As used in this subpart:

1. (1)

   1. (A) “Actuarial cost for local plans” means the basis for the allocation of premium tax as provided in Arkansas Code § 24-11-214(b)(2).
   2. (B) The actuarial cost for local plans is calculated using the base benefits of the local plan.
   3. (C) The assumptions used in determining this actuarial cost are not necessarily the assumptions used in the actuarial valuations of the local plans.
   4. (D) The actuarial assumptions and methods will be recommended by the actuary assigned to complete the premium tax allocation and approved by the Arkansas Fire and Police Pension Review Board;

2. (2)

   1. (A) “Additional allocation” is described in Arkansas Code § 24-11-217.
   2. (B) Beginning in 2012, the additional allocation will be calculated and allocated to certain qualified underfunded plans as provided in 24 CAR § 20-1210;

3. (3) “Base benefits” means, for local plans, the minimum benefits defined in the pertinent law:

   1. (A)

      1. (i) For paid service benefits, fifty percent (50%) of final salary plus an additional twenty dollars ($20.00) per month for years of service twenty-one (21) through twenty-five (25) (with a maximum of an additional one hundred dollars ($100)), plus one and one-quarter percent (1.25%) of final salary for years of service over twenty-five (25) at age sixty (60).
      2. (ii) For volunteer benefits, one hundred dollars ($100) per month plus ten dollars ($10.00) per month additional for years of service twenty-one (21) through twenty-five (25) (with a maximum of an additional fifty dollars ($50.00));

   2. (B)

      1. (i) For nonduty disability benefits, computed the same as a normal service retirement.
      2. (ii) Duty disability benefits are computed at sixty-five percent (65%) of final salary; and

   3. (C)

      1. (i) For death benefits, the surviving spouse paid same amount the member received at the time of his or her death, excluding the age sixty (60) bonus of one and one-quarter percent (1.25%).
      2. (ii) For volunteer fire plans, each eligible child paid twenty-five dollars ($25.00) per month.
      3. (iii) For paid fire plans, each eligible child paid one hundred twenty-five dollars ($125) per month.
      4. (iv) For police plans, eligible children paid an aggregate three hundred fifty dollars ($350) per month;

4. (4)

   1. (A) “Certified location” means a qualified location that will have its area established by the legal description of its metes and bounds.
   2. (B) The legal description does not include areas covered by mutual aid agreements.
   3. (C) This will be completed by the Census State Data Center at the University of Arkansas at Little Rock.
   4. (D) The mayor or qualified representative (police locations) must certify the accuracy of the legal description information.
   5. (E) The fire coordinator of the city, town, or fire protection district will make the certification for fire locations.
   6. (F) The population information for each fire and police location must be certified by the Census State Data Center.
   7. (G) After the Executive Director of the Arkansas Fire and Police Pension Review Board receives both of these certifications, a qualified location becomes a certified location;

5. (5)

   1. (A) “Eligible location (in compliance)” means a certified location that is in compliance with the laws governing local plans and the rules promulgated by the Arkansas Fire and Police Pension Review Board which will be eligible to receive an allocation.
   2. (B) An eligible location is a certified location that is not a noncomplying location.
   3. (C) A location that sponsors Arkansas Local Police and Fire Retirement System coverage is considered eligible if it is not delinquent according to Arkansas Local Police and Fire Retirement System rules;
6. (6) “Fire Allocation Fund” means the portion of the Firemen’s and Police Officers’ Pension and Relief Fund attributable to the percentages of the lines of insurance assigned to firefighter funds;

7. (7)

   1. (A) “Firemen’s and Police Officers’ Pension and Relief Fund” is defined in Arkansas Code §§ 24-11-301 and 24-11-809.
   2. (B) This is the combination of the percentages of the assigned lines of insurance premium tax for both fire and police;
8. (8) “General Revenue Allocation Fund” means the portion of the Police Allocation Fund and the Fire Allocation Fund that will not be distributed to locations and will be returned to general revenues;

9. (9) “Insurance tax revenues”.

   1. (A) Arkansas Code §§ 24-11-203(k) and 24-11-214(k) allows up to one percent (1%) to be taken from insurance tax revenues for Arkansas Fire and Police Pension Review Board administration and an additional one percent (1%) of insurance tax revenues for premium tax allocation expenses.
   2. (B) The insurance tax revenues will be defined as the Firemen’s and Police Officers’ Pension and Relief Fund;
10. (10) “Local plan” means a plan authorized under Arkansas Code § 24-11-401 et seq., or Arkansas Code § 24-11-801 et seq., whether locally administered or consolidated with the Arkansas Local Police and Fire Retirement System;

11. (11)

    1. (A) “Noncomplying location” means a certified location that is not complying with the laws governing local plans and rules promulgated by the Arkansas Fire and Police Pension Review Board or the Arkansas Local Police and Fire Retirement System and which will be certified by the Executive Director of the Arkansas Fire and Police Pension Review Board to be a noncomplying location.

    2. (B) The Arkansas Fire and Police Pension Review Board may find a location in noncompliance for any of the following reasons:

       1. (i)

          1. (a) (a) Failure to file a complete annual report of financial and participant information on the form provided by the Arkansas Fire and Police Pension Review Board by March 31 of each calendar year.
          2. (b) (b) This date may be extended by the Executive Director of the Arkansas Fire and Police Pension Review Board, but in no case will it be extended beyond May 15;
       2. (ii) An annual report that does not balance or does not properly track participant information will not be considered a complete report and must be corrected by the compliance date;

       3. (iii)

          1. (a) (a) Failure to pay benefits at the rate provided by law, or paying a benefit increase that has not been approved by the Arkansas Fire and Police Pension Review Board.
          2. (b) (b) This includes administration of DROP accounts not in compliance with 24 CAR § 20-1001 et seq.;
       4. (iv) Other failures to comply with Arkansas Code § 24-11-101 et seq., and the Arkansas Fire and Police Pension Review Board rules;
       5. (v) A location that sponsors Arkansas Local Police and Fire Retirement System coverage that is delinquent according to Arkansas Local Police and Fire Retirement System rules; and

       6. (vi)

          1. (a) (a) A location that does not provide the certifications needed to be a certified location will be treated as a noncomplying location.
          2. (b) (b) These certifications must be provided to the Executive Director of the Arkansas Fire and Police Pension Review Board by March 31 of each calendar year, unless extended by the Executive Director of the Arkansas Fire and Police Pension Review Board;
12. (12) “Police Allocation Fund” means the portion of the Firemen’s and Police Officers’ Pension and Relief Fund attributable to the percentages of the lines of insurance assigned to police funds;

13. (13) “Qualified location”.

    1. (A) A city, town, or fire protection district that sponsors a local fire or police pension plan or is a member of Arkansas Local Police and Fire Retirement System is qualified.
    2. (B) A location remains qualified as long as it continues its pension coverage.
    3. (C) The Executive Director of the Arkansas Fire and Police Pension Review Board will update the list of qualified locations by December 15 of each year; and

14. (14)

    1. (A) “Underfunded plans” means, as described in Arkansas Code § 24-11-217, any local plan whose assets are less than its liabilities.
    2. (B) The determination of the liabilities will be based on the same assumptions used to determine the actuarial cost for the plan.
    3. (C) The assets used for this determination will be the actuarial (funding) value of assets reported in the respective actuarial valuation.