HB1211
To Make Technical Corrections And Clarify Language For The Proper Administration Of Benefits Under The Arkansas Public Employees’ Retirement System.
AI-Generated Summary
This bill proposes technical corrections and language clarifications for the Arkansas Public Employees' Retirement System. It amends the definition of "compensation" to include various recurring remuneration payments and specific types of bonuses or lump-sum payments made to members. The bill specifies limitations on the amount of certain bonuses or lump-sum payments that can be considered compensation during a member's final year of employment. Additionally, it repeals existing sections of the Arkansas Code related to the termination of qualified employment and the commencement of annuity payments. The bill also amends a section concerning the forfeiture of benefits until termination requirements are met, by clarifying language for members who fail to meet these requirements. The stated purpose is to ensure the proper administration of benefits under the retirement system. The bill aims to adjust how certain payments are calculated for retirement benefit purposes.
Potential Impact Analysis
Who Might Benefit?
The primary beneficiaries of this bill would be current and future members of the Arkansas Public Employees' Retirement System. Specifically, those members who receive career service recognition payments, payments under § 21-5-1101, certain payments under § 14-14-1206(a), bonuses or lump-sum payments under § 14-42-308, or lump-sum payments under § 21-5-211, § 21-5-219 (repealed), § 21-5-227, and bonus payments under § 21-5-228, may see their retirement benefit calculations adjusted. If these payments are now more consistently or inclusively counted as "recurring remuneration," it could potentially lead to higher retirement benefits for these individuals. The administrators of the Arkansas Public Employees' Retirement System would also benefit from clarified language, potentially streamlining the administrative processes for calculating and distributing benefits.
Who Might Suffer?
The groups most directly negatively impacted by this bill would be members of the Arkansas Public Employees' Retirement System who might have previously had certain bonus or lump-sum payments counted more favorably towards their retirement compensation, or those who may now face stricter limitations on how these payments are calculated in their final years of employment. The explicit limitations placed on bonuses or lump-sum payments in the last year of employment, specifically the lesser of 5% of current year's salary or the previous year's amount, could reduce the final compensation used for retirement calculations for some individuals. Additionally, the repeal of sections § 24-4-110 and § 24-4-111, and the amended language in § 24-4-520(d), could negatively impact members who were under the previous interpretations of when annuity payments could commence or how retirement elections were handled in relation to termination requirements, potentially delaying or complicating their access to benefits.