Joint Committee on Public Retirement and Social Security Programs
February 13, 2023
Sen Payton: Good morning. If the committee will come to order, the Chair sees a quorum. Those wishing to speak for or against a bill, if you’re in the audience, please sign up to speak for or against a bill and we’re going to get started. Thank you, everybody, for showing up early this morning and Representative Warren do you have anything you want to say?
Rep Warren: No, sir.
Sen Payton: All right. Well, you should have the agendas in front of you. We’ve got House Bill 1193. Representative Warren, you’re recognized to present your bill.
Rep Warren: Thank you, Mr. Chairman, Committee. I’m going to ask the executive secretary from ASHERS to join me at the table.
Sen Payton: And if you would, Ms. Smith, recognize yourself for the record, and you’re recognized.
Smith ASHERS: Robin Smith, ASHERS executive secretary.
Sen Payton: Thank you. Go ahead.
Rep Warren: Thank you, Mr. Chairman. Committee, this is a bill we brought to you the first week that we presented bills, House Bill 1193. First thing that this does is actually addresses the structure of the ASHERS Board of Trustees. There are now two chief engineers. The board will have on its membership the chief engineer over operations because that person has the most employees under his supervision.
The second thing, Section 2 of this bill deals with the death benefits provided by ASHERS, the bill does not change the practice or amount of the death benefits paid but it recognizes the information into one section of code. To summarize, the annuity death benefits provided are a refund of contributions for a non-vested member. The beneficiary of a married vested member will be able to choose between an option A annuity, which is 120 months certain, or an option B annuity, 50% survivor annuity, or a return of the contributions. The named beneficiary of an unmarried vested member may choose between the option A annuity or the return of contributions.
House Bill 1193 would not change the amount of death benefits paid. It’s our opinion or it was in the fiscal impact, that House Bill 1193 will not have a fiscal impact upon the ASHERS plan. The one thing that we did was we removed the spousal consent for a non-spouse beneficiary. So I’ll take any questions.
Sen Payton: Are there any questions by the Committee? Seeing none, is there anybody in the audience who would like to speak for or against this bill? If not, Representative Warren, you want to close for the bill?
Rep Warren: I am closed and would appreciate a good vote.
Sen Payton: What’s the will of the Committee? Have a motion do pass, and a second. Any discussion on the motion? All in favor say aye. Any opposed? Congratulations, the bill has passed.
Rep Warren: Thank you, Mr. Chairman.
Sen Payton: And you are recognized to present House Bill 1201.
Rep Warren: Thank you, Mr. Chairman. I would like to ask that the executive director of Teacher Retirement join me at the table and their legal counsel.
Sen Payton: Mr. Rhoden, if y’all would take a seat and introduce yourself for the record and you’ll be recognized.
Rhoden ATRS: Yes, good morning, Committee, thank you. Clint Rhoden, Arkansas Teacher Retirement.
Liwo ATRS:Good morning, Jennifer Liwo, General Counsel for ATRS.
Sen Payton: You’re all recognized.
Rep Warren: Thank you, Mr. Chair and Committee. You just met Jennifer Liwo, she used to draft retirement legislation here in BLR but she went to work for Arkansas Teacher Retirement System. In her new role there, she went through the entire Arkansas code that relates to teacher retirement. This bill is to clean up and enhance any areas that was not crystal clear before or needed any corrections. Here’s my summary of what has been done through this bill.
Number one, the bill has over 60 sections with mostly wording changes for consistency and clarity purposes, for example retired is now retiree, which is what we usually use when we’re referring to the retirees of a system. Changing reference to deadlines to allow full calendar months for a deadline as opposed to a date in a month to a date in a later month is another key issue. Secondly, federal law changed that required minimum distribution age to change. In 2023 it goes to 73, by the year 2033 it goes to 75. We want to be in compliance with federal law.
And lastly, no benefit enhancement is allowed if the end result cause the unfunded accrued actuarial liability to exceed an 18-year amortization. The bill includes a definition of benefit enhancement that does not allow it to increase the amortization period by more than one year. This allows for people to work to get it back down. There is no fiscal impact that occurs from the implementation of this bill when it’s enacted. I’ll be glad to take any questions.
Sen Payton: Are there any questions by the Committee? Seeing none, is there anybody in the audience that wishes to speak for or against this bill? Representative Warren, you’re recognized to close for the bill.
Rep Warren: I am closed and I would ask for a do pass.
Sen Payton: We have a motion do pass, is there a second? I have a second. Any discussion on the motion? All in favor say aye. Any opposed? Congratulations, your bill has passed.
Rep Warren: Thank you, Mr. Chairman. Thank you, Committee.
Sen Payton: All right, members, it looks like we’ll be on Senate Bill 116 next. Senator Hammer, you’re recognized to present your bill. Senator Hammer, you’re recognized to present Senate Bill 116.
Sen Hammer: Thank you, Mr. Chairman, members of the committee. On Senate Bill 116, it is a gap service purchase. This bill does not reduce any benefits for the ATRS member or beneficiary. This bill creates a new type of service that can be purchased at actuarial value. If a member leaves active employment for a period of time and then returns back to employment the gap years are available for purchase at actuarial value. And this type of purchase is limited to 5 years. The system’s actuary found that this bill would have no material financial impact on ATRS. And with that brief introduction, Mr. Chair if I could defer to Clint to let him maybe give a few more details in the weeds, if you don’t mind.
Sen Payton: Mr. Rhoden, if you would introduce yourself again for the record and you are recognized.
Rhoden ATRS: All right, thank you. Clint Rhoden, Arkansas Teacher Retirement System. So yes, this is a bill that Senator Hammer and I visited with on this summer just kind of brainstorming with ideas as anything the Teacher Retirement System could do in order to help with teacher shortage issues. One of the issues is some of our teachers sat out for a time during the pandemic and one of the ideas is if there was any kind of incentive that we could provide to pull classroom teachers back in after sitting out for that reason.
And this gap year service is essentially the program we’ve come up with. We talked about it with our tax attorney to make sure that this type of air time is permissible, and which it is as long as we have restrictions on it.
So we started out by making it narrowly defined just to classroom teachers. And of course, that 5-year limit is also helpful to make sure that it’s within inside our qualified plan. So I think this is a good bill, it might entice some teachers to come back into a classroom. This type of service is expensive, it probably won’t have a huge impact but it’s just another option that we can throw out there at no cost of the system.
Sen Payton: Thank you. Are there any questions by the Committee? Seeing none, is there anybody in the audience that wishes to speak for or against this bill? Doesn’t look like it. Senator Hammer, you want to close for your bill?
Sen Hammer: I think I’ll quit while I’m ahead. Mr. Chairman, I’d appreciate a good vote and I’d make a motion do pass.
Sen Payton: Have a motion to do pass, is there a second? I have a second. Any discussion on the motion? All in favor say aye. Any opposed? Congratulations, your bill has passed.
Sen Hammer: Thank you, Mr. Chairman, members of the Committee.
Sen Payton: All right, we’re going to be on House Bill 1186. Representative Collins, you’re recognized to present House Bill 1186.
Rep Collins: Thank you, Mr. Chair. Andrew Collins, and I’m joined by Clint Rhoden and Jennifer Liwo, both from Teacher Retirement. So this first bill is 1186 and just kind of zooming out helps me to do this at least. So when a member of ATRS retires, they start getting an annuity paid to them, it’s often for the rest of their life – well, it’s always for the rest of their life – but there’s an alternative option where they can designate a beneficiary and set up what’s called the survivor annuity. The way that works is the member’s annuity payment is reduced during their life but after they die their beneficiary gets a payment for the rest of their life. And the idea behind that is to help a member get their beneficiaries some kind of consistent income after they die.
So under current law, there are two types of people who can be a beneficiary, one is a spouse and one is a disabled dependent child. And so what this bill 1186 would do is allow a member to designate both a spouse and a disabled dependent child to be co-beneficiaries instead of either/or. So there wouldn’t be any change in the amount of the survivor annuity that’s paid out, it would just be split if this is elected between the spouse and the disabled dependent child for the rest of each of their respective lives.
The two other small changes in this bill, one is it adds a way for disability to be determined as applied to a dependent child and that is a determination letter from the Social Security Administration. And finally, it brings in some language from elsewhere in code to do two things, one, it says that a spouse can’t elect a lump sum payment if there’s a disabled dependent child out there. That’s just a necessary clarification given what we’re trying to do with the co-beneficiaries. And two, it just ensures the timing of when benefits start following a member’s death are the same for disabled retirees as for other retirees.
Fiscal impact of this bill is very minimal, there’s few people who would be impacted, I think they said no more than 5. In each case, the fiscal impact is small, so the overall impact is between zero and unmeasurable. But I’m joined by both Clint Rhoden and Jennifer, and happy to answer any questions.
Sen Payton: All right, I don’t see any questions from the Committee right now but I have a little question of my own so if you would. If you’re going to have two beneficiaries instead of one, and these payments are paid until the beneficiary dies, passes away, it seems that obviously, we’re doubling the exposure as far as half of it’s going to be paid until the second one dies, right?
Rep Collins: Maybe one of these guys welcome to hop in but it doesn’t revert. I’m not sure if that’s your question but if one of the halves is paid until that one person dies and the other is paid until the other person dies but that half that’s paid to the spouse won’t revert to this disabled child.
Sen Payton: That’s how I understood it. So currently is it an option to make the disabled child the beneficiary 100%?
Rep Collins: Yes. 100% or 50%, there’s two different options in code but yeah.
Sen Payton: So we currently have the 50% option or that’s what you’re creating?
Rep Collins: Well, let me not confuse things. I’ll let Jennifer take that.
Liwo ATRS: So currently a retiree can either designate their spouse or their dependent child as the beneficiary under option A, which is 100%, or option B which is a 50% reduced annuity. These changes right now will allow a retiree to designate both the spouse and the dependent child as an option A or option B beneficiary. If something were, for example, to happen to the surviving spouse, the surviving spouse’s share of the annuity would not revert back to the dependent child and vice versa.
Sen Payton: Okay, I think that’s how I had it. Senator Hickey, you’re recognized for a question.
Sen Hickey: Yes, thank you. Do we define somewhere else in the code what an actual dependent child is, that that’s if they’re under the IRS regulations or something because I didn’t see where we actually defined what a dependent child was?
Liwo ATRS: The statute actually clarifies that a dependent child is a child that has been declared incapacitated by a court and then with our current amendments we’re also expanding that to a child that has received a Social Security Administration letter finding the child disabled.
Sen Hickey: Okay. Right, I do see that. So are adjudged physically or mentally incapacitated. And just one more thing, if let’s just say that we had someone like that and they were incarcerated, would they continue to receive this or how is that set up, how would that work?
Liwo ATRS: The code and rules don’t provide for us stopping paying benefit payments to a surviving spouse or a dependent child if they’re incarcerated.
Sen Hickey: Okay. All right, thank you, ma’am.
Sen Payton: Okay. Are you done, Senator Hickey? Okay, Senator Hammer, you’re recognized for a question.
Sen Hammer: Thank you, Mr. Chair. One quick question about what if the dependent child is receiving any other kind of supports like SSI or anything else like that, does it interfere with that or does that have any bearing with what we’re doing here?
Liwo ATRS: No it does not.
Sen Hammer: So it wouldn’t prohibit them from continuing to receive that by adjusting their income, would it have an adverse effect on their SSI payment or any other benefits they’re receiving?
Liwo ATRS: Not that I’m aware of, no.
Sen Hammer: Okay, thank you.
Sen Payton: Okay, so I’ve got another question along the lines of what Senator Hickey was asking, on page 2 where we define the dependent child. I mean, currently, it says a dependent child of the retired who has been “adjudged physically or medically incapacitated by a court of competent jurisdiction,” that’s what’s currently in the law. Now we’re creating two different ways to qualify or to define that child. Number 1 is very similar but then number 1 ends with an or. Senator Chesterfield, would you like to take the table down there? That’s what I’m getting to.
So number 2, which follows number 1 with an or, “is found by the Social Security Administration to be disabled.” I would think that would be a much broader number of children than what number 1 covers. And number 1 is basically what’s currently in our code.
Liwo ATRS: It might be and in fact, the reason why we even added this language is because we sometimes had members who had a child with a letter from the Social Security Administration but didn’t necessarily have a court order finding that child incapacitated. So it’s possible that there may be more children that would qualify as a dependent child with the addition of this language.
Sen Payton: So is there any reason why we don’t say what percentage of disability? I mean, doesn’t the Social Security Administration deem somebody disabled at different levels, and this seems to cover all of them?
Liwo ATRS: We just wanted to give our members the broadest possible option to cover the dependent child. I’m not familiar necessarily right now with the different levels the Social Security Administration has for declaring a person disabled but we thought that this would be beneficial for our members and to help them secure annuity payments for their dependent child if they pass away.
Rep Collins: I also would just point out this is just the retirement benefit that the member is entitled to anyway, and they’re leaving their own retirement benefit to a dependent. So it’s not like it’s creating a new liability for anybody. It’s the same property of essentially of the retiree, they’re just designating it to this dependent child or the spouse after they die.
Sen Payton: Well, I would say that’s true but part of the actuarial job and the actuarial study is to determine how long those benefits are going to be paid beyond retirement, and that’s usually calculated by an average age of death. And children usually outlive their parents so it could have an actuarial cost on the system it would seem to me. Representative Rye, you’re recognized for a question.
Rep Rye: Yes, sir. Thank you, Mr. Chairman. Let me ask you this, let’s just say that you have a school teacher and she has a husband and one child, do they receive both of them 100%, what percent does the child receive?
Liwo ATRS: So as we’re amending the statute what would happen is you would calculate the retirement annuity that the member would receive, and then once the member passed away, that annuity would just be split between the spouse and the dependent child equally. Is that answering your question?
Rep Rye:Yes, ma’am. You know like if there was a lady that was a teacher and she died, the husband I guess would receive 100% of the benefit to take care of the child at the same time but does a child receive a check too?
Liwo ATRS: If the member designated the dependent child as a beneficiary as well then the annuity would be split 50/50 between the spouse and the dependent child. So there isn’t an additional calculation that goes after the member passes away. You have one calculation at the time of retirement, the annuity is determined, once the member passes away if it’s at 100%, then 100% of what the member was receiving as an annuity would be split between the spouse and the dependent child. If it was the option B 50% annuity, then 50% of what the member was receiving as an annuity would be split between the spouse and the dependent child.
Rep Rye: I know you’ve probably already said this but let’s just say that the spouse passes away, does the dependent receive the full amount?
Liwo ATRS: No It does not revert back.
Rep Rye: It’s still 50%?
Rep Rye: Yes, ma’am. Thank you. Thank you, Mr. Chairman.
Sen Payton Chair Warren, you’re recognized for a question.
Rep Warren: Thank you, Mr. Chair. All right, so let me make sure that I have this right, a retiree has the ability to choose to get a higher amount and no designated beneficiary, correct? So if they choose the max amount with no survivor, then if they choose the next level, which is making sure that someone gets a survivor benefit, that is a reduced amount, correct? So what kind of reduction are we talking about in that case? And then in this, and I’m pointing that out because if you’ve got split beneficiaries then, and it’s a reduced amount and it’s 50/50, I’m just trying to show the reduction in the liability for the system.
Liwo ATRS: So if a member retires and only selects their spouse as a beneficiary, the spousal reduction factor is used. If they select their dependent child, the dependent child reduction factor is used. If they select both, then only the spousal reduction factor will be used.
Rep Warren: But they can select a higher amount and have no other. And I’m trying to– because my wife just went on but she could have had a higher amount and just gotten a check for her lifetime, right?
Liwo ATRS: I think what you’re asking is could she have elected a straight life annuity?
Rep Warren: Right.
Liwo ATRS: Yes, she could have done that.
Rep Warren: And there would have been no beneficiary and it would have been a higher amount but when you check that you want a survivor benefit, it reduces the amount that that person gets during their lifetime and for the survivor, correct?
Liwo ATRS: Yes.
Rep Warren: And in this case, 50% to one and the other would even be a further reduction after one dies?
Liwo ATRS: Yes because it wouldn’t revert. I don’t know that it would be a further reduction it’s just one-half of the annuity payment just wouldn’t revert back to the other.
Rep Warren: I guess I’m getting to what Senator Payton was saying with the expectation that a child is going to live much longer, it’s a reduced benefit and then it would only be 50% of the reduced benefit going to a child?
Liwo ATRS: Yes, that’s correct.
Sen Payton: Are you done?
Rep Warren: Yeah.
Sen Payton: All right, Senator Chesterfield, you’re recognized for a question.
Sen Chesterfield: Thank you, Mr. Chair. I’m seeking further clarity, let me see if I can get to where I want to be. The spouse passes away, 50% of what he or she would have made will go to the individual. In other words, they will get one quarter each of what the spouse had is that correct? 25% and 25% equals 50%. So one’s going to get 25% and the other is going to get 25%, is that correct?
Liwo ATRS: Yes, that’s correct.
Sen Chesterfield: And when one or the other dies they’re only going to continue to get that 25%
Liwo ATRS: That’s correct.
Sen Chesterfield: Okay, so I’m clear, thank you. And even though we are now with an or, adjudged physically or mentally incapacitated by a court of competent jurisdiction or found by the Social Security Administration, that person no matter how long they live is only going to get a quarter of the spouse’s benefit?
Liwo ATRS: Yes, that’s correct.
Sen Chesterfield: Thank you.
Sen Payton: Senator Hickey, you’re recognized for a question.
Sen Hickey: This may be written exactly right, I just want to point it out just in case I mean, so we can have it perfect. So are we okay like on line 8 where it does say “a spouse or a dependent child?” I mean, should that say it should be and/or? I mean, it is one of those cases so it almost – and I understand we kind of try to define it below that – that within that sentence it almost looks like to me it’s just one or the other.
And then are we okay with just the child there because kind of along the lines of what Senator Chesterfield was just saying, I guess there’s equal shares up here on line 3, is that what you’re talking about, that you’re going to cover it with the 25% or what if there’s 3 disabled kids, is all of that lined out somewhere else? I mean, because we’re kind of acting like it’s just one child here but what if there happens to be 2 or 3 that have been declared by Social Security to be disabled, are they not all 3 going to share in that?
Liwo ATRS: The way that our current practices are, yes, if there was more than one dependent child, then the dependent–
Sen Hickey: Let me ask something right there, I don’t mean–our practice but do we have that in the statute, that’s– I don’t like practice anymore so if it’s in the statute fine but.
Liwo ATRS: We don’t have that in the statute as it pertains to a dependent child under this statute but with surviving children of an active member and under that statute, which is 710, it specifies that the annuity would be split between the children. So I envision that in this situation if there was more than one dependent child, then the dependent child’s portion would be split amongst the children.
Sen Hickey: And personally, I think that we should probably put that in there so there’s no somewhere down the road we get somebody that gets into some type of court battle over that. And it says well, it doesn’t say that it will, it just says the dependent child. I mean, it looks like to me that since we’re in the process of trying to create this statute, that we should at least go ahead and wind all that out and make sure we have it considered within here.
Rep Collins: I think that’s a good idea, Senator Hickey. And you know maybe we can answer any other questions or address them and then we can hold this one for a week and get that language in there, get that right.
Sen Payton: Thank you, Senator Hickey. Representative Rye, you’re recognized for a question.
Rep Rye: Yes. Thank you, Mr. Chairman. Like there is an A and there is a B option, ma’am, if someone took the option A and it was 100% and you had a wife and 3 children, how would that be divided?
Liwo ATRS: So the wife would get 50%, and then the other 50% would be split among the dependent children.
Rep Rye: Okay, thank you. Thank you, Mr. Chairman.
Sen Payton: Senator Hammer, you’re recognized for a question.
Sen Hammer: Thank you, Mr. Chair. Have you done a current assessment to know how many of this would apply now based on the population that we’re serving or with regards to the fiscal impact that this is going to have or the actuary, did we take that in consideration?
Liwo ATRS: So right now annually there are maybe 2 or 3 dependent children that are designated by members. And our staff has said if this bill were to pass they don’t anticipate more than 5 cases per year where both the spouse and the dependent child are designated as beneficiaries. So my understanding is from our actuary report that because of the low number of designations involving dependent children that would occur, there’s a limited impact to the system.
Sen Hammer: Which really doesn’t even– where we are right now doesn’t even drop, make a drop in the retirement system, does it?
Liwo ATRS: No it does not.
Sen Hammer: Okay, thank you.
Sen Payton: Representative Collins, I don’t see any more questions from the Committee, do you want to proceed or did you want to take it down and check into some of this?
Rep Collins: I think we’ll take it down, we’ll check into Senator Hickey’s questions, and we’ll do a little work on it.
Sen Payton: Okay, thank you. Look forward to seeing you back. I think you have another bill on the agenda, House Bill 1188. Representative Collins, you’re recognized to present House Bill 1188.
Rep Collins: Moving right along, 1188 is pretty straightforward. It does 3 things, none of which are substantive changes. First, it allows the ATRS board to make rules regarding how full and partial years that are recorded in service credit are used in the calculation of the final average salary. This is not a change of law because rules cannot change or supersede law but it would allow the system to clarify some things in rule pursuant to law.
The second thing the bill does is really just cosmetic, it changes some language that’s a little vague to the more descriptive term anti-spiking, that’s the term the system uses. They wanted to have it in code. They believe it describes a little bit more clearly what they’re doing but it is not a substantive change, it’s just a wording change.
And finally, this bill sets forth a caveat saying that what a member made in a partial service year when the fiscal year immediately following a partial service year is excluded from the anti-spiking cap. And this just codifies what they’re already currently doing so it doesn’t represent any kind of substantive change, with no substantive changes there’s no fiscal impact and happy to take any questions.
Sen Payton: Are there any questions from the Committee? Senator Chesterfield, you’re recognized for a question.
Sen Chesterfield: Thank you, Mr. Chair. On page 2 with your anti-spiking percentage, speak to me again about that, let me make sure I’m understanding, if you work for 5 years making $50,000, that’s your average salary, and then you get a job that kicks you up to $100,000, is that what the spiking is about, help me understand that if you don’t, through the Chair to Clint.
Rhoden ATRS: I’ll be glad to take that, Senator Chesterfield. So yes, the anti-spiking is exactly that, it smooths out the salary history to prevent, essentially smooths it out to about a 10% increase in salaries each year. So if you do get one of those– if you’re lucky enough to get a double your salary like in your example, the way to maximize that to your benefit is to stay in that job for 5 years and then there would be no anti-spiking.
So it’s a double thing, it helps the system control cost from real high salaries just at the very end of a career, helps smooth out the scenario where individuals that get credit for their sick days and unused leave days and all that added on their salary at the very end, it doesn’t cause the system to spike that salary because of that payout. So that’s the purpose. So yeah, that’s exactly it. I’ll be glad to clarify if you have a follow-up.
Sen Chesterfield: Okay, on line 20 on page 2, starting there, “anti-spiking amount permitted under subdivision of this section is set no lower than $1,250 per year and no higher.” Speak to me about that, you’re not going to allow anything more than $5,000 to count toward the salary average, is that what you’re saying?
Rhoden ATRS: So it works in two different ways. It’s essentially so the percentage will kick in if you have a salary over $50,000, and currently, those thresholds are essentially the guard rails that the board has in order to set the anti-spiking. So currently, it’s set at 110%. So that means if you have $100,000 salary, you’re allowed a $10,000 increase the following year without having any kind of anti-spiking.
But on the other hand, let’s look at the examples where the individuals make less than $50,000, so if you have a $25,000 salary and go – I’m not prepared to do the math in my head – but anyway, the $5,000 allows you to have a higher than 110% increase. So if you go from $25,000 to $30,000, that’s higher than a 10%, that’s roughly a 20% increase, but we allow up to $5,000. Does that make sense?
Sen Chesterfield: So how long do you have to work before it’s considered spiking, after you get the bigger salary you have to work at least 5 years?
Rhoden ATRS: Right.
Sen Chesterfield: Or it’s prorated over 3 and you don’t prorate it over that period of time?
Rhoden ATRS: No, it’s strictly the salary reported to the system for that year, and we take the 5 highest salaries and run it through the anti-spiking formula. So yes, if you work 5 years at your current salary you are not affected by anti-spiking.
Sen Chesterfield: All right, thanks.
Sen Payton: Chairman Warren, I’m recognizing you for a question.
Rep Warren: If you guys would just help me out, on the first page, line 30 you’re saying that the board can, says “in accordance with rules promulgated by the board” but then you go through and you change the code. Tell me how the board is going to do things, what will the board do here that’s not covered in the code?
Rhoden ATRS: Okay, so the situation with partial salaries, we already have, when we were analyzing this section of the code, we already had authority clearly set out in the statute to handle the scenario where you have less than 5 years of service. And these typically come in when we’re dealing with reciprocal services or et cetera. But you could clearly interpret that the partial was not included into the rule-making, we already have rules and it’s pages and pages of rules of how to handle partial salaries in different scenarios. But when you really looked at the statute it was not 100% clear that the partial salaries could be used. We could use rules to do that, we just wanted to clarify that, that’s essentially what that is.
Rep Warren: Okay.
Rhoden ATRS: Does that help?
Rep Warren: Yeah.
Sen Payton: Thank you, I’ve got a question. So if the board can promulgate rules I mean, obviously, we are always on the lookout and very concerned about whether or not something is a fiscal impact on the actuarial studies. So in that rule-making process, how much can they affect the actuarial studies, the fiscal impact side of this?
Rhoden ATRS: I mean, that’s a pretty broad question.
Sen Payton: So if we give the board authority to promulgate rules, we’re giving the board the authority to have a fiscal impact?
Rhoden ATRS: Yes. And the board has broad discretion from promulgating the rules to specify out the details of the statutes already, it’s just this is the belts and suspenders on this particular topic.
Sen Payton: Okay, I just wanted to make sure we understood that it could have a fiscal impact.
Rhoden ATRS: Sure. I mean, any rule could have a fiscal impact, actuarial impact. And that’s always cognizant when the board’s looking at rules. And of course, it has to go through the full promulgation process that gets reviewed by a full ALC, et cetera. So yeah, very cognizant of that possibility.
Sen Payton: Thank you.
Rep Collins: And I would just add real quick that if we have the full statute here, there are other sections that say that there are rules authorized to be promulgated. This is just specifying with respect to these partial service.
Sen Payton: Chairman Warren has a question.
Rep Warren: Just to make sure I’m clear, so basically if there’s something that has some ambiguity to it you’re able to have your board make rules that give you guys clarity to operate then, right?
Rhoden ATRS: Yes, Representative, that is, that is correct. I mean, it’s hard to spell out all the particular scenarios that could come up with a partial salary. Sometimes it’s in the member’s best interest to use this partial salary, sometimes it’s not. And over the years we’ve had several scenarios that we deal with, with rules.
Rep Warren: Thank you.
Sen Payton: All right, seeing no further questions, is there anybody in the audience that wishes to speak for or against this bill? Representative Collins, you want to close for your bill?
Rep Collins: I’m closed for the bill. Move do pass.
Sen Payton: Is there a second on the do pass motion? I have a second. Any discussion on the motion do pass? All in favor say aye. Any opposed? Congratulations, your bill is passed. I don’t see any further business for the Committee today, so we are adjourned. Oh, hold on just a second, Senator Chesterfield, you’re recognized. Well, let me get your button.
Sen Chesterfield: Thank you so much. I’m wondering do we have other bills that are coming from the other retirement systems that we should look for for next Monday or is this it?
Sen Payton: Yes. No, we have several more bills in the pipeline and it looks like we’ll have longer agendas instead of shorter coming up.
Sen Chesterfield: All right, thank you so much.
Sen Payton: Thank you, members. We’re adjourned.