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HomeMy WebLinkAbout1993-08-26 - Agendas - Final• • • AGENDA FIREMEN'S PENSION AND RELIEF BOARD August 26, 1993 11:00 a.m. City Hall Room 326 1. Approval of the minutes of the July 29, 1993 meeting 2. Approval of the Pension List for September, 1993 3 Old Business A. Attendance Rules for Board meetings B. Board Vacancies 4. New Business 5. Adjournment 1 MINUTES OF A MEETING OF THE FIRE PENSION BOARD A meeting of the Fayetteville Firemen's Pension and Relief Board was held on Thursday, July 29, 1993, at 11:00 a.m. in Room 326 of the City Administration Building, 113 W. Mountain, Fayetteville, Arkansas. PRESENT: Pete Reagan, Ron Wood, Retiree Darrell Judy, Mayor Fred Hanna, City Clerk Sherry Thomas, City Treasurer Glyndon Bunton, and Administrative Services Director Ben Mayes. ABSENT: Marlon Doss and Retiree Richard Baird CALL TO ORDER Mayor Hanna called the meeting to order. MINUTES Reagan, seconded by Judy, made a motion to approve the minutes of the June 29, 1993 meeting. The motion was approved unanimously. PENSION LIST Reagan, seconded by Doss, made a motion to approve the pension list for August. There were no changes in the pension list. The motion was approved unanimously. OLD BUSINESS RICHARD BAIRD Reagan stated he had asked City Attorney Jerry Rose for an opinion regarding attendance at the pension meetings. Rose has sent the Pension Board a memo which states the pension board can set rules for attendance to the meetings. Reagan stated Richard Baird has asked Howard Boudrey to fill in for him at the meetings until he can return. However, Boudrey was upset when he was told he had no voting power on the board. Reagan stated the only way a replacement for Richard Baird would have the.. right to vote is. if the person were elected or appointed to fill a -vacancy `created by • Baird's resignation from the Board. ,, r• ` 1 Judy stated when he talked with Richard Baird, Baird'felt the board members were trying to railroad him and get him off the Board. Reagan stated that is not his intention. The retirees elected Baird as their representative just like they elected.Darrell :Judy. ...-.. Mayor Hanna stated all of this puts- the Board in an awkward position. If Baird is comfortable with getting Boudrey to fill in for him on this Board, that is okay, but Mayor Hanna agrees that Boudrey will have no voting authority. Mayor Hanna stated he feels it would be up to the retiree members of the pension fund to make • • • July 29, 1993 a decision regarding Baird's status on the Board. Mayor Hanna asked Darrell Judy to call a meeting of the retirees and discuss this issue. Wood stated he feels Baird has every intention of coming back to this Board. Judy stated he will try and get a meeting with the retirees and get an answer for the next pension board meeting. FINANCIAL STATEMENT Mayes stated the financial statements for the year ending December 31, 1992, were completed by the auditors, Coopers & Lybrand. The City is required to furnish financial information every year to LOPFI. These financial statements use the cost basis of the investments rather than the market value like Merrill Lynch uses when they provide the Board with the portfolio valuation. Reagan asked what the administrative fee of $2,246 listed on page 3 consisted of. Mayes stated it was not city related expenses. It is the actuary and audit expenses. INVESTMENT REPORT Richard Yada, of Merrill Lynch, addressed the Board and stated on August 11 there will be another pension meeting in Little Rock to discuss the recent legislation, especially the DROP Plan. There has been a lot of confusion about how to implement this plan. Bunton asked how many active firefighters are there approaching retirement that might be interested in the DROP Plan. Reagan stated there are 2 who have expressed some interest in this plan. Reagan stated this is permissive legislation and this Board can either adopt or not adopt to offer the plan. He stated the Board needed to have all of the ground rules together and all questions answered before they vote to offer the plan. Yada stated there will be no effect from this plan on the actuarially soundness of the fund. The initial retirement amount under the DROP Plan will not be changed by any future salary increases. Judy stated he did not see the advantage of using this plan. Reagan stated he felt the Pension Board should wait until after the next public hearing before they make any decisions regarding the DROP Plan. • July 29, 1993 INVESTMENT RECAP Yada stated the New Mexico Capital balance is $2.979 million. New Mexico is up 7.87% this year. Roxbury is up .82% for the year. The income account is up 4.29% for the year. Reagan asked what Yada thought about the way Roxbury was performing. Yada stated they had a great year in 1991, but not in 1992 or 93. They have had the fire pension money for about 3 years. They only have about $800,000 of the pension fund which is now valued in excess of $7 million. He recommends terminating Roxbury and allowing New Mexico Capital to handle that portion of the fund. Reagan asked if that would be an equity or balanced account. Yada stated about 1/2 would be in stocks and the other half would be fixed income. He stated by transferring the Roxbury funds to New Mexico, the pension fund would save about $1,200 in management fees per year. Restructuring the portfolio by New Mexico would cost about $1,500 to $2,000. So, there would probably be a net cost of about $1,000 to transfer between the managers. Bunton asked if the investment was in the name of Roxbury or in the City's name. Yada stated the funds were in the name of the pension fund. Yada stated there are about $20,000 in realized gains to be taken from the account. Actuarially, it would help the fund to take these gains and move the investments from Roxbury. He stated 80% of the unrealized gains can be used by the actuary. Reagan asked Ben Mayes for his comments. Mayes stated he felt the funds should be removed from Roxbury and given to New Mexico. The fund's investment policy stated they will give a money manager 3 to 5 years with the investment before making a change. Roxbury has had the money a little over three years and has not performed very well. Reagan, seconded by Bunton, made a motion to terminate Roxbury because of their performance, and reinvest the money with New Mexico Capital. The motion passed by a unanimous vote. M.L. FUTURES FUND Yada stated the "Other Investments" allocation according to the investment policy should be not more than 10%, and it is now at 2%. Yada stated Merrill Lynch has a new strategy fund called M.L. Futures. Merrill Lynch guarantees the worst that a person can do with their money is break even. He stated this is a speculative • • • July 29, 1993 type investment, but the principle is guaranteed. This can be sold every month with a 10 day notice . The most Yada stated he would recommend investing in this fund would be $100,000. He stated this investment has a negative correlation to the stock market. Reagan stated this doesn't sound too bad since the principal is guaranteed to be returned in five years. Bunton stated as diversified as the investments within this fund are, it should be okay. Reagan, seconded by Judy, made a motion to M.L. Futures fund. The motion was adopted BOARD VACANCIES invest $100,000 in the unanimously. Reagan stated he would like the Pension Board to address the problem of vacancies. He would like to get with City Attorney Jerry Rose and draft a policy that could be reviewed at the next meeting. Mayor Hanna stated he felt that would be a good idea. DROP PLAN Richard Yada stated he would try and attend the next public hearing on the DROP Plan and report on that hearing at the next Pension Board meeting. ADJOURNMENT The meeting adjourned at noon. 7 ARKANSAS FIRE AND POLICE PENSION REVIEW BOARD Administration of DROP Accounts Sample Rules for Local Pension Boards with Common Questions and Examples SECTION 1. Local Election of DROP Program 2. Individual Member Election of the DROP Option 3. Accumulation of DROP Account 4. Employee Contributions 5. Interest Rate Certification 6. Location and Administration of DROP Funds 7. Conclusion of the DROP Period 8. Disability Benefits 9. Distribution of DROP Account 10. Reporting Requirements 11. Tax Information Attachment 1 Resolution to Elect Participation in the DROP Attachment 2 Individual Member Election Form for DROP Attachment 3 Actuarial Equivalence Factors SECTION 1. Local Election of DROP Program A. Cost of DROP The pension board understands that adding the DROP option may increase the cost of the pension plan. New factors affecting cost may be activated by the adoption of the DROP provision. Some of these factors include present plan provisions, age and service when DROP is elected by a member, and the relationship between pay when DROP is elected and pay at the time of actual retirement. B. Resolution. In accordance with Attachment 1 to these rules is an executed resolution adopting the DROP program. SECTION 2. Individual Member Election of the DROP Option A. Eligibility. The DROP is a retirement option and can be elected when a member is eligible for service retirement; that is, anytime after attaining 20 years of service. Sample DROP Rules P. 1 1 8/11/93 Final • • • B. Election Form. Attachment 2 of these rules is an election form for the member. This form must be completed at least 30 days 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 you actually retire. The member's benefit will NOT increase because of increased pay. The benefit will NOT increase because of the extra service. *There are two exceptions: The age 60 bonus (based on over 25 years of service earned before the DROP period) starts at age 60; Any retiree raises granted to all retirees, or over- all benefit increases, are also given to persons on DROP. Second, they have agreed that they will be in the employ of the department for a period not to exceed 5 years. C. Optional. The DROP is an option in lieu of normal retire- ment benefit. A member is not required to go on DROP. This is an option that MAY be elected by a member. SECTION 3. Accumulation of DROP Account Each individual member's DROP account will be credited with the following items during the DROP period: A. DROP Payments. A member's DROP account will be credited monthly for the amount of the retirement benefit at the time the DROP is elected. These amounts are credited to the DROP account at the end of each month. 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 50% or $1,500 per month credited to his DROP account. This member would begin receiving this same $1,500 per month at the end of the DROP period. All increases earned at the time DROP is elected are reflected in the DROP payments. For example, if the above officer had 27 years of service his benefit would be: ($3,000 X 50%) + (5 X $20) = $1,600. When he reaches age 60 his payment will be increased by (2 X 1.25% X $3,000) = $75 to $1,675. Sample DROP Rules p. 2 8/11/93 Foul • • Question: What if our pension plan receives a benefit increase during the DROP period? • • Answer: There is an exception in the laws that would apply if the entire plan increased benefits under the usual procedure when the Arkansas Fire and Police Pension Review Board approves the increase. For example, if the pension plan received approval for a benefit increase to a base benefit of 60% of salary, the DROP payment in the example above 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. B. Bnployer Contributions. One-half of the employer matching contributions are credited to the DROP account. That is, for firefighter plans and police plans that do not partici- pate in Social Security, 3% of current salary. 2% of cur- rent salary is added to the DROP account for police plans which participate in Social Security. Plans that have voluntarily agreed to a rate higher than 6% would contribute one-half of that amount. These amounts will be credited to the DROP account at the end of each month. C. Interest. Interest is to be credited to the DROP account at the end of each year. One year's interest is credited to the beginning of the year's balance in the DROP account. No interest is credited to the activity during the year. No interest will be credited for the year that the DROP account is distributed. Question: Can you give an example of how the DROP account accumulates? Answer: 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 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). Sample DROP Rules Monthly DROP amount=50% of $3,000 = $1,500 per month 1/2 city match = 3% of $3,000 = $90 per month P. 3 8/11/93 Final • • • • DROP payments=36 X $1,500 City Match=36 X $90 Interest DROP account at end of 36 months Question: $ 54,000 3,240 2.324 $ 59,564 Can you give an example of the method of crediting interest? Answer: 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 $ 10,000 16,200 972 7% $ 10,000 X 7% $ 700 December 31, 1994 DROP balance $ 27,872 95 DROP payments 16,200 95 City match 972 95 Interest rate 6% The interest credited for 1995 is SECTION 4. Employee Contributions $ 27,872 X 6% $ 1,672 The member continues to make employee contributions at the same rate. These employee contributions are credited to the pension plan and not to the member's DROP account. SECTION 5. Interest Rate Certification The rate of interest that is to be credited to the DROP accounts is to be certified by the actuary for the Arkansas Fire and Police Pension Review Board. SECTION 6. Location and Administration of DROP Funds A member's DROP account remain a part of the pension fund until it is distributed. Sample DROP Rules p. 4 8/11/93 Pool • • • , Question: Answer: Question: Answer: Does the plan have to maintain separate and/or dis- tinct assets for the DROP accounts? No. The assets of the members' DROP accounts are commingled with the other pension assets. The DROP accounts are simply liabilities of the plan, and are accounted for separately. DROP accounts are book- keeping items and should not affect the investment of the pension fund. Where is the DROP account administered? 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 mem- ber who has elected the DROP. SECTION 7. Conclusion of the DROP Period The rules regarding the time of conclusion of the DROP period, the distribution of the DROP account, and the amount of the retirement benefit at the end of the DROP, will be the same as those under Board Rule #10 of the Arkansas Fire and Police Pen- sion Review Board. Question: What happens if the individual dies during the DROP period? Answer: Death benefits are paid per section 9 of Board Rule #10. One section of the member DROP election form allows the member to name a beneficiary. If a mem- ber dies during the DROP period, the named benefi- ciary 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. If there is no living beneficiary then the DROP account would be paid to the deceased's estate. Question: What happens if the individual leaves the department during the DROP period? Sample DROP Rules P. 5 8/11/93 Fuel • • • Answer: 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 later in these rules. SECTION 8. Disability Benefits If a member of a fire or police department becomes disabled dur- ing the DROP period, and if he is otherwise entitled to a dis- ability retirement, he may elect a disability retirement upon approval by the local pension board. If such disabled member elects to receive a disability retirement, then he will not receive his accumulated DROP account, but will instead be consid- ered a disability pensioner who never went on DROP. Question: Can you give an example of how the disability bene- fit works? Answer: Let's use the following assumptions in looking at an example of a duty related disability. This example assumes that the member was disabled at age 50 after 3 years on DROP. Assume he elected DROP at exactly 20 years of service and was earning $30,000 per year at the time. DROP payments 50% X $30,000 X 3 City match 3% of salary per year Interest credited DROP account at the end of 3 years True annuity factor Additional benefit from DROP account Benefit at end of DROP period Equivalent monthly benefit Salary at date of Duty Disability 65% of salary for duty disability "Regular" disability benefit $ 45,000 2,700 2.919 $ 50,619 X .0065144 $ 329.75 1.250.00 $ 1,579.75 $ 34,000 X .65 $ 22,100 This member benefits from the disability benefit normally provided by the pension fund. Therefore, after the disability application is approved by the pension board, he would begin to receive $1,841.67 per month. He would not receive his DROP account. Samek DROP Rules p. 6 8/11/93 Final • • • SECTION 9. Distribution of DROP Account A member who has a DROP account must be allowed to choose to receive his or her DROP account as either a lump sum or a true annuity, as described below. A table of conversion factors for a true annuity are given as Attachment 3. A. Lump Sum. A lump sum amount equal to the accumulation of the DROP account as defined in Section 5 of these rules as of the date of the conclusion of the DROP period. B. True Annuity. A true annuity is payable monthly during the lifetime of the member only. If the true annuity is not purchased from an insurance company licensed to do business in the State of Arkansas, the monthly amount of the true annuity will be paid out of the pension fund. In this case, the monthly amount is the actuarial equivalent of the lump sum in A. above. The factors in Attachment 3 will be used. Question: Can you give an example of converting to an annuity? Answer: We are given the following situation. DROP elected September 1, 1993 DROP payments (based on $3,000/mo pay) Police plan participating in Soc. Sec 93 City match payments ($3,000/mo pay) 94 City match payments ($3,040/mo pay) 95 City match payments ($3,162/mo pay) 96 City match payments ($3,288/mo pay) 97 City match payments ($3,420/mo pay) 98 City match payments ($3,556/mo pay) Interest rate all years (Method 1) DROP account balance 12/31/93 DROP account balance 12/31/94 DROP account balance 12/31/95 DROP account balance 12/31/96 DROP account balance 12/31/97 DROP account balance 8/31/98 Final Age nearest birthday of 55 on 8/31/98 DROP converted to monthly benefit Retirement benefit Total monthly income beginning 9/1/98 NOTE: If this member had NOT gone on the DROP, his retirement benefit on 9/1/98 would be based on $3,556 per month pay and would be: Sample DROP Rula P. 7 $ 1,500.00/mo. 240.00 729.60 758.88 789.12 820.80 568.96 6% $ 6,240.00 25,344.00 45,623.52 67,150.05 89,999.85 102,568.81 X 0.0070869 726.90/mo. 1.500.00/mo. $ 2,226.90/mo $ 1,878.00/mo. 8/11/93 Final . Question: What would be paid when the member in the above example dies (after 9/1/98)? • • Answer: The $726.90 increment from the DROP stops since the true annuity has no widow benefit. If the retiree had an eligible spouse, she would receive $1,500 per month, assuming the plan qualifies for the ACT 397 widow's benefit. Question: Does the plan have to purchase an annuity from an Insurance Company at the end of the DROP period? Answer: No, the DROP account is converted to a monthly bene- fit and the separate DROP accounting is no longer necessary. The money leaves the plan as the calculated monthly increments are paid to the retired member. SECTION 10. Reporting Requirements The financial and member information required to be reported annually will be supplemented by a detailed listing of each mem- ber currently on DROP and the amount of their DROP account as of the end of the current reporting period. SECTION 11. Tax Information The Arkansas Fire and Police Pension Review Board and the Board of Trustees of this Pension Fund assume no responsibility for any adverse tax consequences which may accrue to a participant in the DROP. Participants in this plan are encouraged to seek advice from their own tax advisors prior to enrolling for participation in this plan. If the Internal Revenue Service determines that the DROP is not a qualified deferred compensation plan, a partic- ipant may have liability for not only the tax due on the funds deposited in their DROP account, but also substantial penalties and interest may be applicable. The Arkansas Fire and Police Pension Review Board and the Board of Trustees of this Pension Fund assume no liability for such adverse consequences. Sample DROP Rules p, 8 8/11/93 Final • • • Attachment 1 RESOLUTION TO ELECT PARTICIPATION IN THE ARKANSAS POLICE OFFICERS DEFERRED RETIREMENT OPTION PROGRAM Whereas, Act 757 of 1993 established the Arkansas Police Officers Deferred Retirement Option Program pursuant to the approval of the local pension board; Whereas, this local pension board believes that it is to the advantage of the members of this pension plan and of benefit to our municipality for this option to be made available to our members; It is therefore resolved, that the Board of Trustees of the City of Police Pension and Relief Fund approves and elects that this plan have the Deferred Retirement Option described in Act 757 of 1993 available to its members. • The Board of Trustees, in electing to participate in this plan, agree to abide by the following: 1. The Deferred Retirement Option Program (DROP) will be made available to all members of the plan who are eligible. 2. The DROP account will be maintained as a part of the total pension fund. 3 The DROP accounts will be administered accord- ing to Arkansas Fire and Police Pension Review Board Rule 810 and rules adopted by the Board of Trustees. 4 Once the DROP account is elected, a member's monthly retirement cannot increase due to pay raises or extra years of service worked. That is, the monthly payments made to the member at the end of the DROP period will be the same as the amount of monthly payment into the DROP account. • Sample DROP Rules P- 9 8/11/93 Final • • Attachment 1 (continued) • • There are two exceptions: Raises given to retirees are given to members on DROP; Age 60 bonuses still apply to members who have over 25 years of service when they go on DROP. 5. A copy of this signed resolution will be filed with the Arkansas Fire and Police Pension Review Board. This election may be effective on the date of resolution, but no earlier than August 13, 1993. DATE Chairman Sample DROP Rula Secretary/Treasurer Member Member Member Member Member p. 10 8/11/93 Final • • Attachment 1 RESOLUTION TO ELECT PARTICIPATION IN THE ARKANSAS FIREFIGHTERS DEFERRED RETIREMENT OPTION PROGRAM Whereas, Act 1004 of 1993 established the Arkansas Firefighters Deferred Retirement Option Program pursuant to the approval of the local pension board; Whereas, this local pension board believes that it is to the advantage of the members of this pension plan and of benefit to our municipality for this option to be made available to our members; It is therefore resolved, that the Board of Trustees of the City of Firefighters Pension and Relief Fund approves and elects that this plan have the Deferred Retirement Option described in Act 1004 of 1993 available to its members. • The Board of Trustees, in electing to participate in this plan, agree to abide by the following: 1. The Deferred Retirement Option Program (DROP) will be made available to all members of the plan who are eligible. 2. The DROP account will be maintained as a part of the total pension fund. 3. The DROP accounts will be administered accord- ing to Arkansas Fire and Police Pension Review Board Rule #10 and rules adopted by the Board of Trustees. 4. Once the DROP account is elected, a member's monthly retirement cannot increase due to pay raises or extra years of service worked. That is, the monthly payments made to the member at the end of the DROP period will be the same as the amount of monthly payment into the DROP account. • Sample DROP Rules p. 11 8/11/93 Final • . Attachment 1 (continued) • • There are two exceptions: Raises given to retirees are given to members on DROP; Age 60 bonuses still apply to members who have over 25 years of service when they go on DROP. 5. A copy of this signed resolution will be filed with the Arkansas Fire and Police Pension Review Board. This election may be effective on the date of resolution, but no earlier than August 13, 1993. DATE Chairman Secretary/Treasurer Member Member Member Member Member Sample DROP Rules p. 12 8/11/93 Final Attachment 2 Arkansas Fire and Police Local Plans Deferred Retirement Option Plan (DROP) Member Election Form I hereby elect the DROP as my retirement benefit option from the Pension Plan in place of the normal retirement benefit. I under- stand that in electing the DROP I have agreed to the following statements: 1." The amount of the DROP payments will be $ per month. This amount includes all service and age 60 bonuses that I have earned to this date. This amount is the same as if I retired today. 2.' I understand that the monthly benefit that I will receive at the end of the DROP period is the exact same amount stated in item 1, regardless of any pay raises I receive or extra years of service I may work. 3. I understand that at the end of the DROP period I will have the option to receive the DROP account as a lump sum or convert the DROP account to a monthly annuity amount. 4. I understand that the DROP account will remain in the pension fund until I leave the department. I do not have the ability to withdraw from the DROP account until the time of my departure. 5. I have elected to begin the DROP on The DROP will end at the earlier of when I resign or (5 years from above date). 6. I understand that neither the pension fund or the depart- ment has given any tax advice concerning the way the DROP account is taxed. I have or will consult my own tax advisor for this information. 'Two exceptions to these rules: Age 60 bonuses (for members with over 25 years of service when they go on DROP) begin at age 60 whether still on DROP or not; Raises given to retirees are also given to DROP participants. Member signature Plan Representative Sample DROP Rules Date Date p. 13 8111193 Fuel • • Attachment 2 (continued) Arkansas Fire and Police Local Plans Deferred Retirement Option Plan (DROP) Member Election Form • • DESIGNATION OF BENEFICIARY I hereby designate the following beneficiary to receive any bene- fits from the DROP plan if I die prior to my termination of employment: Signature of Member Date Please select one of the following: I certify that to the best of my knowledge, the above named Member is single or that his spouse cannot be located. Signature of Plan Representative Date or Notary I certify that I have agreed with my spouse on the selection of the above beneficiary or beneficiaries. I understand that if I am not the named beneficiary, I will not be entitled to benefits under the Plan. Signature of Spouse Date I certify that I have witnessed the spouse's signature above. Signature of Plan Representative Date or Notary Supple DROP Rules p. 14 8/11/93 Fuel • • • • • Attachment 3 Arkansas Fire and Police Local Plans Deferred Retirement Option Program (DROP) Actuarial Equivalence Factors for converting the DROP account to a true annuity Factors for converting to a monthly annuity payable for the life of the member only. Age nearest Bithday at End of DROP 46 47 48 49 50 51 52 53 54 55 56 57 58 Sample DROP Rula Multiply DROP account Dv this factor O 0061608 O 0062362 0 0063263 0 0064190 0 0065144 O 0066128 0 0067141 0 0068339 0 0069581 O 0070869 0 0072205 O 0073593 O 0075250 Age nearest Bithday at End of DROP 59 60 61 62 63 64 65 66 67 68 69 70 Multiply DROP account Dv this factor O .0076984 O .0078800 O .0080704 O .0082702 O .0084996 0.0087420 0.0089987 O .0092709 O .0095602 O .0098656 O .0101912 O .0105390 p. 15 8/11/93 Fuld • • D11 n ARKANSAS FIRE & POLICE PENSION REVIEW BOARD P.O. DRAWER 34164 LITTLE ROCK. ARKANSAS 72203 TELEPHONE (501) 324-9495 August 11, 1993 FAX:(501)324-9497 To: All Interested Parties From: Arkansas Fire and Police Pension Review Board Subject: Adoption of Board Rule 110 On June 10, 1993 the Arkansas Fire and Police Pensicn Review Board adopted Proposed Board Rule 110 for hearing and consider- ation. A hearing on this Proposed Board Pule was held on July 14, 1993 and many comments were received by the Board. As a result of the comments received and further consideration, the Arkansas Fire and Police Pension Review Board has adopted Board Rule 110 to be effective August 13, 1993. The following changes were made from the Proposed Board Rule: 1. Change in Format. The proposed rule was in a question and answer format. The format has been changed to the format most normally used by state agencies in issuing regulations. This change in format was made so as not to alter the mean- ing of the proposed rule except as noted below. 2. Specific Administration Rules Removed. Many comments were received by the Board as to the extent of their authority to make rules that were as detailed as the proposed rule. An effort was made to allow the local boards the freedom to operate and, at the same time, give guidance to the plans who would appreciate the assistance. Although the Board believes that all aspects of the proposed rule deal with the level of benefits or funding issues, only the most signifi- cant aspects have been left intact. All other sections have been removed and made a part of a set of sample administrative rules which will be deemed appropriate by the Pension Review Board. one suggestion made at the hearing was that plans who wish to draft their own administrative rules do so, and, file those rules with the Pension Review Board. The final rule incorporates this suggestion. Adoption Notice r. 1 8111193 Final 3 Disability Benefits. There were several different view - IIIpoints about the treatment of disability benefits. The pro- posed rule did not permit disability retirement during the DROP period. Some commentators suggested that a person be allowed to receive a disability retirement and their DROP account. The final rule allows a local pension board to provide disability benefits pursuant to existing law. • • Inquiries concerning this Board Rule should be directed to Cathyrn Hinshaw, Executive Director, Arkansas Fire and Police Pension Review Board, at (501) 324-9495. Cathyrn Hinshaw, Executive Director Arkansas Fire and Police Pension Review Board Adoption Notice p. 2 8/11/93 Fuel FAYETTEVILLE TI OF FAYETTEVILLE, ARKANSAS SHERRY L. THOMAS, CITY CLERK • July 30, 1993 Mr. Richard Yada Merrill Lynch 425 W. Capitol Little Rock, AR 72201 Dear Richard: At the July 29, 1993 meeting of the Firemen's Pension & Relief Board, the Board voted to terminate Roxbury as a money manager and reinvest those funds with New Mexico Capital Management. Please accept this letter as your official notification and proceed with terminating Roxbury and reinvesting the funds. If you there is any additional information you need, please let me know. Thank you for your assistance. Sincerely, /WeU Sherry L. Thomas Secretary Firemen's Pension Board cc: Firemen's Pension Board members 113 WEST MOUNTAIN 72701 501 575-5323