(a)

(1) It shall be considered sound public policy to encourage public employees in the State of Arkansas to participate in the development and growth of their individual retirement benefits.

(2) In order that the Arkansas Public Employees' Retirement System continues to maintain a strong funded status while ensuring that benefits provided to the annuitants and beneficiaries of the system maintain a constant purchasing power, it is incumbent upon the Board of Trustees of the Arkansas Public Employees' Retirement System to consider reintroducing employee contributions as a required provision of the plan structure.

(b)

(1) In accordance with the rules and regulations of the board, there shall be an annual review of the actuarial valuation of the plan as provided by its actuary.

(2) During each annual review, the board shall consider the actuarial appropriateness of establishing a contributory component within the system.

(3) Issues to be considered are to include, but not be limited to:

(A) Mitigating additional increases in the employer contribution rate;

(B) The establishment of a tax deferral of employee contributions under the Internal Revenue Code of 1986, 26 U.S.C.S. § 414(h), as in effect on January 1, 2003;

(C) The establishment of a time horizon in which current system members may elect contributory status; and

(D) The extent of benefit portability.

(c)

(1) Beginning July 1, 2005, the board shall implement and establish a contributory plan for members of the system.

(2) The board shall develop policies and regulations from its annual review of the contributory component of the system and, as a minimum, the board's regulations shall provide for:

(A) The member contribution rate;

(B) The annual multiplier rate for benefits that a contributory member of the system shall receive upon becoming eligible to receive a retirement benefit;

(C) The combining of contributory and noncontributory service together to receive a retirement benefit from the system; and

(D) Any other contributory qualifications or requirements necessary to implement the contributory plan for the system.