Court Opinion

ID: 3258311
Source: CourtListenerOpinion
Date Created: 2016-07-05 16:30:59.468667+00
Date Added: 2024-06-11T12:47:32.446837
License: Public Domain

The Honorable Doyle Webb State Senator P.O. Box 1998 Benton, Arkansas 72018
Dear Senator Webb:
This opinion is being issued in response to your recent question regarding underfunded municipal fire department pension plans. You have presented the following specific question:
  If a municipal fire department pension plan established under authority of Act 491 of 1921 should run out of money to pay benefits, who is ultimately responsible for the shortage — the municipality or the state?
I have previously opined that state law does not create an obligation on the part of a municipality to make up a shortage in an underfunded municipal fire department pension plan, nor does state law contemplate that such a shortage will be made up. See Ops. Att'y Gen. Nos. 95-145 and 92-345. (The law requires that underfunded plans prorate the available funds among those entitled to payment under the plan. See A.C.A. §24-11-807.)
However, Act 1266 of 1995 provides a mechanism by which municipal fire department pension plans can apply for assistance to make up a shortage. The relevant portions of that act (which are codified at A.C.A. §§24-11-208 and -209) create the Arkansas Fire and Police Pension Guarantee Fund. Under the provisions of the act, local pension funds that were created under the authority of Act 491 of 1921 and that become underfunded can apply to the Arkansas Fire and Police Pension Guarantee Fund for financial assistance. The application must be approved by the Arkansas Fire and Police Pension Review Board. In addition, various other requirements that are set forth in the act must be met. See A.C.A. §24-11-209(b).
I therefore conclude that neither the municipality nor the state is obligated to make up the shortage in an underfunded fire department pension plan, but that the shortage can be alleviated by application to the Arkansas Fire and Police Pension Guarantee Fund, pursuant to Act 1266 of 1995.
The foregoing opinion, which I hereby approve, was prepared by Assistant Attorney General Suzanne Antley.
Sincerely,
WINSTON BRYANT Attorney General
WB:SBA/cyh