Arkansas Administrative Code Agency 137 - Arkansas Fire and Police Pension Review Board
Here’s a clear breakdown of Arkansas Administrative Code, Agency 137 – Arkansas Fire and Police Pension Review Board, including its main rules and structure:
📌 Overview of Agency 137
Agency Purpose & Composition
Established under Act 381 of 1983, the Review Board enforces Arkansas laws governing local fire and police pension funding and benefit levels. It consists of nine voting members: three employer representatives, two police, two fire, one public, plus the Director of the Dept. of Finance & Administration (ex officio) (sos.arkansas.gov).
Leadership Structure
In odd-numbered years (after July), the Board elects a Chair and Vice‑Chair. Since July 2007, each Chair serves a one‑term limit. The Chair role rotates among representatives: Municipal League → Police → Public → Fire (sos.arkansas.gov).
📝 Key Rules
Rule 1 – Description & Operation
Defines Board membership, appointment process, meeting transparency, public access to records, and staff duties (lopfi-prb.com).
Rule 2 – Benefit-Increase Procedure
Outlines the process for local pension boards to request benefit increases: board resolution, actuarial valuation funding, staff review, and final certification by the Executive Director (lopfi-prb.com).
Rule 3 – Annual Financial Disclosure
Requires annual financial reports by March 31 (extendable to May 15) for local plans. Non-compliance may result in withholding of premium-tax turnbacks (lopfi-prb.com).
Rule 4 – Definition of “Actuarial Soundness”
Sets actuarial tests (Contribution, Funded percentage, Cash‑flow studies) to determine if a plan is financially healthy (lopfi-prb.com).
Rule 5 – Benefit Levels & Financial Disclosure
Addresses correction of under-/over-payments, with staff oversight, hearings, and potential premium‑tax penalties (lopfi-prb.com, sos.arkansas.gov).
Rule 6 – Funding Enforcement
Mandates employee (4–6%) and employer (match) contributions. Staff enforcement includes notices, audits, and withholding of tax turnbacks (lopfi-prb.com).
Rule 7 – Police Salary Definitions and DROP
Defines “salary” and outlines Deferred Retirement Option Plan (DROP) mechanics including contributions and interest (en.wikipedia.org, lopfi-prb.com).
Rule 8 – Permitted Agency Expenses
Reimburses board members and staff for necessary expenses (excluding alcohol), per-state travel limits. Includes per-diem stipends under A.C.A. 25‑16‑903 (law.cornell.edu).
Rule 9 – Administrative Services Committee
A joint committee with LOPFI for handling complaints and agency administration; Secretary holds public meetings (law.cornell.edu, govt.westlaw.com).
Rule 10 – Administration of DROP Accounts
Details DROP account setup, accruals, interest rates, and payout terms (5–10 years) (lopfi-prb.com).
Rule 11 – Asset Valuation Method
Defines actuarial asset valuation:
For plans ≥ $5 M: 5‑year smoothing
For plans < $5 M: book value (lopfi-prb.com).
Rule 12 – Premium-Tax Turnback Allocation
Governs allocation of insurance premium taxes to "qualified locations." Non-compliance by local plans can lead to significant forfeiture. Also ties in funding and asset‑management standards (lopfi-prb.com).
Rule 13 – Minimum Asset Management Standards
Per Act 851 of 2007, sets requirements for:
Defined rate-of-return formula
Governance, investment policy, professional management, and plans of action
Non-compliance consequences, including loss of premium‑tax funding (sos.arkansas.gov, lopfi-prb.com).
✅ Summary Table
Rule No.
Focus Area
1
Board structure, transparency
2
Benefits increase process
3
Financial reporting
4
Actuarial soundness standards
5
Benefit correction/disclosure
6
Contribution enforcement
7
Salary, DROP program mechanics
8
Expense reimbursement
9
Administrative committee
10
DROP administration
11
Asset valuation method
12
Premium tax allocation framework
13
Minimum asset management rules
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