HomeMy WebLinkAbout1994-02-24 - Agendas - FinalF
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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 Thursday, January 27, 1994, at 10:00 a.m. in Room 326
of the City Administration Building, 113 W. Mountain, Fayetteville,
Arkansas.
PRESENT: Marion Doss, Pete Reagan, and Ron Wood, Retirees Darrell
Judy and Richard Baird, Mayor Fred Hanna, City Clerk
Sherry Thomas, and Treasurer Glyndon Bunton
CALL TO ORDER
Marion Doss called the meeting to order.
MINUTES
Baird, seconded by Judy, made a motion to approve the minutes of
the November 18, 1993 meeting. The motion was approved
unanimously.
PENSION LIST
Reagan, seconded by Wood, made a motion to approve the pension
lists for January and February, 1994. There were no changes in the
pension list. The motion was approved unanimously.
OLD BUSINESS
DROP PLAN
Reagan, seconded by Judy, made a motion to table the discussion on
the Drop Plan to allow time for further information to be gathered
on the plan. The motion passed unanimously.
NEW BUSINESS
ARVEST TRUST PRESENTATION
Bob Plummer of Arvest Trust made a presentation to the Fire Pension
Board regarding their Passport Plus Investment Account. He stated
he was not advocating the Board move their funds from one of the
current investors. He was proposing the Board consider placing a
small amount with Arvest and let them show the Board what can be
done. He stated their investments were placed with Fidelity
Investment Company which is one of the largest mutual fund
companies in the United States. He stated their fees are 1%
annually. There is no minimum investment, but there is a minimum
fee of $20 per month.
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January 27, 1994
LLAMA COMPANY
Wendell Bailey of Llama Company stated they were a bond specialty
company. They have a minimum account of $5 million, but they are
working on a program to combine several smaller investors to meet
the minimum. Their fee is 30 basis points or 1/3 of 1%. He stated
their returns beat the Shearson Lehman Intermediate Bond Index for
the last 5 years.
MERRILL LYNCH INVESTMENT REPORT
Richard Yada stated the portfolio manager will be at the next
meeting to give the year end report.
Yada stated the New Mexico Capital
million. They had a 15.34% return
Jones of 16.96% and Standard & Poors
quite well for 1993. Inflation was
portfolio
for 1993,
at 10.09%.
not quite
is valued at $4.205
compared to the Dow
So, New Mexico dad
3% for 1993.
He agreed with tabling the discussion on the Drop Plan. He stated
there were a lot of unanswered questions about the program.
Yada stated the fixed income portfolio has an average maturity of
5 years because of the cash flow needed for pension distributions.
The account had a return of 7.01% for 1993. The average return
with all portfolios combined was 9.28%. He stated 1993 was a good
year for the stock market. Yada stated the allocation between
stocks, fixed income, and cash is pretty close to the target
allocation.
Yada stated they anticipate the short term interest rates to
increase somewhat. This could take the long term rates up a
little. However, long term rates could be lower by this time next
year.
Reagan asked if the 6.3% in cash included the $245,000 T bill that
just matured.
Ben Mayes stated that was currently being held by the City. He has
requested bids on investing the money as the Board requested of him
at the last meeting.
Mayor Hanna stated the Police Pension Fund had a projection about
what percentage needed to be earned for soundness of the fund. He
asked if the Fire Pension Fund had such a projection.
Mayes stated they did not because the Police Fund had been unsound
for quite some time and paid for an additional study which provided
them with the projected figure.
Mayor Hanna asked if the Fire Pension Fund was on target with their
earnings to become sound.
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January 27, 1994
Reagan stated he thought some time ago they had come up with the
figure of about 12% earnings for 7 years to become sound.
Yada stated he would have to look back for the exact figures, but
he stated the earnings are ahead of projections.
Reagan asked Yada if the $245,0000 was awarded to Merrill Lynch,
how would he invest the money.
Yada stated he would probably advise a 15 year treasury bill.
Mayes distributed the bid tabulations from the various investment
companies. He stated A.G. Edwards bid a little differently by
dividing the money into three investments with staggered maturity
dates.
Reagan stated he remembered when other treasury bills have matured,
they have automatically been awarded to Merrill Lynch. He has been
happy with Merrill Lynch returns and the service Richard Yada has
been providing.
Reagan made a motion to award the $245,000 to Merrill Lynch.
Mayor Hanna asked if the money would be invested according to the
bids or however Merrill Lynch thinks best.
Yada stated it would be invested according to the investment guide
and the current asset allocation.
Glyndon Bunton asked Yada what would be the length of term this
money would be invested.
Yada stated probably 5 years or less. He stated there is currently
money set up to mature each month. Merrill Lynch has targeted
these funds to be longer term to take advantage of higher yields
since the short term needs are already being met.
Judy seconded the motion to award the money to Merrill Lynch.
The motion was approved unanimously.
Reagan thanked the representatives from the various companies for
bidding on this investment. He stated when the Pension Board
decides to re -bid the fund, they will invite all of the management
companies to bid and allow them time to give presentations to the
Board.
The A.G. Edwards representative asked when the fund was scheduled
to be re -bid. He stated there are a lot of good local companies
that would like to have a chance at the business.
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January 27, 1994
Reagan stated it was his understanding in 1989, the Board opted to
watch the fund every month, but to give Merrill Lynch at least 5
years before making any changes. He stated the Pension Board can
address this issue at a later time.
PENSION AFFIDAVITS
Thomas stated there were several pension affidavit forms that had
not been returned. She would be holding the pension checks to the
retirees beginning the month of March until the forms have been
completed and returned.
ADJOURNMENT
The meeting adjourned at 11:12 a.m.
Sr
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"IAYETTEVI LLE
• CITY OF FAYETTEVILLE, ARKANSAS
SHERRY L. THOMAS, CITY CLERK
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TO:
FROM:
DATE:
SUBJECT:
Fire Pension Board Members ��/�'
Sherry L. Thomas, City Clerki4 J
February 17, 1994
Next Meeting
The next meeting of the Fire Pension Board will
February 24, 1994, at 11:00 a.m. in Room 326 of
be Thursday,
City Hall.
The representative from New Mexico Capital Management is
scheduled to attend this meeting.
Attached is a copy of the minutes from the last meeting and an
agenda for the February meeting.
Attachments
List:
Richard Baird, Sr.
Ron Wood
Pete Reagan
Darrell Judy
Mayor Fred Hanna
Marion Doss
Treasurer Glyndon Bunton
Richard Yada, Merrill Lynch
113 WEST MOUNTAIN 72701 501 575-8323
411
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FIRE PENSION
AGENDA ITEMS
FOR
2-24-94
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