How long must an Arkansas county elected official wait before returning to APERS-covered work after the DROP period ends?

Plain-English summary

A county elected official had entered the Arkansas Public Employees' Retirement System Deferred Retirement Option Plan (DROP) in June 2009, with the seven-year DROP window set to end in June 2016. A state representative asked the AG how long the official would have to be off work after the DROP period ended before he could return to a job covered by APERS.

The AG's answer was 90 days. To collect retirement benefits, an APERS member must "terminate" covered employment, which the statute defines for an elected official as resigning, being removed, or otherwise no longer holding the elected position, with a complete severance from that position and a cessation of services. Taking a leave of absence or performing duties without pay does not count as termination. APERS interprets the statute to apply the separation period that was in effect when the member made the irrevocable decision to enter DROP. That rule of decision pulled the answer back to 2001 legislation: Act 154 of 2001 had set a 90-day separation period for elected officials (who earned double service credit), and that 90-day rule controlled.

The opinion was tightly scoped. It only answered the question for a county elected official who entered DROP in June 2009. It did not purport to apply to anyone else, nor did it analyze the additional restrictions added by Act 38 of 2011, which prohibited members who entered DROP after February 2011 from later employment in any APERS-covered position except as permitted by section 24-4-520.

Currency note

This opinion was issued in 2015. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Background and statutory framework

A member of the Arkansas Public Employees' Retirement System who enters the DROP must leave DROP and separate from covered service no later than seven years after entering. Ark. Code Ann. §§ 24-4-802(c)(1), -804(a). When the member leaves DROP, the member begins receiving the monthly benefit that would have applied at the date of DROP entry. § 24-4-803(a)(1), -804(b).

Section 24-4-520(a) requires termination of covered employment to retire and receive benefits. For an elected official, "terminate" means (A) the member has resigned, been removed, or otherwise no longer holds the elected position; (B) a complete severance from the position has occurred; and (C) the member has ceased performing any services in the elected position, except for noncompensated functions related to the transfer of duties or the position. § 24-4-520(e)(2). The same subsection clarifies that "terminate" does not mean taking a leave of absence, performing duties without remuneration, or receiving additional employment-related compensation, reimbursements, benefits, or emoluments. § 24-4-520(e)(3).

There is an exception for an elected official who immediately serves a term in a different "form of government" (city, county, or state) following the term for which retirement benefits are sought. § 24-4-520(c) (Repl. 2014).

Once termination has occurred, the member may return to APERS-covered work after a "separation period." § 24-4-520(b). APERS applies the separation period that was in effect when the member made the irrevocable DROP election. Because the official in this hypothetical entered DROP in June 2009, the applicable separation rule was the 90-day period in Ark. Code Ann. § 24-4-520(b)(2) (Supp. 2007), codifying Act 154 of 2001. The 30-day separation period in former subsection (b)(1), codifying Act 1460 of 1999, did not apply because elected officials received double service credit and were placed under subsection (b)(2). See § 24-4-521(b)(5) (Supp. 2007).

The AG also noted Act 38 of 2011 (codified at § 24-4-804(c)) added stricter restrictions for members who entered DROP after February 2011. Members who entered DROP after that date are not eligible for employment in any APERS-covered position except as section 24-4-520 provides. That rule did not apply to the June 2009 entrant in this hypothetical.

APERS Board of Trustees' Regulation 220 also warns that a "prearranged agreement" to return to work in a covered position before the separation period ends creates a rebuttable presumption that the member did not terminate covered employment.

The AG also flagged that other restrictions on reemployment may apply outside the separation period. For example, Ark. Code Ann. § 14-14-1310(a)(2)(C)(ii) provides that a "county elected officer who resigns during a term of office shall be ineligible for appointment to any county elective office during the term for which he or she resigned."

Common questions

The official's DROP ends in June 2016. Could he run for another county position and start serving immediately?

Under this opinion, the separation period was 90 days from the date of termination, so a return to APERS-covered work within 90 days would not satisfy the termination requirement. The AG also pointed to § 14-14-1310(a)(2)(C)(ii) as a separate restriction on appointment to county elective offices following resignation.

Why does the 2009 rule control when the DROP ended in 2016?

APERS interprets the statute to fix the separation period as of the date of DROP entry. Because DROP entry is irrevocable under § 24-4-802(c)(1), the rules in place at that moment govern. The AG applied the agency-deference doctrine (citing Sugarloaf Mining and Greene Acres) and saw no reason to disturb that interpretation.

Does taking a leave of absence count as termination?

No. Section 24-4-520(e)(3) expressly excludes a leave of absence, performing duties without pay, and receipt of any additional employment-related compensation or benefits from the definition of termination.

Did the AG analyze the rules for someone who entered DROP after 2011?

No. The opinion expressly limited itself to the June 2009 DROP entrant. It noted that Act 38 of 2011 added further restrictions for later entrants but declined to interpret them.

Citations

• Ark. Code Ann. § 24-4-520 (termination of covered employment for retirement)
• Ark. Code Ann. § 24-4-520(a), (b), (b)(2), (c), (e)(2), (e)(3)
• Ark. Code Ann. § 24-4-521(b)(5) (service credit for elected officials)
• Ark. Code Ann. § 24-4-802(c)(1) (irrevocable election to enter DROP)
• Ark. Code Ann. §§ 24-4-803(a)(1), -804(a), (b) (DROP benefits)
• Ark. Code Ann. § 24-4-804(c) (Act 38 of 2011 restriction)
• Ark. Code Ann. § 14-14-1310(a)(2)(C)(ii) (restriction on reappointment after resignation)
• Act 154 of 2001 (90-day separation period)
• Act 1460 of 1999 (30-day separation period)
• Act 151 of 2001 (service credit)
• Act 38 of 2011 (post-2011 DROP restrictions)
• APERS Board of Trustees' Regulation 220 (Termination of Covered Employment Required for Retirement, 2011)
• APERS Board of Trustees' Regulation 214 (DROP Provisions, Prohibition Against Returning to Covered Employment, 2011)
• Matter of Sugarloaf Mining Co., 310 Ark. 772, 840 S.W.2d 172 (1991) (agency deference)
• Arkansas Dept. of Human Services v. Greene Acres Nursing Homes, Inc., 296 Ark. 475, 757 S.W.2d 563 (1988) (agency deference)

Source

• Landing page: https://arkansasag.gov/divisions/opinions-foia/attorney-general-opinions-search/

Original opinion text

Opinion No. 2015-100
November 30, 2015
STATE OF ARKANSAS
ATTORNEY GENERAL
LESLIE RUTLEDGE
The Honorable David L. Branscum
State Representative
P. O. Box 370
Marshall, AR 72650-0370
Dear Representative Branscum:
This is my opinion on your question:

Where a county elected official entered into the APERS DROP in June 2009 and the DROP ends June 2016, how long of a time period must this person be off from work before this person is permitted to return to work?

RESPONSE

In my opinion, the official described may not commence new employment in a position covered under the Arkansas Public Employees' Retirement System (APERS) within 90 days of terminating his current employment. Once termination has occurred and 90 days have passed, there is generally no prohibition on this official's returning to employment in a position covered under APERS.

Readers should note that this opinion is limited to the facts presented. As discussed herein, I conclude that the law governing the answer to the question posed is the law that was in effect in June 2009. The law has been amended since then, and other relevant provisions have been added. This opinion does not purport to provide an answer with respect to anyone other than an elected county official who entered DROP in June 2009 and should not be taken to provide such an answer.

DISCUSSION

With an exception not applicable here, a person must "terminate" covered employment in order to retire and receive retirement benefits from APERS. A person who participates in APERS's Deferred Retirement Option Plan (DROP) must leave DROP and separate from covered service no later than seven years after entering DROP. Accordingly, under the facts given, the person at issue will be required to terminate his covered employment no later than June 2016.

The law provides that "terminate," in the case of an elected public official similar to the person at issue, means:
(A) The member has resigned, been removed, or otherwise no longer holds the elected position;
(B) A complete severance from the elected position has occurred; and
(C) The member has ceased performing any services in his or her elected position, except for noncompensated functions related to the transfer of the duties or the transfer of the position itself.

The law further provides that "terminate" does not mean:
(A) Taking a leave of absence;
(B) Performing job duties or services without remuneration; or
(C) Receiving or accruing additional employment-related compensation, reimbursements, benefits, or other emoluments.

Once a retiring person's employment is terminated, as defined above, there is generally no prohibition on his returning to employment in a position covered under APERS after a specified separation period has passed. I am informed that, in the case of a person in DROP, APERS applies the applicable separation period that was in effect at the time the person made the irrevocable election to enter DROP. In light of our courts' agency-deference doctrine, I see no reason that APERS' current interpretation of the statute should be disturbed.

Here, applicable law provided in June 2009 that termination would not have occurred if the member returned to employment in a covered position within 90 days of the retirement date. It is my opinion, accordingly, that the person at issue may not commence new employment in a position covered under APERS within 90 days of terminating his current employment.

Sincerely,
LESLIE RUTLEDGE
Attorney General