Is a retired Arkansas mayor's pension calculated using the salary he earned as mayor, or the salary the current mayor earns when he starts collecting?

Plain-English summary

Representative Wayne Long asked which salary determines a qualified Arkansas mayor's retirement benefit: the former mayor's own salary at the end of the last term or the salary of the mayor in office when payments begin. He also asked whether a vested benefit could be reduced. The Attorney General answered that the former mayor's own last mayoral salary controls, regardless of when that person qualifies to receive payments. He treated the second question as moot because he concluded that the 2019 amendment clarified the law without changing its substance.

The source of the confusion was codification. Act 414 of 1987 promised an annual benefit of one-half the salary payable to “such mayor” at the time of “his retirement.” In the later Arkansas Code, “such” and “his” were removed, leaving “the salary payable to the mayor at the time of retirement.” That wording could point to the retiree or to a sitting successor. The AG said the original enacted language controls when codification introduces a substantive change, citing Ortho-McNeil-Janssen Pharms., Inc. v. State and A.C.A. § 1-2-303(d)(1). He read “such mayor” in Act 414 as the retiring mayor and said Act 948 of 2019 made that meaning clearer.

The opinion addresses which mayor's salary supplies the base. It assumes the person is eligible for benefits. Footnote 2 points out other provisions on service credits and cost-of-living increases and cites Opinion 2005-203 for the exclusion of vehicle expenses and fringe benefits from “salary.” It does not decide how to correct a past calculation or whether a correction would be prospective or retroactive.

What this means for you

Retired mayors

For an eligible retiree, this opinion uses the salary from the completion of the retiree's last term as mayor, not a later mayor's salary when payments start. If a calculation used the sitting mayor's salary, the opinion supplies the AG's interpretation of the base; it gives no instruction on recalculation procedures or remedies for past payments. The AG also noted that lump sums, rollovers, or service under another retirement plan could affect eligibility or benefits, but assumed those issues away here.

Municipal clerks and pension administrators

When checking the base amount for an eligible mayor, identify that person's last mayoral salary. Do not substitute a successor's salary just because the former mayor began collecting later. Keep the base-salary question separate from service-credit rules and any authorized cost-of-living increases identified in footnote 2. The opinion does not address whether or how to change payments already made.

Sitting mayors and city attorneys

This opinion does not discuss who sets a mayor's salary or the effect of a proposed pay change shortly before retirement. Its answer concerns the statutory referent: “such mayor” in Act 414 means the person retiring. For a dispute about earlier calculations, the opinion explains why it disagrees with Opinion 2009-003's sitting-mayor interpretation, while leaving remedies unresolved.

Common questions

Whose salary counts if a mayor leaves office before qualifying to collect benefits? The former mayor's own salary at the end of the last term. The AG expressly said the answer does not change with the date the former mayor qualifies for payments.

Did the 2019 amendment cut an already vested benefit?
The AG did not decide a general vested-benefits question. He said Act 948 of 2019 clarified the earlier law rather than substantively changing it, making Long's second question moot in this opinion.

Does “salary” include vehicle expenses or insurance benefits? Footnote 2 cites Opinion 2005-203 as concluding that “salary” does not include vehicle expenses or fringe benefits such as insurance payments, sick leave, or vacation time. The body of this opinion focuses on which mayor's salary counts.

Can a city raise a mayor's salary near retirement to increase the benefit? The opinion does not address salary-setting authority, pre-retirement raises, or their effect on a particular pension calculation.

Does the opinion require a city to recalculate old payments? It identifies the salary that controls the base calculation but says nothing about a right to recalculation, timing, back payments, or a procedural remedy.

Background and statutory framework

A.C.A. § 24-12-123(a)(1) sets the benefit base for a qualified mayor at one-half of the mayoral salary at completion of the last term. The opinion contrasts Act 414 of 1987 as enacted with its later codification, then treats Act 948 of 2019 as clarification. It agrees with the result in Opinion 2005-203 and rejects the sitting-mayor result in Opinion 2009-003. Footnote 1 cites A.C.A. § 14-42-117 and § 24-12-123(e) concerning overlapping retirement plans. Footnote 2 cites additional service-credit and cost-of-living provisions.

Citations

• A.C.A. § 24-12-123(a)(1), (a)(3), (a)(5)–(6), (e)
• A.C.A. § 1-2-303(d)(1); § 14-42-117
• Act 414 of 1987; Act 948 of 2019
• Ortho-McNeil-Janssen Pharms., Inc. v. State, 2014 Ark. 124, 432 S.W.3d 563
• Ark. Att'y Gen. Ops. 2005-203, 2009-003, 2005-097

Source

• Landing page: https://arkansasag.gov/divisions/opinions-foia/attorney-general-opinions-search/

Original opinion text

Opinion No. 2023-052

November 15, 2023

The Honorable Wayne Long
State Representative
P.O. Box 456
Bradford, Arkansas 72020

Dear Representative Long:

I am writing in response to your request for my opinion on questions concerning mayoral retirement benefits. You report that a 2019 legislative change to Arkansas law governing mayoral retirement benefits significantly reduced a mayor’s annual retirement benefit. You also say that the mayor retired as mayor after serving more than ten years in that capacity. You ask the following two questions:

1. Should the retired mayor’s retirement benefits be calculated based upon his actual
  salary at the time of retirement, or upon other factors and criteria?
   Brief answer: The retired mayor’s retirement benefits are based upon his mayoral
                 salary at the time of his last term as mayor, regardless of when he
                 qualifies to receive benefits.
2. Is it permissible and proper under Arkansas law to reduce a retirement benefit after
  it has vested and initially conveyed to a retiree?
 Brief answer: This question appears to presuppose that, in 2019, the law governing
               the amount of mayoral retirement benefits was substantively
               changed. But since, as explained in response to Question 1, the 2019
               changes were in wording but not substance, this question appears to
               be moot.

DISCUSSION
Question 1: Should the retired mayor’s retirement benefits be calculated based upon his actual salary at the time of retirement, or upon other factors and criteria? For purposes of this opinion, I will assume that the retired mayor in question met all requirements to retire and receive benefits under A.C.A. § 24-12-123. If the mayor did not,

The Honorable Wayne Long
State Representative
Opinion No. 2023-052
Page 2

or if the mayor took a lump sum in benefits, rolled benefits over into a private account, or continued working for the same city under a different retirement plan, then the retired mayor may have not qualified for benefits or may have forfeited some number of benefits. 1

1. Current law. Under current law, a qualified mayor’s annual retirement benefit is one-
   half of that retired mayor’s “mayoral salary at the completion of his or her last term as mayor.” 2 The law as it stands today is clear and unambiguous. And, as I explain in detail below, the 2019 legislative amendments merely clarified the law without making substantive changes.
2. Act 414 of 1987. To see why the 2019 amendments to § 24-12-123 were changes in
   wording but not substance, one must examine the language of the original act that was later codified at § 24-12-123. This original language controls when the act’s codification introduces a substantive change. 3 And Act 414’s codification changed a few key words, thereby generating some ambiguity in the law as codified. Act 414 of 1987 established both the eligibility criteria to receive retirement benefits and the amount of benefits to which the mayor was entitled:
   • Eligibility for payments: Under Act 414—and still today—a mayor is eligible for
   retirement pay if he or she: (1) has served the city for at least 10 years and is at least
   60 years old; or (2) has served the city for at least 20 years, regardless of the
   person’s age; 4 and
   • Amount of payments: A person who fits either of the foregoing two criteria is
   “entitled to retire at an annual retirement benefit during the remainder of his natural
   life, payable at the rate of one-half of the salary payable to such mayor at the time
   of his retirement.” 5

1
See A.C.A. § 24-12-123(a) (providing the requirements necessary to receive mayoral retirement benefits); A.C.A. § 24-12-123(e) (“Under § 14-42-117, a mayor who receives a retirement benefit from a city…shall not be entitled any retirement benefits based upon service for the same period from any other state authorized plan.”); A.C.A. § 14-42-117 (providing that a city employee or an elected city official who is entitled to retirement benefits “and who also participates in another retirement plan established by the city for the same period of service shall be entitled to only one (1) retirement benefits….”). 2 A.C.A. § 24-12-123(a)(1); but see A.C.A. § 24-12-123(a)(3) (specifying three different year-of-service- duration credit calculations); A.C.A. § 24-12-123(a)(5)–(6) (authorizing cities to approve cost-of-living increases); Ark. Att’y Gen. Ops. 2005-203 (opining that the term “salary” does not include vehicle expenses or other fringe benefits such as insurance payments, sick leave, or vacation time), 2005-097 (reciting the requirements necessary to receive mayoral retirement benefits). 3 Ortho-McNeil-Janssen Pharms., Inc. v. State, 2014 Ark. 124, 15, 432 S.W.3d 563, 573.
4
Act 414 of 1987, § 1, codified at A.C.A. § 24-12-123(a)(1)(A). Later, the General Assembly added a third category of eligibility, which does not apply here: a city may provide by ordinance that a mayor may retire after serving at least 10 years and reaching age 55. A.C.A. § 24-12-123(a)(1)(B). 5 Act 414 of 1987, § 1 (emphases added).

The Honorable Wayne Long
State Representative
Opinion No. 2023-052
Page 3

The emphasized terms—his and such mayor—indicate that, when determining the amount of money to which a retired mayor was entitled, the act was referring to the retiring mayor—not the mayor who happened to be serving at the time the retiring mayor became eligible for payments.

3. Act 414’s codification. Yet in an apparent effort to be gender neutral, the codification
   of Act 414 omitted the terms “such” and “his,” which generated an ambiguity about which mayor’s salary the statute was referring to: the last salary of the retiring mayor, or the salary of the sitting mayor. As this side-by-side comparison shows, Act 414’s codification at
   § 24-12-123 made minor changes to the act that had significant impact:

   Act 414, § 1 A.C.A. § 24-12-123 (before 2019)
   A qualifying mayor is “entitled to retire at A qualifying mayor is “entitled to retire at
   an annual retirement benefit during the an annual retirement benefit during the
   remainder of his natural life, payable at the remainder of the person’s natural life,
   rate of one-half of the salary payable to payable at the rate of one-half (½) of the
   such mayor at the time of his retirement.” salary payable to the mayor at the time of
   retirement.”
   These changes and omissions generated an ambiguity in the law as codified that is not present in the law as enacted. Specifically, suppose a mayor serves from 49 to 59 years of age and then accepts other employment. Then on reaching 60 years of age, after a new mayor has been elected and is serving, the former mayor applies for retirement benefits. Under this scenario, whose salary determines the retiring mayor’s benefit: the sitting mayor or the last salary received by the retiring mayor?
   4. My predecessors’ disagreement. Two of my predecessors disagreed on the answer to
   that question. In Opinion No. 2005-203, one of my predecessors thought the statute was ambiguous but that the best reading of law required that the retiring mayor’s benefit be calculated based on his or her last salary. But the opinion does not provide any argument for why that is the best reading, other than general references to “legislative intent.” In Opinion No. 2009-003, another of my predecessors disagreed. He said the law was not ambiguous and that it required the calculation to be based on the sitting mayor’s salary at the time the mayor retired. His argument to support these claims relied entirely on language added during the codification process, saying that his conclusions were required in order to “give[] meaning to the legislature’s choice of different terminology” in its use of “the person” in addition to “the mayor.” Yet the legislature never made that choice because, as noted above, “the person” was added in the codification process. The law as enacted controls when any substantive changes are inadvertently introduced during codification. 6

6
See Ortho-McNeil-Janssen Pharms., Inc., 2014 Ark. at 15, 432 S.W.3d at 573. The Arkansas Code Revision Commission lacks the power to make substantive changes to acts during the codification process. A.C.A.
§ 1-2-303(d)(1) (“In exercising the powers and duties imposed upon it by this subchapter, the commission shall not authorize any change in the substance or meaning of any provision of the Arkansas Code or any act

The Honorable Wayne Long
State Representative
Opinion No. 2023-052
Page 4

While both predecessors were aware of the fact that the codification changed some of the original act’s terminology, they based their arguments on the fact that the codification omitted the pronouns “his” and drew different inferences from that omission. In my opinion, the more definitive omission is the word “such” from “such mayor.” The entire dispute here is which mayor’s salary counts. The demonstrative adjective “such” directly resolves this question. When used as a demonstrative adjective, as it is here, such is a “pointing word” that refers to an antecedent. 7 The only possible antecedent in Act 414 is “his,” which itself refers to the person retiring. Thus, its omission is material. The codification’s omission of the critical distinction in the wording of the law compels me to partly agree and partly disagree with both prior opinions:
• Regarding Opinion No. 2005-203: I agree with the opinion’s conclusion that the retiring mayor’s last salary is the basis for determining the retirement benefits. But I disagree with the opinion’s reasoning and the claim that the law—as opposed to its codification—is ambiguous. While the law as codified is ambiguous, the law as enacted is clear.
• Regarding Opinion No. 2009-003: I agree with the opinion’s conclusion that the law is unambiguous. But I base that assessment on the law as enacted, not as codified. Further, I disagree with this opinion’s conclusion that the sitting mayor’s salary is the basis for determining the retirement benefits.

5. Conclusion. In conclusion, I believe the law on mayoral retirement benefits, as enacted,
   is—and has always been—clear. Act 414 of 1987 requires that the retiree’s benefits be calculated based on his or her last salary as mayor. And Act 948 of 2019 makes this even more clear. The changes to Act 414 during its codification do not change the law.

Question 2: Is it permissible and proper under Arkansas law to reduce a retirement benefit after it has vested and initially conveyed to a retiree? This question appears to presuppose that the legislature did, in fact, change the law in 2019 when it passed Act 948. But, as noted above, the law was clarified rather than changed.

Assistant Attorney General William R. Olson prepared this opinion, which I hereby approve.

Sincerely,

TIM GRIFFIN
Attorney General

of the General Assembly.”). This provision was the law at the time Act 414 of 1987 was codified. See Act 641 of 1983, § 2(D). 7 Bryan A. Garner, GARNER’S MODERN ENGLISH USAGE 1052 (5th ed. 2022).