Arkansas Administrative Code › Agency 088 - Arkansas Teacher Retirement System › Rule 088.00.05-004 - Policy No. 0-1: Organization and Operation ; Removal of Policy Nos. 1-1 thru 1-15: Governance, Policy Nos. 2-1 thru 2-4: Perspectives/Ends, and Policy Nos. 3-1 thru 3-11: Executive Director Constraints and Executive Director Relationship with the Board

Current through Register Vol. 49, No. 6, June, 2024
I.
INFORMATION FOR PUBLIC GUIDANCE
The Arkansas Teacher Retirement System ("ATRS") is located at
			 1400 West Third Street, Little Rock, AR 72201. Questions about ATRS may be
			 addressed by visiting the ATRS website (
http://www.atrs.state.ar.us
);
			 e-mailing ATRS at info@atrs.state.ar.us; phoning ATRS at 1-800-666-2877 or
			 501-682-1517; or sending a fax to ATRS at 1-800-682-2663. Visits may be made to
			 the ATRS office between 8:00 a.m. and 4:30 p.m. Monday through Friday, except
			 on holidays. Appointments are not required but are suggested.
ATRS makes available a list of persons holding certain
			 responsibilities for handling FOIA requests and requests by the public so that
			 the public may obtain information about ATRS or make submissions or requests.
			 The names, mailing addresses, telephone numbers, and electronic addresses can
			 be obtained from the ATRS office or website.
The ATRS policies, rules and regulations, and official forms may
			 be obtained from the ATRS office or from the ATRS website.
II.
DESCRIPTION OF THE ARKANSAS
		  TEACHER RETIREMENT SYSTEM
The Arkansas Teacher Retirement System ("ATRS") is a cost-sharing
			 multiple-employer, defined benefit pension plan established on March 17, 1937
			 by authority of the Arkansas General Assembly under Act 266 of 1937 (Ark. Code
			 Ann. § 24-7-101 et. seq). ATRS is operated as a "qualified trust" under
			 section 401(a) of the Internal Revenue Code. ATRS is a component unit of the
			 State of Arkansas.
The General Assembly is responsible for setting benefits and
			 contributions and amending plan provisions.
Ultimate authority, general administration and responsibility for
			 the proper operation of ATRS and for making effective the provisions of A.C.A.
			 §§ 24-7-201 et seq. are vested in a fifteen-member board of trustees.
			 Eleven members are elected, and four members serve as ex officio members by
			 virtue of their positions in state government. The board appoints the executive
			 director of ATRS who serves as its chief executive officer. From time to time,
			 the board promulgates rules and regulations.
For administrative purposes, the agency is comprised of several
			 divisions: Administration, Membership Services, Data Processing, Investments,
			 and Fiscal Affairs.
III.
ORGANIZATION AND OPERATION OF THE ATRS BOARD OF TRUSTEES
The officers of the ATRS board of trustees are a Chair and Vice
			 Chair. Election of officers is held in the odd numbered years at the first
			 regular meeting after the beginning of the fiscal year. These officers perform
			 the duties prescribed by applicable law, this rule, and Robert's Rules of
			 Order.
The business of ATRS is conducted in public meeting pursuant to
			 Robert's Rules of Order. All meetings are conducted in conformity with the
			 Arkansas Freedom of Information Act. Regular meetings are held at least
			 quarterly. Special meetings may be held on the call of the chair or as
			 scheduled by action of the Board in a regular meeting.
A quorum for the transaction of business is a majority of the
			 number of voting members of the board.
The ATRS board of trustees may create standing and ad hoc
			 committees whose membership is determined by the chair of the board. A quorum
			 for the transaction of committee business is a majority of the number of voting
			 members of the committee.
The Executive Director prepares the agenda for regular and
			 special meetings. The agenda is distributed to Board members and made available
			 to the public in advance of the meeting. The agenda may be amended by
			 appropriate motion.
Trustees, members, and other individuals wishing to have
			 additional items considered for the agenda should submit a request to the
			 Executive Director prior to a regularly scheduled meeting.
IV.
RULEMAKING
The ATRS board has been authorized by the Legislature to
			 promulgate rules. ATRS follows the procedural requirements of the Arkansas
			 Administrative Procedure Act, in particular A.C.A. § 25-15-203 and §
			 25-15-204. Additionally, ATRS is required to abide by the provisions of A.C.A.
			 §10-3-309.
The process of adopting a new rule or amending or repealing an
			 existing rule (hereinafter referred to as "rulemaking") may be initiated by
			 request of the board or the ATRS staff. Additionally, persons outside the
			 agency may petition for the issuance, amendment, or repeal of any rule.
ATRS will give public notice of proposed rulemaking to be
			 published pursuant to A.C.A. § 25-15-204. The notice will set any written
			 comment period and will specify the time, date, and place of any public
			 hearing, if any.
Before finalizing language of a proposed new rule or an amendment
			 to, or repeal of, an existing rule, ATRS will receive public input through
			 written comments and/or oral submissions. ATRS will designate in the public
			 notice the format and timing of public comment.
A public hearing may be held; if so, it will provide affected
			 persons and other members of the public a reasonable opportunity for
			 presentation of evidence, arguments, and oral statements within reasonable
			 conditions and limitations imposed by the agency to avoid duplication,
			 irrelevant comments, unnecessary delay, or disruption of the
			 proceedings.
Thirty days before the public comment period ends, ATRS will file
			 with the Bureau of Legislative Research the text of the proposed rule or
			 amendment as well as a financial impact statement and a Bureau of Legislative
			 Research questionnaire as provided by §10-3-309. In addition, a copy of
			 the public notice, the text of the proposed rule or amendment, and a summary
			 will be filed with the Secretary of State. Also, a copy of the public notice
			 and the text of the proposed rule or amendment will be published on the ATRS
			 website, if available.
Generally, proposed rules or amendments will be reviewed by the
			 appropriate committee of the ATRS Board of Trustees for recommendation prior to
			 submission to the full Board for consideration and final action.
ATRS will not finalize language of the rule or decide whether to
			 adopt a rule until the period for public comment has expired.
After the ATRS board formally adopts a new rule or amends a
			 current rule or repeals an existing rule, and after the rule change has been
			 reviewed by the Legislative Council, ATRS staff will file final copies of the
			 rule with the Secretary of State, the Arkansas State Library, and the Bureau of
			 Legislative Research, or as otherwise provided by A.C.A. §
			 25-15-204(d).
Proof of filing a copy of the rule, amendment, or repeal with the
			 Secretary of State, the Arkansas State Library, and the Bureau of Legislative
			 Research will be kept in a file maintained by the Executive Director's
			 Office.
Notice of the rule change will be posted on the agency website,
			 if available, and rules will be made available to interested persons.
V.
EMERGENCY
		  RULEMAKING
Upon receipt of a written statement requesting emergency
			 rulemaking or other evidence to support an assertion that an emergency exists,
			 ATRS will make an independent judgment whether the circumstances and facts
			 constitute an imminent peril to the public health, safety, or welfare requiring
			 adoption of the rule with fewer than 30 days notice. If it is determined that
			 the circumstances warrant emergency rulemaking, a written determination setting
			 out the reasons for the finding that an emergency exists will be made. Upon
			 making this finding, the ATRS board may proceed to adopt the rule without any
			 prior notice or hearing, or it may determine to provide an abbreviated notice
			 and hearing.
The emergency rule will be effective immediately upon filing, or
			 at a stated time less than ten (10) days thereafter, if ATRS finds that this
			 effective date is necessary because of imminent peril to the public health,
			 safety, or welfare. ATRS will file with the rule its written findings
			 justifying the determination that emergency rulemaking is appropriate and, if
			 applicable, the basis for the effective date of the emergency rule being less
			 than ten days after the filing of the rule pursuant to A.C.A. §
			 25-15-204(e).
VI.
APPEALS
An ATRS member, beneficiary, survivor, retiree or employer may
			 request a review of an administrative decision made by the Executive Director
			 or an ATRS staff member concerning membership, benefits, service, contributions
			 or refunds. A description of the appeals process may be obtained by contacting
			 ATRS or from the ATRS website.
NOTE:
These are general rules for the organization
			 and operation of the system. Additional and more specific information is
			 provided in the Policies, Rules and Regulations of ATRS, which may be found on
			 the ATRS website (
www.atrs.state.ar.us
under
			 "Publications") or which may be obtained by contacting the Executive Director's
			 office at 501-682-1517 or 1-800-666-2877).
POLICY TYPE: Governance Process
POLICY TITLE: Authority, Function, and Style
The authority and responsibility for the administration,
			 management, and control of the Retirement System, and for the construing and
			 carrying out the provisions of the plan is vested in the Board of Trustees
			 (hereinafter the "Board"). The Board is responsible for the governance of the
			 System. It is accountable for establishing policies and for supervising the
			 implementation of those policies in compliance with all applicable legal
			 mandates.
The function of the Board is to make certain contributions that
			 lead the Retirement System toward the desired performance and ensure that it
			 occurs. The Board's specific contributions are
unique
to its
			 trusteeship role and
necessary
for appropriate governance and
			 management. Board decisions are to be based on facts and expert
			 opinions.
The Board will approach its task with a style that emphasizes
			 outward vision rather than an internal preoccupation; encouragement of
			 diversity of viewpoints; strategic leadership more than administrative detail;
			 clear distinction of Board and staff roles; future rather than past or present;
			 and proactive rather than reactive.
Consequently, the contributions of the Board shall be:
1. The link between the Retirement System and
		  its members.1
2. Written governing policies that, at the
		  broadest levels, address:
A.
Governance Process:
Specification of how the
		  Board conceives, carries out, and monitors its own task.
B.
Board-Staff
		  Relationship
:
How authority is delegated and its
		  appropriate use is monitored.
C.
Ends:
Retirement system products, impacts,
		  benefits, and outcomes (what good for which needs at what cost).
D.
Limitations:
Constraints
		  on executive authority that establish the prudence and ethics boundaries within
		  which executive activity, decisions, and organizational matters shall be
		  carried out.
3. The
		  assurance of Executive Director performance against policies in Nos. 2C and 2D
		  above.
POLICY TYPE: Governance Process
POLICY TITLE: Guiding Principles
1. The Board of Trustees is dedicated to the
		  proposition that its paramount purpose is that of providing an adequate and
		  equitable retirement plan for the members of the teaching profession; to
		  protect this group in the event total and permanent disability causes them to
		  be unable to continue employment in their profession; and to provide in part
		  for their dependents in case of death.
2. The Board is responsible for the prudent
		  investment of System funds. The two paramount considerations in fund investment
		  are safety and yield, with yield being of first importance, provided such
		  investments comply with legally mandated safeguards.
3. The Board should be fully informed of its
		  financial liabilities, not only to the retirants and beneficiaries, but also to
		  active members of the teaching profession, and to make those liabilities known
		  to members of the state legislature, to other state officials, and to
		  education-related organizations.
4.
		  The Board should provide all interested citizens with information regarding the
		  System's procedures for investing system funds, as well as the budgeting,
		  control, and disbursement of those funds.
5. The Board will actively promote the
		  enactment of state and federal legislation that may improve the economic
		  welfare of ATRS members.
6. The
		  Board endorses programs of counseling and information designed to assist
		  members who are approaching retirement.
7. The Board should be knowledgeable of the
		  most current information regarding effective, efficient governance and
		  operation of state retirement systems that could augment prudent decisions for
		  the benefit of members. To this end, Board members are encouraged to actively
		  participate in regional and national retirement organization programs that
		  offer such information and training.
POLICY TYPE: Governance Process
POLICY TITLE: Code of Conduct
The Board expects of itself and its members ethical and
			 business-like conduct.
1.
		  Board members, as fiduciaries, shall discharge their duties solely in the best
		  interest of the system members for the exclusive purpose of providing optimum
		  benefits.
2. Board members must
		  avoid any conflict of interest with respect to their fiduciary responsibility.
		  Board members must not use their positions to obtain favorable treatment for
		  themselves, family members, or close employees.
3. Board members who desire specific
		  information from firms employed by the System should make the request through
		  the Executive Director.
4. Board
		  members shall not, directly or indirectly, solicit or accept any gift of value
		  as defined by the Arkansas Ethics Commission.
5. Board members shall decline any offer and
		  shall not have any contact with anyone associated with a firm that the Board is
		  considering employing after requests for proposals (RFP's) have been
		  sent.
6. Board members shall not
		  attempt to exercise individual authority over the operation of the retirement
		  system or staff members except as explicitly set forth in Board policies. Board
		  members' interaction with the staff, public, press, or other entities must
		  recognize the inability of any Board member or Board members to speak for the
		  Board.
7. Board members shall
		  report violations of any of these policies of conduct in writing to the Board
		  Chair.
POLICY TYPE: Governance Process
POLICY TITLE: Board Member Development
The Retirement Board is responsible for its own readiness for
			 Board work and the performance of that work.
1. The Board determines appropriate issues
		  for Board work and appropriate issues to be addressed, as well as the education
		  and data required to address those issues wisely.
2. The Board determines the need and
		  mechanisms for Board development.
A. Among the
		  mechanisms will be membership in the National Council on Teacher Retirement,
		  Board-approved consultants, and seminars provided by employees of the
		  Retirement System.
B. The Board's
		  annual plan will include expected outcomes, costs, and scheduling of the Board
		  development effort.
C. The Board
		  will set forth the educational experiences it determines appropriate for a new
		  Board member.
3. One or
		  more members appointed by the Board Chair will conduct new member orientation.
		  The Board Chair will designate one member of the Board to be a mentor for a new
		  Board member for a period of one year.
4. The Board may enlist assistance from the
		  Executive Director in any phase of its own development.
POLICY TYPE: Governance Process
POLICY TITLE: Board Meetings
The Board shall hold regular meetings at least quarterly.
			 Additional meetings may be called by the Chair or scheduled by action of the
			 Board in a regular meeting. The Board shall adopt its own rules of procedure,
			 which shall be subject to the following:
1. The Board shall elect a Chair and Vice
		  Chair from its own membership. The election will be in the odd numbered years
		  at the first regular meeting after the beginning of the fiscal year. The Chair
		  and Vice Chair shall be elected for a term of two years and may be reelected
		  for one additional two-year term. The Chair and Vice Chair shall be either an
		  active member or retirant trustee. A Board member must have served at least one
		  full year as a member of the Board to be eligible for election to the position
		  of Chair or Vice Chair.
2. In the
		  event a vacancy of the Chair or Vice Chair occurs for any reason other than
		  completion of a term, the Board shall fill said vacancy by election from the
		  existing Board members for the remainder of the unexpired term at its next
		  regular meeting. A trustee elected to fill an unexpired term of the Chair or
		  Vice Chair shall be eligible for two additional two-year terms.
3.
Quorum
: Eight trustees shall
		  constitute a quorum at any meeting of the Board.
4. Each trustee shall be entitled to one vote
		  on each question before the Board, and at least eight affirmative votes shall
		  be required for a decision by the Board at any meeting.
5.
Roberts Rules of Order
shall be followed in the conduct of all meetings except when a
		  departure from
Roberts
is authorized by action of the
		  Board.
6.
Agenda
: The
		  Board shall adopt an agenda at the beginning of each meeting. By a majority
		  vote of the Board, items may be added to the agenda before it is adopted.
A. The Executive Director shall prepare a
		  tentative agenda and submit it to all trustees at least 30 days prior to a
		  regularly scheduled meeting. The meeting brochure and agenda will be mailed to
		  trustees not later than five days before the regularly scheduled
		  meeting.
B. Trustees who want
		  item(s) to be considered for the agenda should notify the Executive Director no
		  later than 20 days prior to a regularly scheduled meeting.
C. Members or individuals who wish to have an
		  item placed on the agenda at a regularly scheduled Board meeting should submit
		  their request in writing to the Executive Director no later than 20 days prior
		  to the meeting.
D. Members or
		  individuals who wish to make comments during a regularly scheduled Board
		  meeting should indicate-on forms provided-the subject on which they intend to
		  speak.
E. A time limit of five
		  minutes will be allowed members and individuals for presentation, unless
		  extended by majority vote of the Board.
7.
Minutes:
The Board shall keep
		  an official record of the proceedings of each meeting, the final draft of which
		  must be approved by the Board and signed by the Chair and the Executive
		  Director. The Board minutes are to contain only the action of the Board,
		  information required by case law, and the vote thereon.
8.
Public Meetings
: All meetings
		  of the Board shall be public and in compliance with the Freedom of Information
		  Act. Representatives of the Little Rock news media shall be notified of each
		  meeting.
POLICY TYPE: Governance Process
POLICY TITLE: Duties of Chair and Vice Chair
The duty of the Chair is to ensure the integrity of the Board's
			 process and to represent the Board to outside parties.
1. The duty of the Chair is to see that the
		  Board operates consistent with its own rules and those legitimately imposed on
		  it from outside the retirement system.
A.
		  Meeting discussion content will be only those issues that, according to Board
		  policy, clearly belong to the Board to decide.
B. Deliberation will be timely, fair,
		  orderly, and thorough; but also efficient, limited in time, and kept to the
		  point.
2. The authority
		  of the Chair consists only in making decisions on behalf of the Board that fall
		  within and are consistent with Board policies.
A. The Chair is empowered to chair Board
		  meetings with all the commonly accepted power of that position (e.g., ruling,
		  recognizing, etc.).
B. The Chair
		  may also:
i. Convene meetings of the Board, or
		  committees thereof, as prescribed by law.
ii. Certify actions taken by the
		  Board.
iii. Serve as the official
		  spokesperson for the Board.
iv.
		  Name Board members to committees.
v. Perform other duties specifically
		  requested by the Board that are deemed necessary and appropriate for the Board
		  to fulfill its duties and responsibilities under law.
Duties of the Vice Chair
The duties of the Vice Chair are to act as temporary Chair in the
			 absence of the regular Chair.
POLICY TYPE: Governance Process
POLICY TITLE: Reimbursement of Expenses
The Board, by majority vote of the total membership cast at the
			 first regularly scheduled meeting of each calendar year, may authorize expense
			 reimbursement for each trustee for performing official Board duties. Official
			 Board duties are defined as follows:
1. Attending regular and called Board
		  meetings.
2. Attending committee
		  meetings of the Board or any specially appointed committee comprised in whole
		  or in part of Board members.
3.
		  Attending conferences approved by the Board of Trustees.
4. Attending legislative committee meetings
		  when acting as spokesperson for the Board.
5. Attending legislative sessions at the
		  request of the Board or Executive Director.
Board members are subject to the same reimbursable expenses as
			 state employees.
Board officers are authorized payment for personal expenses, not
			 otherwise reimbursed, incurred in the performance of their ATRS-related duties.
			 Such reimbursement is to cover (1) any losses in salary or compensation that
			 would otherwise result from their attendance at Board or committee meetings,
			 and will be paid to the officer's employer; and (2) the costs of communication
			 (longdistance telephone calls, postage, etc.) with other trustees or staff
			 members.
POLICY TYPE: Governance Process
POLICY TITLE: Procurement of Services
ATRS shall utilize an equitable and open system of awarding
			 contracts to providers of all contractual, management, and consultant services,
			 including, but not limited to:
(1)
		  construction architects, engineers, and contractors;
(2) building mangers;
(3) real estate, legal, and investment
		  consultants; and
(4) actuaries and
		  auditors.
The system of awarding contracts will assure that all bona fide
			 providers of such services will have equal opportunity to submit competitive
			 bids or competitive proposals for consideration.
The Executive Director shall develop procurement procedures and a
			 plan for implementing the process of awarding contracts.
The Board of Trustees shall approve all procedures and contracts
			 related to the procurement of services.
POLICY TYPE: Governance Process
POLICY TITLE: Committee Principles
The Board may establish committees to help carry out its
			 responsibilities.
1. Board committees may not speak or act for
		  the Board except when formally given such authority.
2. Committees ordinarily will assist the
		  Board by preparing policy alternatives and implications for Board
		  deliberation.
3. Board committees
		  may not exercise authority over staff.
4. All members of the Retirement Board shall
		  be notified as to the time and place of all committee meetings. Any Retirement
		  Board member may attend any committee meeting, but only committee members may
		  vote on committee matters.
5.
		  Appointments to committees shall be for four-year terms unless otherwise noted.
		  Initial appointments for less than four years may be reappointed to one full
		  four-year term.
6. A quorum of each
		  committee and the number of affirmative votes needed for a motion to carry
		  shall be a majority of the designated size of the committee.
7. Board committees shall elect their own
		  chair and vice chair unless otherwise indicated by Board policy.
8. The Executive Director shall serve as
		  secretary and an ex officio nonvoting member of Board committees or shall
		  delegate another member of the staff to serve in this capacity.
9. Committees shall report to the Board
		  following each of their meetings.
POLICY TYPE: Governance Process
POLICY TITLE: Investment Committee Charter
1. There shall be an Investment
		  Committee composed of six members of the Board. The Chair of the Board will
		  appoint four members. The Chair and Vice Chair of the Board shall serve as ex
		  officio voting members of the committee.
2. The committee shall meet on call by the
		  Committee Chair and/or the Executive Director, but not less than on a quarterly
		  basis.
3. The purposes of the
		  committee shall be:
A. To consider investment
		  policies and procedures for recommendation to the Board for adoption.
B. To consider asset allocations for
		  recommendation to the Board for adoption.
C. To consider all investment proposals for
		  approval or rejection, unless they are assigned to other committees by the
		  Board.
D. To monitor all phases of
		  the investment program and to recommend any changes that need to be made to the
		  full Board.
POLICY TYPE: Governance Process
POLICY TITLE: Legislative Committee Charter
1. There shall be a
		  Legislative Committee composed of five members of the Board appointed by the
		  Board Chair. The Board Chair may serve as a voting member of the
		  committee.
2. The committee shall
		  meet twice monthly, or more often if needed, during the three-month
		  prelegislative fall season and during the General Assembly sessions. At other
		  times, the committee will meet on call by either the Committee Chair or the
		  Executive Director.
3. The
		  committee shall recommend to the Board for approval a spokesperson to present
		  and support the Board's defined and adopted positions on legislative
		  issues.
4. The purposes of the
		  Legislative Committee shall be:
A. To preview
		  legislative proposals that will impact the Retirement System and its
		  members.
B. To suggest and develop
		  legislative proposals for the benefit of the Retirement System and its
		  members.
C. To make recommendations
		  to the Board for initiating or supporting legislative proposals or for opposing
		  proposed legislation.
D. To review
		  and monitor enacted legislation relating to the Retirement System and its
		  members. It shall be the ongoing responsibility of the Legislative Committee:
i. To see that such legislation is properly
		  incorporated into Retirement System policies and procedures, and
ii. To monitor the effect of such legislation
		  as it relates to current and future retirees.
E. To monitor meetings of the Legislative
		  Council and the Committee on Social Security and Retirement.
POLICY TYPE: Governance Process
POLICY TITLE: Policies Committee Charter
1. There shall be a
		  Policies Committee composed of five members of the Board. The Board Chair will
		  appoint four trustees to the committee and will serve as an ex officio voting
		  member of the committee.
2. The
		  committee shall meet bimonthly, or on call by either the Chair or the Executive
		  Director.
3. The primary purpose of
		  the Policies Committee is to receive and consider proposals for the adoption of
		  new policy, except investment policy, which is to be considered by the
		  Investment Committee, and the revision or deletion of existing policy. The
		  committee is responsible for recommending the adoption or rejection of any such
		  policy proposals to the Board.
4.
		  Recommendations or suggestions for initiating or changing Board policy must be
		  submitted in writing to the Board Chair, the Chair of the Policies Committee,
		  and the Executive Director seven days prior to the next meeting of the Policies
		  Committee.
POLICY TYPE: Governance Process
POLICY TITLE: Real Estate Committee Charter
POLICY TYPE: Governance Process
POLICY TITLE: Real Estate Screening Committee
			 Charter
POLICY TYPE: Governance Process
POLICY TITLE: Board Self-Evaluation
The Board will regularly evaluate its own performance, taking
			 whatever action is necessary to govern with excellence. The Board will review
			 these policies of conduct at least annually and discuss the degree to which it
			 complies.
POLICY TYPE: Ends
POLICY TITLE: Financial Perspective
1. Sustain actuarial soundness.
		  The goals are for:
A. The funded ratio to
		  increase and the funding period to decrease unless knowingly modified by Board
		  action or as a result of events over which the Board has no control.
B. The actuarial methodology and economic
		  assumptions to be comparable to other teacher retirement systems.1
2. Manage contributions
		  effectively. The goals are for:
A. Employer
		  contributions to be collected and invested in a timely manner.
B. Receivables of more than 30, 60, and 90
		  days to be reported to the Board.
3. Maximize investment returns within the
		  bounds of prudence.
A. Asset Allocation
Investments shall be within the minimum and maximum ranges
			 established by the Board and will approximate the targeted levels unless the
			 Board is advised as to reasons for a deviation.
B. Investment Return
Total Fund-The overall goal is to achieve, over a period of
			 years, the actuarial interest assumption rate with due consideration being
			 given to preservation of capital and its purchasing power and to maintaining
			 the element of risk at a prudent investor level.
4. Ensure budget credibility. The goals are
		  for:
A. Total operating expenses (excluding
		  investment expenses) of existing programs and services to be maintained or
		  reduced in relation to the five-year rolling average of increases in members
		  and inflation.
B. Investment
		  related expenses to be maintained or reduced in relation to investment assets
		  once each asset category reaches its target allocation.
1 "Other teacher retirement systems" as used
		  here includes those statewide retirement systems in the United States whose:
(a) membership is predominately
		  teachers,
(b) members contribute to
		  Social Security,
(c) membership is
		  within ±50% of ATRS, and
(d)
		  assets are within ±50% of ATRS.
C. Proposed programs or services to have a
		  "business plan" that includes:
i. A
		  description of the need to be met.
ii. The method by which the need will be
		  met.
iii. The method by which
		  members will learn about the program or services.
iv. Staffing requirements.
v. Other resources that are needed.
vi. The method by which the programs or
		  services will be evaluated.
POLICY TYPE: Ends
POLICY TITLE: Customer Perspective
1. Promote contribution
		  rates, benefits, and services comparable to other teacher retirement
		  systems.1 The goals are for:
A. Employer contribution rates to be
		  comparable to other teacher retirement systems.
B. Total benefits paid to be comparable to
		  other teacher retirement systems.
i. Average
		  regular benefits paid to be comparable to other teacher retirement
		  systems.
ii. Average disability
		  benefits paid to be comparable to other teacher retirement systems.
iii. Average survivor benefits paid to be
		  comparable to other teacher retirement systems.
C. Age and length of service requirements for
		  unreduced retirement benefits to be comparable to other teacher retirement
		  systems.
D. Plan of payment options
		  for regular benefits to be comparable to other teacher retirement
		  systems.
2. Increase
		  awareness of trust fund stewardship. The goals are for:
A. The System to receive the "Certificate of
		  Achievement for Excellence in Financial Reporting" each year as presented by
		  the Government Finance Officers Association of the United States and
		  Canada.
B. The system to receive
		  the Public Pension Coordinating Council's "Public Pension Principles
		  Achievement Award" each year it is available.
C. A comprehensive annual financial report,
		  or abstract thereof, to be provided to each member of the System, the
		  Legislative Council, and the Governor [A.C.A. §§24-2-702 and
		  24-7-305(d)].
3. Promote
		  retirement education and communications. The goals are for:
A. Special programming for new ATRS members
		  (those with less than five years of service) to be developed and disseminated
		  to increase awareness of ATRS and its benefits.
1 See Footnote 1, page 2-1-1 (Financial
		  Perspective Policy).
B.
		  The number and percentage of members participating in retirement education
		  events sponsored by the ATRS to increase or remain the same from one year to
		  the next.
C. Printed communications
		  from the ATRS to be judged as well-written, attractively formatted, and helpful
		  by a sample of the members targeted by the communication.
4. Improve overall service level. The goals
		  are for:
A. The overall service level of ATRS
		  to be above the median for its peer group2 and at a
		  cost that is comparable to its peer
		  group.3
B. The overall service level to include the
		  following functions within ATRS:
i. Paying
		  pensions
ii. Pension
		  inceptions
iii. Pension
		  estimates
iv. Counseling
v. Member telephone calls
vi. Communication
(1) Group presentations
(2) Website and E-mail
(3) Newsletters
(4) Other written material
vii. Collections
(1) Annual member statements
(2) Employer services
2 "Peer group" as used here refers to a
		  number of retirement systems selected by Cost Effective Measurement, Inc., that
		  are most like ATRS.
3 It is
		  understood that the first time data will be collected for this and the
		  following goal will be in 2003 for the 2002-2003 fiscal year.
viii. Refunds,
		  terminating payments
ix. Service
		  credit purchases
x. Disability
		  pensions
xi. Financial control
		  & governance (1) The Annual Report
POLICY TYPE: Ends
POLICY TITLE: Internal-Business-Process
			 Perspective
1. Administer retirement laws in a timely,
		  accurate, and consistent manner. The goals are for:
A. The average turn-around time for
		  processing retirement to improve or remain the same from the previous
		  year.
B. Retirement benefits to be
		  calculated accurately and consistently.
2. Provide member benefits and services (1)
		  at a level that promotes member satisfaction and (2) in a cost effective
		  manner. The goals are for:
A. The satisfaction
		  level of members regarding benefits and services to increase from one year to
		  the next.
B. See also No. 4 in the
		  Customer Perspective Policy (Policy No. 2-2).
3. Process improvement. The goals are for:
A. "Business critical" processes to be
		  identified.
B. "Business critical"
		  processes to be analyzed and redesigned as needed.
C. Processes to be continually
		  reevaluated
4.
		  Effectively manage new projects and initiatives. The goals are for:
A. New projects and initiatives to be
		  undertaken with a detailed plan, including projected completion dates and
		  resource requirements.
B. Periodic
		  progress reports to be made to the Board on major projects or
		  initiatives.
5. Promote
		  effective communication. The goal is for:
Communications with the Board, members, and employees that are
			 clear, concise, and timely.
6. Promote knowledge-based decision-making.
		  The goal is for:
Management decisions based on facts and expert opinions.
POLICY TYPE: Ends
POLICY TITLE: Learning and Growth Perspective
1. Foster a positive, innovative
		  work environment. The goal is for:
Professional and support staff responses to an organizational
			 climate survey to indicate a stable or more positive and innovative work
			 environment from one year to the next.
2. Employ and retain highly capable
		  employees. The goals are for:
A. The average
		  educational level of the professional and support staffs to increase or at
		  least remain the same from one year to the next.
B. The net turnover
		  rate1 of the professional and support staffs to
		  decrease or at least remain the same from one year to the next.
3. Recruit and retain a diverse
		  work force. The goal is for:
The gender, race, and age of the professional and support staffs
			 to show progress toward approximating the respective work forces in the Little
			 Rock Metropolitan Statistical Area from one year to the next.
4. Enhance training and development
		  opportunities. The goals are for:
A. The
		  average number of days spent in training by the professional and support staffs
		  to increase or at least remain the same from one year to the next.
B. The number and percentage of professional
		  and support staff having recognized job-specific or job-related credentials to
		  increase or at least remain the same from one year to the next.
1 The net turnover rate is the
		  total separations-less retirements, disabilities, and deaths--divided by the
		  average number of employees during the year.
POLICY TYPE: Executive Director Limitations
POLICY TITLE: General Executive Constraints
The Executive Director shall not cause or allow any acts,
			 decisions, activities, or circumstances that are imprudent, in violation of
			 commonly accepted business and professional ethics, or a breach of fiduciary
			 responsibility.
POLICY TYPE: Executive Director Limitations
POLICY TITLE: Communication and Counsel to the
			 Board
With respect to providing information and counsel to the Board,
			 the Executive Director may not permit the Board to be uninformed. Accordingly,
			 the Executive Director may not:
1. Let the Board be unaware of relevant
		  trends, anticipated adverse media coverage, and material external or internal
		  changes, particularly changes in the assumptions upon which any Board policy
		  has previously been established.
2.
		  Fail to submit the required monitoring data in a timely, accurate, and
		  understandable fashion, directly addressing provisions of the Board policies
		  being monitored. See Policy No. 3-10 (Monitoring Executive
		  Performance).
3. Fail to marshal as
		  many alternatives as needed for fully informed Board choices.
4. Fail to provide requested information that
		  would assist the Actuary, Investment Consultant, and Real Estate Manager from
		  in their efforts to make reports and recommendations directly to the Board
		  without modification.
5. Present
		  information in unnecessarily complex or lengthy form.
6. Fail to provide a mechanism for official
		  Board, officer, or committee communications.
7. Fail to deal with the Board as a whole,
		  except for fulfilling individual requests for information.
8. Fail to report actual or anticipated
		  noncompliance with any policy of the Board.
POLICY TYPE: Executive Director Limitations
POLICY TITLE: Code of Ethics
The Executive Director may not fail to require employees of the
			 Retirement System to adhere to an appropriate code of ethics that will
			 assure:
1. Confidentiality
		  of member records.
2. No conflict
		  of interest, or appearance thereof, with respect to their fiduciary
		  responsibilities.
3. Adherence to
		  applicable professional codes of ethics and standards of professional
		  conduct.
4. No solicitation or
		  acceptance of gifts, favors, or other items of value as defined by the Arkansas
		  Ethics Commission.
5. No ATRS
		  associate shall participate in any activities regarding the candidacy of any
		  person for a position as a Board member or officer of the Board.
POLICY TYPE: Board-Executive Director
			 Relationship
POLICY TITLE: Employment of Executive
			 Director
Employment of the Executive Director will be by the Board.
1. Employment will be based on the
		  Board's judgment that a candidate's knowledge, skill, and character would
		  indicate reasonable assurance of excellent performance.
2. Criteria will be based on:
A. General characteristics set forth by the
		  Board to predict successful Executive Director performance, and
B. Specific characteristics set forth by the
		  Board to predict successful Executive Director performance in view of the
		  Retirement System's strategic challenges in the future.
3. Prior to selecting an Executive Director,
		  the Board will make explicit provisions for:
A. Providing notice of the vacancy,
B. Screening nominations or applications,
		  and
C. The selection process.
POLICY TYPE: Board-Executive Director's
			 Relationship
POLICY TITLE: Executive Director's Job
			 Description
The Executive Director is the Board's official link to the
			 operation of the Retirement System. The Executive Director is accountable for
			 all organizational performance and entitled to exercise all authority delegated
			 by official Board action.
The Executive Director's job description may be stated as
			 performance in these areas:
1. Organizational accomplishment of the
		  provisions of Board policies on
Ends
.
2. Organizational operation within the
		  boundaries of prudence and ethics established in Board policies on
Executive Director Limitations
.
3. Serving as secretary to the Retirement
		  Board and an ex officio nonvoting member of its committees and maintaining an
		  accurate record of the proceedings.
4. Serving as liaison between the (a)
		  Actuary, (b) Investment Consultant, and (c) Real Estate Manager and the
		  Retirement Board, helping to interpret the intent of the Board to the
		  consultants, and coordinating their reports and recommendations to the Board.
POLICY TYPE: Executive Director Limitations
POLICY TITLE: Compensation and Benefits
With respect to employment, compensation, and benefits to
			 employees, consultants, contract workers, and volunteers, the Executive
			 Director may not cause or allow jeopardy to fiscal integrity or public
			 image.
Accordingly, the Executive Director may not:
1. Change his or her compensation and
		  benefits.
2. Promise or imply
		  permanent or guaranteed employment.
3. Establish current compensation or benefits
		  that are not within state-approved salary schedules or benefit
		  provisions.
4. Change the
		  assignment of personnel in Grade 23 and above without notification to the Board
		  at a Board meeting.
5. Fail to:
A. Involve the Board in determining the
		  qualifications and expectations for Grade 23 and above positions, and
B. Submit at least three candidates to the
		  Board for interview or review of credentials.
The Board may remove one or more candidates from consideration.
			 The Executive Director will make the employment decision.
POLICY TYPE: Executive Director Limitations
POLICY TITLE: Operations
Budgeting for any fiscal period shall not deviate materially from
			 Board
Ends
priorities, risk fiscal jeopardy, or fail to show a
			 generally acceptable level of foresight. The proposed biennial budget shall be
			 presented to the Board for review and approval prior to its submission to the
			 General Assembly for adoption.
Accordingly, the Executive Director may not cause or allow
			 budgeting that:
1. Contains too little detail to enable
		  accurate projection of revenues and expenses, separation of capital and
		  operational items, cash flow and subsequent audit trails, and disclosure of
		  planning assumptions.
2. Does not
		  provide for Board prerogatives and Board development.
3. With respect to the actual, ongoing
		  condition of the Retirement System's operating budget, the Executive Director
		  may not cause or allow the development of financial jeopardy.
Accordingly, the Executive Director may not:
1. Allow tax payments or other
		  government-ordered payments or filings to be overdue or inaccurately
		  filed.
2. Allow actual operating
		  budget allocations to deviate materially from Board priorities in
Ends
policies.
3. Fail to
		  promulgate procedures to assure an equitable and open system of awarding
		  contracts to providers of contractual and consultant services.
4. Fail to establish and maintain a System of
		  internal controls designed to assure that the policies and procedures of the
		  Retirement System are being followed and that assets belonging to ATRS are
		  properly received, are protected while in the custody of ATRS, are used only
		  for appropriate purposes, and reduce the opportunity for errors and dishonesty.
		  A qualified auditor will conduct an examination of the effectiveness of the
		  System's internal controls at least every five years. The external auditor
		  responsible for auditing the adequacy of the annual financial statement shall
		  not be eligible for this examination.
POLICY TYPE: Executive Director Limitations
POLICY TITLE: Staff Treatment
The Executive Director may not cause or allow conditions that are
			 inhumane, unfair, or undignified. Accordingly, the Executive Director may
			 not:
1. Discriminate among
		  employees on other than clearly job-related individual performance or
		  qualifications.
2. Employ or
		  promote a family member.
3.
		  Adversely affect the stability of the staff or terminate senior executives
		  without previous discussion with the Board.
4. Fail to take reasonable steps to protect
		  employees from unsafe or unhealthy conditions.
POLICY TYPE: Board-Executive Director
			 Relationship
POLICY TITLE: Delegation to the Executive
			 Director
Authority for implementing policy and the development of
			 supporting procedures is delegated to the Executive Director.
1. All Board authority delegated to staff is
		  delegated through the Executive Director, so that all authority and
		  accountability of staff is considered to be within the authority and
		  accountability of the Executive Director.
2.
Ends
policies direct the
		  Executive Director to achieve certain results;
Executive Director
		  Limitations
policies constrain the Executive Director to act within
		  Board adopted policies, legal requirements, and acceptable boundaries of
		  prudence and ethics. With respect to
Ends
and
Executive Director Limitations
, the Executive Director is
		  authorized to establish further procedures, make decisions, and take actions
		  provided they are consistent with Board policies.
3. The Board may change its policies, thereby
		  shifting the boundary between the Board and the Executive Director domains. The
		  Board and Executive Director will respect and support the parameters of
		  delegation as they exist and as they may be changed in the future.
Authority:
Act 427 of 1973
Adopted:
June 12, 2002
Removed from APA:
December 6, 2005