(a) Under law, the financial objectives of the local plans shall be to establish and receive contributions which:
- (1) Will remain approximately level from year to year; and
- (2) Will not have to be increased for future generations of citizens.
(b) The law specifies that this objective is achieved when contributions received each year by a local plan are sufficient both:
- (1) To fully cover the costs of benefit commitments being made to employees for their service being rendered in such year; and
- (2) To make a level payment which, if paid annually over a reasonable period of future years, will fully cover the unfunded costs of benefit commitments for service previously rendered.
- (c) The financial objectives discussed above must be met in order for a local plan to be considered actuarially sound.
- (d) All computations of actuarial condition shall be based upon assumptions of future financial experiences and funding methods which are either established by or approved by the Arkansas Fire and Police Pension Review Board.
- (e) From the date of the adoption of this part, the tests described below shall be used to evaluate benefit increase requests from the local plans and to determine if pension recipients are eligible for benefits mandated by law for local plans which are actuarially sound.