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HomeMy WebLinkAbout1993-09-30 MinutesMINUTES OF A MEETING OF THE FIRE PENSION BOARD A meeting of the Fayetteville Firemen's Pension and Relief Board was held on Thursday, September 30, 1993, at 11:15 a.m. in Room 326 of the City Administration Building, 113 W. Mountain, Fayetteville, Arkansas. PRESENT: Marion Doss, Ron Wood, Pete Reagan (arrived late), Retirees Darrell Judy and Richard Baird, Mayor Fred Hanna, City Clerk Sherry Thomas, and City Treasurer Glyndon Bunton. CALL TO ORDER Mayor Hanna called the meeting to order. MINUTES Bunton, seconded by Wood, made a motion to approve the minutes of the August 26, 1993 meeting. The motion was approved unanimously. PENSION LIST Judy, seconded by Doss, made a motion to approve the pension list for October. There were no changes in the pension list. The motion was approved unanimously. OLD BUSINESS ROXBURY MANAGEMENT FUND Thomas stated she had received a check in the amount of $494.34 which was a refund of management fees after terminating Roxbury. She had given the check to Administrative Services Director Ben Mayes to put into the Fire Pension Fund. INSURANCE CERTIFICATES Thomas stated she had received certificates of insurance from the various insurance companies and policies for Merrill Lynch, Inc. Richard Yada, of Merrill Lynch, stated the City's auditors had requested a copy of these. NEW BUSINESS DROP PLAN Doss stated he had some materials on the Drop Plan. Thomas made and distributed copies. Mayor Hanna suggested everyone read the information and discuss the plan at the next meeting. • • 1 September 30, 1993 CHASE MANHATTAN BANK LAWSUIT Thomas stated she had received information regarding a lawsuit filed against the Chase Manhattan Bank and informing investors of this litigation. She sent the information to City Attorney Jerry Rose who reviewed the material and replied that he did not see any problems associated with this litigation and the Pension Fund. INVESTMENTS Richard Yada stated the New Mexico Capital balance is $3,101,225 as of August 31. For the same period, Roxbury's balance was $856,646, and the income account had a balance of $3,116,515. He stated the City has a treasury bill invested for the fund that is about $157,000 and matures in October. He requested that Thomas asked Ben Mayes, the Administrative Services Director, the status and exact amounts of that treasury bill. Yada stated through August, New Mexico Capital was up 12.29%, Roxbury was up 7.21%, and the income account was up 6.63%. New Mexico has outperformed many of the managers. These are all pretty good incomes compared to the Dow Jones that was up 7.42%. The portfolio is invested about 58% in stocks and 42% in fixed income. Inflation through July was 1.76%. Yada stated a lot of the bonds that the fund has invested in are and will continue to be called. They are being called and paid off because of their higher interest rates. Then Merrill Lynch reinvests the money but at lower interest rates. The 30 year treasury is earning about 6%, so he feels the interest rates will continue to be low and inflation will not be a major factor for quite some time. Therefore, the rates of return for the pension fund will be coming down. The total portfolio value is in excess of $8 million. The total stock investment is about 30% of the portfolio. During these times when the stock market is doing better than the other markets, the money managers need to be able to invest more in the market. He talked with New Mexico last week, and they are invested about 58% in stocks which results in this fund being about 30%. They would like to have the Board's permission to invest up to 65% which would result in the pension fund being invested at about 33% in stocks. Most public pension plans are invested up to 40% in stocks. This pension fund is more conservative that the majority of pension plans. He does not feel it would increase the risk of the fund to increase the stock exposure from 30% to 33%. Yada stated that the management fee paid to New Mexico Capital had been .6 of 1%. He was able to negotiate with them because of transferring the Roxbury funds to that account and get the fee down to .5 of 1%. Roxbury's fee had been higher, so in all, this should save the pension fund about $4,000 per year. • • • September 30, 1993 Bunton stated with the interest rates staying low, he was comfortable with the fund being invested 33% in the stock market. Reagan, seconded by Judy, made a motion to transfer the Roxbury securities to New Mexico Capital and to allow New Mexico Capital's asset allocation to be as high as 65% in its portfolio that would result in about 33% of the Fire Pension Fund being invested in the stock market. The motion passed unanimously. Bunton stated he would like for Ben Mayes to provide the Board with information about the cap on stock investment of the fund. ADJOURNMENT The meeting adjourned at 11:45 a.m.