Arkansas Code
Subchapter 4 - Arkansas Teacher Retirement System — Funds and Management of Assets
§ 24-7-401. Fund contributions — Fund rates

(a)
(1) The financial objective of the Arkansas Teacher Retirement System is to establish and receive contributions that expressed as percentages of active member payroll will remain approximately level from generation to generation of Arkansas citizens.
(2) Contributions received each year shall be sufficient:
(A) To fully cover the costs of benefit commitments being made to members for their service being rendered in that year; and
(B) To make a level payment that if paid annually over a reasonable period of future years will fully cover the unfunded costs of benefit commitments for service previously rendered.

(3) If the costs of benefit commitments for service previously rendered are overfunded, the plan may deduct a level payment that if deducted annually over a reasonable period of future years will fully liquidate the overfunded portion of the costs.

(b) An actuarial valuation of the entire system shall be made at least annually by the Board of Trustees of the Arkansas Teacher Retirement System's actuary.
(c)
(1) For each fiscal year, the Board of Trustees of the Arkansas Teacher Retirement System shall establish employer contribution rates for the system prospectively and for each fiscal year thereafter.
(2) The employer contribution rates shall be based on the actuary's determination of the rate required to fund the plan in accordance with the objectives stated in subsection (a) of this section.
(3) The employer contribution rates shall be the rates determined by the board based on the annual actuarial valuation.
(4) For the fiscal years ending June 30, 2008, through June 30, 2013, the employer contribution rate shall not exceed fourteen percent (14%).
(5)
(A)
(i) Beginning July 1, 2015, and for each fiscal year thereafter, the employer contribution rate shall not exceed fifteen percent (15%).
(ii) Until July 1, 2015, the employer contribution rate shall not exceed fourteen percent (14%).

(B)
(i) For the fiscal year beginning July 1, 2018, and each fiscal year thereafter, the board may modify the employer contribution rate for future fiscal years above fourteen percent (14%) in increments of one-fourth of one percent (0.25%) per fiscal year provided that the system has a greater than eighteen-year amortization period to pay unfunded liabilities without an employer contribution rate of more than fourteen percent (14%) limited to a maximum employer contribution rate of fifteen percent (15%).
(ii) If a report provided by the system's actuary shows that the system's amortization period to pay unfunded liabilities is eighteen (18) years or less with a fourteen-percent employer contribution rate, then the employer contribution rate shall not exceed fourteen percent (14%).
(iii)
(a) An increase in the employer contribution rate shall only occur if the system implements cost savings from member benefit programs or increased member contributions, or both, measured after July 1, 2013, that equal or exceed the value of the employer contribution increase before or at the same time as an employer contribution increase.
(b) The cost savings from member benefit programs or increased member contributions, or both, shall take place or be approved before or at the same time as an employer contribution increase.
(c) The system may rely upon actuarial reports by the system's actuary to determine the relative impact of changes to member benefit programs or increased member contributions, or both, including whether the cost savings from member benefit programs or increased member contributions, or both, are equal to or exceed the value of the proposed employer contribution increase.
(d) The value of cost savings from a member benefit program or member contribution increases shall be set at the time of the initial actuarial report that establishes the estimated value and shall remain as initially set unless the member benefit program or member contribution rate has changes after the actuarial report sets value.

(d) The employer contribution rate shall be such that the amortization period for all unfunded liability shall not exceed thirty (30) years. However, under no circumstance shall the required employer contribution rate exceed the maximum percentage rate under subsection (c) of this section.
(e)
(1) The board shall annually notify the participating employers of the employer contribution rate established by the board for the upcoming fiscal year.
(2) Local school districts shall pay the teacher retirement employment contribution for any eligible employee in accordance with rules established by the board.
(3) The Department of Education shall pay from the Public School Fund the teacher retirement employer contributions for eligible employees of participating employers as required by the department's appropriations act and in accordance with rules established by the board.
(4) The annual employer contributions to be paid in each year for all other employees by each participating employer shall be the current state contribution percent multiplied by the total covered salaries of the employer's members in the fiscal year.
(5) The employers' contributions shall be remitted to the system in such manner and form and in such frequency and shall be accompanied by such supporting data as the board shall prescribe from time to time.
(6) Timely payment of the contributions shall be a condition of continuance of participation in the system.
(7)
(A) All employers shall pay the total employer contribution rate except as provided under subdivision (7)(B) of this section.
(B) A public school employer shall pay the employer contribution rate up to fourteen percent (14%), and any additional employer contribution up to fifteen percent (15%) required by a public school employer shall be paid from additional funds appropriated by the State of Arkansas for the purpose of paying Arkansas Teacher Retirement System employer contributions.

(8) An increase or decrease in an employer contribution rate shall:
(A) Apply to a complete fiscal year; and
(B) Remain in effect until modified by the board.

(9) The board may adopt a change in the employer contribution rate by resolution at any board meeting.