Arkansas Administrative Code › Agency 088 - Arkansas Teacher Retirement System › Rule 088.00.15-005 - Rule 8-1: Purchase of Service Credit/Repayment of Refunds

Current through Register Vol. 49, No. 6, June, 2024
RULE 8-1
PURCHASE OF SERVICE CREDIT/REPAYMENT OF REFUNDS
A.C.A § 24-7-601
DEFINITIONS
1.
Back Contributions
- Mandatory
		  contributions payable for service and salary rendered in a covered position
		  within the ATRS look-back period.
2.
Private School Service
- As
		  defined in
A.C.A. § 24-7-607,
additionally, employment under
		  the Head Start Programs will also be considered private school service and will
		  have the same requirements for the issuance of teaching licenses by the
		  Arkansas State Department of Education as determined by ATRS staff.
GENERAL
The Arkansas code sets forth the service purchases available and
			 the cost mechanism to be used in service purchases. The various types of
			 service that can be purchased and the definitions for these are in the code.
			 Unless greater explanation is required, the code's provisions are
			 self-effecting without the need to be placed in the policy.
Actuarial cost for purchase of service does not include
			 adjustments to salary and service that are made in order to properly reflect
			 the member's mandatory salary and service records. In addition, the actuarial
			 cost of service does not apply to free military service credit that is
			 established with ATRS.
The actuarial cost for purchase of service shall use the member's
			 highest salary year as the formula's "base year." The base year shall always be
			 the member's highest salary year unless the highest salary year is more than
			 150% greater than the next highest salary year; in that case, the best two
			 salary years shall be added together and divided by two to establish the base
			 year for the formula.
If a member does not have sufficient full service years to
			 establish the base year for the purchase formula, then each partial year's
			 service percentage shall be divided into each partial year's salary to
			 establish a full year salary from the partial year salary to determine the base
			 year for the formula.
Salaries for actuarially purchased service shall not be used in
			 the calculation of final average salary except for repaid refunds for
			 mandatorily reported service within the refunded service.
All actuarially purchased service shall be purchased as
			 contributory.
Members seeking to purchase service with ATRS shall use forms
			 developed by ATRS staff to establish the service.
All service purchases must be accompanied by a service purchase
			 commitment statement. Once the service purchase stated on the service purchase
			 commitment statement is paid in full, the service purchase is final and may not
			 be cancelled by the member.
If an active member with an active purchase account dies, the
			 member's spouse, ATRS beneficiary, or legal representative shall have up to six
			 (6) months to pay the balance of the purchase account. If the purchase account
			 is not paid in full within six (6) months of the date of death, the purchase
			 account is cancelled and any payments shall be treated as part of the member's
			 residual account balance. ATRS may extend the six (6) month period for good
			 cause shown.
SPECIAL PROVISIONS FOR THE REPAYMENT OF REFUNDED MEMBER
			 CONTRIBUTIONS
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 forty
		  (40) days or more after reemployment by an ATRS covered employer.
2. A member must purchase the total credited
		  service forfeited by the refund in order to purchase the refunded
		  service.
3. 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 a previous refund
		  account can be purchased.
Adopted:
June 15, 2004
Amended:
April 26, 2007
July 1, 2011 (Emergency)
Adopted:
August 8, 2011
Effective:
November 11, 2011
Approved by Board:
February 6, 2012
Amended:
April 18, 2012
Effective
: May 29, 2012
Approved by Board:
October 5, 2015
Amended:
February 1, 2016
Effective:
February 10, 2016