088.00.07 Ark. Code R. 001

Current through Register Vol. 49, No. 9, September, 2024
Rule 088.00.07-001 - Rule No. 7-4 - Employee Contribution Rate; Rule No. 8-4 - Direct Rollovers Eligibility

DEFINITIONS

1.Salary means the remuneration paid to an employee in a position covered by the Arkansas Teacher Retirement System and on which the employer withholds federal income tax.
2.Participating employers means local school districts, cooperative education services areas, vocational centers, the Department of Correction, open enrollment charter schools, all public postsecondary institutions, the educational components of certain state agencies and instrumentalities, or an educational nonprofit corporation approved by the Board of Trustees in accordance with rules and regulations established by the Board.
3.Adjustments include error corrections, payments for members who were omitted from the correct reporting period, and any adjustments agreed to by both the employer and the Teacher Retirement System.

RULES FOR THE EMPLOYER CONTRIBUTION RATE

1. Effective July 1, 2003, the employer contribution (matching) rate shall be the rate established by the Board of Trustees of the Arkansas Teacher Retirement System prospectively for each year pursuant to A.C.A. §§ 24-2-701(c) and 24-7-401(c).
2. The rate shall be set by the Board following consultation with its actuary. In determining such rate, the Board shall consider the financial objectives set forth in A.C.A. § 24-2-701 and § 24-7-401 and shall base the rates on the actuary's determination of the rate required to fund the plan in accordance with these financial objectives.
A. The employer contribution rates for the fiscal years ending June 30, 2008, and June 30, 2009, shall not exceed fourteen percent (14%).
B. If the costs of benefit commitments for service previously rendered are overfunded, the plan may deduct a level payment that, if deducted annually over a reasonable period of future years, will fully liquidate the overfunded portion of the costs.
3. The Arkansas Teacher Retirement System shall annually notify the local school districts, the Department of Education, and other participating employers of the employer contribution rate established by the Board for the upcoming fiscal year.
4. Pursuant to A.C.A. § 24-7-103, participating employers shall pay the Teacher Retirement employer contributions for eligible employees in accordance with these rules and regulations.
5. The Department of Education shall pay from the Public School Fund the Teacher Retirement employer contributions for eligible employees of participating employers as required by the department's biennial appropriations act and in accordance with rules established by the Board. Beginning with the 1996-97 school year, special language in the Department of Education's biennial appropriations for grants and aids to local school districts requires that the appropriation for Teacher Retirement matching each fiscal year be used for employees of the Cooperative Education Services Areas, Vocational Centers, Arkansas Easter Seals, and the school operated by the Department of Correction1.

RULES FOR REPORTING EMPLOYER CONTRIBUTIONS

1. The annual employer contributions to be paid each fiscal year by participating employers shall be the current ATRS employer contribution rate multiplied by the active employees' total salaries
2. The employer contributions are to be remitted to ATRS in the manner form, and frequency and shall be accompanied by supporting documentation as determined by the Board. Timely payment of contributions shall be a condition of continued participation in the System.
3. In order to ensure members of the Teacher Retirement System receive credited service in a timely manner, employers shall report employee and employer contributions to the System on the following schedule:

Monthly Remittance Reports (D-1 Active Members; T-1 T-DROP Members)

Date Due: Tenth (10th) calendar day following the end of each month. To avoid late report penalties and interest penalties on late contributions (see page 7-4-4 (Nos. 7 and 8), reports must be received by the 15th day of the month or must be postmarked by the 14th day of the month due. If the 14th falls on Saturday, Sunday, or a holiday, the postmarked date is extended to the next working date.

Quarterly Reports (D2A Active Members; T-DROP Members)

Date Due: Tenth (10th) calendar day following the end of each quarter. To avoid the late report penalties (see page 7-4-4 (Nos. 7 and 8) reports must be received by the 15th day of the month or must be postmarked by the 14th day of the month due. If the 14th falls on Saturday, Sunday, or a holiday, the postmarked date is extended to the next working date.

4. Each of the reports listed above must be on forms or electronic media either furnished by the Teacher Retirement System or approved by the System.
5. For Cooperative Education Services Areas, Vocational Centers. Arkansas Easter Seals, and the school operated by the Department of Correction (paid by the Department of Education from the Public School Fund), the Teacher Retirement System shall certify to the Department of Education at the close of each quarterly report the amount of employer contributions due. The amount will be based on the employers' reported salaries.
6. The monthly remittance of employer contributions shall be due in the ATRS

office by the tenth (10th) calendar day following the end of each month. Under A.C.A. § 24-7-411, a $150.00 late report penalty and a 6% interest penalty on late contributions will be assessed on reports and contributions not received by the 15th day of the month or postmarked by the 4th day of the month due. If the 14th falls on Saturday, Sunday, or a holiday, the postmarked date is extended to the next working date.

7. The System may certify to the state's Chief Fiscal Officer the names of participating employers who are delinquent in reporting and remitting contributions under this policy. Upon notification, the Chief Fiscal Officer may direct a transfer of funds on deposit in the State Treasurer's Office for any delinquent employer payments plus the six percent (6%) interest penalty to the System.
8. Supplemental salary payment reports for previous years will be accompanied by the employer contributions due (based upon the rate in effect the year payment was due).
9. The Arkansas Teacher Retirement System shall return to participating employers overpaid matching amounts due to erroneous submission of payments or incorrect reporting of Salary Option 2 (first $7,800.00) member salaries. If an overpayment of employer matching amount is less than $25.00, the refund will not be issued to the employer unless requested in writing by the employer.
10. The Arkansas Teacher Retirement System shall not collect from participating employers an underpayment of employer contribution amount if less than $25.00.
11. For members retiring who are employed by agencies or other institutions that use the state's 26-week payroll schedule, employers should adhere to the state's fiscal year payroll schedule for reporting the last salary payment of the state's fiscal year and for the termination date of employment.

RULES FOR REPORTING T-DROP EMPLOYER CONTRIBUTIONS

1 The annual T-DROP employer contributions to be paid each fiscal year beginning September 1, 2003, by participating employers shall be the contribution rate as defined below multiplied by the total T-DROP member salaries. (A.C.A. § 24-7-1303)
A. For members whose effective date in T-DROP is before September 1, 2003, the employer contribution rate to the Arkansas Teacher Retirement System on behalf of all members in T-DROP shall be at the rate of:

* One percent (1%) for the period from September 1, 2003, through June 30, 2005

* Three percent (3%) for the period from July 1, 2005, through June 30, 2007

* Six percent (6%) for the period from July 1, 2007, through June 30,2009

* Nine percent (9%) for the period from July 1, 2009, through June 30, 2011

* Twelve Percent (12%) for the period from July 1, 2011, through June 30, 2013

* After July 1, 2013, the percentage rate established by the entity having the authority to set the employer contribution rate for the System pursuant to A.C.A § 24-7-401.

B. For members whose effective date in T-DROP is on or after September 1, 2003, the employer contribution rate on behalf of members in T-DROP shall be the rate established by the entity having the authority to set the employer contribution rate for the System pursuant to A.C.A § 24-7-401.
2. Until and on August 31, 2003, employer contributions on behalf of the members participating in the T-DROP may be retained by the school district.
3. Except for employer contributions to the Arkansas Teacher Retirement System beginning September 1, 2003, the school district shall not make contributions to any tax-qualified retirement plan on behalf of any employee participating in the T-DROP.

DIRECT ROLLOVER ELIGIBILITY

A.C.A. § 24-7-719, § 24-7-406, as amended by Act 97 of 2007)

DEFINITIONS

Direct rollover means the payment of an eligible distribution to an IRA or another eligible employer benefit plan.

Eligible rollover distribution means that portion of a distribution that may be rolled over to an IRA or other qualified employer benefit plan.

Eligible retirement plan means an individual retirement account, retirement annuity or employer benefit plan that accepts direct rollovers.

RULES

1.ACCEPTING ROLLOVERS FOR PAYMENT ON ATRS PURCHASE ACCOUNTS
A. ATRS will accept participant rollover contributions and/or direct rollovers for the purchase of service credit from:
i. A qualified plan described in Sections 401(a) or 403(a) of the IRS Code, excluding after-tax employee contributions;
ii. An annuity contract described in Section 403(b) of the Code, excluding after-tax employee contributions; or
iii. An eligible plan under Section 457(b) of the Code maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state.
B. ATRS will accept a participant rollover contribution of the portion of a distribution from an individual retirement account or annuity described in Sections 408(a) or 408(b) of the Code that is eligible to be rolled over and would otherwise be includible in gross income
2. ROLLOVER ELIGIBILITY OF ATRS DISTRIBUTIONS
A. ATRS may pay the following plan distributions as a direct rollover to the Trustee of a qualified plan upon the election of the member or the member's spouse (at the member's death):
i Refund of accumulated contributions plus regular interest paid to the member or spouse beneficiary under § 24-7-711;
ii. Single distributions of a member's T-DROP account under § 24-7-1308;
iii. Distributions of the reserve value of a member's account under § 24-7-716;
iv. Residue payments to a spouse beneficiary under § 24-7-709; and
v. Lump sum death benefit payments to a spouse beneficiary under § 24-7-720.
B. A rollover of an ATRS distribution is limited to a single rollover for each distribution.
C. ATRS requires a minimum distribution amount of $2,500 in order to roll over a distribution.
D. The depository trustee shall certify to the System that the rollover deposit account is "qualified" and eligible to receive rollover distributions prior to a distribution being rolled over.
E. The System shall not roll over a distribution into an employer benefit plan, retirement account, or other annuity if it fails to qualify under the IRS regulations for acceptance of rollovers.

Adopted: February 3, 2004

Amended: June 15, 2004

.April 26, 2007

1 Active employers as of 2006-2007 are: 1307 SW AR Educ. Coop., 1308 SE AR Educ. Coop, 1330 Western AR Educ. Coop, 1332 North Central Educ. Coop, 1336 Ozark Unlimited Resource Coop, 1337 NE AR Educ. Coop., 1338 Howard Dawson Educ. Coop., 1339 Arch Ford Coop, 1345 Wilbur D. Mills Educ. Serv. Coop, 1349 AR River Educ. Services Coop., 1350 Great Rivers Educ. Coop., 1351 NW AR Educ. Services Coop., 1353 DeQueen-Mena Educ. Coop., 1354 Crowley's Ridge Coop., 1355 South Central Services Coop., 1359 Conway Vocational Center, 1362 Jonesboro Vocational Center, 1363 Monticello Vocational Center, 1365 North Central Career Center, 1366 River Valley Vocational Center, 1370 Russellville Vocational Center, 1371 Metropolitan Vocational Center, 1372 Texarkana Vocational Center, 1373 Warren Vocational Center, 06864 Easter Seals, 1-328 AR Department of Corrections. Inactive employers as of 2006-2007 are: 1358 Camden Vocational Center, 1360 Fayetteville Vocational Center, 1367 AR Educ. Service Center.

088.00.07 Ark. Code R. 001

6/21/2007