AR SB116

Adds definitions for "gap year" (period when member was inactive and unemployed or did not provide qualified service), "permissive service credit" (non-previously credited service purchased by member contribution), and "qualified service" (service defined in 26 U.S.C. § 415(n)(3)(C)(i)-(iv) as of January 1, 2023)

Allows Arkansas Teacher Retirement System members with 5+ years of actual service to purchase up to 5 years of permissive service credit for gap years when they left their teaching position, were inactive, and subsequently returned to teaching

Requires members to accrue at least one-half year of service credit after returning to teaching and prohibits purchasing permissive service credit after retirement

Members must pay the actuarial equivalent of benefits for each year of permissive service credit purchased, with credit not becoming effective until full payment is received

Permits refund of payments if member ceases to be active before credit is established or credit is not used to establish retirement eligibility; effective July 1, 2023