24-2-402. Deferred annuity — Eligibility — Definition.

24-2-402. Deferred annuity — Eligibility — Definition. If a member of a reciprocal system left or leaves a position covered by a reciprocal system, if an employee in a position covered by a reciprocal system left the employ of a state employer before the latter position was covered by a reciprocal system, or if an employee in a position later covered by a reciprocal system leaves that position before it is covered by a reciprocal system, which in this section in each case is called the “preceding system”, and if that person entered or enters a position covered by a reciprocal system, which in this section is called the “succeeding system”, and if the person is a member of the succeeding system after July 1, 1975, then the person shall be entitled to a deferred annuity payable by the preceding system subject to the following conditions: (1) The person has credited service acquired in the employ of the preceding state employer; (2)(A) The person does not withdraw his or her accumulated contributions from the preceding reciprocal system, or if he or she has withdrawn his or her accumulated contributions, he or she deposits with the preceding reciprocal system the amount he or she withdrew, together with interest from the date of withdrawal to the date of repayment at the rate in effect for the preceding reciprocal system, but that deposit must be made while he or she is an active member of a reciprocal system. (B) In addition to the forfeited credited service, the active member of a reciprocal system shall receive credit for his or her previous employment with a public employer upon his or her paying the prescribed employee and employer contributions based upon the rate in effect during the previous employment, together with regular interest from the dates for the previous service to the date of repayment. (C) The provisions for determining a year of service credit shall be the prevailing rules of each reciprocal system; (3) The person qualifies for age and service retirement in the succeeding reciprocal system using his or her credited service in force with the preceding reciprocal system plus his or her credited service acquired in the employ of succeeding state employers to meet the minimum service requirements of the succeeding systems; (4)(A) The person's annuity payable by the preceding reciprocal system shall be upon the basis of the annuity formula of the preceding reciprocal system, exclusive of any minimum amount at the time the person begins to receive monthly retirement benefits from that system. (B) The final average compensation to be used to determine monthly benefits payable to that person shall be that of the reciprocal system which furnishes the highest final average compensation at the time of retirement, but each reciprocal system shall use the method of computing final average compensation stipulated by its law, and compensation in the Arkansas Judicial Retirement System shall not be used to determine final average compensation. (C) Any person retiring on or after July 1, 1982, with credited service in more than one (1) reciprocal system shall have his or her benefits recomputed based on the provisions of this section; (5)(A) It is the expressed intention of this subdivision (5) to provide the same death-in-service benefits that would have been payable had the member died while an active member of a reciprocal retirement system. (B) A member who dies in service while a member of one (1) reciprocal system shall be considered as currently employed by all systems in which the member retains credited service. (C) If a member has accrued credited service under the provisions of this subchapter but dies before retirement or before becoming eligible to retire, then the benefits payable shall be those provided by the reciprocal retirement system named in this subchapter, with each system being responsible for the payment of the death-in-service benefits provided by the applicable provisions of its retirement laws. (D) If death-in-service benefits are payable by more than one (1) reciprocal system to eligible survivors of a deceased member, the survivors shall not receive more, as a percentage of the deceased member's final pay or as a minimum dollar amount, than the largest amount payable by any single reciprocal system. (E) Each reciprocal system that has a minimum benefit provision in its plan shall pay only a proportionate share of that minimum amount based on the ratio of service in that system to the total service in all reciprocal systems. (F) If the reciprocal system is an alternate retirement plan under § 24-7-801 et seq. or § 24-7-901 et seq., death-in-service benefits shall be contingent on provision of that benefit having been provided by the alternate retirement plan and having been selected by the member as a benefit; (6) Both service in the Arkansas Public Employees' Retirement System as a member of the General Assembly and service in another reciprocal system during the same period of time may be counted to meet the service requirements for benefits from the reciprocal system subject to the following: (A) The benefit payable by a reciprocal system will be based on the credited service in that system and the final average compensation under that system. However, nothing in this subdivision (6)(A) shall diminish the General Assembly member's right to a benefit for which the person is qualified under the provisions of § 24-4-706 [repealed]; and (B)(i) “Final average compensation” as used in this section means the combined highest salaries from the preceding and succeeding systems equaling thirty-six (36) complete months divided by three (3) if a member has: (a) Fewer than twenty (20) years of credited service on July 1, 2009; and (b) Fewer than three (3) years of service in a succeeding reciprocal system. (ii) If the member is a state police officer covered under § 24-6-401 et seq., the combined salaries shall be from the preceding system and State Police Retirement System equaling forty-eight (48) months divided by four (4); (7)(A) If the preceding or succeeding reciprocal system is the Arkansas Judicial Retirement System and the member's benefits are determined under § 24-8-201 et seq., the benefit payable by the Arkansas Judicial Retirement System shall be determined by multiplying the benefit provided by § 24-8-218 by the following fraction: (i) The numerator shall be the number of the actual years of service credited in the Arkansas Judicial Retirement System as a justice of the Supreme Court or judge of the circuit or chancery courts or the Court of Appeals; and (ii) The denominator shall be fourteen (14) years. (B) In no instance shall the benefit payable by the Arkansas Judicial Retirement System exceed the benefit provided by § 24-8-218; (8)(A)(i) If the preceding or succeeding reciprocal system offers a deferred retirement option plan for its members, both service in the preceding and the succeeding reciprocal system may be counted to meet the minimum service credit requirements for benefits under a system's deferred retirement option plan. (ii) The benefit payable by the preceding reciprocal system shall be based on the annuity formula of the preceding reciprocal system, exclusive of any minimum amount at the time the person begins to receive monthly retirement benefits from that system under its deferred retirement option provisions. (iii) The final average compensation to be used to determine monthly benefits payable to that person shall be that of the reciprocal system which furnishes the highest final average compensation at the time of retirement, but each reciprocal system shall use the method of computing final average compensation stipulated by its law, and compensation in the Arkansas Judicial Retirement System shall not be used to determine final average compensation. (iv) Any interest credited to the deferred retirement account will be paid to the member's account under the deferred retirement option benefit program in effect for that system. (B) The boards of trustees of each preceding or succeeding system shall promulgate such rules as are necessary to coordinate their benefits with any system providing a deferred retirement option plan; and (9) If the preceding or succeeding reciprocal system is an alternate retirement plan for a college, university, or the Division of Higher Education provided for under § 24-7-801 et seq., or for a vocational-technical school or the Department of Career Education provided for under § 24-7-901 et seq., the benefits payable shall be in accordance with terms specified in the written alternate retirement plan document for purchasing the insurance policies or annuity contracts, both fixed and variable in nature, for the participants.