HomeMy WebLinkAbout1993-06-29 - Agendas - Final•
•
•
AGENDA AGENDA
FIREMEN'S PENSION AND RELIEF BOARD
June 29, 1993
10:00 a.m.
City Hall Room 326
1. Approval of the minutes of the June 3, 1993 meeting
2. Approval of the Pension List for July, 1993
3. Old Business
A. Report from City Attorney of new Legislation
B. Other
4. New Business
A. Roxbury Investment Report
B. Other
5. Adjournment
r
FAYETTEVI LLE
1 CITY OF FAYETTEVILLE, ARKANSAS
SHERRY L. THOMAS, CITY CLERK
•
•
TO: Fire Pension Board
FROM: Sherry L. Thomas, City Clerk
DATE: June 23, 1993
SUBJECT: Next Meeting
The meeting of the Fire Pension Board has been rescheduled for
Tuesday, June 29, 1993 at 10:00 a.m. in Room 326 of City Hall. A
representative from Roxbury will be at the meeting to discuss their
investment performance, etc.
At the last meeting, copies of the newly enacted legislation was
given to Jerry Rose for his reviewal. Attached is a copy of a memo
from him explaining the changes as a result of the new acts.
Also, attached is a copy of the minutes of the June 3, 1993
meeting.
Attachments
List:
Richard Baird
Ron Wood
Pete Reagan
Darrell Judy
Marion Doss
Mayor Fred Hanna
City Attorney Jerry Rose
City Treasurer Glyndon Bunton
Ben Mayes
113 WEST MOUNTAIN 72701 501 575-8323
•
•
•
MINUTES OF A MEETING OF THE FIRE PENSION BOARD
A meeting of the Fayetteville Firemen's Pension and Relief Board
was held on Thursday, June 3, 1993, at 11:00 a.m. in Room 326 of
the City Administration Building, 113 W. Mountain, Fayetteville,
Arkansas.
PRESENT:
Marion Doss, Pete Reagan, Ron Wood, Retiree Darrell
Judy, Mayor Fred Hanna, City Clerk Sherry Thomas,
City Treasurer Glyndon Bunton, and Martha Lindsay,
City Finance Department.
ABSENT: Retiree Richard Baird
CALL TO ORDER
Mayor Hanna called the meeting to order.
MINUTES
Reagan, seconded by Doss, made a motion to approve the minutes of
the April 29, 1993 meeting.
Reagan stated the question about paying the widows of the volunteer
firemen the full benefits their spouses were receiving came up when
Jim McCord was the City Attorney. He advised the Board that when
the pension fund started paying full benefits to one widow, the
fund would be required to pay full benefits to all of the remaining
beneficiaries.
Thomas stated she had located where Mrs. Jess Tune had been awarded
the full benefits her husband was receiving in December, 1986.
The vote to approve the minutes was unanimous.
PENSION LIST
Reagan, seconded by Doss, made a motion to approve the pension list
as submitted. The motion passed by a unanimous vote.
INVESTMENT REPORT
Curtis Williams with Merrill Lynch distributed a portfolio
performance report to the board members. He stated Roxbury is
continuing to underperform the markets and the other money
managers. The pension fund has been with Roxbury for four years.
Williams suggested that the Pension Board may want to ask a Roxbury
representative to come and explain what is happening with the
account.
Reagan stated he feels that would be very appropriate.
Williams stated the Pension Board has several options available.
The main question is at what point to change managers. As he has
•
•
•
June 3, 1993
always said, you don't change managers based on a short term
performance. However, after 4 years, which is a pretty fair amount
of time, Roxbury is still performing below what Merrill Lynch
expected.
Doss stated he would want either Williams or Richard Yada present
at the meeting that Roxbury attends.
Reagan stated he feels the Pension Board should hold a special
meeting after they hear from Roxbury.
Lindsay asked if Williams was proposing transferring to one of the
other managers the fund currently uses.
Williams stated that would be one option. He felt the fund could
probably lower the management fee some by putting in another
$800,000 into an existing account. Or, another option would be to
bring in another manager with the same philosophy as Roxbury.
Still another option would be to get a manager with a totally
different management philosophy.
Williams stated Roxbury was more active than New Mexico Capital.
Bunton asked if they had more short term investments.
Williams stated they really didn't, they must have more changes
overall.
Williams stated for the short terms, Merrill Lynch is expecting
interest rates to go a little higher; however, they do not
anticipate rates to go much higher in the long term. They do not
intend to take capital gains in the bond markets at this time. He
expects the maturity dates to range in the 7-10-12 year range. If
interest rates were to go up to 8-8 1/2%, they would move maturity
dates to longer terms to take advantage of the interest rates. The
inflation rate is at 5%, and the long term bond market is at 7%.
Williams stated the funds will continue to invest in CMO's,
preferred stocks, etc., and try and maintain the portfolio earning
about 8%.
GARY SPRINGSTON TERMINATION
Doss stated he had received a letter of resignation from Gary
Springston effective June 20, 1993. Springston stated
dissatisfaction with his career as the reason for his resignation.
He is requesting his contribution to the pension fund be returned
to him. He is not requesting a disability retirement.
Reagan asked if his contribution would be returned without
interest. Williams stated the law stated he will get a lump sum
distribution of his contributions without interest.
•
•
•
June 3, 1993
Reagan stated there was no action required by this Board because
Springston automatically has the right to get his contributions
returned.
Mayor Hanna asked what would happen if he did request interest on
his money.
Reagan stated there is a state statute that says he is not entitled
to any interest.
Williams stated there is a new federal law that applies punitive
punishment to people who take direct distribution of their
pensions. Springston may want to roll his money over to another
custodian. Williams suggested getting Springston to call him so he
could inform him of the available options.
NEWLY PASSED LAWS
Reagan handed out copies of Act 1197, 1004, 1203, 1202, and 999 to
the Board for their review.
Mayor Hanna suggested giving copies to City Attorney Jerry Rose and
ask him to review them and report back at the next meeting.
Reagan, seconded by Bunton, made a motion to get the acts to the
City Attorney and request a report at the next meeting. The motion
passed unanimously.
RICHARD BAIRD
Reagan stated Richard Baird was reelected for a two year term, but
as a result of illness, he will be unable to attend the pension
meetings for quite some time.
Doss stated if he elects not to return, the retirees will need to
hold a special election for a replacement. He does not want Baird
to feel he is being pushed out of the Pension Board.
Judy stated he would get with Baird and ask him what he wants to
do.
ADJOURNMENT
The meeting adjourned at 11:36 a.m.
A-
FIREIEN'S RELIEF AND PENSION FUND
• 993
, TREASURER
THE FOLLOMING ARE THE OBLIGATIONS OF THE FIREMEN'S RELIEF FUND FOR THE
MONTH OF JURE 1993. YOU ARE HEREBY INSTRUCTED TO ISSUE CHECKS TO THE
PAYEES, IN THE AMOUNTS SION, AND FOR THE PURPOSE SO STATED.
•
•
EMPB NAME GROSS FED. TAX ST. TAX NET
43 BAIRD, RICHARD H.
1 BARNES, ELIZABETH
2 BLACKARD, PAUL
3 BOLAIN, LEONARD
44 BOUDREY, BETTY MRS.
45 BOUDREY, HOWARD
49 BOUDREY, JACK
4 CARL, FLOYD JR
5 CASELMAN, ARTHUR
57 CATE, ROY
6 CHRISTIE, ARNOLD 45.00
7 COLE, EVERETT 375.00 32.50
8 COUNTS, MAYNE 55 00
61 DAVIS, BEULAH F. 377.50
10 DEARING, EMIA HRS. 50.00
11 FARRAR, ALONZO 707.84
38 FRAWLEY, JOSEPH G. 953 38 100.00
33 HARRIS, BILL C. 55.00
34 HARRIS, JAMES E. 55 00
47 JUDY, DARRELL 837.68
37 KING, ARNOLD D. 828.42 100.00
54 KING, ARVIL 113 130.00
12 LAZE, HOPE MRS 45
13 LAYER, MERLIN 417.50
14 LEE, HAROLD 55.00
51 LEWIS, CHARLES 837 68
60 LEWIS, MARVIE 439.16
55 LEMIS, ROGER 439.17
40 LOGUE, PAUL D. 1469.38 175.00
50 MASON, LARRY 829.35 29.35
39 MC ARTHUR, RONALD A. 891.62 100.00
35 MMC CHRISTIAN, DWAYME 55 DO 30.00
15 MC MIORTER, CHARLES 885 14 50.00
29 MILLER, DONALD 863.01 125.00
42 MOORE, JAMES H. 55_00
17 MORRIS, WILKIE HRS.
16 MORRIS, MILLIAN H.
62 NORRISON, ELIEME
48 MULLENS, DENNIS N.
58 OSBURW, EDWARD
46 OSBUHJ, TROY
53 POAGE, LARRY
20 POLLY, GRACE A. MRS.
21 POORE, CARMEN MRS.
22 REED, JOE
30 SCHAOER, EARVEL
41 SCHADER, TROY
23 SKELTON, BURL L.
916.200 100.00 816.20
C5S00 45.00
- 55.00
55 00 55.00
1266.21 66.21 1200.00
1066.66 1066.66
837. 287 68 50.00 500.00
45. 45.00
75.00 75.00
909.50
45.00
342.50
55 00
377.50
50.00
707.84
10.00 843.38
55.00
55.00
837.68
10.00 718.42
1001.00
45.00
417.50
55.00
837.68
439.16
439.17
20.00 1274.38
800.00
791.62
25.00
835.14
738.01
55.00
45.00
60.00
70.00
1114.11
160.00 1124.63
65.81 900.00
200.00 30.00 971.98
45.00
00 350.00
55 00 55 00
915.78 915.78
783.74 20.00 763.74
692.50 42.50 650.00
909.19._
.00
70.00
1114.11
1284.63
965.81
1201.98
•
24 SKELTON, LEE
56 SKELTON, ROY
36 SPRINCSTON, CARL
25 STOUT, ORVILLE
27 TUNE, MILDRED MRS.
26 TUE, JESS
28 MATTS, DONALD
59 MATTS, MAYNE
52 NRIDNT, RANDALL
390,00
1626.02
609.88
590.36
70.00
70.00
400.00
921.17
877.68
126.02 50.00
50.00
96.17
150.00
390.00
1450.00
609.88
540.36
70.00
70.00
400.00
825.00
727.68
931,162.74 42,236.24 $170.00 $28,756.50
22
IE, THE LMERSIQED, DO SOLEMNLY SMEAR THAT THE ABOVE OBLIGATIONS ARE
JUST AND CORRECT; THAT NO PART THEREOF HAS BEEN PREVIOUSLY PAID; THAT
THE PENSION PAYMENTS SO CHARGED ARE IN ACCORDANCE NITH THE ACTIONS OF
THE BOARD OF TRUSTEES OF THE FIREMEN'S RELIEF AND PENSION FUO; THAT
THE SERVICES OR SUPPLIES FURNISHED. AS THE CASE MAY BE, MERE ACTUALLY
RENDERED OR FURNISHED; AND THAT THE CHARGES MADE THEREFORE DO NOT
EXCEED THE AMOUNT ALLOMED BY LAN OR THE CUSTOMARY CHARGE FOR SIMILAR
SERVICES OR SUPPLIES.
•TARP
• 4414410 #17444 v/
CH RMAN AND PRESIDENT
ACKNA7LLEDGEMENT
STATE OF ARKANSAS 1
COUNTY OF NASHINGTON ) )SS
SHORN TO AND SUBSCRIBED BEFORE ME THIS (AL DAY OF , 1993.
HY COMMISSION EXPIRES: / D 'O -o?OD
NOTARY PUBLIC
Stats o[ Arkansas
2 79tp General Assembly
3 Regular Session, 1993
4 By: Representative Wallems
As Engrossed: 3/17/93 3/19/93 3/30/93
ACT's 19 71993
A Bill
HOUSE BILL 1202
5
6
7 For An Act To Be Entitled
g "AN ACT TO AMEND TITLE 24, CHAPTER 11, SUBCHAPTER 4 AND
9 SUBCHAF2EE 8 OF THE ARKANSAS CODE OF 1987 TO PROVIDE A
10 MINIMUM MONTHLY RETIREMENT BENEFIT FOR RETIRED POLICEMEN
11 AND FIREMENAMD THEIR SURVIVING SPOUSES; AND FOR OTHER
12 PURPOSES."
13
14 Subtitle
15 "PROVIDE A MINIMUB MONTHLY RETIREMENT BENEFIT FOR RETIRED
16 POLICEMEN 4219 FIREMEN AND THEIR SURVIVING SPOUSES."
17
18 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS:
19
20 SECTION 1. Arkansas Code 24-11-424 is hereby amended to read as
•
21 follows:
22 "f 24-11-424. Benefits - Retirant receiving less than one-half salary.
23 Retired police officers who are eligible to receive benefits from a
24 policemen's pension and relief fund shall receive from the policemen's pension
25 and relief fund a minimum monthly benefit of no less than three hundred fifty
26 dollars ($350)."
27
28 SECTION 2. Arkansas Code 24-11-425(a) is hereby amended to read as
29 follows:
30 "(a) If any active police officer or any retired member dies from any
31 cause, leaving a surviving spouse, or child under the age of eighteen (18)
32 years, then the board of trustees shall direct a monthly pension during the
3 surviving spouse's life in an amount equal to the pension attached to the rank
of the deceased police officer at the time of his death, but in no event shal
35 the benefit of the surviving spouse be less than three hundred fifty dollars"
36 ($350) per month."
rrs067
CDC AVr0 ,IR
:•
•
As Engrossed: 3/17/93 3119/93 3/30/93 118 1202
1 SECTION 3. Arkansas Code Annotated 24-11-818(c) is amended to read as
2 follows:
3 "(c) Any full -paid fire fighter who is already retired shall not
4 receive less than three hundred fifty dollars ($350) per month."
5
6 SECTION 4. Arkansas Code Annotated 24-11-820(a)(2) is amended to read
7 as follows:
8 "(2) In the case of full -paid fire fighters classification, a monthly
9 pension shall be paid for life to the spouse in the amount of the pension
10 received by the retired fire fighter at the time of his death, or the amount
11 of the pension to which the member would have been entitled on the day he
12 died, had he been retired, but in no event shall the benefit of the spouse be
13 less than three hundred fifty dollars ($350) per month, regardless of whether
14 the spouse has already been receiving pension payments and regardless of
15 whether the fire fighter was on active duty or retired."
16
17 SECTION 5. Subsection (a) of Arkansas Code 124-11-807 is hereby amended
18 to read as follows:
19 "(a)(1) For volunteer fire fighters, in no case shall the payment to
20 any retired member be less than fifty dollars ($50.00) per month, and the
21 payment shall be made in accordance with the justice and equity of each case
22 as determined by the board of trustees of the firemen's relief and pension
23 fund. The benefits provided for in this subdivision shall only be paid
24 provided the retirement funds are actuarially sound after the increase as
25 determined by the actuary for the Arkansas Fire and Police Pension Review
26 Board.
27 (2) In no case shall the payment to any retired member be less than
28 thirty dollars ($30.00) per month, and the payment shall be made in accordance
29 with the justice and equity of each case as determined by the board of
30 trustees of the firemen's relief and pension fund."
31
32 SECTION 6. The increased benefits provided for under .he provisions of
33 this act shall only be paid provided the retirement funds are actuarially
34 sound after the increase as determined by the actuary for the Arkansas Fire
35 and Police Pension Review Board.
1
36
rrs067
•
•
•
•
•
•
Ar Engrossed: 3/17/93 3/19/93 3130/93 HB 1202
1 SECTION 7. Ail provisions of this act of a general and permanent nature
• are amendatory to the Arkansas Code of 1987 Annotated and the Arkansas Code
3 Revision Commission shall incorporate the same in the Code.
4
SECTION 8. If any provision of this act or the application thereof to
6 any person or circumstance is held invalid, such invalidityshall not affect
7 other provisions or applications of the act which can be given effect without
8 the invalid provision or application, and to this end the provisions of this
9 act are declared to be severable.
10
11 . SECTION 9 All laws and parts of laws in conflict with this act are
12 hereby repealed.
13
14
I5
16
L7
18
L9
21
2
•
/s/Frank Willems
•
APPROVED
7 67V
covEnNoR .r
3 rrs067
•
•
•
1 State of Arkansas
2 79th General Assembly
3 Regular Session, 1993
4 By. Representative Mclunkin
5
6
7
•
As Engrossed: 3/9/93
ACT 9 9 91993
A Bill
For An Act To Be Entitled
•
HOUSE BILL 1294
8 "AN ACT TO AMEND ARKANSAS CODE 524-11-207 TO ALLOW LOCAL
9 POLICE AND FIRE PENSION FUNDS IN THEIR ANNUAL ACCOUNTANT'S
10 REPORT TO INCLUDE EIGHTY PERCENT (802) OF ANY GAINS AND
11 LOSSES OF AN ASSET'S YEAR-END FAIR MARKET VALUE IN THE
12 PLAN'S REVENUES AND IN THE PLAN'S RESERVE ASSETS; AND FOR
13 OTHER PURPOSES."
14
15 Subtitle
16 "AN ACT TO ALLOW LOCAL POLICE AND FIRE PENSION FUNDS TO
17 INCLUDE 80Z OF ANY GAINS AND LOSSES IN STOCK VALUE IN
1.11
18 THEIR ACCOUNTANT'S ANNUAL REPORT."
19
20 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS:
•
•
21
22 SECTION 1. Arkansas Code 5 24-11-207 is hereby amended to read as
23 follows:
24
25
"24-11-207. Annual accountant's report.
(a)(1) The board of trustees of each plan shall annually cause an
26 accountant's report to be prepared covering each plan fiscal year.
27 (2) The accountant's report shall be prepared by an accountant;
however, in the case of a fund with less than twenty-five thousand dollars
9 ($25,000) in total assets, the board of trustees may authorize the city clerk
30 or, in the case of a fire improvement district, the secretary -treasurer of the
31 board of commissioners to prepare the report, but only if the fund's accounts
have been kept in accordance with bookkeeping procedures established by the
office of the Arkansas Fire and Police Pension Review Board.
(b) Each accountant's report shall include at least the following:
35 (1) The plan's revenues and expenditures during the year.
(A) The revenues exhibit shall show at least the annual
mak170
•
•
•
•
•
•
•
•
As Engramed: 319193 HB 1294
1 total for each of the following items:
2 (i) Employee contributions;
3 (ii) Employer contributions, from state;
4 (iii) Employer contributions, other;
5 (iv) Investment income:
6 (a) Interest and dividends;
7 (b) Gain or loss on sales;
8 (c) Other (specify);
9 (d) Total of (i) + (ii) + (iii);
10 (v) Unrealized gain or loss from previous year on
11 corporate common or preferred stock, if using the option to include eighty
12 percent (802) of year end market value;
13 (vi) ,Other (specify);
14 (vii) Total of (i) through (vi).
15 (B) The expenditures exhibit shall show at least the annual
16 total for each of the following items:
17 (i) Refunds of employee contributions;
18
19
20
21
(ii) Benefits paid;
(iii) Administrative expenses;
(iv) Other (specify);
(v) Total of (i) through (iv).
22 (C) The difference between revenues and expenditures is the
23 change in plan reserve assets for the year;
24 (2) The plan reserve assets. The reserve assets exhibit at year -
25 end shall show at least the total for each of the following items:
26 (A) Cash and bank checking accounts, noninterest -earning;
27 (B) Bank deposits, interest-earning;
28 (C) Savings and loan deposits, interest-earning;
29 (D) Other cash equivalents, maturing one (1) year or leas;
30 (E) USA government securities;
31 (F) Non -USA government securities;
32 (G) Mortgages;
33 (H) Corporate bonds;
34 (I) Corporate common and preferred stock;
35 (J) Other (specify);
36 (K) Total of (A) through (J).
2
•
•
mak170
•
•
•
1
As Engrossed: 3/9/93 HB 1294
1 The asset values shall be cost values or amortized coat values. If
2 corporate common or preferred stock is held, there shall also be shown
3 separately the year-end market value of the stock. The value of the total
4 corporate common or preferred stock may be shown in the plan reserve asset
5 exhibit, subdivision (b)(2)(I) of this section, at either the cost value or
6 eighty percent (SOt) of the year end market value, whichever is greater;
7 (3) The accumulated employee contributions at year-end of all
8 nonretired covered employees;
9 (4) A comparison between the actual employer contributions
10 received for the year and the actuary's computed contributions for the year,
11 including the following items:
12 (A) Total employer contributions, in dollars;
13 (B) Covered employee payroll, in dollars;
14 (C) Actual employer contribution expressed in percentage
15 or, in the case of volunteer fire department pension plans, expressed in
16 dollar amounts, (A)/(B);
17 (D) Actuary's computed contribution exp d in
18 percentage, from most recent biennial reports, or, in the case of volunteer
19 fire department pension plans, expressed in dollar amounts, for the biennium;
20 (5) For a plan covering both volunteer firemen and full -paid
21 firemen, the following items specified in this section, which shall be
22 prepared separately for each of the two (2) groups:
23 (A) Subdivision (1)(A)(i) of this subsection,
24 (B) Subdivisions (1)(B)(i) and (ii) of this subsection;
25 (C) Subdivision (3) of this subsection; and
26 (D) Subdivision (4) of this subsection;
27 (6) Investment results for the year. The investment results
28 exhibit shall show at least the following results:
29 (A) Ordinary income from all plan reserve assets, except
30 common stock, expressed as an annual percentage. The numerator for this
31 calculation shall be all interest dollars received for the year, and the
32 denominator shall be the average cost value of all plan reserve assets, except
33 common stock, held during the year;
34 (B) Total return from all plan reserve assets, except
35 common stock, expressed as an annual percentage. The numerator for this
36 calculation shall be the numerator for (A) plus (or minus) the net of all
3
mak170
a
a
ri
4
•
•
•
•
•
•
•
•
•
•
As Engrossed: 3/9/93 HB 1294
• I realized gains and losses on sales of the assets during the year, and the
2 denominator shall be the same as for (A);
3 (C) Ordinary income from common stock assets, expressed as
4 an annual percentage. The numerator for this calculation shall be all dividend
5 dollars received for the year, and the denominator shall be the average market
6 value of all common stock held during the year;
7 (D) Total return from common stock assets, expressed as as
8 annual percentage. The numerator for this calculation shall be the numerator
9 for (C) plus (or minus) the net of all market value changes in common stock
10 during the year, realized and unrealized, and the denominator shall be the
11 same as for (C);
12 (E) Ordinary income from all plan reserve assets, expressed
13 as an annual percentage. The numerator for this calculation shall be the total
14 of the numerators in (A) and (C), and the denominator shall be the total of
15 the denominators in (A) and (C);
16 (F) Total return from all plan reserve assets, expressed as
17 an annual percentage. The numerator for this calculation shall be the total of
18 the numerators in (B) and (D), and the denominator shall be the total of the
19 denominators in (B) and (D).
20 (c) The accountant shall certify that, in his opinion, the information
21 contained in his report is an accurate statement of these activities in
22 accordance with the provisions of this subchapter."
t•
23
•
24 SECTION 2. All provisions of this act of general and permanent nature
25 are amendatory to the Arkansas Code of 1987 Annotated and the Arkansas Code
26 Revision Commission shall incorporate the same in the Code.
27
28 SECTION 3. If any provisions of this act or the application thereof to
29 any person or circumstance is held invalid, the invalidity shall not affect
30 other provisions or applications of the act which can be given effect without
31 the invalid provisions or application, and to this end the provisions of this
32 act are declared to be severable.
33
34 SECTION 4. All laws and parts of laws in conflict with this act are
35 hereby repealed.
36
4
mak170
•
•
As Engrossed: 3/9/93
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
•
•
/a/L. McJunkin
APPR
• a.
C '. ❑ l •
HB 1294
24
25
26
27
28
29
30
31
32
33
34
35
36
5
U)
mak170
•
•
1 State of Arkansas
3
4
t
6
79th General Assembly
Regular Session, 1993
Hy Representative McGinnis
ACT '12 0 21993
A Bill
For An Act To Be Entitled
HOUSE BILI; 1569
8 "AN ACT TO AMEND ARKANSAS CODE f 24-10-610 TO INCREASE THE
9 AMOUNT OF THE LIMITATION ON DEATH AND DISABILITY ANNUITIES
10 UNDER THE LOCAL POLICE AND FIRE RETIREMENT SYSTEM FROM
11 NINETY PERCENT (90Z) TO ONE HUNDRED PERCENT (1002) OF THE
12 FINAL AVERAGE SALARY; AND FOR OTHER PURPOSES."
13
14 Subtitle
15 "AN ACT TO INCREASE THE AMOUNT OF THE LIMIT ON DEATH AND
16 DISABILITY ANNUITIES UNDER THE LOCAL POLICE AND FIRE
17 RETIREMENT SYSTEM."
IS
19 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS:
_0
=1 SECTION 1. Arkansas Code s 24-10-610 is hereby amended to read as
follows:
I; "24-10-610. Limitations on death and disability annuities.
24 (a) If a death annuity is payable on behalf of a member who dies in
x employer service before retirement, or for the portion_of a disability annuity
26 payable before a disability retirant's attainment of his normal retirement
. age, in no event shall the total amount of the system annuities based on paid
9 service exceed one hundred percent (100Z) of the amount of his final average
9 pay at the time of death or disability, as the case may be, less the total of
30 the following amounts:
31 (1) Workers' compensation, if any, on account of the death or
disability;
_3 (2) Benefits, if any, from social security on account of the
-1 death or disability;
(3)(A) If the recipient is a retirant, the remuneration, if any,
36 received by the retirant for personal services rendered by him in any gainful
•
NB
1 occupation.
2 (B) If the recipient is a beneficiary, the portion of the
3 remuneration, if any, received by the beneficiary for personal services
4 rendered by him in any gainful occupation which is more than the amount of the
5 remuneration being received by the person at the time of the member's
6 termination from covered employment.
7 (b)(1) Beginning with the January 1 which is at least twelve (12) full
8 months after the effective date of an annuity, an amount of final average pay
9 usable for the purposes of this section shall be redetermined each January 1,
10 and the redetermined amount shall be applicable for the ensuing year.
11 (2) The redetermined amount shall be the amount of final average
12 pay at the time of termination of covered employment increased by any
13 percentage increase in the inflation index for the period from the October
14 immediately preceding the effective data of the benefit to the October
15 immediately preceding the January 1."
16
17 SECTION 2. All provisions of this act of general and permanent nature
18 are amendatory to the Arkansas Code of 1987 Annotated and the Arkansas Code
19 Revision Commission. shall incorporate the same in the Code.
21 SECTION 3. If any provisions of this act or the application thereof to
22 any person or circumstance is held invalid, the invalidity shall not affect
23 other provisions or applications of the act which can be given effect without
24 the invalid provisions or application, and to this end the provisions of this
25 act are declared to be severable.
26
_7
28 hereby
29
30
=1
SECTION 4. All laws and parts of laws 70,:i71:00109 h thi r t are
repealed.
1
APPRO
1
(12.,
GOOK /l19/
2 11340
F
•
•
As Engrossed: 3/4/93 3/9/93
1 State of Arkansas AGT 10Bill 1993
2 79th General Assembly A
3 Regular Session, 1993
4 By. Representatives Mullenix, Blair, Hendrix, and Pollan
•
HOUSE BILL 1624
5
6
7 For An Act To Be Entitled
g "AN ACT TO ESTABLISH THE ARKANSAS FIRE FIGHTERS DEFERRED
9 RETIREMENT OPTION PLAN; AND FOR OTHER PURPOSES."
10
11 Subtitle
12 "AN ACT TO ESTABLISH THE ARKANSAS FIRE FIGHTERS DEFERRED
13 RETIREMENT OPTION PLAN."
14
15 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS:
16
17 SECTION 1. Deferred retirement option plan.
" 18 (a) In lieu of terminating.employment and accepting a service
19 retirement pension pursuant to Arkansas Coda SS 24-11-801 et seq , any full
'� paid fire fighter who is a member of a firemen's pension and relief fund who
21 has not less than twenty (20) years of credited service and who is eligible to
22 receive a service retirement pension may elect to participate in the Arkansas
23 Fire Fighters Deferred Retirement Option Plan and defer the receipts of
24 benefits in accordance with the provisions of this act, provided the local
25 fireman's pension and relief fund board of trustees approves the participation
26 in the plan.
27 (b) For purposes of this act, credited service shall include service
28 credit recognized pursuant to Arkansas Code SS 24-11-801 et seq.
(c) The duration of participation in the Arkansas Fire Fighters
30 Deferred Retirement Option Plan for active full paid fire fighters shall not
31 exceed five (5) years. At the conclusion of a member's participation in th
`G r 32 Arkansas Fire Fighters Deferred Retirement Option Plan, the member shall
Z▪ t▪ ' I terminate eeployment with all participating municipalities as a fire fighter
and shall start receiving the member'slaccrued monthly retirement benefit f
• 35 the firemen's pension and relief fund.
Z
6 (d) When a member begins participation in the Arkansas Fire Fighters
mak263
•
•
•
•..
•
•
•
As Engrossed: 3/4/93 3/9/93 HB 1624
1 Deferred Retirement Option Plan, the contribution of the fire fighter and the
2 employer contribution shall continue to be paid. Municipal matching
3 contributions for employees who elect the Arkansas Fire Fighters Deferred
4 Retirement Option Plan shall be credited equally to the firemen's pension and
5 relief fund and to the Arkansas Fire Fighters Deferred Retirement Plan. The
6 monthly retirement benefits that would have been payable had the member
7 elected to cease employment and receive a service retirement shall be paid
8 into the Arkansas Fire Fighters Deferred Retirement Option Plan Account.
9 (e)(1) The member's monthly retirement benefit shall not change, unless
10 the plan receives a benefit increase.
11 (2) A member who participates in this plan shall earn interest at
12 a rate of two (2) percentage points below the rate of return of the investment
13 portfolio of the firemen's pension and relief fund, but no less than the
14 actuarial assumed interest rate as certified by the actuary. The interest
15 shall be credited to the individual account balance of the member on an annual
16 basis.
17 (f) A participant in the plan shall receive at the option_af—the
18 participant, a lump sum payment from the.account equal to the payments to the
19 account, or a true annuity based upon the account of the participant or may
20 elect any other method of payment if approved by the board of trustees.
21 (g) If the participant dies during the period of participation in the
r plan, a lump sum payment equal to the account balance of the participant shall
23 be paid.
•
24
25 SECTION 2. All provisions of this act of general and permanent nature
26 are amendatory to the Arkansas Coda of 1987 Annotated and the Arkansas Code
17 Revision Commission shall incorporate the same in the Code.
28
29 SECTION 3. If any provisions of this act or the application thereof
30 any person or circumstance is held invalid, the invalidity shall not affect
,31 other provisions or applications of the act which can be given effect wit•'1� \ F.
32 the invalid provisions or application, and to this end the provisions of this p
to
1
0
33 act are declared to be severable.
' o d
1 35 SECTION 4. All laws and parts of laws in conflict with this act are I`n
36 hereby repealed.
2
mak263
INED
•
0
State of Arkansas
• l9th General Assembly
3 Regular Session, 1993
4 By: Representative McGinnis
s
6
•
ACT 120 31993
A Bill
HOUSE BILI 1570
For An Act To Be Entitled
8 "All ACT TO AMID ARKANSAS CODE s 24-10-301(d) TO ELIMINATE
9 THE REQUIREMENT OF A PREEllPLOYHENT PHYSICAL PRIOR TO BEING
10 COVERED UNDER THE LOCAL POLICE AND FIRE RETIREMENT SYSTEM;
11 AND FOR OTHER PURPOSES."
L:
13 Subtitle
14 "AN ACT TO ELIMINATE THE REQUIREMENT OF A PREEMPLOYMENT
15 PHYSICAL PRIOR TO BEING COVERED UNDER THE LOCAL POLICE AND
16 FIRE RETIREMENT SYSTEM."
17
18 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS:
19
33 SECTION 1. Subsection (d) of Arkansas Code s 24-10-301 is hereby
21 amended to read as follows:
"(d3(1) When covering a person first employed in paid service as a fire
13 fighter or police officer on or after July 1, 1985, the employer shall require
24 an employment physical examination of the employee, under criteria established
25 by the Arkansas Local Police and Fire Retirement System Board.
26 (2) The employer shall submit a copy of the examination to the
system within thirty (30) days of the date of hire."
5 SECTION 2. All provisions of this act of general and permanent nature
30 ars amendatory to the Arkansas Code of 1987 Annotated and the Arkansas Code
31 Revision Commission shall incorporate the same in the Code.
•
Jab
..•
34
36
O
SECTION 3. If any provisions of this act or the application thereof to
any person or circumstance is held invalid, the invalidity shall not affect
other provisions or applications of the act which can be given effect without
the invalid provisions or application, and to this end the provisions of this
4339
(
•
• i
•
W.
•
•
•
•
1 act ars declared to be tamable.
2
3 SECTION 4. All lava and parts of laws
4 hereby rspealsd.
5
6
7
8
9
10
11
12
13
14
15
16
17
,• 18
19
20
21
23
24
25
26
lis
29
30
31
•
•
•
in conflict with this act ars
f Pwr
f
i
•
•
-531ARKANSAS FIRE & POLICEni
QWafikEVIEW BOARD
1�
!, J P.C. DRAWER 34164
LITTLE ROCK. ARKANSAS 72203
June 21, 1993 r�n1 �F DE -91. TELEPHONE (501) 324.9495
1 ,V� FAX: (501) 324-9497
TO: A11 Boards of Trustees of Police and Paid Fire Pension Plans
FROM: Arkansas Fire and Police Pension Review Board
SUBJECT: Rules Regarding the Administration of the Deferred Retirement Option
Plan (DROP)
NOTICE OF PUBLIC HEARING
Pursuant to Arkansas Code Annotated 24-11-203 et seq. and 25-15-201 et seq.,
NOTICE is hereby given that a Public Hearing will be held on July 14, 1993 at 9:30 a.m.
in Suite 940 of the Union National Bank Building in Little Rock.
1. The Public Hearing will be held to determine whether the Pension Review Board
should adopt proposed rule *10 pertaining to administration of the Deferred Retirement
Option Plan (DROP) as found in Acts 757 and 1004 of 1993.
2. All interested persons are encouraged to attend the Public Hearing, and may
appear and present, orally or in writing, statements, arguments or opinions on the
proposed rule.
3. Persons wishing to testify should notify Cathyrn Hinshaw at 324-9495 as soon
as possible and are requested to submit intended statements in writing.
r
ARKANSAS FIRE AND POLICE PENSION REVIEW BOARD
PROPOSED BOARD RULE # 10
This Board Rule is promulgated by the Arkansas Fire and Police
Pension Review Board by the authority of Arkansas Code Annotated
§24-11-203. This Board Rule will be effective on August 13,
1993. This Board Rule is not intended to conflict with any part
of A.C.A. §24-11-101 et. seq.
The purpose of this Board Rule is to describe the administration
of the Deferred Retirement Option Plan (DROP).
Q.1. What is the DROP program,
A.1. In 1993, the Arkansas Legislature passed two laws which
establish a "Deferred Retirement Option Program" (DROP)
for paid firefighters and for police officers. Act 757
of 1993 established the plan for police officers and Act
1004 of 1993 did the same for paid firefighters. Both of
these Acts will be effective on August 13, 1993.
The DROP is a retirement option that may be elected by a
member of one of these plans. This option, if elected by
the member, allows them to "drop" their retirement bene-
fit into a DROP account and accumulate a lump sum. The
member may continue to work up to five years while the
DROP account accumulates.
Q.2. If a local fire or police pension board wishes to start a
DROP program, what must be done?
A.2. Both Act 757 and Act 1004 make the DROP a local option.
If the local pension board wishes to make it available to
its members, the board must vote to do so. A sample
board resolution is Attachment 1 to this Board Rule.
If a local board does elect to make the DROP an option, a
copy of the board resolution must be filed with the
Arkansas Fire and Police Pension Review Board.
June 10, 1993 Draft
Q.3. The local fire or police pension fund in my city has con-
solidated with LOPFI for administrative purposes. How
can we start the DROP program?
A.3. [RESERVED]
Q.4. When can an individual member of the plan elect the DROP?
A.4. The DROP is a retirement option and can be elected when a
member is eligible for retirement; that is, anytime after
attaining 20 years of service.
Q.S. How does the individual elect to begin the DROP?
A.S. Attachment 2 of this Board Rule is an election form for
the member. This form would have to be filled out prior
to the member beginning the DROP. When an individual
elects the DROP they have agreed to two important items:
First, they have fixed their retirement benefit at the
amount they would receive if they retired normally at
this time. The retirement benefit will NOT change during
the DROP period and will NOT change when the member
actually quits the department. In other words, when you
go on DROP, the monthly retirement you draw will be fixed
at that time and will never change, even when they
actually retire. The member's benefit will NOT increase
because of increased pay. The benefit will NOT increase
because of the extra service.
Second, they have agreed that they will be in the employ
of the department for a period not to exceed 5 years.
Note that a person is not required to go on DROP. The
DROP is just an extra option for a member.
Q.6. What is the amount of DROP payments?
A.6. A member's DROP account will be credited monthly for the
amount of the retirement benefit at the time the DROP is
elected. For example, an officer whose final salary is
$3,000 per month with exactly 20 years of service, who is
a member of a standard police pension plan, would have
June 10, 1993 Draft
r
•
50% or $1,500 per month
This member would begin
month at the end of the
credited to his DROP account.
receiving this same $1,500 per
DROP period.
Q.7. What if our pension plan receives a benefit increase dur-
ing the DROP period?
A.7. There is an exception in the laws that would apply if the
entire plan increased benefits under the usual procedure
when the Pension Review Board approves the increase. For
example, if the pension plan in the above Q&A received
approval for a benefit increase to a base benefit of 60%
of salary, the DROP payment would increase to 60% of
$3,000 or $1,800 per month. This member would begin
receiving this same $1,800 per month at the end of the
DROP period.
Q.8. Would the member continue making contributions while on
DROP?
A.B. The member would continue making contributions to the
• plan (not to the DROP account) while they are on DROP.
That is, 6% of current salary (4% of current salary for
policemen participating in Social Security).
•
Q.9. Besides the normal retirement benefit, what goes into the
DROP account?
A.9. One half of the employer matching contributions go into
the DROP account. That is, 3% of current salary (except
for police funds participating in Social Security, which
would be 2%). The account is also credited with interest
once a year
Q.10. Can you give an example of how the DROP account accumu-
lates?
A.10. Let's use the example of the police officer with exactly
20 years of service. The pension plan is standard, that
is, 50% of final salary. They do not participate in
Social Security. The officer's final salary is $3,000
June 10, 1993 Draft
r
•
•
•
per month. For this example, assume the salary does not
change during the DROP period. He remains on DROP for 3
years (i.e., 36 months).
Monthly DROP amount=50% of $3,000 = $1,500 per month
1/2 city match = 3% of $3,000 = $90 per month
DROP payments=36 X $1,500 $ 54,000
City Match=36 X $90 3,240
Interest 2.324
DROP account at end of 36 months $ 59,564
Q.11. How is the interest that is credited to the DROP account
calculated?
A.11. The Acts which established the DROP accounts specify that
interest will be credited annually. The law does not
specify the way to credit this interest. There are 3
methods of crediting interest to the DROP accounts that
will be considered acceptable. Of these three, Method 1
is preferred.
Method 1 One year's interest is credited to the begin-
ning of the year's balance in the DROP. No interest is
credited to the activity during the year. No interest
will be credited for the year the DROP account is dis-
tributed.
Method 2 One year's interest is credited to the begin-
ning of the year's balance in the DROP. One half year's
interest is credited to the sum of all activity in the
DROP regardless of date of activity. No interest will be
credited for the year the DROP account is distributed.
Method 3 One year's interest is credited to the begin-
ning of the year's balance in the DROP. All activity in
the DROP account is weighted according to the date of
activity. This weighting may be based on months or days.
This weighted activity would then receive one year's
interest. No interest will be credited for the year the
DROP account is distributed.
Q.12. Can you give an example of each method of crediting
interest?
June 10, 1993 Draft
r
A.12. Method 1 Assume the following facts.
December 31, 1993 DROP balance
94 DROP payments 12 X $1,350
94 City match 12 X $81
Interest rate
The interest credited for 1994
is
Method 2 Assume the following facts.
December 31, 1993 DROP balance
94 DROP payments 12 X $1,275
94 City match 12 X $76.50
Interest rate
The interest credited for 1994 is
Beginning of year balance
1/2 DROP payments
1/2 City match
Investment Base
times interest rate
1994 DROP interest
Method 3 Assume the following facts.
DROP elected September 1,
City match payments
Interest rate
The interest credited for
9/1/93 payments=$1,272 X
10/1/93 payments=$1,272 X
11/1/93 payments=$1,272 X
12/1/93 payments=$1,272 X
Investment Base
times interest rate
1993 DROP interest
1993
1993 is
4/12
3/12
2/12
1/12
$ 10,000
16,200
972
7%
$ 10,000
X 7$
$ 700
$ 8,000
15,300
918
6.5%
$ 8,000
+ 7,650
+ 459
16,109
X 6.5%
$ 1,047
$ 1,200/mo.
72/mo.
6$
$ 424
+ 318
+ 212
+ 106
1,060
X 6%
$ 63.60
Q.13. How is the interest rate certified by the actuary?
A.13. The Pension Review Board will communicate the necessary
information from the annual reports that are submitted to
it to the actuary for the Pension Review Board. The
June 10, 1993 Draft
•
r
•
•
•
actuary will then from time to time issue a list of local
plans which have elected participation in the DROP and
the certified interest rate for the DROP.
The interest rate used in the actuarial valuations as of
December 31, 1991 was 6%. Therefore, this would be the
minimum rate of interest credited to the DROP accounts at
that time. This rate of interest may be changed from
time to time.
Q.14. Does the plan have to maintain separate and/or distinct
assets for the DROP accounts?
A.14. No. The assets of the members" DROP accounts are com-
mingled with the other pension assets. The DROP accounts
are simply liabilities of the plan, and are accounted for
separately. DROP accounts are bookkeeping items and
should not affect the investment of the pension fund.
Q.15. Where is the DROP account administered?
A.15. The DROP accounts remain part of the local pension fund
during the DROP period. The amount of each DROP account
is calculated separately for each member who has elected
the DROP.
Q.16. What is the duration of the DROP?
A.16. A member's DROP will continue for 5 years or until termi-
nation of employment, whichever is first.
Q.17. What happens at the end of 5 years?
A.17. At the end of 5 years (or termination of employment if
earlier) the member's DROP account is distributed. The
member may receive the DROP account in a lump sum or as a
monthly annuity payable for the life of the member. The
June 10, 1993 Draft
•
•
•
•
member would also begin to receive the same monthly
retirement amount that had been going into the DROP
account.
The member has also agreed to terminate his employment
with the department at this time.
Q.18. What happens if the individual dies during the DROP
period?
A.18. One section of the member DROP election form allows the
member to name a beneficiary. If a member dies during
the DROP period, the named beneficiary would receive the
balance of the DROP account in a lump sum payment. The
member's widow (if there is one) would begin to receive
the normal widow's benefit based on the benefit at the
time the DROP was elected.
Q.19. What happens if the individual leaves the department dur-
ing the DROP period?
A.19. A member who leaves the department after electing the
DROP option but before the five years have expired would
begin receiving the same monthly retirement amount that
had been going into the DROP account. They would also
receive the DROP account either as a lump sum or as an
annuity as discussed in Q&A.17.
Q.20. What happens if an individual is disabled during the DROP
period?
A.20. A member is considered to have retired at the time that
they elected the DROP option. If a member is disabled
during the DROP period, they are treated as if they left
the department. The same procedure is followed as dis-
cussed in Q&A.19.
Q.21. How is the DROP account converted to an annuity at the
end of the DROP period?
June 10, 1993 Draft