(a) In lieu of terminating employment and accepting a service retirement pension pursuant to this subchapter, any full-paid firefighter who is a member of a firemen's relief and pension fund who has not less than twenty (20) years of credited service and who is eligible to receive a service retirement pension may elect to participate in the Arkansas Fire Fighters Deferred Retirement Option Plan and defer the receipt of benefits in accordance with the provisions of this section, provided the local board of trustees of the local firemen's relief and pension fund approves the participation in the plan.
(b) For purposes of this section, credited service shall include service credit recognized pursuant to this subchapter.
(c)
(1)
(A) Except under subdivision (c)(1)(B) of this section, the duration of participation in the plan for active full-paid firefighters shall not exceed five (5) years.
(B) The five-year limit may be extended if:
(i) The extension does not cause the limit to exceed ten (10) years;
(ii) The extension applies to all active full-paid firefighters and all members on the plan;
(iii) The extension is approved by a majority of votes of the board of trustees of the firemen's relief and pension fund or of the Board of Trustees of the Arkansas Local Police and Fire Retirement System for funds whose administrative responsibility has been assigned to the system as provided in § 24-11-406(b);
(iv) The interest credited after the first five (5) years on the plan shall be two (2) percentage points below the rate of return of the investment portfolio of the fund and shall not be determined under subdivision (e)(2) of this section, but the interest rate credited shall not be less than zero percent (0%);
(v) Seventy-five percent (75%) of the monthly retirement benefits that would have been payable had the member elected to cease employment and receive a service retirement shall be paid into the plan account, or one hundred percent (100%) of the monthly retirement benefits that would have been payable had the member elected to cease employment and receive a service retirement shall be paid into the plan account if approved by a majority vote of the governing board of the sponsoring municipality; and
(vi) The extension is approved by a majority vote of the governing body of the sponsoring municipality after receiving approval for an increase in benefits under § 24-11-102.
(2)
(A) Except under subdivision (c)(2)(B) of this section, at the conclusion of a member's participation in the plan, the member shall terminate employment with all participating municipalities as a firefighter and shall start receiving the member's accrued monthly retirement benefit from the firemen's relief and pension fund.
(B) If a member is at the conclusion of a member's participation in the plan, then the member may continue employment by a municipality under the following conditions:
(i) The municipality makes continued employment available to all similarly situated members;
(ii) The availability of continued employment is approved by a majority vote of the governing body of the sponsoring municipality after receiving approval for an increase in benefits under § 24-11-102;
(iii) The monthly benefit that is credited to the member's plan account is discontinued and the member shall not receive a monthly benefit until the member actually ceases employment;
(iv) The interest rate credited to the plan account is the same as paid under subdivision (e)(2) of this section, except that the minimum rate is zero percent (0%);
(v) The employer's matching contribution of six percent (6%) shall cease, but all other employer contributions shall continue and be credited to the firemen's relief and pension fund; and
(vi) The employee contributions of six percent (6%) shall discontinue.
(d)
(1) When a member begins participation in the plan, the contribution of the firefighter and the employer contribution shall continue to be paid.
(2)
(A) In a municipality having a population of over twenty thousand (20,000) persons, municipal matching contributions for employees who elect the plan shall be credited equally to the firemen's relief and pension fund and to the plan, or at the option of the local firemen's relief and pension fund board of trustees, credited in the manner provided in subdivision (d)(2)(B) of this section.
(B) In a municipality having a population of twenty thousand (20,000) persons or less, municipal matching contributions for employees who elect the plan shall be credited in full to the firemen's relief and pension fund, and the contribution of the employee shall be credited to the member's plan account.
(3) The monthly retirement benefits that would have been payable had the member elected to cease employment and receive a service retirement shall be paid into the plan account.
(e)
(1) The member's monthly retirement benefit shall not change, unless the plan receives a benefit increase.
(2)
(A) A member who participates in this plan shall earn interest at a rate of two (2) percentage points below the rate of return of the investment portfolio of the firemen's relief and pension fund as certified by the actuary under contract with the Arkansas Fire and Police Pension Review Board in accordance with generally accepted actuarial practices and § 24-11-207, but no less than the actuarial assumed interest rate as certified by the actuary.
(B) The interest shall be credited to the individual account balance of the member on an annual basis.
(f)
(1) A participant in the plan shall receive at the option of the participant a lump-sum payment from the account equal to the payments to the account or a true annuity based upon the account of the participant or may elect any other method of payment if approved by the board of trustees.
(2) If approved by a majority vote of the governing body of the sponsoring municipality and the board of trustees, a participant in the deferred retirement option plan may defer receiving payment of the participant's account and continue with the funds deposited in the plan.
(3)
(A) Interest credited to the continuing deposit of funds in the plan under subdivision (f)(2) of this section shall be calculated in the same manner as interest under subdivision (e)(2) of this section.
(B) However, the minimum interest rate shall not be less than zero percent (0%).
(4) The payment of funds accumulated while participating in the deferred retirement option plan may be deferred only one (1) time. These funds must be distributed or annuitized by December 31 of the year a member attains age seventy and one-half (70½).
(g) If the participant dies during the period of participation in the plan, a lump-sum payment equal to the account balance of the participant shall be paid.
(h) The Arkansas Fire and Police Pension Review Board may promulgate rules to make the plan under this section comply with the requirements of this section and with the applicable portions of the Internal Revenue Code, 26 U.S.C. § 1 et seq., as it existed on January 1, 2003.