(a) As used in this section, "buyout plan" means a voluntary program established by the Board of Trustees of the Arkansas Teacher Retirement System to make a one-time lump-sum payment to a member, surviving spouse, or alternate payee in exchange for a member's, surviving spouse's, or alternate payee's cancellation of membership and retirement benefit rights in the Arkansas Teacher Retirement System.

(b)

(1) The board may adopt rules as necessary to implement this section.

(2) A buyout plan established by the board:

(A) May be offered periodically and have a limited term of duration for participation, as determined by a resolution adopted by the board at a meeting of the board;

(B) Shall specifically identify the formulas by which contributory and noncontributory service or a future retirement benefit will be purchased by the system as a one-time lump-sum payment from the system, paid directly to the member, surviving spouse, or alternate payee or transferred to another administrator in compliance with the Internal Revenue Code; and

(C) Applies only to a group of members, group of surviving spouses, or group of alternate payees, who:

(i) Are identified by the board as a group eligible to participate in a buyout plan offered by the board; and

(ii) Elect to participate in a buyout plan in exchange for future benefit rights in the system.

(3) A buyout plan established by the board may be extended, modified, or expanded by board resolution.

(c) A member is eligible to participate in a buyout plan if the member is:

(1) Eligible for deferred retirement under § 24-7-707; and

(2) Inactive for a minimum of one (1) year following the last fiscal year that the member rendered actual service to a covered employer and received at least one-fourth (1/4) year of service credit.

(d) The board may offer a buyout plan to surviving spouses or alternate payees who:

(1) Are eligible for a future retirement benefit from the system; and

(2) Have not received a retirement benefit from the system.

(e) A member who participates in a buyout plan shall receive a one-time lump-sum payment from the system that cancels interest in any retirement benefit and all future rights in the system effective upon tender of payment by the system.

(f) A buyout plan may be used to cancel both a member's contributory and noncontributory credited service in the system.

(g) A member who receives a buyout of his or her credited service under this section may repurchase his or her previously credited service as contributory service after becoming an active member of the system as if the service had been private school service.