Contract buyout agreement — Settlements — Judgments — Calculation of benefits

1. Law
2. Arkansas Code
3. Retirement And Pensions
4. Retirement of Employees of Schools and Educational Institutions
5. Arkansas Teacher Retirement System — Benefits
6. Contract buyout agreement — Settlements — Judgments — Calculation of benefits

1. (a) A member shall not accumulate service credit in the Arkansas Teacher Retirement System during the time that payments under a contract buyout agreement, settlement, claim, judgment, arbitration award, decree, or court-ordered payment are paid to the member by the employer unless the member continues to work on-site for the employer.

2. (b)

   1. (1) The employer shall provide a copy of a settlement agreement or court order under this section to the system so that the system can prevent the accumulation of service credit for any payments that are not for on-site work for the employer.

   2. (2) A member shall not receive service credit or additional salary from the system under a settlement agreement or court order unless permitted under this section.

3. (c) The system shall allow a member or employer to purchase service credit or additional salary for the member for salary that should have been paid under a settlement agreement or court order to resolve a claim of wrongful termination or the underpayment of salary that should have been paid if the service credit is:

   1. (1)

      1. (A)

         1. (i) Purchased as additional salary by an employer or member to be added to the final average salary of the member calculated at the time of the purchase.

         2. (ii) The member's official salary record shall include the purchased additional salary years which may be used to compute the final average salary at the time of retirement if the salary in any of the additional purchased salary years qualifies for the final average salary calculation.

      2. (B) Service credit earned by the member from an employer from the date of termination by an employer to the date of the settlement agreement or court order shall be subtracted from the amount of service credit allowed for purchase under subdivision (c)(1)(A) of this section; and

   2. (2) Paid using the actuarial equivalent, as calculated by the system, of the member's benefits to the system.

4. (d)

   1. (1) The system shall use the same factors as used to determine the cost of the additional salary purchase to calculate an additional monthly benefit in the annuitization of a Teacher Deferred Retirement Option Plan distribution.

   2. (2) The calculation shall be made with the assumption that the member would have immediately retired at the time of the additional salary purchase.

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