HB1341
To Amend The Law Concerning Benefits Under The Arkansas Local Police And Fire Retirement System; And To Amend The Definition Of "pay" Under The Arkansas Local Police And Fire Retirement System.
AI-Generated Summary
This bill proposes amendments to the Arkansas Local Police and Fire Retirement System. It specifically targets the definition of "pay" used for calculating retirement benefits. The amendment seeks to exclude certain types of payments from being considered "pay," including special single-sum payments, employer contributions to employee benefit plans, and any other unusual or nonrecurring remuneration. Additionally, it introduces provisions for active members receiving temporary workers' compensation benefits. These members may remit their workers' compensation benefits to their employer, who will then report the total pay to the system. However, the reported pay for any month cannot exceed what the member would have earned if they had not received workers' compensation. The bill also updates the reference date for Internal Revenue Code limitations on annual compensation that shall be disregarded. The intent is to refine how retirement "pay" is calculated for police and fire personnel.
Potential Impact Analysis
Who Might Benefit?
The primary beneficiaries of this bill would be active members of the Arkansas Local Police and Fire Retirement System who may be injured and receive temporary workers' compensation benefits. By allowing them to remit these benefits to their employer and have their regular pay reported to the system, it potentially ensures their retirement calculations are not negatively impacted by short-term disability. Additionally, the retirement system itself might benefit from a more standardized and predictable calculation of "pay," by explicitly excluding non-recurring or unusual payments. Employers of covered police and fire personnel would also be directly involved and potentially benefit from clearer guidelines on how to report pay in specific circumstances.
Who Might Suffer?
The primary groups that could be negatively impacted are active members of the Arkansas Local Police and Fire Retirement System if they are unable to remit temporary workers' compensation benefits to their employer, or if the employer does not manage the reporting correctly. This could lead to a lower calculation of their "pay" and consequently a reduced retirement benefit. The retirement system itself could also face administrative complexities in ensuring compliance with the new provisions, particularly regarding the remittance of workers' compensation benefits and the accurate reporting of "pay" that adheres to the modified definition. Any individuals or situations that fall under the newly excluded categories of "pay" would see a direct reduction in the amount considered for their retirement benefits.