The Insider was tipped to take a look at Rep. Allen Kerr's recent uncomfortable appearance before the House to endorse SB 55, now Act 16, to bring the Arkansas State Highway Employees retirement system into compliance with federal law.
The technical bill gives scant evidence of its purpose and brief debate enlightened no casual onlooker. In short, it was to accommodate Highway and Transportation Director Dan Flowers' vested retirement benefits — now in the range of $195,000 a year. They had reached the point that, without this law, the state might fall out of compliance with federal IRS regulations aimed at curbing excessive pensions.
Without the fix, others in the Highway Department and the state could have been liable for taxes on payments into deferred retirement accounts. The state could have incurred substantial penalties. "It looked like a deal to accommodate one guy with a high retirement package," Kerr said, explaining his discomfort in testifying in support of protecting a high pension while he works to root out abuses in the state retirement system. "It looked right on the verge of a triple dip." But, Kerr said, he became convinced that the change was necessary to "avoid fallout," which he said would have been a lot more expensive.