The Honorable Patrick H. Hays State Representative P.O. Box 5578 North Little Rock, Arkansas 72119
Dear Representative Hays:
This is in response to your request for an opinion regarding the calculation for the purchase of credited service by participants of the Policemen's Pension and Relief Fund under Act 811 of 1987. You have asked, specifically, whether the base figure in calculating the employee's contribution will always be the last month of the eighteenth year of service, or whether it is the last month the policeman was employed. You have also asked when the six percent (6%) rate of interest accrues.
Subsection (3) of Act 811 provides the formula for calculating the amount an officer would be required to pay upon attaining his or her eighteenth anniversary of participation in the Pension and Relief fund. For an actual calculation, one would determine the employer's contribution and the individual's contribution for the last month of the employee's eighteenth year of service multiplied by the number of months desired to be credited with interest accruing at a rate of six percent (6%) annually from the date of eligibility to the date of purchase. Act 811 of 1987 subsection (3). The language of the Act specifically states that the figure to be used is the combined contribution of the employer and employee for the last month of the individual's eighteenth year of service. Thus, in response to your first question, the base figure will include the last month of the employee's eighteenth year of service, not the last month of employment.
Your second question involving the accrual of six percent (6%) interest also extends to a determination of the "date of eligibility" and "date of purchase." While Act 811 does not specifically define these phrases, subsection (3) states that the interest accrues ". . . from the date of eligibility to purchase the service." (Emphasis added.) It is reasonable to conclude based upon the act as a whole that an officer is eligible to purchase the service after his eighteenth year of service. This conclusion is reinforced by the Act's title:
An Act to Amend Section 1 of Act 514 of 1981, [Ark. Stat. 19-1828], to Permit the Purchase of Credited Service for Military Service After Participating in the Policemen's Pension and Relief Fund For Eighteen Years; And For Other Purposes [Emphasis added.]
Finally, the "date of purchase" clearly refers to the date on which the officer actually elects to purchase the credited service.
The foregoing opinion, which I hereby approve, was prepared by Assistant Attorney General Elisabeth A. Walker.