LR police pension-fund merger OK’d

The Little Rock Board of Directors voted Tuesday night to merge the old police pension fund with the state police and firefighter pension fund.

The board also voted to approve an annual dental plan through Delta Dental and a health insurance plan through QualChoice for city employees. The board voted unanimously to approve the measures without discussion Tuesday.

The merger with the state’s Local Police and Fire Retirement System comes after years of financial concern over the police retirement fund, which was closed to new enrollment in 1983. Police officers hired after that date were automatically enrolled in the state retirement fund.

With the lack of new income coming in and more officers on the plan retiring, the city’s old police retirement system was projected in 2010 to be insolvent within 10 years, according to a state actuarial review. The 2011 citywide sales-tax increase bolstered the fund with an annual $500,000 allocation, and the plan was removed from the insolvency list.

As of last month, the fund was liable for $112 million in projected benefits but only funded for about 38.8 percent of those liabilities. Even with the added money from the sales tax, City Manager Bruce Moore proposed merging the funds, saying the city would save $200,000 in administrative costs annually.

The vote Tuesday came after the pension board approved the move Oct. 3 and before the state’s Oct. 31 deadline to apply for the merger. The decision included a onetime $75 a month cost-of-living increase, which was negotiated because the city would not have to pay anything extra into the new system above what was being paid under the old plan.

The resolution also included a requirement to reconsider additional cost-of living increases every three years.

The dental plan approved Tuesday will increase city employee premiums between 4 percent and 16 percent depending on which plan employees choose, and will go into effect Jan. 1, 2014.

The health insurance plan will increase premiums an average of about 6.4 percent across the board with no decrease in benefits.