The Arkansas House of Representatives has sent the governor three bills that are part of a five-bill package that its proponents said is aimed at improving the financial sustainability of the Arkansas State Highway Employees Retirement System.
In separate 96-0 votes, the House on Wednesday approved Senate Bills 102, 103 and 105.
SB102 by Sen. Bill Sample, R-Hot Springs, would allow the system's board of trustees to set the employer contribution rate with final approval by the Arkansas Highway Commission.
SB103 by Sample would raise employer contributions for working members participating in the deferred retirement plan. The contributions would go from nothing to 14.9% of pay for tier-one members in their first five years in the plan and from 6.9% to 14.9% of pay for tier-two members after their first five years in the plan, if they haven't reached the age of 65. That would take effect July 1 for all deferred plan participants.
The bill would change the employee contribution rate for the deferred retirement plan period, starting with new employees hired after June 30. The bill would increase employee contributions for tier-one members from nothing to 7% and for tier-two members from 6% to 7% of pay for these new hires only.
Senate Bill 105 by Sample would reduce from two years to one year the minimum period that the spouse of a retired member had to be married to the member, before the member retired or participated in the deferred retirement plan, to receive annuity benefits upon the death of the retiree.
In separate 34-0 votes, the Senate on Wednesday sent the two other bills that are part of the five-bill package -- Senate Bill 104 and Senate Bill 106 -- to the House for further consideration
SB104 by Sample would change the average salary definition used in the retirement benefit formula from the highest annual compensation paid during any 36 consecutive months of service to the highest annual compensation during any 60 months of service.
"This policy change would be phased in by developing a benchmark benefit based on each employee's high three years [of salary] as of June 30, 2021," state Rep. Les Warren, R-Hot Springs, told the retirement committee on Monday.
Senate Bill 106 by Sample would defer the payment of the health care offset until a working member's deferred retirement plan period is complete. This would apply only to new enrollees in the deferred plan after June 30, Warren said.