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HomeMy WebLinkAbout1994-03-31 MinutesMINUTES OF A MEETING OF THE FIRE PENSION BOARD A meeting of the Fayetteville Firemen's Pension and Relief Board was held on Thursday, March 31, 1994, at 11:00 a.m. ih`'Room 326 of the City Administration Building, 113 W. Mountain,Fayetteville, Arkansas. - PRESENT: Marion Doss, Pete Reagan and Ron Wood, Retirees Richard Baird and Darrell Judy, Mayor Fred Hanna, City Clerk Sherry Thomas, and Treasurer Glyndon Bunton CALL TO ORDER Marion Doss called the meeting to order. MINUTES Reagan, seconded by Wood, made a motion to approve the minutes of the February 24, 1994 meeting. The motion was approved unanimously PENSION LIST Reagan, seconded by Doss, made a motion to approve the pension lists for April 1994. There were no changes in the pension list. The motion was approved unanimously. OLD BUSINESS DROP PLAN Reagan stated he did not attend the meeting that was held on the 30th about the Drop Plan. The Pension Review Board will be discussing this at their April 6 meeting, so he stated this should be left on the table until the April meeting. NEW BUSINESS INVESTMENT REPORT Richard Yada, Merrill Lynch, stated the portfolio balance through February was $4,313,316 with New Mexico Capital and $3;406,680 in the income account. New,.Mexico was up 2.56%, but the income account was down .7%. The pension fund investment with Merrill Lynch has basically doubled since originally invested in 1985-86. The asset allocation is $2,646,430 in stocks, $4,166,579 in bonds, $433,807 in cash, and $173,180 in other. The percentage allocation is 5.62% in cash, 53.97% in fixed income, 38.17% in stocks, and 2.24% in other. Yada stated the actuary report should be ready in July or August. He stated all pension plans are to be sound by the year 2003, and he feels Fayetteville will meet that deadline. He discussed some • • • March 31, 1994 of the figures from the 1992 actuary report. He stated if the pension fund had sold everything in 1993, the fund would have been sound. He reminded the board that the actuary report in based on cost and not market figures. Yada stated in 1988 there were 38 or 39 active members in the plan. Now, there are only 26 still paying into the plan, so the rate of retirement has been greater than expected. This is a negative to the actuary. The projected payroll for 1993 was $750,000, but the actual is around $600,000, so this too is a negative to the actuary. The projected benefit payments for 1993 was $33,337, but the actual amount is a little over $31,000. Yada stated he hopes the fund will be actuarially sound by the 1995 actuary. He stated the actuary feels the Drop Plan will have a zero effect on the actuarial soundness of the pension plans. Reagan stated he read a memo from the Pension Review Board that said the Drop Plan would have a zero effect on police pension funds, but they expect there will be a 15% negative effect on fire pension funds. He stated he would like to see this board not approve the drop plan until the actual costs and effects are known. Doss stated the Pension Board has to consider the future of the people who are already retired as well. There can be no benefit increases until the fund is sound. If the Drop Plan costs the fund 15%, he does not know whether the fund can afford the plan. Yada stated the fund is on target, and perhaps even a little ahead, on becoming actuarially sound. Doss stated a member of the Harrison Fire Department Pension Board called him to see if Fayetteville would be interested in doing their own actuary report. He told the member he did not feel the Pension Board would be interested, but he would report this to the Pension Board and let them make a decision. Yada stated the state Pension Review Board has some very conservative projections and rules. A pension board is allowed to select another actuary as long as it is certified. No one expressed any interest in obtaining an outside actuary. ELECTION OF OFFICERS Reagan stated in May, his term and Darrell Judy's come up for re- election. He asked Thomas to mail out a letter asking for nominations, and then a ballot to the full time retired firemen. ADJOURNMENT The meeting adjourned at 11:38 a.m.