with CLINT RHODEN Executive Director of the Arkansas Teacher Retirement System
You’re relatively new in your role as Executive Director of ATRS, but you’ve been with the System for some time. What have your past roles been and what is involved in your role as the Executive Director of ATRS?
Answers have been edited for clarity and length.
The main mission at ATRS is to Recruit, Retain, and Reward quality Arkansas educators. The ATRS has 130,000 members and manages $18 Billion in investments.
I started working at ATRS in the summer of 2000 as part of a team of computer contractors that migrated the ATRS membership system from an aging application into the modern computer system that we have today. The end result reduced the ATRS annual Information Technology budget by over one million dollars a year. Before being selected as executive director, I served as director of operations for five years. In that role I worked closely with the executive director and senior staff in drafting legislation that resulted in major benefit adjustments in the 2017 session. The 2017 benefit adjustments are one of the key reasons that ATRS is currently at a strong 80% funding level. As executive director my primary responsibility is to exercise a fiduciary duty to keep ATRS strong and secure so that it can fulfill the promised lifetime retirement benefits to ATRS members. In performing this duty, I work closely with the ATRS Board of Trustees to execute the Board’s policies and promote the Board’s legislative agenda. I meet with members of the General Assembly to keep them informed about ATRS and assist them with their oversight role. ATRS staff and I strive to keep all 130,000 ATRS members informed about their benefits and address concerns as they arise. Why is ATRS important for recruiting and retaining Arkansas educators? The ATRS reward is a lifetime retirement benefit. After providing 30 years of service, educators can expect a lifetime of annual benefits up to 60% of their highest salary earned. That benefit is based on a formula that increases for each year of service the educator provides. The reward of a lifetime of retirement payments is a really good tool used to recruit high-quality educators and then retain them for a full career.
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ARKANSAS EDUCATOR
aeaonline.org
What is T-DROP, and how does it work (how can educators participate)? T-DROP stands for Teacher Deferred Retirement OPtion. T-DROP is an optional deferred “retirement” plan for ATRS members. After serving for at least 28 years, a member is eligible to participate in the T-DROP program. Instead of retiring the member can continue to work and provide service in the classroom while a reduced amount of their retirement benefit is deposited each month into an account exclusively for them. T-DROP deposits will be made for up to 10 years. After 10 years, no more deposits will be made, but the account continues to grow with a competitive interest rate. Once the educator decides to fully retire, the money in their T-DROP account can be withdrawn in a lump sum, converted to a lifetime annuity, rolled over to another retirement plan, or left in a Cash Balance Account (CBA). Money left in an ATRS CBA pays a competitive interest rate that increases over time. The funds are not taxed until withdrawals are made. The majority of the ATRS board members are elected trustees who are or have been educators. Why does the makeup of the board matter? Ultimate authority, general administration and responsibility for the proper operation of ATRS is vested in the 15-member Board of Trustees. Eleven trustees are elected by ATRS members, and four trustees serve as ex-officio by virtue of their elected positions in state government (Auditor of the State, Treasurer of the State, Bank Commissioner, and Commissioner of Elementary and Secondary Education). I have found that having a member elected board is very important to the members of ATRS. Time and again I hear they trust the ATRS Board to look out for their interests. Particularly since the elected trustees are members of ATRS and are themselves affected by the Board’s decisions.
