2021 APERS LEGISLATION UPDATE

Note: To view the legislative update for the State Police Retirement System click here. There were no legislative changes for the Arkansas Judicial Retirement System.


 The 93rd General Assembly enacted laws concerning provisions of APERS that affect your participation in or benefits from the system. Below is information about those laws. 

Summary of Laws

  • Act 20 – Termination Period
  • Act 365 – Member Contributions
  • Act 366 – Redetermination of Benefits (COLA)
  • Act 370 – Member Contributions
  • Act 518 – Duration of Participation in the DROP
  • Act 686 – Membership of the Board of Trustees
  • Act 687 - Membership of Volunteer Firefighters and Police Officers

Act 20 – Termination Period

Current Provision: Generally, a member is not terminated from employment for retirement purposes if that person returns to employment in a position covered by the system within one hundred eighty (180) days of the person’s effective date of retirement.

New Provision: Act 20 exempts from the termination period a member who returns to temporary employment with the House of Representatives, the Senate, the Bureau of Legislative Research, Arkansas Legislative Audit, or the Arkansas Code Revision Commission during a regular session, fiscal session, or special session.


Act 365 – Member Contributions

Current Provision: For members first hired on or after July 1, 2005, the member contribution rate is five percent (5%).

New Provision: Act 365 increases the member contribution rate beginning July 1, 2022. This act affects all existing and future contributory members on that date. Beginning July 1, 2022 and continuing each following fiscal year, the rate increases in increments of twenty-five hundredths of one percent (0.25%) until it reaches a maximum of seven percent (7%).

Below is a schedule of member contribution rate increases.

Effective Date            

Contribution Rate      

July 1, 2022

5.25%

July 1, 2023

5.50%

July 1, 2024

5.75%

July 1, 2025

6.00%

July 1, 2026

6.25%

July 1, 2027

6.50%

July 1, 2028

6.75%

July 1, 2029

7.00%

 


Act 366 – Redetermination of Benefits (COLA)

Current Provision: Each July 1, we redetermine the monthly benefit amount for retirees who received benefits for at least 12 calendar months. The redetermined amount or cost of living adjustment (COLA) is the preceding July 1 amount increased by three percent (3%).

New Provision: Act 366 changes the redetermination method for members first hired on or after July 1, 2022. This act does not affect existing retirees. For members first hired on or after July 1, 2022, the redetermined amount is the monthly benefit payable as of the preceding July 1 increased by the lesser of:

  • Three percent (3%), or
  • The percentage change in the Consumer Price Index for Urban Wage Earnings and Clerical Workers (CPI-W) over the one-year period ending in the December preceding the redetermination date.

The redetermined amount will not be less than the redetermined amount that we paid to the retiree in the preceding year.


Act 370 – Final Average Compensation

Current Provision: “Final average compensation” is the average of the highest annual compensations paid to a member during any period of three (3) years of credited service.

New Provision: Act 370 changes the number of years used in the computation of the final average compensation (FAC) to five years for a member first hired on or after July 1, 2022. This change does not affect members first hired before that date; we will continue to compute their FAC using three years. For members first hired on or after July 1, 2022, the final average compensation is the average of the five (5) highest annual compensations paid to the member during a completed fiscal year.


Act 518 – Duration of Participation in the DROP

Current Provision: The duration of participation in Deferred Retirement Option Plan (DROP) cannot exceed seven (7) years.

New Provision: Act 518 increases the maximum duration of participation in the DROP to ten (10) years effective March 31, 2021. It permits an immediate continuation of service for current DROP participants. If you are an active participant on the effective date of the change, you are eligible to remain in the DROP for up to 10 years. This change does not affect former DROP participants who reached the 7-year maximum before the effective date of the act.


Act 518 does not change any DROP provisions other than the maximum duration. The eligibility requirements, election to participate, amount of benefit, contribution rate, and interest remain the same.


If you reach the 10-year maximum duration, the requirement to separate from service remains the same. When your participation ends, you must elect to receive the balance in your DROP account as a lump sum or as a monthly benefit, and we also begin paying your annuity benefit in regular monthly amounts.


Act 686 – Membership of the Board of Trustees

Current Provision: The APERS Board of Trustees consists of nine (9) trustees. The 9 trustees include the following members:

  • The Auditor of State, Treasurer of State, and the Secretary of the Department of Finance and Administration as ex officio members, and
  • Three (3) members who are state employees and three (3) members who are nonstate employees appointed by the Governor.

New Provision: The board will consist of thirteen (13) trustees including the following members:

  • The Auditor of State, Treasurer of State, and the Secretary of the Department of Finance and Administration,
  • Three (3) members who are state employees and three (3) members who are nonstate employees appointed by the Governor,
  • Two (2) members who retired from the system including one (1) who is a retired law enforcement officer to be appointed by the President Pro Tempore of the Senate, and
  • Two (2) members who retired from the system including one (1) who is a retired law enforcement officer to be appointed by the Speaker of the House of Representatives.

Act 687 – Membership of Volunteer Firefighters and Police Officers

Current Provision: Only volunteer firefighters participating in a local firemen’s pension fund are permitted to be members of APERS at the same time.

New Provision: Volunteer firefighters and volunteer police officers covered by the Arkansas Local Police and Fire Retirement System (LOPFI) also are permitted to be members of APERS at the same time.


Legislation Questions

If you have a general question about legislation, please submit your question through the contact page on our website. If you have a specific question about legislation regarding your individual member account, please send us a secure message in the member self-service (MSS) portal.

 

 

 

 

Arkansas public employees retirement system

Here you will find information based on your role in our system, whether you are an active member, near retirement, a retired member or an APERS participating employer.