HomeMy WebLinkAbout1993-08-26 - Agendas - Final•
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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
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Baird's resignation from the Board. ,, r•
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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
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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.
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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
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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
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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
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• Question: What if our pension plan receives a benefit increase
during the DROP period?
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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
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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
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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
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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
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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)?
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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
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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.
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Sample DROP Rules
P- 9 8/11/93 Final
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• Attachment 1 (continued)
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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
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• 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)
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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
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• Attachment 2 (continued)
Arkansas Fire and Police Local Plans
Deferred Retirement Option Plan (DROP)
Member Election Form
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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
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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