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Committee approves optional life‑insurance route for APERS survivor benefit language
Summary
Senate Bill 157, as amended, passed committee to allow APERS to offer a death benefit either by traditional pension funding or via an insurance product. The amendment changes mandatory language to permissive and directs overpayments to reduce system liabilities.
The committee passed Senate Bill 157 as amended, enabling the Arkansas Public Employees Retirement System to offer a survivor death benefit funded either through system assets or an employer‑owned life insurance approach. Representative Mark Perry explained that the original draft used mandatory 'shall' language; the adopted amendment changed the provision to 'may' to make the approach permissive rather than required.
The amended bill also provides that if a life insurance payment is used for a death benefit, the amount paid to a beneficiary will be a set payment reduced by any overpayments the system must recover, and any remaining balance would be used to reduce the system’s unfunded liabilities.
Committee members and the actuary discussed structural options. Jody Carrero prepared an actuarial review of multiple iterations of the proposal; the committee adopted the amendment and passed the bill.
Ending: The bill authorizes APERS to consider life‑insurance mechanisms as one option to provide death benefits to beneficiaries while allowing residual amounts to reduce system liabilities; the provision is permissive and not mandatory.
