24-10-602. Annuity generally.

24-10-602. Annuity generally. (a) Upon a member's retirement, he or she shall receive an annuity for life in accordance with the applicable benefit program elected by his or her employer, as follows: (1)Benefit Program 1. (A) For each year of paid service resulting from employment: (i) In a position not also covered by Social Security, two and ninety-four hundredths percent (2.94%) of his or her final average pay; and (ii) In a position also covered by Social Security, one and ninety-four hundredths percent (1.94%) of his or her final average pay. (B)(i)(a) In addition, if the member is retiring as provided in § 24-10-604, § 24-10-605, § 24-10-606, or § 24-10-607, and if the member's age at retirement is less than Social Security's minimum age for an immediate unreduced retirement benefit, then the member shall receive a temporary annuity equal to one percent (1%) of his or her final average pay for each year of paid service resulting from employment in a position also covered by Social Security. (b) The provisions of this section that allow a member who retires as provided in § 24-10-607, whose employment was also covered by Social Security, and who is thereby eligible for a temporary annuity shall be applied retroactively to all persons who retired under those circumstances on or after October 1, 1989. (ii) The temporary annuity shall terminate at the end of the calendar month in which the earlier of the following events occurs: (a) The member's death; or (b) His or her attainment of Social Security's minimum age for an immediate unreduced retirement benefit. (iii) Any member who has had a temporary annuity terminated because of an award of disability retirement under the Social Security Act, 42 U.S.C. § 301 et seq., shall have that temporary annuity restored; (2)Benefit Program 2. (A) For each year of paid service rendered on or after the election date of the Benefit Program 2 and before the election is rescinded: (i) In a position also covered by Social Security, two and ninety-four hundredths percent (2.94%) of the member's final average salary; and (ii) In a position not covered by Social Security, three and twenty-eight hundredths percent (3.28%) of the member's final average salary. (B)(i) For each year of paid service rendered before the election date of the Benefit Program 2 or after the election is rescinded: (a) In a position also covered by Social Security, one and ninety-four hundredths percent (1.94%) of the member's final average salary; and (b) In a position not covered by Social Security, two and ninety-four hundredths percent (2.94%) of the member's final average salary. (ii) A member who has paid service rendered before the election date of Benefit Program 2 or after the election is rescinded and subsequently readopted may have the paid service rendered on or after July 28, 1995, treated as though the paid service had been rendered after the election date of Benefit Program 2 by paying to the system the actuarial cost of the increased benefit by a single contribution or by an agreement to pay an increased rate of contributions if approved by the Board of Trustees of the Arkansas Local Police and Fire Retirement System. (iii) As used in subdivision (a)(2)(B)(ii) of this section, “actuarial cost” means an amount that is the actuarial equivalent of the value of the credited service to be purchased at the time of the purchase, as determined by the system's actuary. (C)(i)(a) In addition, if the member is retiring as provided in § 24-10-604, § 24-10-605, § 24-10-606, or § 24-10-607, and if the member's age at retirement is less than Social Security's minimum age for an immediate unreduced retirement benefit, then the member shall receive a temporary annuity equal to one percent (1%) of his or her final average pay for each year of paid service rendered before the election date of Benefit Program 2 and resulting from employment in a position also covered by Social Security. (b) The provisions of this section that allow a member who retires as provided in § 24-10-607, whose employment was also covered by Social Security, and who is thereby eligible for a temporary annuity shall be applied retroactively to all persons who retired under those circumstances on or after October 1, 1989. (ii) The temporary annuity shall terminate at the end of the calendar month in which the earlier of the following events occurs: (a) The member's death; or (b) His or her attainment of Social Security's minimum age for an immediate unreduced retirement benefit. (iii) Any member who has had a temporary annuity terminated because of an award of disability retirement under the Social Security Act, 42 U.S.C. § 301 et seq., shall have that temporary annuity restored; (3) As used in subdivisions (a)(1) and (2) of this section, “Social Security's minimum age for an immediate unreduced retirement benefit” means one (1) of the following: (A) If the member is retiring as provided in § 24-10-607 and is in receipt of a disability benefit under the Social Security Act, 42 U.S.C. § 301 et seq., the age when the Social Security disability benefit becomes effective; (B) If the member's retirement is effective before July 1, 2001, as provided in § 24-10-604, § 24-10-605, § 24-10-606, or § 24-10-607, age sixty-two (62); or (C) If the member's retirement is effective on or after July 1, 2001, as provided in § 24-10-604, § 24-10-605, § 24-10-606, or § 24-10-607, the minimum age for the member's receipt of an immediate unreduced Social Security old age benefit; (4)Benefit Program 3. (A) The total benefit amount computed under subdivisions (a)(1) and (2) of this section shall not exceed at the time of retirement one hundred percent (100%) of the final average pay plus the amounts provided in subdivision (a)(4)(B) of this section for volunteer service; (B)(i) For retirements effective before July 1, 2003, annuity amounts based upon volunteer service shall be in accordance with system provisions in force before July 1, 2003. (ii) For retirements effective July 1, 2003, and the twelve (12) calendar months thereafter, the monthly annuity amount for each year of volunteer service shall be five dollars ($5.00), to a maximum of two hundred dollars ($200) monthly for all volunteer service. (iii) For retirements effective in the twelve (12) calendar months beginning July 1 thereafter, the monthly annuity amount for each year of volunteer service shall be five dollars ($5.00), increased by any percentage increase in the inflation index for the period from December 2003 to the December immediately preceding the July 1, to a maximum for all volunteer service of two hundred dollars ($200) monthly, similarly increased by any percentage increase in the inflation index; and (5)Benefit Program 4. (A) For each year of volunteer service rendered on or after the election of Benefit Program 4 and before the election is rescinded: (i) The total benefit amount computed under subdivision (a)(2) of this section shall not at the time of retirement exceed one hundred percent (100%) of the final average pay plus the amounts provided in subdivision (a)(5)(B) of this section for volunteer service; and (ii) For retirements effective July 1, 2013, the monthly annuity amount for each year of volunteer service shall be ten dollars ($10.00), increased by any percentage increase in the inflation index for the calendar year preceding July 1, to a maximum of four hundred dollars ($400) monthly for all volunteer service. (B) The increased benefit associated with Benefit Program 4 in excess of that defined in Benefit Program 3 shall not be funded through an allocation of premium tax revenues. (C) The election of Benefit Program 4 may be rescinded only one (1) time by the political subdivision. (D)(i) A member who has volunteer service rendered before the election date of Benefit Program 4 or after the election is rescinded and subsequently readopted may have the volunteer service rendered on or after July 1, 2013, treated as though the volunteer service had been rendered after the election of Benefit Program 4 by paying to the system the actuarial cost of the increased benefit by a single contribution or by an agreement to pay an increased rate of contributions if approved by the board. (ii) As used in this subdivision (a)(5)(D), “actuarial cost” means an amount that is the actuarial equivalent of the value of the credited service to be purchased at the time of the purchase, as determined by the system's actuary. (b) If each portion of a member's credited service is not covered by the same benefit program, then his or her total annuity for life shall be the total of the annuity for life determined under each applicable benefit program. (c) Each employer shall have the credited service of each of its members covered by Benefit Program 1 as provided for in this section, unless the employer shall have elected another benefit program provided for in this section. (d)(1) By majority vote of its governing body, each political subdivision may elect from time to time to cover its members who retire in the future under one (1) of the benefit programs provided for in this section. (2) The clerk or secretary of the governing body of the political subdivision shall certify, in a manner and form acceptable to the board, the election of the benefit program to the board within ten (10) days of the vote. (3) The effective date of the political subdivision's benefit program is the first day of the calendar month specified by the governing body, the first day of the calendar month next following receipt by the board of the certification of election of benefit program, or the effective date of the political subdivision's becoming an employer, whichever is the latest date. (4) The election of Benefit Program 2 may be rescinded only one (1) time by the political subdivision. (5) If the changed benefit program provides smaller annuities for life than the benefit program previously in effect, then the changed benefit program shall be applicable only to credited service for employment rendered from and after the effective date of the change. (e) Should an employer change its election of benefit program as provided in this section, the employer contributions shall be correspondingly changed effective the same date as the benefit program change. (f) The limitation on increases in an employer's contribution provided by § 24-10-405(h) shall not apply to any contribution increase resulting from: (1) An employer's electing a benefit program that provides larger annuities; and (2) Increased benefits applicable to retirements on or after July 1, 2001, as provided in subdivisions (a)(1)-(3) of this section. (g) Increases made to a member's annuity benefits under subsection (a) of this section after August 12, 2005, shall result in a corresponding increase in the employer contributions effective on the same date as the member's annuity benefits increase.