the date of the executive director’s acknowledgement letter.

(d)(1) Upon receiving a member’s request for a review of a staff determination, the executive director shall independently review the facts and the law, rules, and policy applicable to the member’s claim.

(2) The executive director shall consider the staff determination as well as any relevant documents and information provided by the member.

(3) The executive director may affirm, reverse, or modify the staff determination before a final determination on the member’s claim is made by the board.

(e)(1) The executive director shall send a review determination letter to the member within ninety (90) calendar days from the date on which the member’s request for a review was received by the system.

(2) A review determination letter shall:

(A) Advise the member of the determination and the applicable law, rules, and policy used by the executive director to reach his or her determination;

(B) Advise the member of the procedure for appealing the review determination letter to the board;

(C) Advise the member of the deadline to appeal the review determination letter to the board; and

(D) Not include findings of fact and conclusions of law, separately stated.

(f) A review determination letter is not and shall not be construed as a final decision or order of the system that may be appealed under the Arkansas Administrative Procedure Act, Arkansas Code § 25-15-201 et seq.

(g) The system shall consider a member’s claim as closed if the member does not appeal the executive director’s review determination within thirty (30) calendar days of the date of the review determination letter.

24 CAR § 10-1007 Staff determinations — Appeals — Initiation of appeal to the board {#sec-24-car-10-1007 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-1007}

24 CAR § 10-1007. Staff determinations — Appeals — Initiation of appeal to the board.

(a) A review determination of the Executive Director of the Arkansas Teacher Retirement System may be appealed by the member to the Board of Trustees of the Arkansas Teacher Retirement System.

(b)(1) A member shall appeal a review determination of the executive director in writing by filing a signed notice of appeal with the Arkansas Teacher Retirement System in the manner required by the system.

(2) A member shall file his or her signed notice of appeal with the system within thirty (30) calendar days of the date of the review determination letter.

(c) A member shall address and deliver his or her signed notice of appeal to the

Board of Trustees of the Arkansas Teacher Retirement System, Member Appeals ATTN: Legal Department 1400 West Third Street Little Rock, Arkansas, 72201

24 CAR § 10-1008 Staff determinations — Appeals — Assignment of hearing officer {#sec-24-car-10-1008 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-1008}

24 CAR § 10-1008. Staff determinations — Appeals — Assignment of hearing officer.

(a)(1) All member appeals of a review determination shall be assigned to a hearing officer.

(2) The Executive Director of the Arkansas Teacher Retirement System or his or her designee shall appoint a hearing officer from a list of qualified individuals approved by the executive director.

(3) The hearing officer shall conduct an administrative hearing, recommend factual and legal determinations, and prepare a proposed order for the Board of Trustees of the Arkansas Teacher Retirement System that includes findings of fact and conclusions of law, separately stated.

(b)(1) Following appointment, the hearing officer shall issue a written scheduling order to the member, executive director, and legal counsel for the Arkansas Teacher Retirement System.

(2) The scheduling order shall include all information required under the Arkansas Administrative Procedure Act, Arkansas Code § 25-19-201 et seq.

(3) The hearing officer, at his or her discretion, may include in the scheduling order reasonable deadlines for the submission and exchange of exhibits, witness lists, and related materials before the hearing, including without limitation, any requested proposed findings of fact and conclusions of law.

(4) The hearing officer may continue any scheduled matter at his or her discretion for good cause shown by any party or counsel of record.

(c) Unless otherwise ordered, hearings shall be held at the:

Arkansas Teacher Retirement System 1400 West Third Street Little Rock, Arkansas 72201

24 CAR § 10-1009 Staff determinations — Appeals — Filing documents {#sec-24-car-10-1009 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-1009}

24 CAR § 10-1009. Staff determinations — Appeals — Filing documents.

(a) Following the appointment of a hearing officer, all correspondence, documents, requests, submissions, filings, and other documents relating to an appeal shall be mailed or hand delivered to the:

Arkansas Teacher Retirement System, Member Appeals ATTN: Legal Department 1400 West Third Street Little Rock, Arkansas 72201

(b) Any party submitting or filing a document relating to an appeal shall simultaneously deliver a copy of the filing or document to the opposing party or, if applicable, opposing counsel.

(c) The Arkansas Teacher Retirement System shall be the responsible for ensuring that:

(1) Copies of all correspondence, documents, requests, submissions, filings, and other documents relating to an appeal are provided in a timely manner to the hearing officer; and

(2) A complete record of each appellate proceeding before a hearing officer and the Board of Trustees of the Arkansas Teacher Retirement System is prepared and maintained in a single, centralized location.

24 CAR § 10-1010 Staff determinations — Appeals — Hearings {#sec-24-car-10-1010 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-1010}

24 CAR § 10-1010. Staff determinations — Appeals — Hearings.

(a) The hearing:

(1) Is an administrative hearing before the hearing officer; and

(2) Is not a hearing before the Board of Trustees of the Arkansas Teacher Retirement System.

(b)(1) All hearings shall be conducted according to this subpart concerning the staff determination appeal process and the corresponding procedural provisions of the Arkansas Administrative Procedure Act, Arkansas Code § 25-15-201 et seq.

(2) The hearing shall be informal and the formal rules of evidence shall not apply.

(3) In conducting a hearing:

(A) The hearing officer shall not be bound by the formal rules of evidence; and

(B) No informality in any proceedings or in the manner of taking of testimony shall invalidate any order or decision of the board.

(c) A member shall at all times have the right to counsel, provided that such counsel:

(1) Is duly licensed to practice law in the State of Arkansas; or

(2) Has been granted permission to appear pro hac vice by the hearing officer. (d)(1) All hearings shall be conducted in an orderly manner.

(2) The hearing officer shall have the authority to maintain the decorum of the hearing and may clear the hearing room of witnesses who are not under examination.

(e) If a member fails to appear at the hearing, the member waives his or her right to present evidence and arguments to the hearing officer and the hearing officer may proceed with the hearing and prepare a proposed order for the board’s consideration based on the evidence presented.

(f) The hearing officer shall have the authority to administer oaths and affirmations.

(g)(1) Each party shall be entitled to examine and cross-examine witnesses, present evidence, make arguments, and generally participate in the conduct of the proceeding.

(2) The hearing officer may question a witness during any portion of the direct or cross-examination of the witness.

(3)(A) Before giving testimony, each witness shall swear or affirm that the testimony about to be given shall be the truth, the whole truth, and nothing but the truth.

(B) All testimony considered by the hearing officer, except for matters officially noticed or entered by stipulation, shall be sworn testimony.

(h)(1) The hearing officer may admit into the record any evidence that in his or her judgment:

(A) Has a reasonable degree of probative value and trustworthiness; or

(B) Is of a type or nature commonly relied upon by reasonably prudent people in the conduct of their affairs.

(2) The hearing officer may exclude evidence that is:

(A) Irrelevant;

(B) Immaterial; or

(C) Unduly repetitious.

(3) Objections to evidentiary offers may be made and shall be noted of record.

(4) Documents received into evidence by the hearing officer shall be marked and filed as part of the record.

(i) Following the close of evidentiary submissions and witness testimony, the hearing officer may in his or her discretion allow summations and closing arguments by the parties.

(j)(1) The Arkansas Teacher Retirement System shall arrange for a court reporter to attend and record all hearings.

(2)(A) The system shall pay the cost for preparing a transcript of the hearing.

(B) Upon receiving the hearing transcript, the system shall promptly forward a copy of the transcript to the hearing officer and the member or, if applicable, the member’s counsel.

24 CAR § 10-1011 Staff determinations — Appeals — Post-hearing briefs {#sec-24-car-10-1011 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-1011}

24 CAR § 10-1011. Staff determinations — Appeals — Post-hearing briefs.

(a)(1) Upon the completion of the hearing, the hearing officer may allow the parties to submit post-hearing briefs to be included as part of the record on appeal.

(2) The decision on whether or not to allow the submission of post-hearing briefs is within the sole discretion of the hearing officer.

(3) A hearing officer’s decision to not allow post-hearing briefs shall have no effect on the validity of any order or decision issued by the Board of Trustees of the Arkansas Teacher Retirement System.

(b) If a hearing officer grants the member or the Arkansas Teacher Retirement System an opportunity to submit a post-hearing brief, the hearing officer shall provide the opposing party an opportunity to submit a response.

(c) The hearing officer shall have discretion to set reasonable deadlines for the parties to submit post-hearing briefs and responses, provided that the parties shall be allowed a minimum of fourteen (14) calendar days from the date of receipt of the hearing transcript before any initial post-hearing brief shall be due for filing.

24 CAR § 10-1012 Staff determinations — Appeals — Proposed orders {#sec-24-car-10-1012 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-1012}

24 CAR § 10-1012. Staff determinations — Appeals — Proposed orders.

(a) After the hearing officer receives all evidence, arguments, and, if applicable, post-hearing briefs, the record before the hearing officer shall be officially closed.

(b)(1) After the record before the hearing officer is closed and the hearing officer has considered all of the evidence, the hearing officer shall, as soon as practical, prepare a proposed order to be delivered to the Board of Trustees of the Arkansas Teacher Retirement System.

(2) The proposed order shall include:

(A) Findings of fact based exclusively on the evidence and testimony in the record of the hearing;

(B) Conclusions of law that shall be separately stated from the findings of fact; and

(C) A recommendation to the board.

(3)(A) The hearing officer shall provide the proposed order to the board via email and via United States Postal Service mail addressed to the:

Arkansas Teacher Retirement System, Member Appeals ATTN: Legal Department 1400 West Third Street Little Rock, Arkansas 72201

(B) Upon receiving the proposed order, the Arkansas Teacher Retirement System shall mail a copy of the proposed order to the member and, if applicable, the member’s counsel via certified first-class United States Postal Service mail with a copy to the Executive Director of the Arkansas Teacher Retirement System.

24 CAR § 10-1013 Staff determinations — Appeals — Objections to proposed orders {#sec-24-car-10-1013 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-1013}

24 CAR § 10-1013. Staff determinations — Appeals — Objections to proposed orders.

(a)(1) The member shall have the right to file a written statement of objections outlining any objections, exceptions, and arguments that the member determines should be considered by the Board of Trustees of the Arkansas Teacher Retirement System during the board’s evaluation of the hearing officer’s proposed order.

(2) A member shall not be permitted to introduce additional evidence or testimony in his or her statement of objections.

(b) A member’s written statement of objections shall be delivered to the Arkansas Teacher Retirement System within twenty-one (21) calendar days of the member’s receipt of the hearing officer's proposed order.

(c)(1) Counsel for the system may prepare a written response to any written statement of objections filed by the member.

(2) A copy of any response by the system shall be provided to the board and the member and, if applicable, the member’s counsel, before the board meeting at which the hearing officer's proposed order is scheduled to be considered by the board.

24 CAR § 10-1014 Staff determinations — Appeals — Consideration of proposed orders by the board {#sec-24-car-10-1014 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-1014}

24 CAR § 10-1014. Staff determinations — Appeals — Consideration of proposed orders by the board.

(a) The Board of Trustees of the Arkansas Teacher Retirement System shall render a final determination on the hearing officer’s proposed order.

(b)(1) The board’s consideration of the hearing officer’s proposed order shall be scheduled within a reasonable time to be heard, at a regular meeting of the board after the issuance of the proposed order.

(2) The board may call an emergency meeting to consider the hearing officer’s proposed order if the situation warrants.

(3) The Arkansas Teacher Retirement System shall notify the member and, if applicable, the member’s counsel in writing of the date, time, and location of the board meeting at which the board intends to consider the hearing officer’s proposed order.

(c)(1) Before rendering a decision on the hearing officer's proposed order, the board may request that the member and, if applicable, the member’s counsel make a brief statement to the board concerning facts and any arguments that the member wishes to present and respond to any questions from the board.

(2) The board's consideration of a brief statement and any responses to questions made by the member or, if applicable, the member’s counsel shall not require the board to conduct another hearing and shall be based on the hearing previously conducted before the hearing officer.

(3) The chair of the board shall have the final authority to set the amount of time any party may have to make a statement to the board.

(d)(1) Failure of a member to appear at the meeting of the board without prior notification shall result in the member waiving his or her right to be heard by the board.

(2)(A) A member may petition the board for another opportunity to address the board.

(B) The board may grant a member’s petition for another opportunity to address the board if the board determines that the member’s absence was for good cause.

(e)(1) After the board’s consideration of the hearing officer’s proposed order, the board shall either accept or reject all or part of the hearing officer’s proposed order.

(2) The board may either accept the proposed order, reject the proposed order, or accept the proposed order as modified by the board.

(3) If the board rejects the proposed order or accepts the proposed order as modified by the board, the board may:

(A) Prepare its own written findings of fact and conclusions of law, separately state, and issue its own order based upon those findings and conclusions;

(B) Consider manifest injustice as a basis for any remedy; or

(C) Remand the matter in whole or in part to the hearing officer for reconsideration of additional findings of fact or conclusions of law or both additional findings of fact and conclusions of law.

(f) A quorum of votes of the board is necessary to approve any motion, resolution, or order under the board’s consideration.

(g)(1) Following the board’s decision on the hearing officer’s proposed order, the board shall prepare a written final order on the member’s appeal.

(2) The board’s final order shall include findings of fact and conclusions of law, separately stated, that were relied upon by the board in formulating the final order.

(3) The board’s final order shall be a final decision or order of the system that may be appealed under the Arkansas Administrative Procedure Act, Arkansas Code § 25-15-201 et seq.

(4) A copy of the board’s final order, including the board’s findings of fact and conclusions of law, separately stated, shall be delivered by the Executive Director of the Arkansas Teacher Retirement System to the member and, if applicable, the member’s counsel via certified first-class United States Postal Service mail.

24 CAR § 10-1015 Staff determinations — Appeals — Settlement authority {#sec-24-car-10-1015 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-1015}

24 CAR § 10-1015. Staff determinations — Appeals — Settlement authority.

(a) With the member’s written consent or, if applicable, the written consent of the member’s counsel, the Executive Director of the Arkansas Teacher Retirement System may suspend his or her review of a member’s claim being considered under this subpart concerning the staff determination and appeal process if the member’s claim may be more expediently resolved using the manifest injustice process.

(b) The executive director may settle any claim in a manner mutually agreeable to the Arkansas Teacher Retirement System and the member at any time before the Board of Trustees of the Arkansas Teacher Retirement System issues its final order on the member’s appeal.

(c) In settling any claim, the executive director shall not exceed the authority previously granted to him or her by the board.

(d) The executive director shall report any settlement that occurs after the hearing officer issues a proposed order to the board.

24 CAR § 10-1016 Staff determinations — Appeals — Rights of members under the Arkansas Administrative Procedure Act {#sec-24-car-10-1016 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-1016}

24 CAR § 10-1016. Staff determinations — Appeals — Rights of members under the Arkansas Administrative Procedure Act.

(a) A member who receives an adverse final order from the Board of Trustees of the Arkansas Teacher Retirement System retains certain rights under the Arkansas Administrative Procedure Act, Arkansas Code § 25-15-201 et seq.

(b)(1) A member may file a petition for judicial review under the Arkansas Administrative Procedure Act.

(2) A petition for judicial review of a final order of the board shall be filed by the member within thirty (30) days after service of the board’s final order on the member.

(3) A member shall file the petition for judicial review in Pulaski County Circuit Court or the circuit court of any county in which the member resides or does business.

24 CAR § 10-1017 Staff determinations — Appeals — Ex parte communications {#sec-24-car-10-1017 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-1017}

24 CAR § 10-1017. Staff determinations — Appeals — Ex parte communications.

(a) The Arkansas Administrative Procedure Act, Arkansas Code § 25-15-201 et seq., prohibits direct or indirect communications between the members and staff of the Arkansas Teacher Retirement System and a hearing officer or a member of the Board of Trustees of the Arkansas Teacher Retirement System concerning any issue of fact or law at issue in a member’s appeal unless there has been notice providing all parties with an opportunity to participate in the communication.

(b) A hearing officer and a member of the board shall not consider any ex-parte or off-the-record evidence or statements made to them by the member or a staff member of the system in connection with a pending appeal.

(c) This section does not preclude communications by and between the hearing officer, system staff, and the board concerning minor scheduling and procedural matters necessary to timely and efficiently process and handle member appeals under this subpart concerning the staff determination and appeal process.

24 CAR § 10-1018 Manifest injustice {#sec-24-car-10-1018 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-1018}

24 CAR § 10-1018. Manifest injustice.

(a) The Board of Trustees of the Arkansas Teacher Retirement System may waive or modify the impact of a rule, provision, or law applicable to the Arkansas Teacher Retirement System that does not violate a federal law or jeopardize the tax qualified status of the system in order to prevent a manifest injustice to:

(1) A member;

(2) A benefit participant;

(3) A covered employer; or

(4) The system.

(b)(1) The process of declaring a manifest injustice is a rare and extraordinary remedy that shall not be used as a routine method of addressing:

(A) Error;

(B) Oversight; or

(C) Simple mistake.

(2) As an extraordinary remedy, manifest injustice shall be cautiously and carefully used to:

(A) Prevent unfairness;

(B) Preserve the integrity of the system; and

(C) Avoid or correct unduly harsh or unconscionable outcomes.

(c) In determining whether or not a manifest injustice exists, the system may consider:

(1) The degree of fault of the system, benefit participant, or employer;

(2) An ambiguity in the interpretation of the circumstances, rule, or law;

(3) The cost to the system of correcting the error that is far outweighed by the benefit afforded to the system, benefit participant, or employer;

(4) Whether or not an expedited decision is in the public interest;

(5) The fundamental fairness of a remedy in a particular situation; and

(6) Whether or not the status quo would result in an unconscionable outcome.

(d)(1) The manifest injustice process shall not be used to address a change, omission, or error in the records of the system that may be corrected within the look-back period.

(2) The manifest injustice process may be used to correct a change, omission, or error in the records of the system discovered after the look-back period if the board determines that the time limitation imposed by the look-back period would cause a manifest injustice.

24 CAR § 10-1019 Manifest injustice — Referrals {#sec-24-car-10-1019 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-1019}

24 CAR § 10-1019. Manifest injustice — Referrals.

(a) A manifest injustice referral shall be made to the Executive Director of the Arkansas Teacher Retirement System.

(b)(1) The following persons or entities may submit a manifest injustice referral to the executive director:

(A) A member of the Board of Trustees of the Arkansas Teacher Retirement System;

(B) A staff member of the Arkansas Teacher Retirement System, including without limitation the executive director;

(C) A benefit participant as defined by Arkansas Code § 24-7-202;

(D) A covered employer; or

(E) A guardian, fiduciary, or other interested party.

(2) A member of the Manifest Injustice Committee shall not be permitted to make a manifest injustice referral to the executive director.

(c)(1) The system shall create and maintain a record of each manifest injustice referral submitted to the executive director and the resolution of the manifest injustice referral.

(2) The executive director shall submit all manifest injustice referrals to the committee.

(3) Each referral shall be given a number and a year designation by the committee.

24 CAR § 10-1020 Manifest injustice — Authority of executive director {#sec-24-car-10-1020 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-1020}

24 CAR § 10-1020. Manifest injustice — Authority of executive director.

(a) With the member’s written consent or, if applicable, the written consent of the member’s counsel, the Executive Director of the Arkansas Teacher Retirement System may suspend his or her review of a member’s claim being considered under this subpart concerning the staff determination and appeal process if the member’s claim may be more expediently resolved using the manifest injustice process.

(b)(1) The executive director is authorized to implement a resolution of a manifest injustice after a determination is made that a manifest injustice exists using this subpart concerning the manifest injustice process.

(2)(A) The executive director may implement a resolution of a manifest injustice of up to five thousand dollars ($5,000) of direct financial impact to the Arkansas Teacher Retirement System.

(B) The executive director shall provide the chair of the Board of Trustees of the Arkansas Teacher Retirement System with written notice of a manifest injustice determination and the proposed resolution before implementing the resolution if a resolution has a direct financial impact on the system in an amount exceeding five thousand dollars ($5,000).

(c)(1) The executive director shall not waive a deadline that may apply in the law or rules applicable to the system.

(2) Only the board may waive a deadline.

(d)(1) The executive director shall provide a report to the board at least biannually that:

(A) Outlines the facts and circumstances of each manifest injustice referral;

(B) Describes findings and recommendations of the Manifest Injustice Committee; and

(C) Provides and explains the resolution of the manifest injustice referral if a manifest injustice is found.

(2) The names of members or other information that is not material to the findings shall not be required in the report to the board.

24 CAR § 10-1021 Manifest injustice — Manifest Injustice Committee {#sec-24-car-10-1021 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-1021}

24 CAR § 10-1021. Manifest injustice — Manifest Injustice Committee.

(a) The Arkansas Teacher Retirement System’s general counsel and two (2) members of senior management designated by the Executive Director of the Arkansas Teacher Retirement System shall be the sole members of the Manifest Injustice Committee.

(b)(1) The committee shall review all manifest injustice referrals and shall meet on a reasonable schedule or as needed to review manifest injustice referrals.

(2) If a committee member has a conflict or otherwise cannot review or act on a manifest injustice referral due to absence, sickness, or work load, the committee member may appoint a representative from his or her supervised staff to review or act on the manifest injustice referral on the committee member’s behalf.

(3) A majority vote of the committee shall constitute a recommendation on a manifest injustice referral.

(c)(1) The committee may request that a party to the manifest injustice referral provide information or input concerning the manifest injustice referral.

(2) A party to the manifest injustice referral is not required to provide any information or input requested by the committee.

(d)(1) The committee shall make a recommendation on the existence of a manifest injustice to the executive director based upon the committee’s review of the manifest injustice referral.

(2) If the committee finds that a manifest injustice exists, then the committee shall propose and include in its recommendation a resolution of the manifest injustice.

24 CAR § 10-1022 Manifest injustice — Review of recommendation {#sec-24-car-10-1022 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-1022}

24 CAR § 10-1022. Manifest injustice — Review of recommendation.

(a)(1) The Executive Director of the Arkansas Teacher Retirement System shall review the manifest injustice referral and the Manifest Injustice Committee's basis for the recommendation.

(2)(A) The executive director may request that a party to the manifest injustice referral provide information or input concerning the manifest injustice referral.

(B) A party to the manifest injustice referral is not required to provide any information or input requested by the executive director.

(b)(1) The executive director may either accept the committee’s recommendation or return the manifest injustice referral to the committee for further consideration if the executive director disagrees with the committee’s recommendation.

(2)(A) The manifest injustice referral shall be considered reviewed and closed if:

(i) The committee recommends that a manifest injustice exists; and

(ii) The executive director accepts the recommendation.

(B) If the committee recommends that a manifest injustice exists and the executive director accepts the recommendation, the executive director may either adopt the resolution suggested by the committee or an alternative resolution that the executive director is authorized to implement.

(C) A committee’s recommendation that is accepted by the executive director and finds that a manifest injustice exists is not appealable under the rules concerning the staff determination appeal process or the Arkansas Administrative Procedure Act, Arkansas Code § 25-15-201 et seq.

(3)(A) The manifest injustice referral shall be considered reviewed and closed if:

(i) The committee recommends that a manifest injustice does not exist;

(ii) The executive director accepts the recommendation; and

(iii) The recommendation is not appealed to the Board of Trustees of the Arkansas Teacher Retirement System using this subpart concerning the staff determination appeal process.

(B)(i) A committee’s recommendation that is accepted by the executive director and finds that a manifest injustice does not exist may be appealed to the board using this subpart concerning the staff determination appeal process if the manifest injustice referral involves:

(a) An ambiguity in the interpretation of the specific facts of the member’s claim that would impact the manner in which the law, rules, or policy applicable to the Arkansas Teacher Retirement System are applied to the member’s claim;

(b) An ambiguity in the interpretation of the law, rules, or policy applicable to the system; or

(c) An ambiguity concerning the proper application of the law, rules, or policy applicable to the system to the specific facts of the member’s claim.

(ii) A board member or staff member of the system shall not be permitted to appeal a committee’s recommendation that is accepted by the executive director.

(iii) A committee’s written recommendation shall not be considered a final decision or order of the system that may be appealed under the Arkansas Administrative Procedure Act.

(4)(A) If a manifest injustice referral is returned to the committee by the executive director, the committee shall reconsider the manifest injustice referral and take into consideration any addition information provided by the executive director.

(B) The committee may maintain or amend its original recommendation after reconsidering a manifest injustice referral that is returned by the executive director.

(C)(i) If the committee maintains its original recommendation and the executive director does not accept the recommendation, the executive director may include the manifest injustice referral as an action item on the agenda of the board’s next scheduled meeting for consideration and resolution by the board.

(ii) If the manifest injustice referral was submitted by a person or entity who is not a board member or staff member of the system, the system shall send the person or entity written notice that:

(a) Provides the time and date on which the board intends to consider the manifest injustice referral;

(b) Advises the person or entity that the person or entity may present arguments to the board concerning the manifest injustice referral;

(c) Advises the person or entity that the system will send the person or entity a written final order of the board after the board meeting; and

(d) Advises that the board’s final order shall be a final decision or order of the system that may be appealed by the person or entity under the Arkansas Administrative Procedure Act.

(D) If the board finds that a manifest injustice does exist, the board may implement a resolution suggested by the system’s staff or an alternative resolution.

(E) A final order of the board concerning a manifest injustice referral shall be considered the final decision or order of the system that may be appealed under the Arkansas Administrative Procedure Act.

Subpart 11

24 CAR § 10-1101 Retirement fund asset accounts {#sec-24-car-10-1101 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-1101}

24 CAR § 10-1101. Retirement fund asset accounts.

(a) In accordance with Arkansas Code § 24-7-405, the Board of Trustees of the Arkansas Teacher Retirement System establishes the following accounts to manage the Arkansas Teacher Retirement System's fund assets and liabilities:

(1) The Members' Deposit Account is the account in which members' contributions, interest, purchases of service, refunds, transfers, and other related activity are reported in accordance with current accounting processes and procedures used by the system's fiscal department;

(2) The Employer Accumulation Account is the account in which employers' contributions and transfers are reported in accordance with current accounting processes and procedures used by the system’s fiscal department;

(3) The Retirement Reserve Account is the account into which transfers for the payment of benefits to retirees and beneficiaries are reported in accordance with current accounting processes and procedures used by the system's fiscal department;

(4) The Income-Expense Account is the account in which all investment income is reported and from which interest credits and other expenses of the board are reported for the administration and operation of the system in accordance with current accounting processes and procedures used by the system's fiscal department; and

(5) The Teacher Deferred Retirement Option Plan Account is the account in which T-DROP participants' T-DROP account activity is reported in accordance with current accounting processes and procedures used by the system’s fiscal department.

(b) The accounts established by the board may have subaccounts as deemed necessary by the system’s staff to further classify and manage the assets of the system.

History

• Codification Notes: “T-DROP” means Teacher Deferred Retirement Option Plan. Authority: Arkansas Code § 24-7-305

Subpart 12

24 CAR § 10-1201 Purpose, construction, and establishment of plan and trust {#sec-24-car-10-1201 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-1201}

24 CAR § 10-1201. Purpose, construction, and establishment of plan and trust.

(a) The Arkansas Teacher Retirement System Benefit Restoration Plan and Trust is established effective upon final adoption by the Board of Trustees of the Arkansas Teacher Retirement System pursuant to authority granted by Arkansas Code § 24-7-305.

(b)(1) The purpose of the plan is solely to restore the part of a participant’s retirement benefit that would otherwise have been payable by the Arkansas Teacher Retirement System except for the limitations of 26 U.S.C. § 415(b).

(2) The plan is intended to be a “qualified governmental excess benefit arrangement” within the meaning of 26 U.S.C. § 415(m)(3) and shall be interpreted and construed consistently with that intent.

(3) This plan is deemed a portion of the employers’ qualified plan solely to the extent required under, and within the meaning of, 26 U.S.C. § 415(m)(3) and Arkansas Code § 24-7-305.

(c)(1)(A) The plan is an “exempt governmental deferred compensation plan” described in 26 U.S.C. § 3121(v)(3).

(B) 26 U.S.C. §§ 83, 402(b), 457(a), and 457(f)(1) do not apply to this plan.

(2) The system shall not hold any assets or income under this plan in trust for the exclusive benefit of participants or their beneficiaries.

(d) Whenever any actuarial present value or actuarial equivalency is to be determined under the plan to establish a benefit, it:

(1) Shall be based on reasonable actuarial assumptions approved by the board in its sole discretion; and

(2) Will be determined in a uniform manner for all similarly situated participants.

24 CAR § 10-1202 Definitions {#sec-24-car-10-1202 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-1202}

24 CAR § 10-1202. Definitions.

(a) The definitions in this section are exclusive to the Arkansas Teacher Retirement System Benefit Restoration Plan and Trust unless stated otherwise.

(b) As used in this subpart:

(1) “Actuary” means the actuary selected by the Board of Trustees of the Arkansas Teacher Retirement System from time to time;

(2) “Administrator” means the Arkansas Teacher Retirement System and includes any person with whom the Arkansas Teacher Retirement System contracts to provide services to the plan;

(3) “Beneficiary” means an individual receiving joint and survivor benefits from the Arkansas Teacher Retirement System;

(4) “Benefit restoration” means the benefit determined in accordance with 24 CAR § 10-1204;

(5) “Benefit Restoration Trust Fund” or “trust fund” means the Benefit Restoration Trust Fund established pursuant to 24 CAR § 10-1206 which fund constitutes a valid trust under the laws of this state;

(6) “Employer” means any public school, other educational agency, or other eligible employer participating in the Arkansas Teacher Retirement System as provided under Arkansas Code § 24-7-202;

(7) “Participant” means a retiree or beneficiary who is entitled to benefits under this plan;

(8) “Plan” means the Arkansas Teacher Retirement System Benefit Restoration Plan and Trust established pursuant to Arkansas Code § 24-7-305;

(9) “Plan year” means the twelve-calendar month period ending on December 31 of each year;

(10) “Retiree” means a member of the Arkansas Teacher Retirement System who is receiving a retirement benefit from the Arkansas Teacher Retirement System;

(11) “Retirement benefit” means the amount of retirement income payable to a retiree, or the benefit payable to a beneficiary, without regard to any limitations on that retirement income or benefit under 26 U.S.C. § 415(b); and

(12) “Retirement fund” means the trust fund established pursuant to Acts 1937, No. 266, approved March 17, 1937.

24 CAR § 10-1203 Participation {#sec-24-car-10-1203 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-1203}

24 CAR § 10-1203. Participation.

(a)(1) All retirees and beneficiaries of the Arkansas Teacher Retirement System are eligible to participate in the Arkansas Teacher Retirement System Benefit Restoration Plan and Trust if their retirement benefits from the system for a plan year are or have been since January 1, 2013, limited by 26 U.S.C. § 415(b).

(2) The Board of Trustees of the Arkansas Teacher Retirement System determine for each plan year which retirees and beneficiaries are eligible to participate in the plan.

(b)(1) Participation in the plan begins each plan year after a retiree or beneficiary has the benefit restoration in that plan year.

(2) Participation in the plan ends:

(A) For any portion of a plan year in which the retirement benefit of a retiree or beneficiary is not limited by 26 U.S.C. § 415(b); or

(B) When all benefit obligations under the plan to the retiree or beneficiary have been satisfied.

24 CAR § 10-1204 Payment of benefits {#sec-24-car-10-1204 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-1204}

24 CAR § 10-1204. Payment of benefits.

(a)(1) A participant in the Arkansas Teacher Retirement System Benefit Restoration Plan and Trust shall receive a benefit equal to the amount of retirement income that would have been payable by the Arkansas Teacher Retirement System to, or with respect to, a participant, that could not be paid because of the application of the limitations on the participant’s retirement income under 26 U.S.C. § 415(b).

(2) The benefit restoration under the plan shall be paid only if and to the extent the participant is receiving retirement benefits from the retirement fund.

(b)(1) The benefit restoration shall be paid at the same time and in the same manner as the retirement benefit payable under the system.

(2) The timing of the benefit restoration shall take into consideration the existence of monthly deductions from the retirement benefit.

(3) No election shall be directly or indirectly provided by the system at any time to the participant to defer compensation under this plan.

(c)(1) A participant’s right to a restoration benefit shall be vested as of the participant’s vesting under the retirement fund.

(2) Additionally, each member in the retirement fund who is receiving a retirement benefit under the retirement fund on the date of adoption of this plan shall be vested.

(3) A beneficiary’s right to a restoration benefit shall be vested as of the date of the participant’s death.

(d) Notwithstanding 24 CAR § 10-1203, if the retirement fund is terminated and employers are making no further contributions to the retirement fund, no further restoration benefits shall be payable after the date that the employers’ contributions to the retirement fund cease unless the employers:

(1) Establish another plan to serve the same purpose; or

(2) Make other arrangements to pay benefit amounts that would have been payable had the plan continued to receive employers’ contributions to fully fund the plan.

24 CAR § 10-1205 Contributions and funding {#sec-24-car-10-1205 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-1205}

24 CAR § 10-1205. Contributions and funding.

(a)(1) The Arkansas Teacher Retirement System Benefit Restoration Plan and Trust is and shall remain unfunded and the rights, if any, of any person to any benefits under the plan are limited to those specified in the plan.

(2) The plan constitutes a mere unsecured promise by the employers to make benefit payments in the future.

(b)(1) The Executive Director of the Arkansas Teacher Retirement System, using authority delegated by the Board of Trustees of the Arkansas Teacher Retirement System, shall determine the amount necessary to pay the benefit restoration under the plan for each plan year.

(2) The Arkansas Teacher Retirement System shall provide an estimate of the benefit restoration on or before March 1 of each year, provided, however, in 2013, the plan administrator will provide an estimate of the benefit restoration within ten (10) days of the effective date of this subpart.

(c)(1) The required contribution will be the aggregate of the benefit restorations payable to all participants for the plan year and an amount determined by the executive director, through delegation, to be a necessary and reasonable expense of administering the plan.

(2)(A) The employers will contribute the amount determined to be necessary to pay the benefit restoration of the participants and administrative expenses of the plan, and these payments will be made before the employers’ deposits are credited to the retirement fund.

(B) The employers’ required contribution will be due at the same time as contributions to the retirement fund.

(C) Under no circumstances will the employers’ contributions to fund the benefit restorations be credited to the retirement fund.

(3)(A) Any contributions not used to pay the benefit restoration for a current plan year, together with any income accruing to the trust fund, shall be used to pay the administrative expenses of the plan for the plan year.

(B) Any contributions not used to pay the benefit restoration for the current plan year that remain after paying administrative expenses of the plan for the plan year will be used to fund administrative expenses or benefits of participants in future plan years.

(d)(1) The system shall account separately for the amounts the executive director, using the authority delegated by the board, determines to be necessary to provide the benefit restoration under the plan for each participant.

(2) However, the separate accounting will not be deemed to set aside these amounts for the benefit of a participant.

(e) Benefits under this plan will be paid from the trust fund.

(f)(1) The consultants, independent auditors, attorneys, and actuaries performing services for the system may also perform services for this plan.

(2) However, any fees attributable to services performed with respect to this plan will be payable solely from the trust fund.

24 CAR § 10-1206 Trust fund {#sec-24-car-10-1206 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-1206}

24 CAR § 10-1206. Trust fund.

(a)(1) The Benefit Restoration Trust Fund is established pursuant to Arkansas Code § 24-7-305, separate from the retirement fund, to hold employers’ contributions to the trust fund.

(2) The trust fund is maintained solely to provide benefits under a qualified governmental excess benefit arrangement within the meaning of 26 U.S.C § 415(m) and pay administrative expenses of this arrangement.

(b) Contributions to the trust fund shall be held separate and apart from the funds comprising the retirement fund and shall not be commingled with assets of the retirement fund and must be accounted for separately.

(c)(1) All assets held by the trust fund to assist in meeting the employers’ obligations under the plan, including all amounts of employers’ contributions made under the Arkansas Teacher Retirement System Benefit Restoration Plan and Trust, all property and rights acquired or purchased with these amounts, and all income attributable to these amounts shall be held separate and apart from other funds of the employers and shall be used exclusively for the uses and purposes of participants and general creditors as set forth in this plan.

(2) Participants do not have a preferred claim on, or any beneficial interest in, any assets of the trust fund.

(3) Any rights created under the plan are unsecured contractual rights of participants against the employers.

(4) Any assets held by the trust fund are subject to the claims of the employers’ general creditors under federal and state law in the event of insolvency.

(d)(1) The trust fund is intended to be a grantor trust, of which the employers are the grantors, within the meaning of Subpart E, Part I, Subchapter J, Chapter 1, Subtitle A of the Internal Revenue Code of 1986 as defined by Arkansas Code § 24-7-202, and will be construed accordingly.

(2) This subsection does not create an irrevocable trust of any kind.

(e) Income accruing to the trust fund under the plan constitutes income derived from the exercise of an essential governmental function upon which the trust fund is exempt from tax under 26 U.S.C. §§ 115 and 415(m) – (l).

24 CAR § 10-1207 Administration {#sec-24-car-10-1207 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-1207}

24 CAR § 10-1207. Administration.

(a)(1) The Board of Trustees of the Arkansas Teacher Retirement System has the exclusive authority to control and manage the operation and administration of the Arkansas Teacher Retirement System Benefit Restoration Plan and Trust.

(2) The board has the same rights, duties, and responsibilities respecting the plan as it has with respect to the retirement fund.

(3) The administrator has the same duties and authority respecting the plan as the administrator has with respect to the retirement fund.

(b) The board has the power and authority, including without limitation discretion with respect to the exercise of that power and authority, necessary, advisable, desirable, or convenient to enable it to:

(1) Establish procedures to administer the plan in a manner that is not inconsistent with the plan and the Internal Revenue Code as defined by Arkansas Code § 24-7-202, and to amend or rescind these procedures;

(2) Determine, consistent with the plan, applicable law, rules, or regulations, all questions of law or fact that may arise as to eligibility for participation in the plan and eligibility for distribution of benefits from the plan, and the status of any person claiming benefits under the plan;

(3) Make payments from the trust fund to participants pursuant to 24 CAR § 10-1504;

(4) Contract with a third party to perform designated administrative services under this plan; and

(5) Construe and interpret the plan as to administrative issues and to correct any defect, supply any omission, or reconcile any inconsistency in the plan with respect to same, subject to and consistent with the Internal Revenue Code as defined by Arkansas Code § 24-7-202.

(c)(1) Any action by the board that is not found to be an abuse of discretion will be final, conclusive, and binding on all individuals affected thereby.

(2) The board may take any such action in such manner and to such extent as the board in its sole discretion may deem expedient, and the board will be the sole and final judge of such expediency.

(d)(1) The board may delegate any of its authority to the administrator with respect to the trust fund.

(2) The board has delegated certain authority as set forth herein to the Executive Director of the Arkansas Teacher Retirement System.

(e)(1) The board may obtain assistance and advice with regard to its responsibilities under the plan.

(2) If in doubt concerning the correctness of their action in making a payment of a benefit, the board may suspend payment until satisfied as to the correctness of the payment or the person to receive the payment.

(f) The administrator shall handle the day-to-day operation of the plan and may delegate certain functions to a third party as required.

24 CAR § 10-1208 Plan amendments {#sec-24-car-10-1208 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-1208}

24 CAR § 10-1208. Plan amendments.

The Board of Trustees of the Arkansas Teacher Retirement System, from time to time, may amend, suspend, or terminate any or all of the provisions of the Arkansas Teacher Retirement System Benefit Restoration Plan and Trust as may be necessary to:

(1) Comply with 26 U.S.C. § 415(m); and

(2) Maintain the plan’s or the retirement fund’s qualified status under the Internal Revenue Code as defined by Arkansas Code § 24-7-202.

24 CAR § 10-1209 Nonassignability and exemption from taxation and execution {#sec-24-car-10-1209 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-1209}

24 CAR § 10-1209. Nonassignability and exemption from taxation and execution.

The interests of participants under the Arkansas Teacher Retirement System Benefit Restoration Plan and Trust:

(1) Are exempt from any state, county, municipal, or local tax;

(2) Are not subject to execution, garnishment, attachment, or any other process of law whatsoever; and

(3) Are unassignable and nontransferable.

24 CAR § 10-1210 Miscellaneous {#sec-24-car-10-1210 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-1210}

24 CAR § 10-1210. Miscellaneous.

(a) The Board of Trustees of the Arkansas Teacher Retirement System, the employers, and the administrator, if any, do not guarantee that any particular federal or state income, payroll, or other tax consequence will occur because of participation in the Arkansas Teacher Retirement System Benefit Restoration Plan and Trust.

(b) The board may hold the assets of the plan uninvested as it deems advisable for making distributions under the plan.

(c) In resolving any conflict between provisions of the plan, and in resolving any other uncertainty as to the meaning or intention of any provision of the plan, the prevailing interpretation shall be the interpretation that:

(1) Causes the plan to constitute a qualified governmental excess benefit arrangement under 26 U.S.C. § 415(m) and the trust fund to be exempt from tax under 26 U.S.C. §§ 115 and 415(m);

(2) Causes the plan and the Arkansas Teacher Retirement System to comply with all applicable requirements of the Internal Revenue Code as defined by Arkansas Code § 24-7-202; and

(3) Causes the plan and the system to comply with all applicable laws of this state.

(d) Neither the establishment nor maintenance of the plan, nor any amendment to the plan, nor any act or omission under the plan or resulting from the operation of the plan shall be construed:

(1) As conferring upon any participant or any other person a right or claim against the board, trustees on the board, employers, or administrator, if any, except to the extent that the right or claim is specifically expressed and provided in the plan;

(2) As creating any responsibility or liability of the employers for the validity or effect of the plan;

(3) As a contract between the employers and any participant or other person;

(4) As being consideration for, or an inducement or condition of, employment of any participant or other person, or as affecting or restricting in any manner or to any extent whatsoever the rights or obligations of the employers or any participant or other person to continue or terminate the employment relationship at any time; or

(5) As giving any participant the right to be retained in any employer’s service or to interfere with any employer’s right to discharge any participant or other person at any time.

(e) Any benefit payment that should not have been made according to the terms of the plan and the benefits provided under the plan may be recovered as provided by law.

(f)(1) Any payment to any participant shall, to the extent of the payment, be in full satisfaction of the participant’s claim for which the payment is being made.

(2) The board may condition the payment on the participant’s delivery of a duly executed receipt and release in a form determined by the board.

(g)(1) The board, board trustees, administrator, if any, shall not incur any liability in acting upon any paper or document or electronic transmission believed by the board, board trustees, or administrator to be genuine or to be executed or sent by an authorized person.

(2) The plan shall hold harmless and indemnify the board, the board trustees, and the administrator, and the officers and employees thereof, from financial loss arising out of any claim, demand, suit, or judgment by reason of alleged negligence or other act by that board member, trustee, officer, or employee if:

(A) The board member, trustee, officer, or employee at the time of the alleged negligence or act was acting in the discharge of his or her duties and within the scope of his or her employment;

(B) The damages did not result from a willful and wrongful act of gross negligence of the board member, trustee, officer, or employee; and

(C) The board member, trustee, officer, or employee shall, within five (5) days of the time he or she is served with any summons, complaint, process, notice, demand, or pleading, deliver the original or a copy thereof to the administrator’s legal advisor.

(3) The board may obtain insurance to provide coverage for any liabilities that may arise as described by this subpart.

(h) The plan does not directly or indirectly waive any sovereign immunity protection of the board, board trustees, administrator, or officers and employees thereof.

(i) The laws of Arkansas apply in determining the construction and validity of this plan.

(j)(1) The only party necessary to any accounting, litigation, or other proceedings relating to the plan is the administrator.

(2) The settlement or judgment in any case in which the administrator is duly served will be binding upon all affected participants in the plan, their beneficiaries, estates, and all persons claiming by, through, or under them.

(k) If any provision of the plan is held by a court of competent jurisdiction to be invalid or unenforceable, the remaining provisions of the plan will continue to be fully effective.

Subpart 13

24 CAR § 10-1301 Definitions {#sec-24-car-10-1301 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-1301}

24 CAR § 10-1301. Definitions.

As used in this subpart:

(1) “CASH Program” has the same meaning as “buyout plan” as defined in Arkansas Code § 24-7-505; and

(2) “CASH Program payment” means the one-time lump-sum cash payment made to a member who elects to participate in the CASH Program.

History

• Codification Notes: “CASH” means cash and savings help. Authority: Arkansas Code § 24-7-305

24 CAR § 10-1302 CASH Program {#sec-24-car-10-1302 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-1302}

24 CAR § 10-1302. CASH Program.

(a) The Board of Trustees of the Arkansas Teacher Retirement System by resolution shall establish and approve the category of members who are eligible to participate in the CASH Program, the CASH Program offering period, and the formula to be used during a CASH Program offering period.

(b)(1) In accordance with Arkansas Code § 24-7-505, this subpart, and applicable resolutions of the board, the Arkansas Teacher Retirement System shall determine if a member is qualified to receive a CASH Program payment.

(2) Only qualifying members may receive a CASH Program payment.

(3) Any erroneous delivery of a CASH Program election form by the system to a member shall not establish the member’s right to a CASH Program payment.

History

• Codification Notes: “CASH” means cash and savings help. Authority: Arkansas Code § 24-7-305

24 CAR § 10-1303 CASH Program payment {#sec-24-car-10-1303 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-1303}

24 CAR § 10-1303. CASH Program payment.

(a) The tender of a CASH Program payment by the Arkansas Teacher Retirement System to a member who elects to participate in the CASH Program shall:

(1) Cancel the member’s membership in the system;

(2) Extinguish any credited service the member has accumulated in the system; and

(3) Extinguish the member’s right to any future retirement benefit that the member would have received from the system based on the member's service.

(b)(1) The opportunity for a CASH Program payment shall be available:

(A) In accordance with the provisions of Arkansas Code § 24-7-505 and this subpart; and

(B) Only for a specific and temporary period of time to a specific category of members.

(2) The Board of Trustees of the Arkansas Teacher Retirement System may determine the category of members of the system to whom a CASH Program payment may be offered.

(c)(1) The CASH Program payment shall be calculated under a formula that is:

(A) Unique to the category of members to whom the CASH Program payment is available; and

(B) Applicable for the offering period exclusively.

(2)(A) The system shall not be obligated to extend a CASH Program payment offer or to make a future or similar CASH Program payment offer.

(B) The terms, rules, and rights for any CASH Program payment offer under a specific offering period shall not apply to a subsequent CASH Program payment offering.

(d) A CASH Program payment:

(1) Shall be tendered only for actual service credit that a member has in the system; and

(2) Shall not be tendered for reciprocal service credit that a member has in the system.

(e)(1) A CASH Program payment may be:

(A) Made by check and may be mailed to a member’s address; or

(B)(i) At the member’s direction, directly rolled over into a qualifying retirement plan under Arkansas Code § 24-7-719.

(ii) The system shall roll over a CASH Program payment into only one (1) qualifying retirement plan.

(2)(A) The system shall make reasonable efforts to contact all members who are eligible to participate in the CASH Program.

(B) However, the system shall not be obligated to:

(i) Contact a member to verify the accuracy of the member’s last address of record on file with the system;

(ii) Confirm a member’s receipt of a CASH Program offer;

(iii) Confirm a member’s receipt of a CASH Program election form; or

(iv) Confirm that the system has received a CASH Program election form submitted by a member.

History

• Codification Notes: “CASH” means cash and savings help. Authority: Arkansas Code § 24-7-305

24 CAR § 10-1304 CASH Program — Offering period {#sec-24-car-10-1304 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-1304}

24 CAR § 10-1304. CASH Program — Offering period.

(a) The Board of Trustees of the Arkansas Trustee Retirement System shall set the dates for any CASH Program offering period.

(b)(1) After the board sets a specific CASH Program offering period, only members who submit an election to participate in the CASH Program to the Arkansas Teacher Retirement System shall qualify to receive a CASH Program payment that is available during the CASH Program offering period set by the board.

(2) However, a member shall not qualify to receive a CASH Program payment that is available during a CASH Program offering period set by the board if the member submits his or her election to participate in the CASH Program after the CASH Program offering period deadline.

(c) The board by resolution may re-offer a previously expired CASH Program or may extend the duration of a current CASH Program offering period.

History

• Codification Notes: “CASH” means cash and savings help. Authority: Arkansas Code § 24-7-305

24 CAR § 10-1305 CASH Program — Election form {#sec-24-car-10-1305 omnilex-key=us-ar-regs-official--title-24-part-10--24 CAR § 10-1305}

24 CAR § 10-1305. CASH Program — Election form.

(a)(1) The CASH Program election form shall be made available to members using the Arkansas Teacher Retirement System’s standard procedures.

(2) The system shall not be responsible for confirming the member’s receipt of a CASH Program election form, regardless of the manner in which the member requested to be provided with the CASH Program election form.

(3) The member shall be solely responsible for obtaining and submitting to the system a CASH Program election from as required under this subpart.

(b)(1) A member’s election to participate in the CASH Program shall be submitted to the system on a form approved by the system before the applicable CASH Program offering period deadline.

(2) A CASH Program election form is invalid and shall not be accepted by the system if it:

(A) Has not been completed in its entirety by the member or as required by this subpart;

(B) Is postmarked after the CASH Program offering period deadline;

(C) Is submitted by facsimile and has a date-stamp that is after the CASH Program offering period deadline; or

(D) Is sent as an attachment to an email and the email is sent after the CASH Program offering deadline.

(c) A CASH Program election form shall include the following:

(1) The member’s signature and the date on which the member signed the election form; and

(2) The member’s signed statement that he or she understands that:

(A) The purpose and scope of the CASH Program and that the CASH Program election form cannot be withdrawn by the member after the system tenders the CASH Program payment to the member; and

(B) A member who participates in the CASH Program plan shall receive a one-time lump-sum payment from the system that, upon the system’s tender of payment, cancels the member's interest in any retirement benefit and all future rights in the system.

History

• Codification Notes: “CASH” means cash and savings help. Authority: Arkansas Code § 24-7-305