Public Retirement & Social Security Programs-Joint

Charities quorum. Those wishing to speak for against the bill please make sure you sign in. Welcome everybody glad to have you here this Monday morning. My co chair would you like to make any comments good morning. Sounds good we've got six bills to. Here this morning so we'll just go straight to that first up house bill eleven eighty three represent Maddox you're recognized. Well let me make one up brief announcmenet before you start represent Maddox everybody should have a. The sheet of paper on your desk what this is is an additional disclosure Committee reports for the reports that Osborn Carreiro and associates do with the actuarial studies this has to be done with every study that they do for us so instead of attaching one to every study I've just asked one be put everybody's colder so this goes with every report that we get from this farm an actuarial studies. Any questions. Okay represent Maddox you're recognized two percent of I'm sorry. One of clarity please Mr as a member of both papers and ATR S. do I need to fully disclose that before I vote on the issues. I thought I would probably everybody in here to remember one of but I thought that Bills thank you for making that you are very welcome making that now and I will be voting in that. Representative Max you can go Now. Thank you Mr chairman. Mister chairman I've asked Mr Roden misli would join me at the table. If you would please identify yourselves thank you Mr chairman Clint Rhoden executive director Arkansas teacher retirement system. Jennifer Lee well general counsel Arkansas teacher retirement system. Thank you you're recognized to present thank you Mr chair house bill eleven eighty three is a technical clean up bill those brought to me by teacher retirement all this bill does is remove some obsolete language there is no fiscal impact that has any material effect on the system. Okay representative Maddox says president is built are there any questions from the committee. I'm sorry your we go. Representative Collins you're recognized. Thank you Mr chair so I think I read in may be one of these actuarial studies that all of the current employers or surcharge employer is there's no one who's opted to become a covered employer for purposes of this is that always been the case even prior to right now if there ever been any employers at a. May the other option. I would like to defer to Mr Roden for this question. yes representative calling the there have been no employer that has ever opted to pay the full fifty percent on their outsource services it was provided in two thousand seventeen as an option I am it is never expected that they would ever go this route we just want to clean that section of thank you. Represent represent Hickey you're recognized. I'm sorry senator Dicky thank you for trying to demote you I'm fine either one of you just a question I heard you say technical clean up so this was. And maybe that's the case but maybe going to explain to me on page three. This four percent. It does that go along with what the. The old language of the bill was because I'm sitting here trying to. Yes E. would've been what you're what we would have been under is that correct an amount not to exceed four percent during the twenty twenty two fiscal year. Is that what you did is you just yes L. center so so we put this in two thousand seventeen there was a phase in surcharge that ramped up over the years we have hit the maximum four percent at this point the phase in schedule is no longer necessary okay and again I know that was in the other language you could use it but as far as my cash flow type standpoint is is that. Is that just enough to cover where you're at which or whatever using the money for or is it exceeding what it needs what are the one of the calculations with that so that we'll know right so so the four percent was just the maximum that was negotiated when the bills first passed it helps offset the the missing employer contribution for these outsource services it obviously I mean it's not the full fifteen percent but these individuals also not getting teacher retirement benefit so this is just helping with the unfunded liabilities okay and make sense there yes and just just one more thing and I soon under seven through eleven on page four. The system. They were the ones they were the ones that have been. Calculating that all this time so we're just putting in there to make sure that the we know that there. The ones that do it or. The yes we we put this section in here for I mean we are at the maximum four percent. But the we didn't want to unlock the board and always having at four percent if for some reason in the future they decided to even lower it for whatever reason this would just allow them a little less optionality. But it it can't go over the four percent that is in the statute thank you Sir. Other questions. We have anyone the audience signed up to speak for against the bill. Okay Sir just build what did you say. Or. Okay Senator Hickey you're recognized. Just just to make a hundred percent sure over on line five said the board may promulgate rules necessary to manage administer this section all that was done right as far as that they promulgated the rules already yes yes that's correct thank you. Represent Maddox do you want to close for your bill Mister chairman I'm close my bill okay. All right we have a motion to pass any discussion. I'm sorry and second all right all those in favor say any discussion first. All those in favor say aye are you opposed same sign. Your motion carries. All right thing Mr you're up again Mr Matix house bill eleven eighty four. Thank you Mr chairman of same as them to stay at the table with me I'll try to do a little bit of explanation on this one the effect of this bill is to ensure equal treatment of full time employees regardless of their date of hire. Current law could be interpreted to say that a full time employee hired subsequent to the start of the year could have the option of becoming non contributory. Or as a full time person hard at the start of the year does not have this option so all this bill is doing is equalizing the treatment between these two groups. Okay representative Maddox says explain the bill senator Chesterfield you're recognized equalizes in what way Sir. Mister read would you as a place. Yes ma'am so eight licenses to the full time teachers are required by law to be contributory but in my opinion the the due to the fact that we have the law that says if you have a contract this less than one hundred eighty five days. That's all the current law says and we have no wiggle room on it so if they have to get hired a month the end of the school district I have a hundred seventy day contract because that's the number of days left in the year. Technically they would be available to have the non contributory option this just closes that loophole that and treat everybody equally. Other questions. All right we have been to anyone in the audience. Wishes to speak for against the bill. All right seeing none represent. A Russian Maddox are you ready to close for your yes Mister I'm close for bills all right do we have a motion our motion and a second any discussion. All those in favor say aye. Any opposed. Motion carries congratulations represent Maddox your second bill is passed thank you Mr chairman. All right at this time we're going to move on to house bill eleven ninety nine representative pair you're recognized to present this bill. The. All right representative Perry you're recognized thank you Mr chairman committee members of asked them to stay at the table with this we have a house bill eleven ninety nine which is refund unused purchase credit. Instead this bill does not reduce any benefits for any eighty eight eighty R. S. member or beneficiary what this bill is doing is codifying existing practice for refunding payments for purchase to service and all cases of purchase service credit at the member's request payment for the service credit shall be refunded if the member ceases to be an active member for the service credit is established in the system or the service credit is not otherwise used to established eligibility under the system effectively canceling the entire transaction in there's not any a material financial impact on this bill. All right representative Perry has presented the bill do we have any questions representative right you're recognized mmhm thank you thank you Mr chairman but may I ask you this does this apply like in a situation where if a person is a teacher in Arkansas moved to another state and they're probably not going to each anymore. Can they just cash out what they actually of a manner one. Yes represent rice so this bill is not specifically for that scenario which is when a teacher moves out of the state they are eligible for a refund of their services it could come into play if they moved back to Arkansas and decided they wanted to a re purchase some of that purchased for that refund and they get halfway through and they decide I don't really want this we will we will give them a refund or even if they pay the whole thing off early and. Stay for many many more years to the point that they actually don't need that purchased serviced in it in their calculation we can also refund that this bill essentially that practice was done it has always been done for all types of purchases at a TRS but will we analyze the code some of the purchase types had this language in in some do not and this bill is simply putting that same refund language across all the different purchase types follows. Raise age to clean up I know someone that went through that and that's just what works I mean I guess if they want to cash it out they can but sometimes they come back over here is lower to each school and they've already care center they're going to take a pretty good here and what's going on here on yes Sir it is a purchase of services very expensive at this point because it is act actuarial services actually quilts yes thank you thank you Mr chairman. All right other questions. Do we have anybody in the audience that wishes to speak for against the bill. Representative Perry would you like to close for your bill all be close all right do we have a motion. Got a motion that we have a second all right we have a motion and a second any discussion. All those in favor say aye. Any opposed. Your motion is passed. The Bill pass try. All right let's move on to your next one representative fairy house bill twelve hundred. Thank you Mr chairman house bill twelve hundred. Is a of dealing with the military free military purchase service this bill again does not reduce any benefits for an eighty R. S. member or beneficiary this bill provides for members who served in the United States Armed Forces during the period that a military draft was in effect to receive up to five years of free service credit before retirement regardless of the current ATR S. active status this bill also allows for members to purchase federal service credit in to convert non contributory service to contribute or a service before retirement regardless of their current active status. In we do not a there's not a financial impact to the system. Okay. We have one question here senator Johnson you're recognized thank you Mr chairman a representative Perry I hope this is a simple question it talks about during the period the federal military draft was in effect. Do we have one in effect now we have registration does that count as having an effect or is this actually require a time when individuals were actually being conscripted. All deferred to okay thank you know senator we do not have a a draft currently selective service process is not what we're talking about so nineteen seventy three I believe was the last good compulsory service period that we had I remember it well I just didn't know yes what the definition so you know questions are why we really do look at this mathematically it is still possible there's a few there could be a few veterans out there that fit this category that have not reached the required minimum distribution age at which is seventy going up to seventy five and right now they would actually have to be an active member in eighty R. S. as employed as an active employee member which seems a little ridiculous to me so we have just made it were regardless of your status you're eligible for the service since I was in that last little wave of those that were exposed I still remember my draft lottery numbers so I'm but I understand Jack which say it makes perfect sense looks like a good bill representative thank you Mr chairman thank. Sir but you're recognized. Thank you I guess my question is about the five years credit for for years or or have you referred to that. Okay the. Beneficiary that's currently retired receiving benefits. Receive an increase from that because now there they have eligibility to add five years. So so all of the services district is up and to the point of retirement that's all the credit service that you can get one to make the decision to retire that locks in your retirement okay so it can't get added on later okay thank you. Any other questions. Do we have anyone in the audience would like to speak for against the bill. Represent Perry rate close for your bill I'm close from a bill okay. You have a question. All right you're recognized Senator Hickey I can I don't think this to death but good and this is something I don't know so on page two it says online twenty eight twenty nine says becomes inactive mender member. After non honorable discharge. So that's that's that's the other way is that is that correct they don't so they've served in the military and then they're coming in here they don't have to because stay with us for certain members of my mountain time. I guess my question is do we need any any time limitations on that we just say active member so if somebody is an active member for. Ninety days is that what we won't actually the the free military service that has been all part of a terrorist for to talk remember you've always had to be vested so you have to be vested first and then if you have are eligible for that service to gets added on that makes sense yeah so so we do we we have that under another code six seven somewhere all in a section is not edited or not modify this bill that made requirement yes Sir thank you Sir. All right any other questions all right your clothes for your bill yes all right. Do we have a motion all right we got a motion to have a second. Our motion and a second any discussion. All those in favor say aye are any opposed same sign. Your vote your bill passes congratulations thank you. Thank you are but let me sign that B. L. bear with us just a couple minutes I'm going to sign off on some bills and then I've got to swap with the chair my co chair. Representive warn you are recognized to present house bill two O. two. Thank you Mr chairman I would ask these two please remain at the table with me about this bill is actually clarifying what. Actual Arkansas teacher retirement system practice is with respect to the multiplier which is a component that is used in determining your actual retirement pay. For the first ten years in the system the multiplier can be lower after you get the ten years the board can increase the multiplier for those ten years. As well as future years the way the law was written could be seen as redundant this bill will take out the unnecessary language in order to make this effective with the next fiscal year which will begin July first two thousand twenty three we're asking for an emergency clause to make sure is there from the start of the new fiscal year. Thank you representative Warren are there any questions by the committee. Seeing none of them by an audience signed up to speak for against this bill. Representive one would you like to close for your bill I'm close with I would ask for a good vote. What's the pleasure of the Committee. I have a motion do pass and a second all of any discussion. All in favor say aye. Any opposed congratulations your bills passed thank you Mr chair thank you Committee. Representive Warren you are. Recognized to present Senate bill one one five. All right thank you Mr chair the this is a several pieces to this we're clarifying survivor application deadlines were clarifying dependent child's ability to receive a dependent child and unity when the child is called to active military duty or training or clarifying a independent child's eligibility for dependent child annuity. And when the child's parent has retired but returns to work under a covered employer and we need to do this with an emergency clause so it's effective with the next fiscal year for the state. Basically it's just making sure we're we're taking care of the children's benefits for retirees and needed to be cleaned up and we're doing that with this bill. Thank you representative worn any questions from the committee center Chesterfield you're recognized for a question this is chair looking at channel line twelve on page two by the end of the six full calendar months following the date on which the application required under subdivision this section in any additional documentation. Is the six full calendar month traditionally there. How long has it been before that a person can deal with this particular issue how much time at. It had been three months and so this is making a run to do is okay and I apologize I should point that out we're giving them six months and it begins the month after That I mean after the disability. All right let let me pass Jennifer on this to make sure I get it correct. Okay so what the system is doing is giving applicant six months of two file an application and all of accompanying documents six months would have been for example if the applied in July one they would have until January one stretching it to six full calendar months just gives them and of until the end of the last six calendar month to submit the application and documents it just gives them more time to get everything in thank you that makes sense to me thank you and there is a provision senator that if for some reason they didn't get it in the six months they can go to the executive director for a waiver. Representive rai you are recognized for a question thank you Mr chairman grant in a situation where you have a husband life and Shiseido's when had twenty years of service in the dad. What what happens to that spells as far as retirement is concerned. So. So represent right so the In that particular scenario it really matters whether saying the husband in your example is still an active member. So if they actually die in active service That is particular what this bill is a dealing with it covers both the spousal survivor benefit and the dependent children benefit so The spouse will essentially get it depends on his it's not a service but it's is age so what he would have turned sixty as long as I've been married for two years then she would get a spousal benefit now that is that's the general rule it also we also look at the beneficiary's statement that the member feel that so in that case where if he did not have a spouse on like actually he had declared his parents to be the residue beneficiary we would look at that first and In in in that case the the person that he designated on his beneficiary form would actually wait that benefit and then the spousal benefit would pick up. Okay if it gets more complicated that I'm glad to do any follow ups are like today okay Sir you're recognized for follow yes Sir thank you Mr chairman what would it be basically half the amount as as the member. With the actually drawing for the retirement for the life for us and we will get a strange way so it's calculated on if they get their benefit calculated with their service. And it is a full it is the full benefit is not half of the benefit is it's our what we call our option a benefit but it is based on his service and then it's elegies eligible at the time he would have turned sixty or his time of death if he already was over sixty. Thank you good information thank you Mr Senator Hickey you're recognized for a question yes. Okay top of page two of those languages says that that they shall be paid the. Shall be paid to the eligible survivors. So let me ask you this of. And the only reason I'm doing this is because of papers kind of been discussed in this so I don't know if we need to try to make sure consistent across all these or not. So if somebody doesn't apply let's say they would they apply in month five. Okay so. It says will be that it'll be paid. There's going to be are are you going to accrue up to month five and whenever they apply you're going to pay the black benefits all the way from there. Or you just going to start paying at that time. Yes senator are are practices we we pay benefits from the month after the time of death okay and and if it takes five months sometimes these actually take longer than five or six months depending on how. Extreme the circumstances are but it is a retroactive payment back to the time of death once we get the full application process sorted out so intense. Somewhere within this language or somewhere else or are we just doing that by practice so in other words do we have it somewhere that it will accrue so we will if somebody does but you don't hear from the survivor two months five you don't know where to where to send the send the check of course right. So we're just holding the money but once they applied month five you're actually going to send that lump sum back to them at that time once all that's correct correct and is that in the statute or is that just your practice last year it's somewhere else in the code but I know it's our products are it's in the statute perhaps not the way that you stated it but it's the language in the statute needs of that result. Okay. I'd like I'd like to know and I'm okay with we go ahead with this I just I'd like to make sure all this stuff is if we're going to do this that were consistent with that across all these plans because with it sounds like to me with some of this that we're not you know we've kind of been all over the board with it and no disrespect anybody there's just it's hard to think about this okay so one other thing so it says that there if that's okay Mr yes you're recognized it says that they're going to pay it by the end of the six are that they will do it by the end of the six full calendar month. I guess to be seven months. And they haven't applied for sore they out and they lose it. No Sir the. Six months is the extension that's being given from the three months that it has been if at the end of six months they haven't made application they have to go through the executive director of a TRS and to explain how they had just and no one told me this benefit existed he has the claimant or whoever is in that position has the ability to to hear And make a judgment call. at that point. Clinton may be okay with you doing that I don't know who's gonna be sitting there ten years from now so does it say the executive director or is it what you're you're border somebody would is there any type of appeal process from from the Director after that so so let me I mean so how we do this now is you know open to that said the system could waive the deadline and the up and to the point that the deadline has passed so that's that's within the powers of the executive director once the deadline has passed the it go the director has no ability to wave a deadline that's the board has to do that so we have had a few circumstances just like what you're talking about deadlines weren't met it just meant we had an extra step or we had to take those scenarios to the board let the full board make the decision to waive the deadline because that's in their powers so that's the process is it's just simply taken to the board at that point okay I will go to I'm going to a rabbit trail here but that's okay. Okay so I don't know if there's ever a. I don't ever know what the reason would be that they would they wouldn't pay it. So I mean. I have have you ever have you all ever done that I mean if you give it the board somebody has been eight years. I mean they're not going paid at that time or I mean is I I guess that's going to be their decision and you have to have some cut offs but right. I guess the thing is is that just the. I don't know if the board with that type of stuff needs to develop some type of rules so that they stay consistent or or what so right that's more just to. Just a little bit of a suggestion or thought I can say I don't I don't know if what that reason whatever be and then if there is a reason you know how they're going to maintain that consistency you know from person to person after that right. Thanks for the explanation thank you thank you. I'd like to say thank you senator Hammer and client I don't. Know exactly how much of that. Is governed specifically by this bill or what's being changed in this bill but just for the housekeeper members I mean we all know a lot of latitude to learn as much as we can about this unless I have there for people in the queue I'll give you plenty of room to explore those options Senator Murdock you're recognized for a question. Thank you chair in my was a long line of would send Hickey took me most of the way down and roll but there's a little bit that I'm just concerned about this long lines would you just mentioned chair is is there ever really I guess is there ever a time that we would not pay a survivors their benefits are you know eight years whatever number it is a. There are lots of reasons why people may not meet that six month or whatever that term is is determined but. You know are we prepared for if whatever whatever peered that eligible surviving shows up that they will get that benefit is that. Or do we need to do something from a legislative standpoint to ensure that. I guess that's my bigger question. Okay US Senator Clark yes so thank you for all of me thank you both for eight expressing there's your concern about our survivors as I have the same concerns the board has those concerns we have not had a case where we've ever that to my knowledge that we've ever had as a survivor scenario where people. They're going to get their benefits it's just there's a process that we have to go through in order to you know we we need deadline so people apply for these in a timely manner but there is a process obviously to. Waive those deadlines to extend those deadlines and to to make sure that the members are taken care of that that's don't this is why these bills that we added a little bit of cost our system because we added a few fairness circumstances to our survivors because we really do care about this benefit. Thanks I hope that helps yep that the what you're saying is that at the end of the day they will be able to get the benefit it just they just may have to go through a couple of meetings or whatever right to the scene why they had not shown up thank you to. And I would I would just add to I appreciate both comments of what I would say is that in working with with all for the systems. These are kind of comments that but I know that they appreciate because they like to have the uniformity and consistency. Across the systems because we we don't like sale that system offers this. You all are treating us differently these are good topics that frequently we sit and discuss so that it's like the state of Arkansas handles these all the same so that that is great information that we can make sure that and I know Senator Hickey we have had a an issue we've talked about with a provision so that's that's excellent information and I and I know like in case with teachers that they are reaching out to these people to get them to apply for the benefits and it's a matter of just not responding not responding so they're trying to get them to get the benefits so and in this case they're just making it where instead of going to the board the executive director canal deal with it instead of having to go to another step. Seeing no other questions is there anybody in the audience signed up to speak for against this bill. Representative Warren are you close with bill and closed appreciate a good vote. Was the will of the committee. I have a motion to pass in the second. Any discussion on the motion. All in favor say aye any opposed Like sign. Congratulations your bills passed thank you Mr thank you Committee. I think that concludes the business Preciado showing up there bright and early this morning we are adjourned.