On the bottom of the page you will find links to the DROP Application Form, the DROP Distribution Form and Tax Notice, and the DROP Provisions. Please read through the following notices before continuing.
Notice to APERS DROP Participants
Act 38 of 2011
Act 38 of 2011, which was signed by the Governor and became effective on February 16, 2011, prohibits members who enroll in APERS’ Deferred Retirement Option Plan (DROP) from returning to work for any Arkansas authorized plan after completion of the DROP participation. This Act affects those who enroll in APERS DROP with an effective date of March 1, 2011 and later.
Any change in legislation to ACA 24-4-520 may impact this Act. DROP participants already enrolled in the DROP as of February 1, 2011 are not affected by this provision, but will be required to be terminated from employment in compliance with ACA 24-4-520 before being allowed to return to work for a public employer.
Change in Interest Paid
Effective July 1, 2011, the interest paid on accrued on monthly benefit contributions to the Arkansas Public Employees Retirement System (APERS) Deferred Retirement Option Plan (DROP) members’ accounts will be 3%. At their regularly scheduled quarterly board meeting on February 16, 2011, the APERS Board of Trustees voted for the new rate after considering the current economic environment, the future viability of the APERS plan, and interest rates available on other investment vehicles in making their decision.
If you have specific questions regarding your DROP account, please submit them in writing to the APERS Member Services Section at the address listed above (please include your social security number and current mailing address). General questions can be answered via telephone by either our Call Center representative or a retirement counselor in the Member Services Section.
A History of APERS
From its humble beginnings in 1957 as a multi-employer defined benefit retirement plan for State of Arkansas employees, the Arkansas Public Employees Retirement System (APERS), formerly Arkansas State Employees Retirement System, has developed into a mature system that continues to satisfy the general financial objective of level contribution financing.
As of June 30, 2009, the assets of the System remained healthy at $4.3 billion despite a recently tough investment environment. The APERS investment program has seen rates of return that range from -20.89% (fiscal year 2009) to 38.5% (fiscal year 1985). The investment of these assets has gone from certificates of deposits at local banks to an allocation of assets among numerous investment managers that include domestic equities, domestic fixed income, international equities and alternatives (i.e. timber, real estate).
With changes in the retirement world, APERS has experienced the implementation of a Deferred Retirement Option Plan (DROP), the ability to retire at any age with 28 years actual service, the Partial Annuity Withdrawal (PAW) and the ability to purchase various types of service (i.e. federal, out-of-state, military, national guard/reserves). Enhancements to the monthly retirement annuity have included Ad Hoc increases for retirees and increases in the multipliers for active members, as well as a reduction in the years utilized to calculate the final average salary.
APERS membership has grown steadily. Our active to retired lives is approximately 1:1.8, according to the 2009 APERS Report of Actuarial Valuation and Experience Gain/(Loss). Over the next several years, we will be experiencing the “Baby Boomers” retirement and the active to retired lives is anticipated to be more like 1:1.
From 1957 through 1965, county employers (Act 42 of 1959), municipal employers (Act 64 of 1961), college and university employers (Act 149 of 1963) and non-teaching public school employers (At 63 of 1965) joined the System.
With the establishment of reciprocity, service rendered to other state authorized retirement systems could be recognized for vesting in conjunction with service rendered to APERS.
Any member joining the System prior to January 1, 1978 was required to contribute a percentage of their salary to the System. However, effective January 1, 1978, all new members were no longer required to contribute to the System; only the employer contributed. All contributory members of the System were given an opportunity to remain contributory or choose to be non-contributory.
Throughout the next several years, various other non-state employers were added to the System through various legislative enactments. Act 653 of 1989 required that all newly hired public school employees be enrolled in the Arkansas Teacher Retirement System (ATRS). The School Division became a closed-plan.
In 1991, Act 757 provided for fractional service credit for members who work less than 80 hours per month. Act 975 changed the final average salary (FAS) used in the calculation of retirement benefits from five (5) years to four (4) years. Act 1137 of 1997 set the way for the FAS to be set at three (3) years. Act 1143 required adherence for retirement systems to the Qualified Domestic Relation Orders (QDRO). Effective July 1, 1997 the vesting requirements changed from ten (10) years to five (5) years for all active and future members of the System with the exception of members of the General Assembly (Act 1356 of 1995). As of July 1, 1999 a retired member of another state-sponsored retirement system, who worked in a position covered by APERS and met the eligibility requirements, could be reported to APERS.
In 2005, the 86th General Assembly provided for the establishment of a new contributory provision for the System. Therefore, effective July 1, 2005, all new members of the System would be contributory and contribute 5% of their salary into the System. Current members of the System were given the option to remain non-contributory or choose to be a contributory member of the System.
Effective July 1, 2007, the Arkansas District Judges Retirement System (ADJRS) was transferred to APERS by Act 177 of the 2007 Arkansas Legislature. ADJRS at that time was treated as a closed system and was recorded as one of APERS “divisions”. District Judges entering the System after July 1, 2007 are treated as APERS employees and fall under the same benefits as APERS employees.
Act 295 of 2009, which went into effect in March 2009, broadened members’ ability to purchase retirement credit for time served in the military or armed forces reserves. Vested members who are either eligible for or currently receiving military retirement benefits may purchase up to 5 years of service in APERS. Similarly vested members may purchase up to 5 years of armed forces reserve time in the system. Act 295 also invokes the federal protections afforded by the Uniformed Services Employment and Reemployment Rights Act (USERRA) for APERS members called to active duty.
Mr. Artee Williams, Chair
State Employee Representative
Mr. Maurice Henry, Vice-Chair
School Employee Representative
The Honorable Martha Shoffner
Ex Officio, State Treasurer
The Honorable Jim Wood
Ex Officio, State Auditor
Mr. Richard Weiss
Ex Officio, Department of Finance & Administration
Ms. Ouida Wright
State Employee Representative
Mr. Bill Gaddy
State Employee Representative
The Honorable Mike Jacobs
Mr. Charles “Stephen” Northcutt
Mayor of Malvern
Click on the dates below to view the meeting minutes in PDF format.
Content to come