1. (a)

   1. (1) A plan participant who has not retired shall receive plan interest at the end of each fiscal year.

   2. (2) The plan interest rate shall be based on a:

      1. (A) Fixed interest rate that is adopted by the Board of Trustees of the Arkansas Teacher Retirement System by the end of the first quarter of the fiscal year in which the interest rate shall apply; or
      2. (B) Variable interest rate formula that is based on investment returns and other factors adopted by the board by the end of the first quarter of the fiscal year in which the interest rate shall apply.
   3. (3) The board shall adopt a plan interest rate by the end of the first quarter of the fiscal year in which the plan interest shall apply if a variable interest rate formula is used.

2. (b)

   1. (1) If a plan participant continues covered employment after ten (10) consecutive years from the date of his or her entry into T-DROP, the plan participant’s T-DROP account shall be credited with a post 10-year T-DROP interest rate.

   2. (2) The board shall set the post 10-year T-DROP interest rate:

      1. (A) By the end of the first quarter of the fiscal year in which the interest rate shall apply; and
      2. (B) At the same meeting in which the plan interest rate is set.
   3. (3) The post 10-year T-DROP interest rate shall be credited to a plan participant’s T-DROP account on June 30 of each year, or through the date of retirement, whichever occurs first.
   4. (4) The post 10-year T-DROP interest rate for T-DROP shall be determined by the board and adopted by the end of the first quarter of the fiscal year in which the interest rate shall apply.
3. (c) In addition to the interest rate for the fiscal year, the board may adopt an incentive rate during the fiscal year if investment returns justify an incentive rate for the fiscal year.

Codification Notes: “T-DROP” means Teacher Deferred Retirement Option Plan.