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.