Gov. Asa Hutchinson has appointed former state Sen. Steve Faris, a Democrat who lives outside Hot Springs, and two state agency directors to replace three trustees on the Arkansas Public Employees Retirement System’s nine-member board.
Department of Workforce Services Director Daryl Bassett replaced former department Director Artee Williams on the board, state Bank Commissioner Candace Franks took over for former state administrator Bill Gaddy, and Faris replaced former Conway Human Development Center employee Ouida Wright last week, Hutchinson spokesman Kendall Marr said.
The governor replaced these directors under state law, as amended by Act 311 of 2017, Marr said. House Speaker Jeremy Gillam, R-Judsonia, sponsored the legislation.
The new law limits the Arkansas Public Employees Retirement System’s board of trustees to two retired members, one representing state employees and the other representing local government employees.
The law also reduced the length of public-employee service to be appointed to the board from 10 to five years. Williams, Franks and Wright are each retired state employees.
Bassett and Franks will serve as working state employee representatives on the board, and Faris will serve as the retired state employee representative, Marr said.
“No specific directions were given to the appointees. I expect them to use their experience and good judgment to do a good job,” Hutchinson said.
The Arkansas Public Employees Retirement System is state government’s second-largest retirement agency, with more than $7 billion in investments and more than 75,000 working and retired members from state and local governments.
Faris, a self-described “very conservative Democrat,” said Tuesday that he intends “to do a lot of listening,” protect the system members’ retirement benefits, and make sure that the system remains one of the better public retirement systems in the nation.
“I hope the institutional knowledge I bring to the table helps some,” he said.
Faris served as a member of the Legislature’s Joint Committee on Public Retirement and Social Security Programs during his 14 years in the Legislature from 1997-2011 and was chairman of the committee for part of that time.
Bassett said that “we want to make sure that the staff employees get the best possible return on investment” in the retirement system.
Franks said she’ll “just try to do a good job” as a system trustee.
The system’s board of trustees includes six appointees from the governor. The governor appoints three members who are state employee representatives and three members who are local government employee representatives.
The three local government representatives on the board are Sebastian County Judge David Hudson, Searcy Mayor David Morris and Pulaski County Regional Solid Waste Management District Deputy Director Carol Bevis. Their terms expire in March 2021, March 2022, and March 2018, respectively
The state treasurer, auditor and Department of Finance and Administration director also serve on the board.
Williams’ initial term on the board started in 2003, and his latest term had been scheduled to expire in 2020 until Hutchinson appointed Bassett to replace him. Bassett’s term on the board expires in March 2020, Marr said.
Hutchinson appointed Bassett to replace Williams as director of Workforce Services in 2015.
Gaddy’s initial term started in 2007; his latest term had been scheduled to expire in March 2019 until Hutchinson appointed Franks to replace him. Franks’ term expires in March 2019, Marr said.
Wright’s initial term started in 1989, and her latest term expired March 17. Faris’ term expires in March 2023, Marr said.
In an email dated March 28 to system Executive Director Gail Stone, Gaddy said he is confident that Hutchinson appointed “3 experienced public servants as our replacements, who’ll work diligently with the other APERS board members to solve all future APERS policy and performance issues which may come before the Board.”
“My best wishes to you for continued success, Gail; to your superbly professional APERS staff members; and to all APERS Board of Trustees members,” Gaddy wrote.
Williams declined to comment Tuesday about being replaced on the board. Wright could not be reached for comment by telephone on Monday and Tuesday.
Hutchinson had no role in developing the legislation, but he agreed to support it after Gillam told the governor about the bill in late January, Hutchinson spokesman J.R. Davis has said.
In late January, Gillam said that he worked in consultation and cooperation with Hutchinson on the bill that became Act 311 of 2017.
State and local governments paid $263.5 million into the system in the fiscal year that ended June 30, while employees who are members paid $55.9 million, according to a system report.
The system paid out $480.9 million in retirement benefits last fiscal year. Sources for the payouts include employer and employee contributions and investment returns.
The system included 45,676 working members with an average annual salary of $36,923 as of June 30 and 34,214 retired members with annual retirement benefits totaling $509.7 million, or an average of $14,897 a year‚ Gabriel Roeder Smith & Co. reported last fall.
The system’s unfunded liabilities totaled $1.894 billion as of June 30, with a projected payoff period of 21 years — a decline from $1.943 billion as of June 30, 2015, with a projected payoff period of 25 years, according to Gabriel Roeder Smith & Co.