By Jeremy Peppas
Stephens Media

LITTLE ROCK — The executive director of the Arkansas Municipal League sees potential for a crisis with the pension fund that pays benefits to retired police officers and firefighters, an opinion the fund’s director does not share.

Speaking Thursday at the Municipal League’s winter conference, Executive Director Don Zimmerman termed local government support for the pension fund “almost unsustainable.”

“The only way to control it is to hold salaries down,” Zimmerman told about 1,000 city officials from around the state attending the conference. “You have to pay so much when they retire.”

Under the Arkansas Local Police and Fire Retirement System, known as LOPFI, a police officer who works more than 34 years can retire at 55 with benefits totaling 100 percent of his or her salary for life.

The state’s 1,905 retired police officers received an average of $37,631 in retirement and 90 retired firefighters averaged $42,160 in benefits in 2009, according to pension officials.

“We are in a real pickle,” Zimmerman said, calling the Arkansas plan “one of the most lucrative in the country. “We need a fix.”

The organization has not proposed a solution in its agenda for the legislative session that began this week.
LOPFI director David Clark said the pension fund is on solid financial footing.

“I don’t know if Don was talking for the league or himself,” Clark said.

In 2009, the most recent year for which financial statements were available, the pension fund had nearly $889 million in assets with a liability of $71 million.

The system had $84 million paid in with another $123 million in investment income the year. Benefits paid out for the same time period were $30.6 million.

“We are in really good financial shape,” Clark said Thursday. “2009 was better than 2008 and 2010 is looking like it will be better than 2009.”

Clark said the state pension fund does not have the problems faced by other funds around the country.
For example, he said, the program does not allow employees to take “contribution holidays” from paying into the system as some state plans allow.

Paying in 2.5 percent of their salaries, active police and firefighters contributed $29.9 million to the pension fund in 2009 while municipalities, which match member contributions at a 2.9 percent rate, paid in $54.4 million.