PRB Overview

The Arkansas Fire and Police Pension Review Board (PRB) was established by Act 381 of 1983. Its legal charge is to enforce Arkansas laws which govern funding of local fire and police pension funds, which were established by Act 491 of 1921 and Act 250 of 1937, respectively, and to enforce the legal level of benefit payments from each pension fund. The law also charges the Board with approving decisions of staff, who certify to them action to be taken on benefit increase requests made by a local pension fund.

The Board has 9 voting members: Employers have 3 representatives; each employee group has 2 representatives (2 firefighters and 2 police officers); the public has 1 representative; and the Director of Finance and Administration or designee. Board members are appointed by the Governor and hold terms which are set by law. The Board must meet once a year, and may call other regular and special meetings at its discretion. These meetings are open to the public.

The law designates the executive director and staff of the Local Police and Fire Retirement System to serve the Pension Review Board.

The Board is authorized to make rules necessary to enforce the laws governing funding and benefit levels, and to withhold Premium Tax from a local pension fund when non-compliance with such laws are determined.

Reports

Annual Audit Report

2023 Independent Auditor's Report

2022 Independent Auditor's Report

2021 Independent Auditor's Report

Local Plans Summary of Valuations

2023 Summary of Valuations

2022 Summary of Valuations

2021 Summary of Valuations

State Insurance Premium Tax Report

2024 State Insurance Premium Tax Report

PRB Local Plan Provisions

Procedure for Increasing Benefits for a Local Pension Fund

Arkansas law requires local fire and police pension funds considering an increase in their benefits to process such requests through the Arkansas Fire and Police Pension Review Board (PRB). The PRB accepts benefit increase requests as late as September 30th. If the PRB does not receive all required items, including payment for the benefit increase valuation, by the September 30th date, the Local Plan will be required to wait until the following calendar year to proceed with a benefit increase request. The following steps will assist a Local Plan that is considering a benefit increase. PRB Rules 2 and 4 provide greater details on benefit increases (see PRB Rules).

• First, the local board of trustees must adopt a resolution stating the amount of the proposed increase (must be in $5 increments for volunteer Local Plans) and to whom it would apply - current retirants; future retirants; current/future retirants; surviving spouses/children; etc. At least 6 of the 7 trustees must approve and sign the resolution. Minutes of the same board meeting the resolution was adopted and showing which trustees voted for/against the increase must be sent with the resolution to the PRB. The Local Plan shall ensure the minutes are accurate.

• Once the PRB receives the properly completed resolution and minutes, the Local Plan will be invoiced for the valuation fee. Actuarial work will begin after payment is received for the valuation.

• For standard Local Plans (have not raised benefits), the valuation fee is $600. For non-standard Local Plans (have raised benefits), the valuation fee is $900 for the first proposal and $500 for each additional proposal in the resolution. A Local Plan may also ask that if the first proposal cannot be approved, for the actuary to determine the highest amount permitted i.e. a "random search" valuation. The random search valuation fee is $700 for standard Local Plans; $1,400 for non-standard Local Plans.

• For an alternate cash flow valuation, for Local Plans with less than 50 participants, the fee is $3,000. Note, an alternate cash flow valuation requires a substantial amount of supporting documentation from the Local Plan.

• Benefit increase valuations take approximately four (4) weeks to complete. The executive director shall certify whether or not the benefit increase is approved. The local board must file a copy of the resolution, actuarial valuation, and the executive director's certification with the circuit and city clerk's office of the county/city where the Local Plan is located.

Definition of "Actuarial Soundness"

Under law, the financial objectives of Local Plans shall be to establish and receive contributions which will remain approximately level from year to year and to not increase for future citizens. The law specifies that this objective is achieved when contributions received each year by a Local Plan are sufficient both, (1) to fully cover the costs of benefit commitments being made to employees for their service being rendered in such year and, (2) to make a level payment which, if paid annually over a reasonable period of future years, will fully cover the unfunded costs of benefit commitments for service previously rendered. The financial objectives discussed above must be met in order for a Local Plan to be considered "actuarially sound."

Reporting and Disclosures of Local Plan Financial activity

Act 700 of 1979, as amended, (ACA 24-11-101 et. seq.) requires that each Local Plan disclose its annual financial activity to the PRB. This report, which may be completed by a CPA, registered accountant, city clerk, recorder or treasurer, is a compilation of annual financial activity of the Local Plan. Reporting requirements are addressed in PRB Rule 3.

Premium Tax may be withheld from any Local Plan and its sponsoring location which does not satisfy the reporting requirements.