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
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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.