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HomeMy WebLinkAbout1994-09-01 Minutes• • MINUTES OF A MEETING OF THE FIRE PENSION BOARD A meeting of the Fayetteville Firemen's Pension and Relief Board was held on Thursday, September 1, 1994, at 11:00 a.m. in Room 326 of the City Administration Building, 113 W. Mountain, Fayetteville, Arkansas. PRESENT: Marion Doss, Ron Wood, Pete Reagan, Retirees Darrell Judy and Richard Baird, Mayor Fred Hanna, City Clerk Traci Paul, Treasurer Glyndon Bunton, City Attorney Jerry Rose, Administrative Services Director Ben Mayes and Personnel Director Don Bailey. CALL TO ORDER Mayor Hanna called the meeting to order MINUTES Reagan, seconded by Doss, made a motion to approve the minutes of the July 28, 1994, meeting. The motion was approved unanimously. PENSION LIST Reagan, seconded by Doss, made a motion to approve the pension list for October, 1994. There were no changes in the pension list. The motion was approved unanimously. NEW BUSINESS INVESTMENT REPORT Richard Yada, Merrill Lynch, stated there have not been many changes through the end of July. New Mexico Capital, which was at $4,200,000 at the beginning of 1994, has gone to $4,187,000. Yesterday it was up to $4,239,000. The income account is down, the treasury is up 2.1%, the Dow Jones is up 1.85% and the S & P 500 stocks in the index is down .13%. One of the big things that has affected our portfolio is the long term treasury being down 5.85%. High grade corporate bonds are down 3.52%. The CPI, which affects our actuary, is up 1.51% through the end of June. It is at a pace of about 3% inflation rate for this year. That makes New Mexico Capital, starting out with $4,200,000, down .43% for the year. We compare that to the Dow Jones Industrial Average being up 1.85% and the stock of S & P 500, which is down .13. Since their portfolio is about 40% in bonds, you factor in the treasuries and the corporate bonds. Combine all those to see what New Mexico Capital has done. They have outperformed the indexes. The income account was down .37 for the year. There was a withdrawal from the account to supplement the payments each month. New Mexico Capital's asset allocation for the $4,291,000 as of • August 30 is 72% of stocks, 26% of fixed income, and 2% in money • September 1, 1994 markets. That compares to a model long term growth portfolio that should be 70% of stocks, 25% fixed income, and 5% cash. They are almost right on the long term growth portfollio. The income portfollio is 83% fixed income, 5% in equity, and 12% cash. The model for income portfolio is about 60% fixed income, 30% stocks. We are leaving stocks to New Mexico Captial Management. Combining both portfollios, we have a 44% exposure to the stock market, 50% fixed income, and 6% cash. Key items of the acutuary report are the income, actuary accounts, employer contributions. The insurance turnback for 1993 was $123,000 and the millage is $143,000. The actuary says we have to have $156,484 coming in to the plan. That only counts the insurance turnback, the millage, and the matching part of the city's contribution. Those three have got to be at least $156,000. To recap 1981 to 1993, assets of one million seven in 1981 have increased to a total of 7.2 million in 1993. Projected payroll has basically stayed the same. On unfunded liability, we are a little • ahead of schedule from what we had originally planned back in 1987. There is enough money to pay the people who are already retired in the plan we are in. There is enoungh money so that benefits can continue to be paid. We have 78% of money needed to pay those who are working right now when they retire. • OLD BUSINESS DROP PLAN Pete Reagan, Jerry Rose, Don Bailey, and Ben Mayes discussed and agreed to hold a working session regarding the Drop plan before the next meeting. Yada stated the interest ongoing and the final interest payment in Section 5.01(c) could be confusing as to what you are going to pay, which figure you are going to use. For a partial year use money market rates as published in the Wall Street Journal. OTHER BUSINESS RICHARD BAIRD - RESIGNATION Mrs. Richard Baird read a letter explaining Richard Baird's resignation. ADJOURNMENT The meeting adjourned at 11:40 a.m.