Arkansas Code
Subchapter 3 - Membership
§ 24-4-303. Membership — Election by municipalities — Leased water and sewer utilities

(a)
(1)
(A) Any municipality may elect to become a participating public employer and to cover its employees under the Arkansas Public Employees' Retirement System either by a three-fifths (3/5) vote of its governing body or by a majority vote of the qualified voters of the municipality.
(B) However, the mayor and city clerk of a city of the first class who are serving in a municipality that participates in the system shall become participating employees under the system upon taking office.
(C)
(i) If the employee elects not to continue participation in the system and opts to participate in the local retirement plan as provided under § 24-12-121 or § 24-12-123, instead, written notice of the election shall be presented to the system in a form determined acceptable by the system not later than ninety (90) calendar days after first assuming office.
(ii) The election under subdivision (a)(1)(C)(i) of this section is irrevocable.
(iii) Employer contributions made to the system on behalf of employees who elect not to continue participation will be refunded to the city without interest, and the associated service credit in the system is forfeited.


(2) If a newly elected city attorney or city treasurer of a city of the first class is otherwise covered under a local retirement fund, then the provisions of subdivisions (a)(1)(B) and (C) of this section also apply to those offices.
(3) The clerk or recorder of each municipality electing to become a participating public employer shall certify the vote to the Board of Trustees of the Arkansas Public Employees' Retirement System within ten (10) days after the vote of the governing body or the canvass of the votes of the electorate, as the case may be.
(4) The effective date of coverage under the system shall be either the first day of the calendar month next following receipt by the board of the election results or the July 1 next following the receipt, as determined by the vote.
(5)
(A) If a municipal employee or a former municipal employee covered by the system in a municipality with a city administration of justice fund created under § 16-10-308 that exists to provide a pension fund for the position held by the employee or former employee elects to establish participation in the public retirement system under § 24-12-101 et seq., and to waive any rights the employee or former employee may have had, or would otherwise have, in the local retirement system, then:
(i) The employee or former employee may transfer his or her service credit to the system; and
(ii) The municipality for which he or she is or was serving in the capacity as a district judge, may use the funds within the city's administration of justice fund to pay all contributions and interest required by the system to transfer the service credit to the system.

(B) In addition, if any employee or former employee covered by the city's administration of justice fund has transferred or does transfer service credit to the system anytime after January 1, 2000, and if the municipality has used general revenue funds to pay the contribution required to fund the transfer, or if the municipality has used the city's administration of justice fund to fund the transfer, then the city's administration of justice fund shall not be refunded. However, if general funds were used, the city may reimburse the general fund from the city's administration of justice fund for the contribution paid on behalf of the employee or former employee.
(C)
(i) In addition to paying for the transfer of service credit for the position for which the fund is created, the municipality may also pay from the city's administration of justice fund on behalf of the employee or former employee for any additional transfer of service credit the employee or former employee elects to make regarding time as city attorney for the municipality.
(ii) The municipality may reimburse itself for any payment from the city's administration of justice fund to fund the transfer made from its general fund after January 1, 2000, on behalf of the employee or former employee to purchase city attorney service credit in the system.
(iii) If any payment for the service has been made directly from the city's administration of justice fund after January 1, 2000, the municipality shall not be required to reimburse the city's administration of justice fund for those transfers.
(iv) If a transfer from the general fund is made to the city's administration of justice fund after payment from the city's administration of justice fund for the service credit transfers and before the effective date of this subdivision (a)(5), the municipality is entitled to reimburse the general fund from the city's administration of justice fund for the amount of the transfers.



(b)
(1) Any municipality which has as of March 28, 1981, taken its first vote to withdraw from participation shall be eligible to withdraw under the provisions of this section if the final vote to withdraw is certified to the board before July 1, 1981.
(2) The effective date of withdrawal must be before January 1, 1982.

(c)
(1) When the water and sewer department of a municipal participating public employer in a city of the first class becomes leased from the municipality and operated by a nonprofit corporation, the mayor shall notify the board in writing within ten (10) days after the utility ceases to be operated by the municipality and may request a refund of the employer contributions paid to the system by the municipality on behalf of the utility employees during their period of employment with the utility.
(2) As soon as practicable after notification and request, the board shall arrange for a determination by its actuary or investment counselor of the lump sum present value of future system benefits for retirants, beneficiaries, and inactive members entitled to a deferred annuity from the employment with the utility while it was operated by the municipality.
(3) The refund requested shall be subject to the following:
(A)
(i) If the present value is more than the present system assets arising from the municipality's applicable contributions, then the difference determined by the system's actuary shall be paid to the system by the municipality, either in a single sum or in a series of actuarially equivalent payments over a period not to exceed ten (10) years.
(ii) The payment method shall be elected by the municipality from reasonable optional payment methods to be offered by the board;

(B) If the present value is less than the present system assets arising from the municipality's applicable contributions, then the difference determined by the system's actuary shall be paid by the system to the municipality, either in a single sum or in a series of actuarially equivalent payments over a period not to exceed ten (10) years as the board shall determine;
(C) The board shall withhold twenty percent (20%) from the municipality's applicable employer contributions and shall maintain that amount in the employer accumulation account for noncontributory utility employees who may reenter the system and have their forfeited utility service restored to their credit; and
(D) From and after the date the utility ceased to be operated by the municipality:
(i) The system shall have no further obligation for payment of benefits for the municipality's employees, which benefits would be based on service with the utility, except for any refund of contributions due a former member from the members' deposit account; and
(ii) The system shall retain the obligation for payment of benefits for the retirant and beneficiaries and inactive members entitled to a deferred annuity from employment with the utility while it was operated by the municipality, except that the retained obligation shall be reduced by any payment overdue or not paid to the system by the municipality for service of its utility employees before the municipality ceased operating the utility.

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