Arkansas Code
Subchapter 8 - Firemen's Relief and Pension Funds
§ 24-11-804. Administration of small funds by Arkansas Local Police and Fire Retirement System

(a)
(1) In those local firemen's relief and pension funds that cover fewer than five (5) members, a local board of trustees may no longer exist, and the fund shall be designated as inactive by the employer.
(2) As used in this section, “member” includes an active member or a retired member of the fund described in subdivision (a)(1) of this section but does not include beneficiaries.

(b) Administrative responsibility for the fund shall be assigned to the Arkansas Local Police and Fire Retirement System as allowed by §§ 24-10-301 and 24-10-302 and as provided in the following procedure:
(1)
(A) The actuary under contract to the system shall compute the retirement reserve for vested and active members and for eligible beneficiaries of the inactive fund. After receiving the report of the actuary, the employer shall transfer the computed reserve to the system to be held in an account designed as the retirement reserve for the inactive fund and from which the system shall pay eligible beneficiaries.
(B) The retirement reserve and any additional employer contributions shall include such amounts as are necessary to provide administrative expenses for the system, but such expenses shall not exceed a total of one-half of one percent (0.5%) of active member payroll plus one percent (1%) of annual reserve assets.

(2) Any excess assets of the fund remaining after the retirement reserve is created shall be transferred to an account designated by the employer, to be used solely for the purpose of making payments to the system for employee coverage administered under the system, and for no other purpose.
(3)
(A) If a former member of the local pension fund returns to service in which the employee would have again become a member of the local fund, the past service credit may be purchased by the employer for the employee under the system and the purchase costs shall be amortized in the same manner as other service credit purchases are amortized under the system.
(B) Retired members and beneficiaries of any inactive fund under administration of the system that was actuarially sound before being designated inactive shall be eligible for annual redetermination of benefits as defined in § 24-10-612.
(C) Should the law mandate an increase in benefits to retired members or their beneficiaries, the increases shall be payable from the retirement reserve of the inactive fund.
(D) No prorating of benefits shall be allowed in inactive funds under the administration of the system.
(E) If the retirement reserve of an inactive fund shall become inadequate to pay full benefits to eligible recipients or if active members are still covered by the fund, the system shall require of the employer and the employer shall remit such actuarially computed amounts as are necessary to pay full benefits to current and future recipients.

(4)
(A) Once a fund becomes inactive and a retirement reserve is created as required by this section, the employer may continue to collect such millages, state insurance tax turnback, and other revenues allowed by law for the support of firefighter retirement programs.
(B) The revenues shall be deposited locally into an account designated by the employer solely for making payments to the system for employee coverage administered under the system, and for no other purpose.

(5)
(A) All employer contributions for inactive funds shall be made in such amounts and in such manner, form, and frequency as the Board of Trustees of the Arkansas Local Police and Fire Retirement System shall require.
(B) The pension records of inactive funds and other materials and reports as may be required by the board to administer the inactive funds shall be provided to the system in such manner as the board shall require.