Joint Public Retirement
October 10, 2025
Senator Jim Dotson All right, members, we’re going to call this meeting to order. First off, consideration of approval of June 4, 2024, meeting minutes. Item B. Do I have a motion to approve? I got a motion. Do I have a second? I got a second. Any discussion? All in favor? Any opposed? Motion carries. All right. Item D, overview of the summary of actuarial evaluation data and results. Sorry. I skipped directly over B C D. All right.
Well, item C first. Consideration of a motion to authorize chairs to approve special expenses incurred by the committee. Do I have a motion? I get a motion. Second. Any discussion on that motion. All in favor? Any opposed? Motion carries. All right. Now item D. Jody, if you would come and you are recognized. State your name for the record and you are recognized to present.
Police and Fire Pension report
Jody Carrero Good afternoon. I’m Jody Carrero, and today I am here as the actuary for the Pension Review Board. And what is the Pension Review Board, you may ask? Well, in the dark days of the previous century, fire and police pensions were provided by individual funds for each different city, pre-LOPFI. And then LOPFI came in in 1983. And then everyone who had been hired after that was LOPFI, and everyone before that was in one of these individual plans.
Well, those individual city plans are governed by another board, which is the Pension Review Board, that uses the same staff as LOPFI. It’s the same folks, but they are the folks that do that. So, what this is is, as asked for by the law, a review of what’s going on with those local plans. Well, if everybody had to be hired before 83, then since those plans had 20 year retirement, 20-and-out type retirement, everybody was eligible to retire back in 2003. And by now, except for one or two weird exceptions, everybody has retired from these plans, and these are all just retiree plans.
So that gets us to what’s in your packet. In your packet, there is an exhibit D. It is the report that we presented to the Pension Review Board back in May and– well, in June was their meeting. The report is dated May 26. And the first page of the cover letter there kind of shows you how that number of plans has went down. Our firm has worked for the Pension Review Board for over 30 years. I don’t know, I can’t count beyond that.
But there were about 200 plans that we valued when we started, and those have consolidated into LOPFI, or all the participants have passed away or some combination. But for the most part they’ve all consolidated into to LOPFI. And LOPFI pays the benefits for those remaining retirees. So now you can see the last four years here, 51, 41, 33, 31. There are 31 plans that are remaining that we valued at the end of last year. Since the end of last year, there have been two police plans and five firefighter plans.
So seven other plans have consolidated. It looks like about half of those, three or four of those were because they did not have enough participants to form a board as is required by the law. And part of them were ones that had decided it was just time to consolidate and let LOPFI pay the benefits instead of maintaining a local board.
So with seven more, that means at the end of this year they’ll have 24 plans that we will value at the end of this year. So you can see there’s still 485 participants. Each of those plans has its own assets and liabilities, and the unfunded liability from all that group is still several million dollars. $14 million dollars, 14.393 that you see there on the report.
But you can also see that they have improved funding the last several years because of some of the efforts that have been made, and mainly because several of them have started putting in more money so that hopefully they can either increase their benefit or join LOPFI or both. That is available. So the remainder of the cover letter just covers some of the some of the hot spots.
The other thing on page three of that report is the Pension Review Board and the work that we do, watches for those that might be a projected insolvent plan. If we, looking at the stream of money that’s coming in and the benefits that are going out, if it looks like it could use up all of its assets in a fairly short period of time, there’s some interventions that are there that we can talk to the cities and hopefully do that. There’s very few of these left.
Happy to report that in the last 15 years that we’ve had that ability to talk with these projected insolvent plans, that most all of them have improved their funding and or consolidated with LOPFI. In fact, two of the ones that are consolidating this year are ones that we’d worked with for many years to get them improved and now they’re to the point that they can consolidate and have their benefits guaranteed for the remainder of the lives of those participants.
The only other thing I want to show you, and there’s several pretty graphs in there. I know they’re pretty because I generated them– just seeing if anybody was awake. But at the very end of the report is a listing of the cities that still have a local plan. And it’s the last two pages of the report and there are different metrics which are described on the page before, that we use to kind of let them know where they’re at and how they’re doing. And we show those on this page.
So if you think your area has one of these local plans that are still there, they would be listed on these two pages. And you can kind of see based on the little color blips, the one, two, three, four, five, what kind of shape they are in, so to speak, from an actuarial standpoint. And that’s all I have for you unless you have some questions.
Senator Jim Dotson Members, you’ve heard the report. Are there any questions? Representative Andrews.
Representative Wade Andrews Thank you, Mr Chair. So Mr. Jody, basically what you’re saying is if some of these plans that are going to be insolvent and the cities don’t pay into them or fix it, these retirees are just out of luck, basically, right?
Jody Carrero I wish it was that simple. Yes and no.
Representative Wade Andrews Or is there some legal– is there some obligations to pay them even if the plan goes insolvent?
Jody Carrero It’s not been a tested theory legally, but we think it’s kind of our opinion that the city does have an obligation, that they have promised those benefits and they have in writing done that. So the city has an obligation. There is something in law that benefits can be proportionally reduced if the plan completely runs out of money. But that has only been tested once and only lasted for a couple of months and all of that was straightened out and everybody was–
Representative Wade Andrews So is this entirely the responsibility of the local governments? Or are they going to come to the legislature and say, we need money?
Jody Carrero I would not be surprised if somebody got close to being broke that they didn’t come to the legislature and say it was your fault and can you help us pay for it. But, yeah, these are the cities’ responsibility.
Representative Wade Andrews Gotcha.
Jody Carrero And that’s why we asked for and got some of the changes I mentioned about dealing with them on a projected basis so that it’s several years away and there’s time to correct, get some more income in usually, or do some other things to try to help the plans.
Representative Wade Andrews I was looking here on page three, it says Dumas, Earle, Glenwood and Nashville are going to be depleted in 10 to 20 years. Do those cities have a plan in place or what to do? Or do they have an estimation of they think they’re going to have retirees roll off the plan in that time period?
Jody Carrero Well, I mean, that was part of what went into the projection was the ages and the people that are drawing a benefit.
Representative Wade Andrews Right, okay, because I just did rough math in my head of you said 1983 was the cutoff year, right? So 20 years later, ’03, those people would have been about 41 if they started at 21 years old. So you got like 37 more years potentially of these plans, if I can do math right.
Jody Carrero So, yeah, in rough terms, yeah. Most of the board members and the people from the locations are in their 70’s that are talking to us. So that’s the main, they’re the ones that are involved.
Representative Wade Andrews Bible says you live to 120.
Jody Carrero Wel’ll see.
Representative Wade Andrews So maybe do some more math on that? What? Three score and ten, okay. My friendly Baptist is helping me over here. Thank you, Mr. Chair.
Senator Jim Dotson Any other questions? Seeing none, thank you, sir. Appreciate your presentation. There’s no action necessary on that. So that will take us to item E, APERS. If Ms. Fetcher, if you will introduce yourself for the record and anyone who is joining you, and then you are recognized to present E1.
APERS rule changes
Amy Fetcher Amy Fetcher with APERS. We have two rules, one new rule and one that we’re repealing. In your packet on the first one, this is a rule in response to Act 370 of 2025, which allowed district judges to be appointed as special judges immediately upon retirement. And so we had to make some changes so their benefits would not be suspended because there’s the normal 180 days, six months of separation normally. So that’s what that one’s about.
Senator Jim Dotson Any questions, members? So these are review items. So without objection, we’ll consider E1 reviewed. Okay. E2.
Amy Fetcher The other one is for the judicial retirement system. And this is just repealing a rule that had some obsolete language in it that set specific times for the board to meet, which, they do meet quarterly like the law says, but they can move those meetings around. So it’s just obsolete language that we’re repealing.
Senator Jim Dotson Are there any questions by members? Without objection, we’ll consider that one reviewed.
Amy Fetcher Thank you.
Senator Jim Dotson Thank you for your– Representative Walker?
Representative Steven Walker Thank you, Mr Chair. While Miss Fetcher’s at the table, can I ask a quick question?
Senator Jim Dotson Is this in relation to the review item that we just considered?
Representative Steven Walker It’s not. That’s why I tried to buzz in after.
Senator Jim Dotson Okay. So that one’s reviewed. We’ve done that. Try to keep it pretty relevant to the purpose we’re here for, which is retirement rules.
COLA questions
Representative Steven Walker Yes. It’s just about the COLA increase that was just recently changed. I just need some help understanding why we did it and how it works. I know before– I think it was just a few years ago before that we’ve done it forever to where it was a 3 percent compounding COLA increase. And then here recently we changed it to where it was the lesser.
You’ll just have to explain that to me a little bit more to help me understand it. I’ve had some constituents ask me about it here recently. And seeing you at the table made me think of it. But I’m assuming it’s because the old way wasn’t sustainable so we had to change things up.
And then I’m wondering, I’m trying to consolidate all this into one question. And the other part that I’d like to know is why was it better to go this way than how we’re doing it in the Arkansas teacher retirement to where it’s a simple 3 percent COLA increase.
Amy Fetcher Okay. So that was in the 2021 session. And I was not at April’s at the time, but I’ll tell you what I’ve been told, that that was based on actual assumptions and projections. And that, yes, it’s not sustainable where we are. And so I believe, and Jody may have to help me, the anyone that– was the date July 1 of 2022–
Jody Carrero I forget exactly, but yeah, I think that’s it.
Amy Fetcher So everyone before that date was grandfathered in. So they had to start employment with the state on July 1 of 2022 or after. And then, to this point, we’ve had no one retire under the new law. But yes, it is not just a flat 3 percent anymore. It’s the lesser of the 3 percent or the CPIW.
Representative Steven Walker And that’s the part I– how does that work? The CPIW part.
Amy Fetcher I’m going to ask Jody to help us on that.
Representative Steven Walker That’s where my confusion’s at. I know it’s a lesser of the two and I wasn’t sure how that part worked.
Amy Fetcher I do believe, just to give you a little context, I know that the former director of APERS and some of the staff went around the state and did town halls. And the reason they chose that option to ask for in legislation is because they heard resoundingly that people didn’t want their benefits cut. They would rather have things like that, and also on the employees pay, a higher employee contribution, than have benefits cut.
Senator Jim Dotson Jody, if you would state your name for the record.
Jody Carrero Jody Carrero. And now I’m the actuary for the retirement committee. The CPIW is one of two or three CPIs that the Department of Labor produces every month. And you can look it up online. It’s out there. It’s available. It is the one that most plans around the country that use that feel is closest to a retiree cost of living.
So it’s just when somebody says what inflation is, that’s one of the numbers that they might use to say what that is. And so whatever that rate is for the 12 months, that’s what’s applied for that, unless it’s over 3 percent. And then it stops at 3 percent. One other little quick thing is that COLAs haven’t been 3 percent forever.
The 3 percent didn’t go in until 99, 2001, one of those two sessions. And it was 3 percent all those years. So majority of the people in APERS now, that’s what they’re covered. And everybody before that was grandfathered up to the 3 percent. So the COLAs have changed over the years.
Representative Steven Walker Okay. Do you know when this was changed by any chance, why we went this route instead of the way the Arkansas teacher retirement where it’s a 3 percent or a simple 3 percent COLA?
Jody Carrero I think the consensus was when they asked around was they preferred it to still be tied to something that was a COLA as opposed to because the teacher COLA kind of diminishes over time. It gets less than 3 percent as time goes on since it’s a simple. And so I think the membership liked that better.
Representative Steven Walker And I agree. That’s why I’m asking these questions. I was just curious on how you guys went that route instead of the way Arkansas teacher retirement. I don’t really like how that’s done with Arkansas teacher retirement because of, like you said, it diminishes it.
If you’ve been retired for 20, 30 years, that 3 percent is now originally, what, 1.6 percent or less, depending on how bonuses were distributed. But anyway, you guys answered my question. I appreciate it and I appreciate the work you do, Ms. Fetcher. But thank you. Thank you, Mr. Chair.
Teacher Retirement rule changes
Senator Jim Dotson Thank you, Representative. All right. Thank you, Ms. Fetcher. And that completes item E. Item F ATRS. Mr. White, if you would state your name for the record, and you are recognized. We’ll just take these one at a time. Members, if you’re looking, basically F1 there is the full list of 187 pages of the rule. But then you get down to item F2, and that’s within that 187 pages. So I don’t know how you’re wanting to present those, but F2 starts on page nine. And so if you just want to take these one at a time. And I’ll stop explaining your presentation.
Mark White Go ahead. Thank you, Mr. Chairman. Mark White, Arkansas Teacher Retirement System. And yes, Mr. Chairman, I’m happy to do whatever is best for the committee. But I’ll start just walking through these individually.
Senator Jim Dotson Yeah, if we can just take them one at a time. And I’ve written down the page numbers if you don’t happen to have them so people can scroll to it real quick.
Mark White Okay. And I do have the page numbers, so I’ll try and mention those as well. All right. So thank you, Mr. Chairman. Committee members, these rules changes, we do have quite a few. You have the full rules so that you see the context of those changes. All of the changes I’m going to outline today are either implementing acts from the session or making technical corrections and changes.
And so I’ll walk through and explain these individually. The first one, page nine of that of the full rule, section 10-207. Act 938 eliminated the requirement that we have a board member who is a minority. The act changed that, so it’s simply an at-large position. And so we’re changing the language of the rule to match the act.
Senator Jim Dotson Any questions on that one? Without objection, we’ll consider that one reviewed. If you’ll go on to the next.
Mark White Thank you, Mr. Chairman. Next one is on page 19. This is a change to Section 10-302 regarding confidentiality. We’re concerned because if you read our existing confidentiality language too literally, it prevents some things that just come up in the course of administering the system.
Classic example is when a member passes away and we reach out to the beneficiary, we need to be able to discuss specifics of that member’s situation with that beneficiary. And we may not have a signed authorization. So it will make clear in situations like that that we can disclose information in that case.
Senator Jim Dotson Do we have any questions on F3? Seeing none, without objection, that rule is reviewed. F4.
Mark White All right, this is section 10-329 starting on page 40. And this is from Act 587. This is the Act that allows certain child care employees in child care facilities to become members of the retirement system. And this is limited to child care facilities that accept state vouchers for child care. And so in the rule we’ve outlined the process of how that will work, how they’ll become approved as employers, excuse me.
We’ve tried to parallel as much as we can our other situations where we approve non-school employers. The one big difference is that the act and this rule allows us to appoint one fiscal agent who can represent all of those different providers.
They’ll be responsible for making that initial approval decision to approve that new employer, and then they’ll be collecting the contributions and remitting those to us. And that just simplifies things for us administratively, so we’re dealing with that one fiscal pass-through agent. But as far as qualifications, it doesn’t add anything to what’s in the act.
Senator Jim Dotson At the risk of opening a can of worms here, the child care vouchers that we’re referring to, are those ABC vouchers? Or do they also apply to the ones that were federally funded that are being pulled back on? How does that work?
Mark White It applies to any childcare funding that is flowing through the State Department of Education.
Senator Jim Dotson So if we’re receiving the dollars from the fed for a grant purpose, whatever it is, those education facilities still potentially qualify to participate in the APERS program under this. However, obviously once those federal funds, if they’re not available or the grant is no longer renewed and that goes away, that program ends, then they’re going to have to find alternative sources of funds. But they still remain in the ATRS system.
Mark White Yes, sir. As long as they have that agreement with the department, even if the funds aren’t there, as long as they maintain that agreement with the department, they can continue to be eligible.
Senator Jim Dotson Representative Andrews.
Representative Wade Andrews Thank you, Mr. Chair. What’s the fiscal impact to this rule change?
Mark White It should be neutral, because the act provides that these individuals will come in on the same terms as everyone else. They’ll pay the same contribution rates and everything else. So we don’t expect it to have any change. Well, let me say, if anything, the change will be positive because we will have more members making more contributions, but no expense.
Representative Wade Andrews Okay, makes sense. Thank you.
Senator Jim Dotson Any other questions of the committee? Seeing none, without objection, F4 will be reviewed. Moving on to F5.
Mark White All right, so the next one, the section starts on page 58. The actual change is on page 59. This is section 10-501. This is implementing Act 227. This act may change to what used to be known as Gap Year Service. This is where a classroom teacher, they leave the district for a year and then later come back.
This allows them to buy that service back and add that to their credit with us. The issue we saw was under the old legislation, you had to miss at least a year. And so if you had, for example, a teacher who was on maternity leave for a semester, they could not buy that back. So Act 227 revised that so we can issue credit as little as a quarter to a member who’s willing to purchase that back. And so this just implements the act.
Senator Jim Dotson Any questions? Seeing none, without objection, that rule is reviewed. And F6.
Mark White And this starts on page 72, section 10-512, and this is the second piece of that same act. It does the same thing.
Senator Jim Dotson Any questions? Seeing none, without objection, that rule is reviewed.
Mark White And the next one starts on page 74, section 10-513. And all we’re doing is correcting the misspelling in the title.
Senator Jim Dotson Any questions? Seeing no questions, without objection, F7 is reviewed. Takes us to F8.
Mark White F8 begins on page, the section begins on page 100. The actual change is on page 103. And this is implementing two acts. This first change on page 103, that is implementing Act 222, and that just clarifies language around the deadline for a member to cancel an annuity option.
Annuity option is where when they retire, they decide they want to receive a slightly smaller annuity so that a spouse or a dependent child can continue to receive benefits after their death. And then if I may explain the other half of this same section, and that is on page 106.
This is implementing Act 363, and that allows us when benefits are owed to a beneficiary, this allows us to make those payments to a special needs trust that has been set up for that beneficiary to protect their Medicaid eligibility.
Senator Jim Dotson Any questions on this one? Seeing none, without objection, F8 is reviewed. F9.
Mark White All right, the next one starts on page 108. The actual change is on 109. This is section 10-616. And this is just, there’s four words that were in there as a subsection heading. And at some point in all this transition around rules, it got pulled into the language of the rules. So we’re just eliminating what was a heading.
Senator Jim Dotson Any questions on F9? Without objection, that rule is reviewed. F10.
Mark White Next one starts on page 120. This is section 10-710. And this implements Act 226. And what this does is this clarifies when a member may cancel their T-DROP distribution election. So when they’re in the T-DROP program, they accumulate retirement earnings while they continue to work.
And then once they finally stop working, they have the option of either rolling that over to another qualified retirement account, they can take a lump sum distribution, they can leave it with us in a cash balance account, or they can use it to increase their monthly payment. And so this just allows them to make a change within a certain period of time after they make that initial election.
Senator Jim Dotson Any questions? Seeing none, without objection, that rule is reviewed. F11.
Mark White All right. And then this is on page 121, section 10-712. The change is actually on 122. We’re just correcting a typo. It should say cash balance account and it says cash account balance. So we’re correcting that.
Senator Jim Dotson Any questions? Without objection, F11 is reviewed. F12.
Mark White The next one starts on page 127. This is section 10-804. And there’s changes in two places on this one. The first change on page 127, this is implementing Act 224. If you are a retired member and you marry, there’s a waiting period before your spouse can become eligible for survivor benefits.
You have to be married, current law was, at least two years. This bill changes that to one year, so we’re reflecting that in the rule there on page 127. And then on page 128, we’re just making explicit that before a surviving spouse can receive benefits, they have to provide us all the documentation that we ask for. And the two key things are bank information and tax forms. We have to have those before we can make payments.
Senator Jim Dotson Any additional documentation required by the system is the way it– that’s kind of broad. Is there any other– those are specifically bank statements and tax records?
Mark White For most members that’s going to be their bank account information of where the deposit should be made, and then also their tax forms. They may need to provide us their tax ID number. They may need to send us a W9 form. But we also leave it open because there are situations where there may be some possible suggestion of fraud, and so we may want to ask for some additional documentation around that.
Senator Jim Dotson So should there be a list of what some of those other documentations are? So I wouldn’t say that you would do this, but 10 years from now, I don’t know who’s going to be sitting in that chair making this determination of what those documents might be. But it could be punitive to where, hey, we don’t want this survivor to get these benefits, so we’re going to make it impossible with this new documentation.
Mark White I had that thought as well. And we talked through that. The concern though is that when you’re talking about, in cases where you may have a suspicion of fraud, that’s a very open ended list of things you might want to ask for if you’re trying to determine if there is something abusive or something else going on in that situation. And so we thought, because of that uncertainty, we thought it better to leave it open ended.
Senator Jim Dotson Okay. Any other questions? Seeing none. Representative Burkes.
Representative Nick Burkes Thank you. I actually think you’re off by one exhibit. This is exhibit 11.
Senator Jim Dotson Staff is going to speak to that.
Staff You’re correct. He has been going in the proper order of what we’ve been talking about on the agenda. It has the numerals. We are on twelve. It is exhibit eleven. But for the sake of the agenda we are in the right order.
Representative Nick Burkes Okay, thank you.
Senator Jim Dotson Okay. All right. Any other questions on this particular item? Without objection, this rule is reviewed. Item F13, survivors dependent children.
Mark White This starts on page 131. The actual changes start on 132, section 10-807. This is implementing Act 225, and what that does is it allows qualifying child survivors to receive benefits through age 22. The old law was they had to meet certain specific requirements about being in school, and that was repealed by the legislation. So we’re making the changes here. And then as you’ll see in these next couple of rules, they’re making other changes to implement that act as well.
Senator Jim Dotson Right. Any questions on this rule? Without objection, that one will be reviewed. Item F14-10-808
Mark White And so this is, again, page 132. We’re repealing the language that was repealed by the Act.
Senator Jim Dotson Any questions? Without objection, that rule is reviewed. Item F15-10-809.
Mark White And this is on the following page on 133. Again, repealing language that is no longer needed because of Act 225.
Senator Jim Dotson Any questions? Seeing none, without objection, that rule is reviewed. Item F16-10-811.
Mark White All right. And this begins on page 134, 10-811. This also relates to Act 225. This is the other part of that act, which is it allows children of disability retirees to receive children survivor benefits if the member passes away. And so we are making that explicit in the rule.
Senator Jim Dotson Any questions? Seeing none, without objection, that rule is reviewed. Item F17, 10-826.
Mark White And this one starts, the section starts on page 145. The changes are on the following page on 146. This relates to qualified domestic relations orders or as we call them quads. These are when you have a member who is married and they divorce. Very often the court will enter an order dividing assets between those two individuals.
And so in some cases, we have a member who has an ex-spouse. We will have to pay a portion of that member’s benefits to the ex-spouse based on the court order. This language here, we’re just making explicit that we do not incur any obligation to pay out until we’ve actually received a court order that meets the requirements. We shall make sure that there’s no indication where we’ve already paid out to the member and someone wants to go retroactive even though we did not have the court order.
Senator Jim Dotson Any questions on this rule? Without objection, that rule is considered reviewed. And then F18 is just a summary, so I think you may be done. Representative McCullough, you are recognized for a question.
Representative Tippi McCullough Thank you, Mr Chair. Is it okay if I go– I just wanted to ask a couple of questions about a rule that was up above, kind of got away from me. Is that okay?
Senator Jim Dotson Yeah.
Representative Tippi McCullough Thank you. So I want to go back up to, I believe it’s exhibit F1 but F2 maybe on the agenda. So can you remind me, was that part of the eradication of all language kind of in relation to DEI?
Mark White There was a bill, I think it was run by Representative Brown. It eliminated minority board positions in about 20 different boards, including ours.
Representative Tippi McCullough Okay, thank you. And if I can follow up just on that, do you know how long this rule had been in place for that minority position before it was– do you know when it was first put on?
Mark White I am not certain about that. It was in statute. But I don’t know offhand when that statute was originally passed.
Representative Tippi McCullough Is there any way to find that out?
Mark White I can find that out for you.
Representative Tippi McCullough Great. Thank you. Thank you, Mr Chair.
Senator Jim Dotson Welcome. All right. Any other questions before I let the witness go? Seeing none, thank you, Mr. White. And seeing no other business, we are adjourned.
