Fayetteville pension trustees authorize exploration of consolidation with LOPFI, approve actuarial fee

The Fayetteville Police Pension and Relief Fund Board of Trustees on April 17 voted unanimously to authorize the mayor and city clerk to begin fact-finding on consolidating the city’s police pension plan with the Arkansas Local Police and Fire Retirement System, commonly referred to in the meeting as LOPFI. The board also approved using plan assets to pay the special actuarial valuation fee needed to begin the consolidation process.

Eldon Roberts, trustee, moved that the board “grant the mayor and the city clerk authority to start exploring the possibility of consolidating the old federal police retirement plan with the Arkansas State Police Fire Retirement System known as LOPFI with a 3% compounded cost of living adjustment annually for all participants.” The motion was seconded and, after discussion, carried on a roll-call vote: John Brown — yes; Reston Cole — yes; Rick Hoyt — yes; Mayor Molly Ron — yes; Eldon Roberts — yes; Melvin Stanley — yes; Kara Paxton — yes.

Roberts told the board he had spent months gathering information from LOPFI and other sources and argued consolidation could increase investment returns available to plan participants and free administrative time for city staff. “Achieving improved investment returns helps protect the benefits of all local plan participants,” he read from the LOPFI letter provided to trustees.

Trustees debated several implementation questions before voting. City Clerk Kara Paxton said the board’s initial vote would authorize staff to request the special actuarial valuation LOPFI requires; the actuarial report will show two employer contribution rates: one implementing a 3% COLA and one without a COLA. Paxton and staff said there should be no interruption in pension checks during consolidation and that the primary operational change would likely be the payment date (checks could be paid on the first of the month instead of the 15th). Trustees also discussed that local records and plan identity remain distinct after consolidation — the local plan continues to be administered under its name inside LOPFI’s larger fund.

Roberts noted the plan’s relative strength compared with other legacy local plans and said many legacy plans have already chosen to consolidate; he cited LOPFI materials that show there were roughly $3.563 billion in LOPFI assets (handout) and that the system’s five-year average administrative charge is about 0.94%. Trustees also discussed that mandatory consolidation is triggered by low active-member counts and that waiting until a plan falls below the statute’s threshold could make a benefit increase impossible for current retirees.

The board then approved a second motion authorizing the mayor and city clerk/treasurer to use needed funds from the plan’s assets to pay the special actuarial valuation and associated fees (the LOPFI packet referenced an $850 charge for the special valuation). That motion also passed on a unanimous roll call (John Brown — yes; Reston Cole — yes; Rick Hoyt — yes; Mayor Molly Ron — yes; Eldon Roberts — yes; Melvin Stanley — yes; Kara Paxton — yes).

City staff and trustees said the special actuarial evaluation typically takes a minimum of four weeks; because the window to consolidate with LOPFI this calendar year closes early in September, trustees agreed to call a special meeting to review the actuarial report and vote again if they wish to proceed. No final decision to consolidate was made at this meeting; the votes authorize fact-finding and payment for the valuation only.