Making a list | Arkansas Blog

Saturday, August 22, 2009

Making a list

Posted By on Sat, Aug 22, 2009 at 5:47 AM

The Arkansas Teacher Retirement System continues its work to identify system members who exceeded the statutory earnings limitation after beginnning retirement benefits and may owe refunds of portions of benefits dating back several years. George Hopkins, director of the system, said it has already begun steps to recover $111,000 from one retiree who went to work for a college. As much as $200,000 may be at issue in another single case. All told, some $5 million may have to be repaid.

Hopkins is hearing grumbling it would appear, based on his memo updating the situation. He said the system doesn't presume that anyone intentionally tried to skirt the rules and he said it won't attempt to recapture interest on improper payments. He said the system would act "fairly." This likely will mean withholding future benefits until money is repaid.

He has promised a full accounting of the amounts of the overpayments, though he said the law prohibits release of names of people who received the money.

MEMO FROM GEORGE HOPKINS

Executive Director’s Update – Earnings Limitations


First this Executive Director Update is intended to be informational for members who are reviewing the Earnings Limitations and want more information.  Prior to July 1, 2009, ATRS had applied an Earnings Limitation for decades.  The Earnings Limitation was repealed effective July 1, 2009.  Earnings Limitation obligations owed to ATRS for service before July 1, 2009, remains due and payable.  The Earnings Limitation was intended to encourage ATRS members to remain active members until they were certain they intended to retire.  By having members retire when they plan to no longer work, the System saved money by not paying retirement benefits earlier than the member’s actual retirement.


The difficulty with the Earnings Limitation was that there was no provision in the law that gave ATRS any ability to determine compliance with retirees reporting income in excess of the Earnings Limitation.  Some ATRS employers provided ATRS information when they hired an ATRS retiree but it was not a requirement in the law.  Some retirees may not have realized that public colleges and universities in Arkansas are ATRS employers.  Those institutions also have alternate retirement plans to ATRS.  This could have been very confusing to some retirees.


Act 743 of 2009 provided ATRS with an information source concerning all current retirees working at ATRS employers.  Act 743 now requires all ATRS employers to pay a 14% contribution to ATRS on ATRS retirees.  Prior to July 1, 2009, a contribution from the employer was not required on a retiree.  That is why since July 1, 2009, ATRS is compiling a list of all ATRS retirees working for ATRS employers.


ATRS has been reviewing information from employers.  ATRS has found  that several ATRS retirees are working for ATRS employers.  In addition, ATRS has discovered that some of these retirees worked in previous years while the Earnings Limitation still existed.  Several retirees have made more than the Earnings Limitation threshold for work in those prior years.


ATRS is currently working with various ATRS employers to verify which ATRS retirees earned more than allowed under the Earnings Limitations threshold in prior years.  The threshold for the Earnings Limitations for various years in the past are as follows:
2004-05                         $23,280.00
2005-06                         $24,000.00                  

2006-07                         $24,960.00                  

2007-08                         $25,920.00                       
2008–09                         $27,120.00     

               
ATRS has already had members self-report their own earnings above the Earnings Limitation threshold in previous years that had not been reported.  Retirees may wish to self-report their Earnings Limitation issues to ATRS for ATRS to review and determine what, if any, liability they have to ATRS.  ATRS pledges to cooperate fully with retirees who self-report an Earnings Limitation liability to ATRS.  ATRS can work out repayment terms that take into consideration a retiree's situation.


Some have questioned why this review was started.  The review started after ATRS started comparing retirees’ information received for ATRS compliance with the new retiree contributions owed by ATRS employers after July 1, 2009.  ATRS is not assuming that a failure to report earnings above the threshold in prior years was wrongful or intended to be improper.  ATRS is not applying interest to any amount owed through the Earnings Limitation review and will act fairly to recover any amount owed.  ATRS staff has a duty under the Arkansas Code to attempt to collect any amount that is owed to ATRS due to ATRS paying more to a retiree than what the retiree is entitled.  Ark. Code Ann. §24-7-206 states when an overpayment or underpayment to a retiree occurs, ATRS "shall correct the error" in such a way that "the benefit to which the person was correctly entitled shall be paid."   ATRS has a duty imposed by the legislature to collect overpayment of benefits that it knows is rightfully due.

ATRS would like to move quickly to put this issue behind it and its retirees. If you would like to self report an earnings limitation problem you think you may have, ATRS will review the matter and if you have been overpaid, ATRS will work with you on fair terms. You can call or email me directly. I had planned to get this out during most ATRS employers' regular business hours. I had several issues arise that tied up my time. I am sorry for those who waited just to find it was sent later.

If you have questions or need more information, please feel free to call me on my direct line at (501) 682-1820 or my cell (501) 318-5998 or email me at georgeh@artrs.gov. In addition, if you use Twitter, you can follow events by finding the Twitter ID of ATRS or find George Hopkins in the Twitter directory.  On Twitter, you will have access to day-to-day updates on ATRS happenings.
Respectfully;
George Hopkins

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