Opinion No.

The Honorable Ben Allen State Senator P.O. Box 2635 Little Rock, AR 72203

Dear Senator Allen:

This is in response to your request for an opinion regarding Act 547 of 1989, which is codified at A.C.A. 24-4-611 (Supp. 1989). This act provides for a minimum monthly benefit of $150 for all persons "who are now vested or hereafter vest" under the Arkansas Public Employees' Retirement System ("System") or the Arkansas State Highway Employees' Retirement System.

The question posed involves an individual who is retiring with an early annuity, as provided for under A.C.A. 24-3-207. According to correspondence attached to your request, this person has been advised by the System that she "would also loose [sic] 18% of the $150.00". This information is being questioned.

My review indicates that the System has accurately applied the benefit provisions in this instance. It should be initially recognized that Act 547 of 1989 (A.C.A. 24-4-611 (Supp. 1989)) must be read together with other pertinent Code sections, and that neither repeals nor amendments by implication are favored in construing legislative enactments. Firemen's Fund Ins. Co. v. Polk County, 260 Ark. 799, 543 S.W.2d 947 (1976). Relevant to your inquiry is A.C.A. 24-3-207, involving early retirement benefits, which states:

(a)(1) Any member or former member with sufficient years of credited service to qualify for a vested termination annuity who has not attained his normal retirement age may retire with an early annuity provided for in subsection (b) of this section upon his written application to the plan setting forth at what time, not less than thirty (30) days nor more than ninety (90) days subsequent to the execution and filing of his application, he desires to be retired.

(2) The member or former member eligible for a vested termination annuity must have at least ten (10) years of credited service and be within ten (10) years of normal retirement age.

(b) Upon early retirement, a member shall receive a certain percent of an annuity for life provided for in 24-3-201(e), which percent shall be one hundred percent (100%) reduced by one-half of one percent (0.5) multiplied by the number of months by which his age at early retirement is younger than his normal retirement age, using what his normal retirement age would have been if he had continued named plan-covered employment from the time of early retirement. [Emphasis added.]

Thus, in order to calculate this person's early annuity, reference must be made to A.C.A. 24-3-201(e) (Supp. 1989). This Code section outlines the method of calculating the annuity for a member who has attained his or her normal retirement age. See A.C.A. 24-3-201(d)(2). It is this annuity amount which, under Act 547 of 1989 (A.C.A. 24-4-611 (Supp. 1989)), cannot be less than $150.00. This is the starting point for calculating the early annuity under 24-3-207, above. If the annuity for life under 24-3-201(d)(2) totals less than $150.00, this figure would automatically increase to the $150.00 minimum under 24-4-611 (Act 547 of 1989).

With regard to the individual in question, the 18% reduction mandated under 24-3-207(b)¹ may, in fact, result in an early annuity that is less than $150.00, if the initial calculation under 24-3-201(e) yields $150.00 or less. Section 24-4-611 should not, in my opinion, be construed to require an early retirement benefit of $150.00, without regard to the reduction required under 24-3-207(b). This result would have to be premised upon the implied amendment or repeal of 24-3-207; and as noted previously, this rule of construction is not favored in determining legislative intent.

It is therefore my opinion that, when reading Act 547 of 1989 (24-4-611 (Supp. 1989)) together with the relevant early retirement provisions, the System has correctly applied the benefit calculations in this instance.

The foregoing opinion, which I hereby approve, was prepared by Assistant Attorney General Elizabeth A. Walker.

¹ 18% is, in this instance, the equivalent of one-half of one percent (0.5) multiplied by the number of months by which this person's age at early retirement is younger than her normal retirement age (36 months). See A.C.A. 24-3-207(b).