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Arkansas Code Title 24. Retirement and Pensions § 24-7-720. Lump-sum death benefit--Definition

Current as of March 28, 2024 | Updated by Findlaw Staff

(a)(1)(A) If an active member, T-DROP participant, or a retired member with five (5) years of actual service, including actual service for the year immediately preceding the member's death, dies before July 1, 2007, then one (1) lump-sum death benefit of up to ten thousand dollars ($10,000) shall be paid in equal shares to each person designated by the member as a beneficiary in the manner required by the Arkansas Teacher Retirement System.

(B) Effective July 1, 2009, if a member who retired or became a T-DROP participant on or before July 1, 2007, with five (5) or more years of actual service dies, then one (1) lump-sum death benefit of up to ten thousand dollars ($10,000) shall be paid in equal shares to each person designated by the member as a beneficiary in the manner required by the system.

(C) If an active member, T-DROP participant, or a retired member with ten (10) or more years of actual service dies on or after July 1, 2007, then one (1) lump-sum death benefit of up to ten thousand dollars ($10,000) shall be paid in equal shares to each person designated by the member as a beneficiary in the manner required by the system.

(D)(i) If a member accrues a minimum of ten (10) years of actual, contributory service, regardless of noncontributory service accrued in combination with the contributory service, the member shall receive the maximum lump-sum death benefit as determined by the Board of Trustees of the Arkansas Teacher Retirement System under this section.

(ii) Upon the member's death, the maximum lump-sum death benefit shall be paid in equal shares to each person designated by the member as a beneficiary in the manner required by the system.

(iii) The board may set a lump-sum death benefit for noncontributory service as the board deems appropriate.

(2) If a member designates more than one (1) beneficiary, the lump-sum death benefit shall be divided equally amongst each designated beneficiary.

(3) If all of the member's designated beneficiaries do not survive the member, the lump-sum death benefit shall be paid to the member's estate.

(b) The amount of the lump-sum death benefit payments under this section shall be set periodically and not more often than annually by rules and resolutions of the board as the board determines is actuarially appropriate for the system.

(c)(1) A benefit enhancement provided for under this section shall not be implemented if it would cause the system's unfunded actuarial accrued liabilities to exceed an eighteen-year amortization.

(2) If the system's unfunded actuarial accrued liabilities exceed an eighteen-year amortization, a benefit enhancement provided for under this section shall not be implemented until the unfunded actuarial accrued liability is reduced to a level less than the standards prescribed by § 24-1-101 et seq.

(d) Pursuant to the board's fiduciary duty, the board shall implement this benefit provision for lump-sum death benefit payments by either making the lump-sum death benefit payments directly from the system or by purchasing a group life insurance policy for the benefit of system members.

(e) A lump-sum death benefit payment under this section is intended to be exempt from income tax.

(f) For eligibility under this section, a member is considered active for an additional fiscal year following the last fiscal year that the member renders actual service in a position reported to the system by a covered employer and the member obtains at least one-fourth (1/4) year of service credit.

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Cite this article: FindLaw.com - Arkansas Code Title 24. Retirement and Pensions § 24-7-720. Lump-sum death benefit--Definition - last updated March 28, 2024 | https://codes.findlaw.com/ar/title-24-retirement-and-pensions/ar-code-sect-24-7-720/

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