Arkansas Administrative Code › Agency 088 - Arkansas Teacher Retirement System › Rule 088.00.07-005 - Rules Nos. 8-1 - Definitions Concerning Pruchase of Service Credits; 8-3 - Repayment of Refunds; 8-7 - Free Military Service; 8-10 - Purchase of Additional Contributions; 8-11 - Purchase of Noncontributory Service as Contributory; 8-13 - Purchase of National Guard Service; 8-14 - Purchase of Out-of-State Service; 8-15 - Purchase of Overseas Service; 8-17 - Purchase of Private School Service

Current through Register Vol. 49, No. 6, June, 2024
DEFINITIONS CONCERNING PURCHASE OF SERVICE
			 CREDITS/REPAYMENT OF REFUNDS
1.
Additional Contributions
- Contributions due on service rendered
		  in a covered position but not withheld by the employer. This term also applies
		  to the difference between the employee/employer contributions paid on the first
		  $ 7,800.00 and actual salary earned.
A.C.A. §
		  24-7-406(a)(6).
2.
Back Contributions
- Contributions payable by an active member for
		  service rendered in a covered position after July 1, 1937, on which no
		  applicable contributions have been paid and on which no service has been
		  credited.
A.C.A.
§ 24-7-502(b)(5)(A)(i).
3.
Employer Pick-Up
-
		  Contributions withheld from salary by covered employers after June 30, 1997.
		  Such contributions shall not be subject to state and federal income taxes and
		  shall not be included as gross income until distributed or made available to
		  the member. "Picked-Up" contributions may also be used to repay a refund or
		  purchase service.
A.C.A. § 24-7-406(h).
4.
Military Service (purchased)
- The purchase of active duty military service.
A.C.A. §
		  24-7-602 and A.C.A. § 24-2-502.
5.
National Guard Service
-
		  Service rendered in the Arkansas National Guard.
A.C.A. §
		  24-7-610
.
6.
Noncontributory to Contributory
- Payment made to convert
		  noncontributory service credit to contributory service credit
. A.C.A.
		  § 24-7-406(f)(3)(A)(ii).
7.
Out-of-State Service
-
		  Service rendered in any state except Arkansas in a position that would have
		  been covered by ATRS had the service been rendered in the state of Arkansas.
A.C.A. § 24-7-603
.
8.
Overseas Service
- Service
		  rendered in an American-type overseas school sponsored and approved by either
		  the United States Department of State or the Department of Defense, Peace
		  Corps, or Volunteers in Service to America (VISTA).
A.C.A. §
		  24-7-604.
9.
Private
		  School Service
- Service rendered in any private school or agency
		  recognized by the Arkansas State Department of Education for the issuance of
		  teaching licenses.
A.C.A. § 24-7-607
. Employment under the
		  Head Start Programs will be considered private school service and will have the
		  same requirements for the issuance of teaching licenses by the Arkansas State
		  Department of Education.
10.
Repayment of Refund
- Repayment to ATRS of contributions that have
		  been withdrawn. Withdrawal of contributions forfeits contributory service
		  credit. Service credit can be restored by repayment of a refund.
A.C.A.
		  § 24-7-502(b)(4)(A) and A.C.A. § 24-7-406(d).
11.
Rollover/Transfer
-
		  Acceptance of before tax contributions as rollover distributions and/or direct
		  rollovers of distributions from plans pursuant to Rule No. 8-4 (Acceptance of
		  Rollovers).
12.
Sabbatical
		  Leave
- Leave of absence from a school from and after June 28, 1985, in
		  order to obtain an advanced degree at an institution of higher learning or to
		  fulfill the requirements of a scholarship or grant.
A.C.A. §
		  24-7-606.
13.
Interest
- The rate or rates per annum, compounded annually, as the Board shall
		  adopt from time to time, that will be charged for the purchase of service
		  credit or to repay a refund, but the rate shall equal no less than the System's
		  current assumed interest rate assumption (currently 8%).
A.C.A. §
		  27-7-202(16).
REPAYMENT OF REFUNDS
[A.C.A. § 24-7-502(b)(4)(A) and A.C.A. §
			 24-7-406(d)]
DEFINITION
(Amended by Act 142 of 1997)
Repayment of refund
means repayment to the System of
			 contributions that have been withdrawn. Withdrawal of contributions forfeits
			 contributory service credit. Service credit can be restored by repayment of a
			 refund. A.C.A. § 24-7-502(b)(4)(A)
RULES
(Amended by Act 524 of 1995; Acts 142 and 206
			 of 1997; Act 866 of 1999)
1. To be
		  eligible to repay a refund, a person must be an active member of the System. A
		  person who has received a refund may reestablish active membership by
		  completing thirty (30) days or more during his last such
		  re-employment.
2. To repay a refund
		  requires repayment of the entire amount withdrawn, plus interest from the date
		  of withdrawal to the date of final payment. If a member has received more than
		  one refund, repayment must be made in inverse order. The most recent refund
		  account must be paid in full before another refund account can be established
		  for purchase.
3. The cost to repay
		  a refund account is the entire amount withdrawn plus interest from the date of
		  withdrawal to the date of final payment.
4. An agreement to complete payment shall
		  exist upon acceptance of the initial payment.
5. Repayments of refunds or the purchase of
		  service may be made by employer pick-up (tax-deferred deductions). See Rule No.
		  8-5 (Purchase Payments).
6. ATRS
		  will accept participant rollover contributions and/or direct rollovers of
		  distributions for the repayment of refunds under certain circumstances. See
		  Rule No. 8-4 (Acceptance of Rollovers).
7. All rules pertaining to the minimum
		  payments and payment methods are contained in Rule No. 8-5 (Purchase Payments).
FREE MILITARY SERVICE
A.C.A. § 24-7-602)
A member of the Arkansas Teacher Retirement System who entered
			 the Armed Forces of the United States between July 1, 1937, and June 30, 1973,
			 may establish that active duty service in this System without cost, provided
			 the following conditions are met:
1.
		  Service must be the initial enlistment. Reenlistment or voluntary extension of
		  the initial enlistment is not considered compulsory and shall not be allowed as
		  service credit.
2. Military service
		  shall not exceed five (5) years, and the years to be credited shall be those
		  closest to the teaching service.
3.
		  Crediting of military service will require the completion of Form M-1, provided
		  by the System, and official military documents listing the entry and discharge
		  dates of the first enlistment or induction.
4. Must have received an honorable discharge;
		  and
5. The period of military
		  service credit shall be based on 120 days of service rendered during a fiscal
		  year, July 1 through June 30. For military service, the actual number of days
		  in the month shall be counted. Fractional years of service cannot be credited
		  prior to July 1, 1971. Days on both ends of the military time period may be
		  combined to provide a year of service credited prior to July 1, 1971, if:
A. The minimum number of days to be combined
		  is 120;
B. The maximum number of
		  fiscal years to be counted is two (2); and
C. Combined military service may not be
		  credited during fiscal years in which the member received credit for a year of
		  teaching service.