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HomeMy WebLinkAbout1994-02-24 - Agendas - FinalF • • 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. ARCHIVED 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. • • 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. • • 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 1 "IAYETTEVI LLE • CITY OF FAYETTEVILLE, ARKANSAS SHERRY L. THOMAS, CITY CLERK • • 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 • • • FIRE PENSION AGENDA ITEMS FOR 2-24-94 ARCHIVED