The board of trustees of the Arkansas Teacher Retirement System approved a slight but expected increase in the contributions of employers and most employees during a meeting Monday at which the board also learned that the system’s investments increased in value by $797 million in the past quarter.
The system’s investment return was 5.4% in the quarter that ended Dec. 31, said P.J. Kelly of Chicago-based Aon Hewitt Investment Consulting. That ranked in the top third among the nation’s public pension systems, he said after the trustees’ meeting. The investments totaled $18.3 billion at the quarter’s end.
The trustees voted to increase the rate charged to system employers from 14.25% to 14.5% of their employees’ payroll. The board also increased the rate charged to the system’s members who pay into the system from 6.25% to 6.5% of their salaries in fiscal 2021, which starts July 1. (Most employees make contributions, but not all.)
The system received $430.8 million from employers based on a 14% rate charged on about $3 billion in salary in fiscal 2019, said Clint Rhoden, the system’s executive director. Given the same amount of salary, the system can expect to receive about $7.6 million more in fiscal 2020, based on the 14.25% rate, and then about $7.6 million more in fiscal 2021 based on the 14.5% rate, he said.
Trustee Richard Abernathy said the state budget in fiscal 2020 includes funds to help school districts pay for the rate increase to employers. Putting those funds in the budget was suggested by Republican Gov. Asa Hutchinson.
The system received $141.8 million in contributions from working members in fiscal 2019 based on a 6% rate and salaries totaling about $2.3 billion, said Rhoden.
Given the same amount of salary, the system can expect to receive about $5.9 million more in fiscal 2020 based on the 6.25% rate and then about $5.9 million more in fiscal 2021 based on the 6.5% rate, he said.
Read the whole article in the Arkansas Democrat Gazette.
This article quotes selections from “Arkansas teacher, district pension pay-ins raised” by Michael R. Wickline in the Arkansas Democrat Gazette.