Police pension board votes to explore consolidation with LOPFI, authorizes actuarial fee

The Fayetteville City Policeman Pension and Relief Fund Board of Trustees voted on April 17 to authorize the mayor and the city clerk to begin exploring consolidation of the city’s old police retirement plan with the Arkansas Local Police and Fire Retirement System (LOPFI) and separately approved using plan assets to pay the special actuarial valuation fee required by LOPFI.

Those votes are significant because consolidation with LOPFI would shift plan administration and investment management to the larger state system; trustees discussed potential benefits including higher expected investment returns, lower administrative costs and the possibility of a compounded 3% cost‑of‑living adjustment (COLA) for participants if actuarial requirements are met.

Trustee Eldon Roberts introduced the motion 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.” Roberts told the board he had researched the issue, spoken with LOPFI staff and reviewed a LOPFI letter that, he said, framed fiduciary responsibility as “achieving improved investment returns helps protect the benefits of all local plan participants, which make safeguarding assets the prime responsibility of each person serving on the local plan board of trustees.”

The board discussed steps required to proceed. City staff and LOPFI told trustees the next formal step is a special actuarial valuation LOPFI provides; that valuation returns two employer contribution rates — one assuming a 3% COLA and one without a COLA — to show the cost implications of consolidation. City staff told trustees the consolidation vote on April 17 grants authority to fact‑find and return with the actuarial numbers; a separate board or council decision would be required to finalize consolidation.

Trustees then approved a second motion authorizing the mayor and city clerk/treasurer to use needed funds from the plan’s assets to pay costs to pursue consolidation, specifically the special actuarial valuation fee LOPFI lists at about $850. City staff clarified the accounting department must approve check requests and that trustees will be given documentation for the cost; one trustee suggested limiting the authorization to an explicit maximum if the board preferred.

Votes at a glance

- Motion to approve minutes for Oct. 17 and Dec. 10, 2024 meetings: Passed by roll call (Yes: John Brown, Reston Cole, Rick Hoyt, Mayor Ron, Eldon Roberts, Melvin Stanley, Kara Paxton). (Outcome: approved)

- Motion to approve pension payment list for May–October 2025: Passed by roll call (Yes: John Brown, Reston Cole, Rick Hoyt, Eldon Roberts, Melvin Stanley, Kara Paxton; Mayor Ron abstained). (Outcome: approved)

- Motion to authorize exploration of consolidation with LOPFI including a 3% compounded COLA: Mover: Eldon Roberts; second: not specified on record. Passed by roll call (Yes: John Brown, Reston Cole, Rick Hoyt, Mayor Ron, Eldon Roberts, Melvin Stanley, Kara Paxton). (Outcome: approved; further formal consolidation vote required after actuarial valuation)

- Motion to authorize use of plan funds to pay actuarial valuation and related fees (approximately $850): Mover: Eldon Roberts; second: not specified on record. Passed by roll call (Yes: John Brown, Reston Cole, Rick Hoyt, Mayor Ron, Eldon Roberts, Melvin Stanley, Kara Paxton). (Outcome: approved)

The board’s discussion addressed why trustees considered consolidation now: trustees said most older local plans in Arkansas have consolidated with LOPFI since the system’s creation, that LOPFI’s scale (billions in assets) supports different investment returns and that consolidation becomes mandatory if a local plan’s active membership falls below the statutory minimum. Trustees emphasized that the actuarial valuation will show whether a 3% COLA is affordable and whether consolidation can be achieved “at no cost to the city.”

Several trustees and the city’s finance staff noted practical details that would not change for pensioners: checks would continue, there should be no pause in benefit payments during the transition, and the monthly payment date could change (for example, moving to the first of the month rather than the fifteenth). City finance staff said they will provide documentation for any payments requested from plan assets and will work with trustees to schedule a special meeting after the actuarial valuation is returned; LOPFI told the board the minimum processing time for the special valuation is about four weeks.

Ending: The board directed staff to request the special actuarial valuation from LOPFI, authorized payment of the valuation fee from plan assets, and scheduled staff to return with the actuarial results for a subsequent vote before any final consolidation decision.