A legislative committee Monday declined to consider a bill that would stop retirement benefits from going to a public employee who was guilty of certain felonies.
Senate Bill 52 by Sen. Mark Johnson, R-Little Rock, would apply to Arkansas' public retirement systems except for the system for higher education employees, said Jody Carreiro, an actuary for the Joint Committee on Public Retirement and Social Security Programs.
The bill would apply to current or former public employees who are convicted of or plead guilty to a felony arising out of abuse of public trust, abuse of office or fraud.
Johnson told the committee that he has a similar bill -- Senate Bill 238 -- on the state's lawmakers and constitutional officers.
"That is one we are going to need to work on a little bit," Johnson said.
Johnson said SB52 includes provisions that if a public employee "is under indictment or charges, they would be unable to make a lump sum withdrawal of their funds in their account, that can be frozen until their case was adjudicated and certainly upon acquittal it would be released."
The legislation also "allows in the case of a conviction that the court could direct that restitution be made from funds that a person otherwise would have been entitled to," he said.
[RELATED: Complete Democrat-Gazette coverage of the Arkansas Legislature]
However, Carreiro told lawmakers that "our primary concern is that any forfeiture of retirement benefits can at times conflict with federal retirement law."
"Our opinion is that there are ways for the courts to work with the systems to attach the assets once they come out of the plans and, according to the systems, it happens now, so our opinion is that we don't need to do something that could cause a problem with federal law when we have things in place that would do this," he said.
Assistant Attorney General Daniel Faulkner told the committee that "we'll defend anything that is passed. But I do agree that Mr. Carreiro has some valid concerns like we talked about a couple of weeks ago with respect to state claims as well."
Johnson said other states "have taken similar strategies to discourage bad behavior by employees.
"This is one disincentive for public employees to be involved in something that is corrupt," he said. "We made great efforts to make sure that this was related to their official duties, and not something that happened outside of their duties."
None of the 20 members on the committee made a motion to recommend approval of SB52, so the bill failed to clear the committee.
Earlier, a bill that would have required the state's retirement systems to conduct financial risk analyses if recommended by the system's actuary also failed to clear the committee after about 15 current and retired public employees testified that the bill is unnecessary.
The financial risk analyses would be presented to the legislative retirement committee 20 days before each regular legislative session under House Bill 1173 by Rep. Doug House, R-North Little Rock. The measure also would give the committee the authority to have its own actuary prepare risk analyses.
"What do we do if we have a major market downturn? That's what this is all about," House said. "We call it stress testing."
Carreiro said the actuaries' financial analyses for the retirement systems continue to improve.
"As always, there is room for improvement and room for better communication between the systems and the committee so that the committee can be prepared to do their jobs when called upon," he said.
Sandra Stewart, a retired teacher from the Pulaski County Special School District, told the committee that the bill is unnecessary.
"I feel like you are opening a door to change our retirement benefits," she said.
No committee member made a motion to recommend approval of HB1173.
The committee recommended approval of:
• Senate Bill 240 by Sen. David Wallace, R-Leachville, that would allow a retired member of the Arkansas Local Police and Fire Retirement System or of the system's Deferred Retirement Option plan to be re-employed by a system employer.
The bill would apply to members who were retired for 180 days and voluntarily waived their right to future benefit accruals. Carreiro, in a letter to the committee, said the member would not be required to make contributions, but the employer would, he said.
Wallace said the bill would allow retired senior law enforcement officers to provide their experience to small towns that need that assistance, and it's backed by the state's Police Chiefs Association.
• Senate Bill 219 by Sen. Eddie Cheatham, D-Crossett, that would reduce from a year to six months the minimum period for an Arkansas Public Employee Retirement System member to be married to his spouse before the surviving spouse would be eligible for benefits.
Senate Bill 144 by Cheatham -- which is now Act 511 -- makes the same changes for the Arkansas State Police Retirement System, Carreiro said in a letter to the committee.
• House Bill 1345 by Rep. Nicole Clowney, D-Fayetteville, that would declare that any disability due to certain cancers among firefighters is automatically considered a duty disability through the Local Police and Fire Retirement System and Public Employees Retirement System.
The police and fire retirement system provides a duty disability paying 65 percent of a member's final average salary as a benefit, while a non-duty-related disability pays a lesser benefit, Carreiro said. For example, a member with 15 years of service would receive a benefit about 50 percent greater from a duty disability than he would from a non-duty disability, he said.
Clowney said the 2015 Legislature enacted Act 341, which provided death benefits for firefighters who die from one of the cancers that has been linked with firefighting.
"However, our state provides no retirement benefits for those who don't die from those cancers, but are forced to retire early, so we provide for firefighters who die, but not for those who are disabled by one of those cancers that we already recognize in Arkansas code as having been acquired in the line of duty," she said. "This bill just would capture where a firefighter exhausts all sick leave in between 10 years of service and 22 years of service until he has to retire."
A Section on 03/26/2019