LINDA BOLDING v. ARKANSAS PUBLIC EMPLOYEES RETIREMENT SYSTEM ARKANSAS PUBLIC EMPLOYEES RETIREMENT SYSTEM BOARD CANDACE FRANKS, IN HER OFFICIAL AND INDIVIDUAL CAPACITY LARRY WALTHER, IN HIS OFFICIAL AND INDIVIDUAL CAPACITY DAVID HUDSON, IN HIS OFFICIAL AND INDIVIDUAL CAPACITY STEVE FARIS, IN HIS OFFICIAL AND INDIVIDUAL CAPACITY DARYL BASSETT, IN HIS OFFICIAL AND INDIVIDUAL CAPACiTY GARY CARNAHAN, IN HIS OFFICIAL AND INDIVIDUAL CAPACITY JOE HURST, IN HIS OFFICIAL AND INDIVIDUAL CAPACITY ANDREA LEA, IN HER OFFICIAL AND INDIVIDUAL CAPACITY DENNIS MILLIGAN, IN HIS OFFICIAL AND INDIVIDUAL CAPACITY AND DUNCAN BAIRD, IN HIS OFFICIAL AND INDIVIDUAL CAPACITY, 2022 Ark. App. 275

Background

Linda Bolding retired from the Dermott Municipal Clerk Retirement Fund effective January 1, 1991 and received a fixed monthly benefit thereafter.
On January 1, 2005 APERS assumed administration of Dermott’s municipal-clerk retirement benefits when municipal plans were transferred to APERS under Ark. Code Ann. § 24-8-903(a).
Bolding’s local Dermott plan never paid a COLA for its retirees, and Bolding never received a COLA from that plan; her monthly benefit remained unchanged since 1991.
APERS treated Bolding as an existing retiree whose benefits it merely administered; she did not accrue APERS service credit or vest under APERS after 2004.
In December 2018 Bolding (through her husband) applied for a 3% annual COLA based on APERS’s website and § 24-8-903; APERS’s acting director denied the claim and the APERS Board unanimously upheld the denial.
The Pulaski County Circuit Court affirmed the Board’s decision; Bolding appealed to the Arkansas Court of Appeals, which affirmed.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Bolding is entitled to APERS 3% annual COLA as an APERS member under § 24-8-903 and APERS materials	Bolding: § 24-8-903 made her a member of APERS on Jan. 1, 2005 and APERS’s website promises a 3% COLA to retirees, so she is entitled to COLA	APERS: Bolding was brought in as an existing retiree whose benefits were simply administered; she never vested or earned APERS service credit and Dermott never paid for a COLA	Court held: Not entitled. Substantial evidence shows Dermott’s plan had no COLA and Bolding never vested in APERS, so § 24-8-903 does not grant her a COLA.
Whether the Board’s denial lacked substantial evidence or was arbitrary/capricious	Bolding: Board relied improperly on vesting and produced no evidence that Dermott’s plan lacked a COLA	APERS: Testimony and records (director’s testimony, city clerk statement, unchanged benefit amount, transfer terms) support Board findings	Court held: Substantial evidence supports the Board. Decision was not arbitrary or unreasonable.
Whether § 24-8-903 must be read with APERS vesting provisions so that mere transfer equals COLA entitlement	Bolding: Statute and APERS website do not mention vesting and thus confer membership and benefit rights	APERS: Statute must be read with vesting rules; a "retiree" under APERS is a vested member and entitlement requires meeting vesting/payment conditions	Court held: Statutes construed together; entitlement to APERS benefits (including COLA) requires vesting/payment; Bolding did not meet that standard.

Key Cases Cited

Smith v. Ark. Dep’t of Human Servs., 559 S.W.3d 291 (2018) (review of agency decision is limited and directed to agency record)
Ark. Dep’t of Human Servs. v. A.B., 286 S.W.3d 712 (2008) (definition and standard for substantial evidence)
Myers v. Yamato Kogyo Co., Ltd., 597 S.W.3d 613 (2020) (statutory interpretation by courts is reviewed de novo; agency interpretation is a persuasive tool when statute ambiguous)
Holloway v. Ark. State Bd. of Architects, 101 S.W.3d 805 (2003) (agencies have expertise and courts give deference to factual determinations)
Williams v. Scott, 647 S.W.2d 115 (1983) (applicant bears burden to prove entitlement to benefits)