AR HB1340

Converts contributory service credit to noncontributory service credit (rather than canceling it) when a member owes a contribution balance and elects not to pay, with the system returning any member contributions for that period without interest.

Expands the look-back period for correcting errors in the Arkansas Teacher Retirement System, allowing corrections beyond the standard period when intentional nondisclosure, fraud, misrepresentation, criminal acts, or documented errors by employers or the system are involved.

Allows unreported service outside the look-back period to be converted to noncontributory service credit as an alternative to requiring members to pay the actuarial equivalent cost.

Addresses reporting failures by employers by distinguishing between unreported service within the look-back period (which requires member and employer contributions plus interest) and service outside that period (which may be converted to noncontributory credit).

Declares an emergency and establishes an effective date of July 1, 2021, citing the need to provide fair remedies for members harmed by reporting errors and to maintain an orderly system of retirement benefits.