As used in this act:
(1) “Accumulated contributions” means the total of all amounts contributed by a member credited to the member's deposit account, together with regular interest;
(2) “Active member” means any member eligible for service credit rendering service to an employer that is covered by the Arkansas Teacher Retirement System;
(3) “Actual service” means service rendered in a position covered by the Arkansas Teacher Retirement System and does not include purchased or free credited service or reciprocal service;
(4) “Actuarial equivalent” means a benefit of equal reserve value when reserve is the present value of all payment to be made on account of any benefit based upon such reasonable rate of interest and table of experience as a plan shall adopt from time to time;
(5) “Administrator” means:
(A) A person who is:
(i) Employed by an education-related agency that participates in the Arkansas Teacher Retirement System; and
(ii) An active member employed in a position that is a grade GS13, a grade above a GS13, or the equivalent of a grade GS13; or
(B) A person who is:
(i) Employed by a participating employer of the Arkansas Teacher Retirement System; and
(ii) Any one (1) of the following:
(a) A public school superintendent, assistant superintendent, principal, or vice principal;
(b) A president, chancellor, or a director of an institution of higher education; or
(c) A president, vice president, or a director of a community college vocational, technical, or educational cooperative;
(6) “Annuity” means an amount payable to a retirant each fiscal year by the Arkansas Teacher Retirement System in equal monthly installments;
(7) “Arkansas Teacher Retirement System” means a governmental state agency created in 1973 and administered under Acts 1973, No. 427, as amended, to provide a system of retirement benefits to its members and includes a limited liability company or other corporate entity solely owned by the system;
(8) “Beneficiary” means any person who is receiving or is designated by a member to receive an Arkansas Teacher Retirement System benefit;
(9)
(A) “Benefit participant” means a person or entity that receives or may receive any kind of benefit, annuity, or other payment from the system due to a member's participation in the system.
(B) “Benefit participant” includes without limitation:
(i) A member;
(ii) A spouse or a member;
(iii) A survivor;
(iv) A residual beneficiary;
(v) A death beneficiary;
(vi) A former spouse of a member; and
(vii) The estate of a member;
(10) “Benefit program” means a schedule of benefits or benefit formulas from which the amounts of Arkansas Teacher Retirement System benefits can be determined;
(11) “Board” means the Board of Trustees of the Arkansas Teacher Retirement System;
(12) “Child of a member” means either a natural child of the member or a child who has been made a child of the member by applicable court action before the death of the member;
(13) “Credited service” means service which is creditable as service by the Arkansas Teacher Retirement System;
(14) “Deferred member” means an inactive member who is eligible to receive benefits under § 24-7-707;
(15) “De minimis amount” means an amount of money so small as to make accounting for it unreasonable or impractical;
(16) “Employee” means any person employed by an employer covered by the Arkansas Teacher Retirement System;
(17) “Employer” or “covered employer” means any public school, public educational agency, or other eligible employer participating in the Arkansas Teacher Retirement System unless the context clearly indicates that the employer is not a covered employer;
(18) “Employment with a school” means, beginning July 1, 1993:
(A) Employment with any of the following institutions or agencies:
(i) Arkansas School for the Blind;
(ii) Arkansas School for the Deaf;
(iii) Arkansas Activities Association;
(iv) State Board of Education;
(v) Regional education service cooperatives; and
(vi) Arkansas Teacher Retirement System;
(B) Employment in a position with any of the following organizations:
(i) The Arkansas Educational Television Commission; and
(ii) Area vocational-technical schools, except those employees of area vocational schools and the Division of Career and Technical Education, the Adult Education Section, and the Office of Skills Development, who have elected to participate in an alternate retirement plan established by §§ 24-7-901 and 24-7-903 — 24-7-908;
(C) Employment by Arkansas Rehabilitation Services except those employees who have elected to participate in the Arkansas Public Employees' Retirement System;
(D)
(i) Employment in a position with an educationally related agency if the employee is or has been a member of the Arkansas Teacher Retirement System for a minimum of five (5) years and elects to become or remain a member of the Arkansas Teacher Retirement System. The employment shall be related to:
(a) Training public school employees or school board members;
(b) Teaching public school students; or
(c) Adult education programs.
(ii) The employment shall not be related in any manner to private schools.
(iii) Each educationally related agency shall be:
(a) Approved according to rules established by the board;
(b) Considered an employer under subdivision (17) of this section; and
(c) Responsible for all required employer contributions;
(E)
(i) Employment in an enterprise privatized by a public school district.
(ii) If a public school district should privatize any of its services, any individual who is or was employed by the school district in one (1) of those services and who is or has been a member of the Arkansas Teacher Retirement System may elect to remain a member if:
(a) The board determines pursuant to rules adopted by the board that the participation of these employees in the Arkansas Teacher Retirement System will not in any way impair any legal status of the Arkansas Teacher Retirement System, including without limitation its status as a governmental plan pursuant to the Internal Revenue Code and the Employee Retirement Income Security Act of 1974, or have a substantial adverse impact on the actuarial soundness of the Arkansas Teacher Retirement System; and
(b) The private provider assumes all responsibility for the required employer contributions and any fees for obtaining Internal Revenue Service rulings or Employee Retirement Income Security Act of 1974 opinions;
(F)
(i) Employment in positions with an educational nonprofit corporation licensed and regulated by the Division of Developmental Disabilities Services of the Department of Human Services, if:
(a) The nonprofit corporation has elected to participate in the Arkansas Teacher Retirement System; and
(b) The board determines pursuant to rules adopted by the board that the participation of the educational nonprofit corporation will not in any way impair any legal status of the Arkansas Teacher Retirement System, including without limitation its status as a governmental plan pursuant to the Internal Revenue Code of 1986 and the Employee Retirement Income Security Act of 1974, or have a substantial adverse impact on the actuarial soundness of the Arkansas Teacher Retirement System.
(ii) The employment shall be related to:
(a) Training public school employees or school board members;
(b) Teaching public school students; or
(c) Adult education programs.
(iii) The employment shall not be related in any manner to private schools.
(iv) Each educational nonprofit corporation shall be:
(a) Approved according to rules established by the board;
(b) Considered an employer under subdivision (17) of this section; and
(c) Responsible for all required employer contributions and any fees for obtaining Internal Revenue Service rulings or Employee Retirement Income Security Act of 1974 opinions; and
(G) Employment with a covered employer that elects to treat embedded employees of a contractor as members of the system;
(19) “Final average salary” means the average of the highest salaries earned by a member in state fiscal years determined in accordance with the rules of the board as is actuarially appropriate for the Arkansas Teacher Retirement System;
(20) “Inactive member” means a formerly active member who is:
(A) No longer rendering service that is covered by the Arkansas Teacher Retirement System; and
(B) Not a retirant;
(21) “Interest” means the rate or rates per annum, compounded annually, as the board shall adopt from time to time, that will be charged for the purchase of service credit or to repay a refund, or repayment of benefits, but the rate shall equal no less than the Arkansas Teacher Retirement System's current assumed interest rate assumption;
(22) “Internal Revenue Code” means the Internal Revenue Code of 1986, 26 U.S.C. § 1 et seq., as amended, as it existed on January 1, 2013;
(23) “Look-back period” means a period of time that includes the current fiscal year and the four (4) fiscal years immediately preceding the current fiscal year;
(24)
(A) “Manifest injustice” means an obvious unfairness that has a direct and observable unconscionable effect that will occur as a result of a technical error or error of judgment, when the error made by the system, a benefit participant, or employer, and the disparity of outcome to the parties, when taken together and supported by clear and convincing evidence, show a great harm to the integrity of the system as a whole, the benefit participant, or an employer, unless the system is afforded the discretion to resolve the matter in a fair manner.
(B) In determining manifest injustice the system may consider:
(i) The degree of fault of the system, benefit participant, or employer;
(ii) An ambiguity in the interpretation of the circumstances, rule, or law;
(iii) The cost to the system of correcting the error that is far outweighed by the benefit afforded to the system, benefit participant, or employer;
(iv) Whether or not an expedited decision is in the public interest;
(v) The fundamental fairness of a remedy in a particular situation; and
(vi) Whether or not the status quo would result in an unconscionable outcome;
(25) “Member” means any person included in the membership of the Arkansas Teacher Retirement System;
(26) “Nonteacher” means a member who is not a teacher;
(27) “Normal retirement age” means sixty-five (65) years of age;
(28) “Reciprocal service” means credited service rendered under a reciprocal system as defined by § 24-2-401;
(29) “Regular interest” means the rate or rates per annum, compounded annually, which the board shall adopt from time to time, that will be used to compute interest on members' contributions;
(30) “Reserve” means the present value of all payments to be made on account of any Arkansas Teacher Retirement System benefit based upon such reasonable tables of experience and regular interest as the board shall adopt from time to time;
(31) “Retiree” or “retirant” means a member receiving an Arkansas Teacher Retirement System annuity;
(32) “Retires” means that a member ceases to be active and is eligible to receive retirement benefits from the Arkansas Teacher Retirement System;
(33)
(A) “Salary” means the remuneration paid to a member employed in a position covered by the Arkansas Teacher Retirement System on which the employer is required to withhold federal income tax from wages or on which income tax would be due under the Internal Revenue Code.
(B) “Salary” includes:
(i) An incentive bonus paid to an employee for the employee's certification by the National Board for Professional Teaching Standards under § 6-17-413 if the Department of Education pays the employer contribution and the member pays the required member contribution; and
(ii) Employer pick-up contributions, cafeteria plans as defined in § 21-5-901, and employee contributions to qualified retirement plans, including without limitation qualified annuities and deferred compensation plans.
(C) “Salary” does not include:
(i) All or part of a payment made as a result of a contract buyout agreement, settlement, claim, judgment, arbitration award, decree, or court-ordered payment to a member; and
(ii) Nonmonetary taxable income, including without limitation vehicles, housing, and personal property.
(D) The board may promulgate rules to modify the definition of salary used in the calculation of benefits by the system;
(34) “School” means any public school under the control of school authorities of the state and supported wholly or partially by state moneys;
(35) “Service” means employment rendered as an employee;
(36)
(A) “Service purchase account” means an account established by a member with the Arkansas Teacher Retirement System to allow the member to buy service credit in the system as allowed under this subchapter.
(B) “Service purchase account” does not include an account established by the system to allow a member to make payments on unreported or incorrectly reported contributory service credit that is not resolved through a release process;
(37) “Social Security” means the Social Security, old age, survivors', and disability insurance program;
(38) “State” means the State of Arkansas;
(39) “System” means the Arkansas Teacher Retirement System;
(40) “T-DROP” means the Teacher Deferred Retirement Option Plan established by the Arkansas Teacher Retirement System;
(41) “T-DROP plan interest” means the rate per annum that the board shall adopt from time to time that will be used to compute interest paid on T-DROP mean balances at the end of each fiscal year;
(42)
(A) “Teacher” means, beginning July 1, 1989, any person employed by a school for the purpose of giving instructions and whose employment requires state licensure.
(B) In any case of a question as to who is a teacher, the board shall have the final power to decide the question; and
(43) “Trustee” means a member of the board.