HomeMy WebLinkAbout1993-06-29 Minutes•
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MINUTES OF A MEETING OF THE FIRE PENSION BOARD
A meeting of the Fayetteville Firemen's Pension and Relief Board
was held on Tuesday, June 29, 1993, at 10:00 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, LaGayle McCarty, Assistant City
Attorney, and Martha Lindsey, Finance Department.
ABSENT: Retiree Richard Baird
CALL TO ORDER
Mayor Hanna called the meeting
MINUTES
Reagan, seconded
the June 3, 1993
PENSION LIST
to order.
by Judy, made a motion to approve the minutes of
meeting. The motion was approved unanimously.
Reagan, seconded by Doss, made a motion to approve the pension list
for July. There were no changes in the pension list. The motion
was approved unanimously.
OLD BUSINESS
NEW LEGISLATION REPORT
Reagan asked to comply with Act 1197 of 1993 does the fund have to
be actuarially sound to increase the minimum benefit. McCarty
stated that it does not have to be. The act merely increases the
minimum amount for both volunteer and full time retirees with all
other regulations staying the same.
Reagan asked regarding the Drop Plan, if a firefighter has in 20
years of service and opts for this plan, 1/2 of his salary goes
into the trust fund, does the city's share continue to be paid?
McCarty stated that it would continue to be paid.
Reagan asked Mayor Hanna if the City would continue to pay 12% or
would they pay only 6%. Mayor Hanna stated he did not know, but
suggested Reagan get with Ben Mayes and/or Personnel Director Don
Bailey to determine this answer.
Reagan stated the Fire Pension Board needs to meet on this Drop
Plan and decide if Fayetteville will participate in this plan and
if so, guidelines for participation need to be established. He
suggested a workshop be set up to discuss this plan.
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Doss stated the
should also be
person chooses
goes to a trust
level and not
McCarty stated
passed.
June 29, 1993
long range effects on the pension fund of this plan
considered. He asked if after working 20 years, a
to participate in this plan and 50% of his salary
fund, will his retirement benefit be frozen at that
take into consideration future pay increases.
that issue was not addressed in the act that was
Mayor Hanna stated he would ask Ben Mayes to research this
it can be discussed further at the next pension meeting.
RICHARD BAIRD
act so
Darrell Judy stated he had contacted Richard Baird, and Baird wants
to continue to be a member of the Board. He would like for Howard
Boudrey to fill in for him until he is able to attend the meetings
himself.
GARY SPRINGSTON TERMINATION
Reagan asked if Gary Springston withdrew his pension contributions
from the fund. Thomas stated Springston did withdraw. She
prepared a check request withdrawing the pension in the amount of
$14,980.60 which is the total of his contributions during the time
he was a firefighter.
NEW BUSINESS
ROXBURY INVESTMENT REPORT
Richard Yada and Curtis Williams of Merrill Lynch were both
present, and they introduced Katie Hayden who is with Roxbury
Investments and was present to give a report on the Roxbury
portfolio.
Ms. Hayden gave the pension board a brief history of the company
which was founded in 1986 but was founded by Tony Browne and Harry
Wilson, both of whom have many years' experience in the investment
business. The company manages $1.2 billion, has 7 institutional
clients and 119 individual clients. There are 22 employees and 5
owners.
Ms. Hayden stated Roxbury buys stocks that are selling below the
worth of the company. Roxbury combines both growth and value in
the same portfolio. They look to invest in companies that maintain
a constant earning stability and return money in the form of
dividends. Roxbury invests in basically 50 stocks, and they do
research and personally visit each of the 50 companies in which
they invest. She stated the portfolio consists of between 30-60%
blue chip stocks, 20-40% small to medium stocks, and about 20% in
specialized stocks.
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June 29, 1993
Ms. Hayden stated Roxbury does have a sell discipline that when
prices decline 15% from their high or cost, they look to see if the
stock should be sold. In the last 10 years, compared with 31 other
managers, Roxbury has been in the top 10% of the managers. They
have outperformed their peers since 1983 by 5.7%.
Roxbury has reworked the client portfolios to try and do the best
in today's economy. Roxbury is seeking to invest in the types of
securities that are not sensitive to interest rate changes. They
do feel interest rates will remain low for some time to come.
Reagan stated for the past 1 and 1/2 years, the pension fund
portfolio has been down compared to the rest of the market. He
asked for an explanation of this from Ms. Hayden.
Ms. Hayden stated when Roxbury started with the account in 1990,
the market was down. In 1991, the market was up, and they earned
about 42% interest. Roxbury realized the portfolio needed to be
changed to deal with the recession because the companies that had
been performing well would not continue to do so. Since Roxbury
has had the account, the pension fund has had about an 11.7%
return. She stated January and February were terrible, but they
have had a good month and expect to have good quarter. The market
is up about 3.5% year to date, and the portfolio is up about 1%.
Reagan stated he was concerned about the length of time it was
taking to reposition the portfolio.
Ms. Hayden stated Roxbury buys stocks in blocks, and if they sold
huge blocks of stock at one time, it could drive down the value of
the stock. So, they slowly reposition the stocks to keep from
losing value.
Reagan asked what percentage of growth they are aiming at for 1993.
Ms. Hayden stated she does not know because of all of the
uncertainty in the market and economy. They hope to have a growth
rate between 15 and 18%.
Richard Yada stated Wal Mart was down 20% since January, which
indicates growth is down in the majority of areas of the stock
market.
Ms. Hayden stated retailers are hurting right now. She feels the
pension fund portfolio is about 92% restructured.
Yada stated as of yesterday, the fund was actually up for the year.
Curtis Williams asked if Roxbury does economic forecasting.
Ms. Hayden said they did do some forecasting. Roxbury studies a
certain stock selection which leads them into industry study of
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June 29, 1993
that particular sector. She stated Roxbury's long term record has
been better than the market. Since inception of the account with
Roxbury, which was March 31, 1990, the pension fund has had an
11.3% annualized average rate of return.
Williams explained that an ADR, or an American Depository Receipt,
was a foreign based company that is listed on the American stock
exchange. An example of this is Nestle's, which is a Swiss
company. At Merrill Lynch, they are trying to get the portfolio at
20% in foreign stocks. The United States now only consists of
about 35% of the world economy as opposed to the 65% that we used
to represent.
Glyndon Bunton asked with the small to medium sized stock
companies, when does Roxbury expect to see gains.
Ms. Hayden stated the fear of inflation has caused these stocks to
decline. One of these companies, Alza Corporation, as of
yesterday, only had a relatively small loss. They are a drug
delivery system company, and they should be able to do ok in the
market.
ADJOURNMENT
• The meeting adjourned at 11:10 a.m.
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