(a) Moneys due and owing the Arkansas Local Police and Fire Retirement System under § 24-10-101 et seq. or due and owing a local firemen's relief and pension fund or a local policemen's pension and relief fund under § 24-11-101 et seq. are not subject to the proceedings under this chapter and are transferred to the control of the system.

(b) (1) (A) A local firemen's relief and pension fund or a local policemen's pension and relief fund created under § 24-11-101 et seq. that is not subject to the administration of the system at the time of the order entered under § 14-62-102 is consolidated with the system.

(B) (i) (a) The actuary under contract to the system shall compute the retirement reserve for vested and active members and for eligible beneficiaries of a local firemen's relief and pension fund or a local policemen's pension and relief fund.

(b) After receiving the report of the actuary, the receiver shall transfer the computed reserve to the system to be held in an account designated as the retirement reserve for a local firemen's relief and pension fund or a local policemen's pension and relief fund and from which the system shall pay eligible beneficiaries.

(ii) If the retirement reserve of a local firemen's relief and pension fund or a local policemen's pension and relief fund is inadequate to pay full benefits to eligible recipients, the receiver may reduce benefits based on such actuarially computed amounts as are necessary to pay eligible recipients, without impairing contracts and to the extent allowed under law.

(iii)

(a) The receiver shall continue to collect such millages, fines, fees, state insurance tax turnbacks, and other revenues as allowed by law for the support of a local firemen's relief and pension fund or a local policemen's pension and relief fund.

(b) When a final order of dissolution is entered under § 14-62-114, the millages, fees, state insurance tax turnbacks, and other revenues as allowed by law shall be paid to the system.

(2)

(A) Pledged or dedicated taxes levied by the extinct municipal corporation at the time of the order under § 14-62-102 for a local firemen's relief and pension fund or a local policemen's pension and relief fund shall continue to be collected until the indebtedness is satisfied.

(B) When a final order of dissolution is entered under § 14-62-114, pledged or dedicated taxes collected under subdivision (b)(2)(A) of this section shall continue to be collected and remitted to the system until the indebtedness is satisfied.

(c)

(1) The system shall refund all member contributions made to the system or fund applicable to the extinct municipal corporation to a member who has not yet vested in the system or in a local firemen's relief and pension fund or a local policemen's pension and relief fund at the time of the order entered under § 14-62-102.

(2) Service credit earned with the extinct municipal corporation by a nonvested member under the system is cancelled, and any member contributions relating only to the extinct municipal corporation shall be refunded to the nonvested member.