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24-7-736. Calculation of final average salary — Definition.

Arkansas Code — all titles (historical 2020) · legal_authorities

24-7-736. Calculation of final average salary — Definition.

Source: Arkansas Code — historical release 78 (November 6, 2020) · 24-7-736

Stored review status: Historical 2020-11-06 source release; later amendments not reconciled; machine-extracted, not independently legally reviewed; source heading status: text_in_historical_source. A text match is a research starting point; applicability is not established.

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Stable record: arkansas_code:legal_authorities:24-7-736
Source file: gov.ar.code.title.24.odt
Pages: Not recorded – Not recorded
Passage SHA-256: 08bd656bed22ff78ac00fe475f3c75d615ef824eac56754669161c14ce915472

Source location: content.xml paragraph 7505

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24-7-736. Calculation of final average salary — Definition. (a) Compensation in excess of the limitations set forth in the Internal Revenue Code of 1986, 26 U.S.C. 401(a)(17), as it existed on January 1, 2011, shall not be used for purposes of calculating final average salary on which benefits under the Arkansas Teacher Retirement System shall be based. (b)(1) The limitation on compensation for an eligible employee shall not be less than the amount that was allowed to be taken into account under the system as in effect on July 1, 1993. (2) As used in subdivision (b)(1) of this section, “eligible employee” means an individual who was a member of the system before the first plan year beginning after December 31, 1995. (c)(1) The Board of Trustees of the Arkansas Teacher Retirement System shall set annually the applicable number of years to be used in computing final average salary for retirement benefits at not less than three (3) years and not more than five (5) years. (2)(A) Full service years that are recorded as service credit shall be used in the calculation of the final average salary. (B) If the member does not have full service years for the total years of service used in the calculation of final average salary, then the board may establish by rule a fair base year for a member's final average salary for purposes of comparison under subdivision (c)(3) of this section. (C) If a member has less than the minimum number of years of credited service required for the final average salary formula, the final average salary of the member shall be the total salary paid to the member for his or her years of credited service divided by the member's total credited years of service. (D) Before reducing the number of years that is used to determine the final average salary, the board shall file relevant information concerning the actuarial appropriateness of the action with the Joint Interim Committee on Public Retirement and Social Security Programs for review by the Joint Interim Committee on Public Retirement and Social Security Programs. (3)(A) The applicable number of highest salary years shall be ranked from lowest to highest remuneration. (B) The lowest remuneration year in the ranking shall be the base year. (C) The next-highest-ranked remuneration year shall be compared to the base year. (D) The next-highest year's value in the calculation of final average salary shall not exceed the percentage increase of the base year, unless the difference in value between the next-highest year and the base year is within the amount of the salary differential. (4) After comparison of the base year to the next-highest year, any required reduction to the next-highest year shall be made. (5) The next-highest year, with any required reduction, becomes the new base year to compare to the next succeeding highest remuneration year in the ranking until all years in the ranking have been compared to its base and reduced as necessary under subdivision (c)(3) of this section. (6) The total value of the base years shall then be averaged to determine final average salary. (d) If a member has a break in covered employment for eight (8) years or more between any of the member's highest salary years used in the calculation of final average salary, then subdivision (c)(3)(D) of this section shall not apply to the next highest salary year in the formula. (e) The system may settle any dispute concerning an employee's salary for purposes of the system. (f)(1) The board may adjust the final average salary calculated in accordance with subsection (c) of this section by board resolution provided that: (A) The percentage increase under subdivision (c)(3)(D) of this section is adjusted no lower than one hundred five percent (105%) per year and no higher than one hundred twenty percent (120%) per year; and (B) The salary differential permitted under subdivision (c)(3)(D) of this section is set no lower than one thousand two hundred fifty dollars ($1,250) per year and no higher than five thousand dollars ($5,000) per year. (2) A partial service year is excluded from the calculation of the final average salary under this subsection.

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Federal law — U.S. Code and appendices · legal_authorities

26 U.S.C. § 401 — Qualified pension, profit-sharing, and stock bonus plans

**(a) Requirements for qualification** A trust created or organized in the United States and forming part of a stock bonus, pension, or profit-sharing plan of an employer for the exclusive benefit of his employees or their beneficiaries shall constitute a qualified trust under this section— (1) if contributions are made to the trust by such employer, or employees, or both, or by another employer who is entitled to deduct his contributions under section 404(a)(3)(B) (relating to deduction for contributions to profit-sharing and stock bonus plans), or by a charitable remainder trust pursuant to a qualified gratuitous transfer (as defined in section 664(g)(1)), for the purpose of distributing to such employees or their beneficiaries the corpus and income of the fund accumulated by the trust in accordance with such plan; (2) if under the trust instrument it is impossible, at any time prior to the satisfaction of all liabilities with respect to employees and their beneficiaries under the trust, for any part of the corpus or income to be (within the taxable year or thereafter) used for, or diverted to, purposes other than for the exclusive benefit of his employees or their beneficiaries (but this paragraph shall not be construed, in the case of a multiemployer plan, to prohibit the return of a contribution within 6 months after the plan administrator determines that the contribution was made by a mistake of fact or law (other than a mistake relating to whether the plan is described in section 401(a) or the trust which is part of such plan is exempt from taxation under section 501(a), or the return of any withdrawal liability payment determined to be an overpayment within 6 months of such determination)); (3) if the plan of which such trust is a part satisfies the requireme

Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 401

Stored review status: release_metadata_unconfirmed. The source passage cites 26 U.S.C. § 401. This identifies an authority to review, not proof of applicability.

Federal law — U.S. Code and appendices · legal_authorities

26 U.S.C. § 401 — Qualified pension, profit-sharing, and stock

Page 1178 TITLE 26—INTERNAL REVENUE CODE § 401 1983—Pub. L. 98–21, title III, § 321(e)(2)(D)(ii), Apr. 20, 1983, 97 Stat. 120, substituted ‘‘Employees of foreign af- filiates covered by section 3121(l) agreements’’ for ‘‘Cer- tain employees of foreign subsidiaries’’ in item 406. 1980—Pub. L. 96–603, § 2(d)(1), Dec. 28, 1980, 94 Stat. 3510, added item 404A. Pub. L. 96–222, title I, § 101(a)(7)(L)(v)(VIII), Apr. 1, 1980, 94 Stat. 200, substituted ‘‘tax credit employee stock ownership plans’’ for ‘‘ESOPS’’ in item 409A. 1978—Pub. L. 95–600, title I, § 141(f)(8), Nov. 6, 1978, 92 Stat. 2795, added item 409A. 1974—Pub. L. 93–406, title II, § 1016(b)(1), Sept. 2, 1974, 88 Stat. 932, inserted heading ‘‘Subpart A—General Rule’’ and added analysis of subparts. Pub. L. 93–406, title II, § 2002(h)(2), Sept. 2, 1974, 88 Stat. 970, added items 408 and 409. 1964—Pub. L. 88–272, title II, § 220(c)(1), Feb. 26, 1964, 78 Stat. 62, added items 406 and 407. 1962—Pub. L. 87–792, § 5(b), Oct. 10, 1962, 76 Stat. 827, added item 405. § 401. Qualified pension, profit-sharing, and stock bonus plans (a) Requirements for qualification A trust created or organized in the United States and forming part of a stock bonus, pen- sion, or profit-sharing plan of an employer for the exclusive benefit of his employees or their beneficiaries shall constitute a qualified trust under this section— (1) if contributions are made to the trust by such employer, or employees, or both, or by another employer who is entitled to deduct his contributions under section 404(a)(3)(B) (relat- ing to deduction for contributions to profit- sharing and stock bonus plans), or by a chari- table remainder trust pursuant to a qualified gratuitous transfer (as defined in section 664(g)(1)), for the p

Source: Supplied 2024 U.S. Code historical extraction · 26 U.S.C. § 401

Stored review status: historical_2024_not_currentness_verified. The source passage cites 26 U.S.C. § 401. This identifies an authority to review, not proof of applicability.