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Home My WebLink About1995-04-27 - Agendas - FinalAGENDA FIREMEN'S PENSION AND RELIEF BOARD April 27, 1995 11:00 a.m. City Hall Room 326 Ma 1. Approval of the minutes of the »rch 30, 1995 meeting 2. Approval of Pension List for May, 1995 3. Old Business AFFIPAylts ALL Ito, 443lol JONES, JONES 4, MAgI71N 4/ 4 -4- I� 4. New Business A. Investment Report, Merrill Lynch 5. Adjournment FIREMEN'S RELIEF AND PENSION FUND MAY 1995 TRACI PAUL, TREASURER •THE FOLLOWING ARE THE OBLIGATIONS OF THE FIREMEN'S RELIEF FUND FOR THE MONTH OF MAY 1995. YOU ARE HEREBY INSTRUCTED TO ISSUE CHECKS TO THE PAYEES, IN THE AMOUNTS SHOWN, AND FOR THE PURPOSE SO STATED. ST. TAX NET • EMP# NAME 43 BAIRD, RICHARD H. 1 BARNES, ELIZABETH 2 BLACKARD, PAUL 63 BOLAIN, ANN 44 BOUDREY, BETTY MRS. 45 BOUDREY, HOWARD 49 BOUDREY, JACK 4 CARL, FLOYD JR 5 CASELMAN, ARTHUR 57 CATE, ROY 6 CHRISTIE, ARNOLD 7 COLE, EVERETT 8 COUNTS, WAYNE 61 DAVIS, BEULAH F. 10 DEARING, EMMA MRS. 11 FARRAR, ALONZO 38 FRALEY JOSEPH G. 33 HARRIS, BILL C. 34 HARRIS, JAMES E. 47 JUDY, DARRELL 37 KING, ARNOLD D. 54 KING, ARVIL 12 LANE, HOPE MRS 13 LAYER, MERLIN 14 LEE, HAROLD 51 LEWIS, CHARLES 60 LEWIS, MARVIE 55 LEWIS, ROGER 40 LOGUE, PAUL D. 50 MASON, LARRY 39 MC ARTHUR, RONALD A. 35 MC CHRISTIAN, DWAYNE 15 MC WHORTER, CHARLES 29 MILLER, DONALD 42 MOORE, JAMES H. 17 MORRIS, WILKIE MRS. 16 MORRIS, WILLIAM H. 62 MORRISON, ELIENE 48 MULLENS, DENNIS W. 58 OSBURN, EDWARD 46 OSBURN, TROY 53 POAGE, LARRY 20 POLLY, GRACE A. MRS. 22 REED, JOE 30 SCHADER, EARVEL 41 SCHADER, TROY 23 SKELTON, BURL L. 24 SKELTON, LEE 56 SKELTON, ROY 36 SPRINGSTON, CARL 25 STOUT, ORVILLE 27 TUNE, MILDRED MRS. GROSS FED. TAX 916.20 100.00 45.00 55.00 55.00 1,266.21 66.21 1,066.66 837 68 287.68 45.00 75.00 909 50 45.00 375.00 32.50 55.00 377.50 50.00 707.84 953.38 100.00 55 00 55 00 837.68 828.42 100.00 1,131.00 130.00 45.00 417.50 55.00 837.68 439.16 4.39.17 1,469.38 175.00 829.35 29.35 891 62 100.00 55.00 30.00 885.14 50.00 863.01 125.00 55.00 45.00 60.00 70.00 1,114.11 1,284.63 160.00 965.81 65.81 1,201.98 200.00 45.00 55.00 915.78 783.74 20.00 692.50 42.50 390.00 1,626.02 126.02 609.88 590 36 50.00 70.00 • 816.20 45.00 55.00 55.00 1,200.00 1,066.66 50.00 500.00 45.00 75.00 909 50 45.00 342.50 55 00 377.50 50.00 707.84 10.00 843.38 55.00 55.00 837.68 10.00 718.42 1,001.00 45.00 417.50 55 00 837 68 439.16 439.17 20.00 1,274.38 800.00 791.62 25.00 835.14 738.01 55.00 45.00 60.00 70.00 1,114.11 1,124.63 900.00 30.00 971 98 45.00 55.00 915.78 763.74 650.00 390 00 50.00 1,450.00 609.88 540.36 70.00 • • 26 TUNE, JESS 28 WATTS, DONALD 59 WATTS, WAYNE 52 WRIGHT, RANDALL 70.00 400.00 921.17 877 68 96.17 150.00 70.00 400.00 825.00 727 68 30,812.74 2,236.24 170.00 28,406.50 WE, THE UNDERSIGNED, DO SOLEMNLY SWEAR THAT THE ABOVE OBLIGATIONS ARE JUST AND CORRECT; THAT NO PART THEREOF HAS BEEN PREVIOUSLY PAID; THAT THE PENSION PAYMENTS SO CHARGED ARE IN ACCORDANCE WITH THE ACTIONS OF THE BOARD OF TRUSTEES OF THE FIREMEN'S RELIEF AND PENSION FUND; THAT THE SERVICES OR SUPPLIES FURNISHED, AS THE CASE MAY BE, WERE ACTUALLY RENDERED OR FURNISHED; AND THAT THE CHARGES MADE THEREFORE DO NOT EXCEED THE AMOUNT ALLOWED BY LAW OR THE CUSTOMARY CHARGE FOR SIMILAR SERVICES OR SUPPLIES. „-t' 'gnzyr ,fleitiz • SECRETARY CHAIRMAN AN n • RESID NT ACKNOWLEDGEMENT STATE OF ARKANSAS ) COUNTY OF WASHINGTON) )SS SWORN TO AND SUBSCRIBED BEFORE ME THISZ% DAY OF{ , 1995. r':L'ltrn. to - 1.* .11 31ARYPUBLIC _ W ' �j n MY OiNMlSSION EXPIR i, Zret Ca -1 CZ IIIClitret rf. •,L' \ FIREMEN'S RELIEF AND PENSION FUND MAY 1995 TRACI PAUL TREASURER •THE FOLLOWING ARE THE OBLIGATIONS MONTH OF MAY 1995. YOU ARE HEREBY PAYEES, IN THE AMOUNTS SHOWN, AND • • EMP# NAME 43 BAIRD, RICHARD H. 1 BARNES, ELIZABETH 2 BLACKARD, PAUL 63 BOLAIN, ANN 44 BOUDREY, BETTY MRS. 45 BOUDREY, HOWARD 49 BOUDREY, JACK 4 CARL, FLOYD JR 5 CASELMAN, ARTHUR 57 CATE, ROY 6 CHRISTIE, ARNOLD 7 COLE, EVERETT 8 COUNTS, WAYNE 61 DAVIS, BEULAH F. 10 DEARING, EMMA MRS. 11 FARRAR, ALONZO 38 FRALEY JOSEPH G. 33 HARRIS, BILL C. 34 HARRIS, JAMES E. 64 JORDAN, CHARLIE 47 JUDY, DARRELL 37 KING, ARNOLD D. 54 KING, ARVIL 12 LANE, HOPE MRS 13 LAYER, MERLIN 14 LEE, HAROLD 51 LEWIS, CHARLES 60 LEWIS, MARVIE 55 LEWIS, ROGER 40 LOGUE, PAUL D. 50 MASON, LARRY 39 MC ARTHUR, RONALD A. 35 MC CHRISTIAN, DWAYNE 15 MC WHORTER, CHARLES 29 MILLER, DONALD 42 MOORE JAMES H. 17 MORRIS, WILKIE MRS. 16 MORRIS, WILLIAM H. 62 MORRISON, ELIENE 48 MULLENS, DENNIS W. 58 OSBURN, EDWARD 46 OSBURN, TROY 53 POAGE, LARRY 20 POLLY, GRACE A. MRS. 22 REED, JOE 30 SCHADER, EARVEL 41 SCHADER, TROY 23 SKELTON, BURL L. 24 SKELTON, LEE 56 SKELTON, ROY 36 SPRINGSTON, CARL 25 STOUT, ORVILLE 12EVISEI.7 OF THE FIREMEN'S RELIEF FUND FOR THE INSTRUCTED TO ISSUE CHECKS TO THE FOR THE PURPOSE SO STATED. GROSS FED. TAX ST. TAX NET 91620 100.00 816.20 45.00 45.00 55.00 55.00 55.00 55 00 1,266.21 66.21 1,200.00 1,066.66 1,066.66 837.68 287.68 50.00 500.00 45.00 45.00 75.00 75.00 909.50 909 50 45.00 45.00 375.00 32.50 342.50 55.00 55.00 377.50 377.50 50.00 50.00 707.84 707.84 953.38 100.00 10.00 843.38 55.00 55.00 55.00 55.00 1192.17 1,192.17 837.68 837 68 828.42 100.00 10.00 718.42 1,131.00 130.00 1,001.00 45.00 45.00 417.50 417.50 55.00 55.00 837.68 837.68 439.16 439.16 439.17 439.17 1,469.38 175.00 20.00 1,274.38 829.35 29.35 800.00 891.62 100.00 791.62 55.00 30.00 25.00 885.14 50.00 835.14 863.01 125.00 738.01 55.00 55.00 45.00 45.00 60.00 60.00 70.00 70.00 1,114.11 1,114.11 1,284.63 160.00 1,124.63 965.81 65.81 900.00 1,201.98 200 00 30.00 971.98 45.00 45.00 55.00 55.00 915.78 915.78 783.74 20.00 763.74 692.50 42.50 650.00 390.00 390.00 1,626.02 126.02 50.00 1,450.00 609.88 609 88 590.36 50.00 540.36 27 TUNE, MILDRED MRS. 26 TUNE, JESS 28 WATTS, DONALD 59 WATTS, WAYNE 52 WRIGHT, RANDALL 70.00 70.00 400.00 921.17 877 68 96.17 150.00 32,004.91 2,236.24 170.00 70.00 70.00 400.00 825.00 727.68 29,598.67 WE, THE UNDERSIGNED, DO SOLEMNLY SWEAR THAT THE ABOVE OBLIGATIONS ARE JUST AND CORRECT; THAT NO PART THEREOF HAS BEEN PREVIOUSLY PAID; THAT THE PENSION PAYMENTS SO CHARGED ARE IN ACCORDANCE WITH THE ACTIONS OF THE BOARD OF TRUSTEES OF THE FIREMEN'S RELIEF AND PENSION FUND; THAT THE SERVICES OR SUPPLIES FURNISHED, AS THE CASE MAY BE, WERE ACTUALLY RENDERED OR FURNISHED; AND THAT THE CHARGES MADE THEREFORE DO NOT EXCEED THE AMOUNT ALLOWED BY LAW OR THE CUSTOMARY CHARGE FOR SIMILAR SERVICES OR SUPPLIES. q ,gym/r SECRETARY CHAIRM AND ACKNOWLEDGEMENT PRESIDENT STATE OF ARKANSAS ) COUNTY OF WASHINGTON) )SS • SWORNTOAND SUBSCRIBEDarrAerA./ £S1 `▪ . • Rry # kY ^ 2%= • ';MY COMMISSION -EXPIRES • A NOTARY PUBLIC • (lc 214911919‘ 'C r. C,„12 Q S izs1 TEL:501-3 5-3451 R 27 95 10:01 No.005 r FAYETTEVILLE FIRE DEPT PENSION AND RELIEF FUND PORTFOLIO PERFORMANCE 12/31/94 TO 03/28/95 NM CAPITAL MANAGEMENT INCOME ACCOUNT 12/31/94 03/28/95 $4,240,646 54,407,434 3,260,081 3,407,722 12/31/94 03/28/95 3 - MONTHS TREASURY BILLS + 4.19 + 1.50 DJIA W/DIV REINVESTED + 4.99 + 9.17 S & P 500 W/DIV REINVEST + 1.30 + 9.78 LONG TERM TREASURY BONDS - 7.70 + 6.26 HIGH GRADE CORP BONDS - x.08 + 6.26 CPI (FEB) + 2.75 + 0.80 • NM CAPITAL (time wtd) + 1.27 + 4.06 INCOME ACCTttirne wtd) - 2.44 + 5.25 WITHDRAWALS: 03/10/95 $ 20,000. 04/11/95 25,000, RECEIVED 4 27-q5 01Y CLERK'S OFFICE 1 1 r t 1 1 1 1 1 1 i 1 1 1 1 RECEIVED MAY 0 1 1995 CITY CLERK'S OFFICE QUARTERLY REPORT March 31, 1995 CITY OF FAYETTEVILLE FIRE PENSION AND RELIEF FUND N1M CA TIAL MArIAGEMENT, 1rJC. FAYETTPP 1 1 t 1 1 1 1 1 r NM Capital Management, Inc. Quarterly Investment Comment First Quarter 1995 FIRST QUARTER 1995 REVIEW Good earnings growth, signs of a slowing economy, : moderate inflation and declining interest rates contributed to a strong bond and stock market advance during the first quarter.. The S&P 500 (including dividends) returned 9.8%, the best quarterly gain in four years. Government/corporate bond indices' returns ranged from 4.5% to 5.0%, a welcome change from the unusually depressed 1994 bond market. These three months' returns are unusually high and some period of consolidation or correction is likely in the months ahead. The markets were positively influenced by the changing perceptions that the economy was beginning to slow down to a more sustainable low inflation growth rate and that the Fed would no longer have to boost short-term rates. As this "soft landing" scenario became more widely accepted, investors bought bonds pushing rates lower. The interest rate decline combined with the outlook for continued earnings growth was a heady tonic for stock investors who had suffered a disappointing 1994. The stock market advance was characterized by a surge in investor attraction for large capitalization issues (i.e., big companies), "growth" stocks and interest-sensitive stocks, encouraged by prospects of a slowing economy, the volatility in foreign markets (such as Japan and Mexico) and the declining dollar. "Value" stocks, which by their very nature tend to be temporarily out of favor and overlooked by investors, lagged the S&P 500 during the quarter. ECONOMIC AND INVESTMENT OUTLOOK Slowing Economic Growth is Positive. Leading indicators fell in February for only the second time in nineteen months. The purchasing manager's index monitoring business activity within the manufacturing sector fell in March, making the second straight monthly decline. Slower consumer spending, weakness in housing starts and auto sales, and a slip in durable goods orders all suggest the economy has slowed from the brisk fourth quarter pace. For investors the appearance of a slowing economy is a welcome relief to the persistent worry over rising interest rates last year. In March the Federal Reserve decided to leave short-term interest rates unchanged, adding to investor confidence that for now rates may show some stability Also a plus, inflation has remained moderate with the CPI up only 2.9% over the twelve months ended February. Looking ahead, the economy and investment environment appear to be favorable. With the stock market at record levels, however, much of the good news may be discounted. Economic stagnation or a recession which could seriously impact corporate earnings and the stock market seems remote at this time. More likely, the significant decline in bond interest rates over the last few months may be enough to strengthen the economy later this year pushing interest rates back up. Signs of re -acceleration would likely temper market returns. Longer term, possible U.S. tax cuts, freer 1 1i9 1 1 1 1 1 1 y 1 1 1 1 1 1 1 r 1 world trade and a recovery in Europe and japan should help extend U.S. economic growth over the 1995-1996 period. EQUITY STRATEGY While we favor stocks over bonds and cash in the present environment, our equity strategy is not driven by top-down economic forecasts. After a disciplined analysis of individual company operations and balance sheet fundamentals, we mvest in stocks which are good long-term values. Equity. Focus Comment Helping Investors Resist the Terrible Temptation to Buy at the Top and Sell at the Bottom While beating the market averages and all other comparable managers should be every equity manager's goal, he or she cannot reasonably expect to do so every single quarter or even every single year. Years in which the manager beats the averages may be followed by quarters and years in which he does not. Experienced and responsible money managers know this to be true and have the historical and statistical perspective to expect it, understand it, and not worry about it. Unfortunately, some investors do not always have access to the requisite knowledge which results in this calm and productive perspective. In a recent Financial Times article "Is there a better way than buying high, selling low?", John Train, author of several influential books on investing, focused on the tragic results of this lack of investment perspective. While the total return of 219 growth funds followed by Morningstar averaged 12.5% per year over a five-year period ending in. mid-1994, the actual return of the average investment dollar in these same funds was a NEGATIVE 2.2% per year. Why? Because investors persist in the mistaken belief that they can somehow enhance their investment returns by chasing each successive performance "star" as it momentarily shines brightly in the investment sky. Reaching for these elusive "stars" at the top most often results in the hapless investor's falling into the far more prosaic mud of. cumulative negative returns and real capital loss. At NMCM, we are absolutely determined to help our clients avoid this dismal fate; to dispel the darkness and bring them into the clear and profitable realm of enlightened strategic investment thinking and above-average cumulative returns. We must understand that underperforming for several quarters does not necessarily signify failure on the investment manager's part. Assuming that our investor understands and agrees with the key elements of the manager's strategy, the investor should question if the manager has continued to implement the strategy through that time period. Most importantly, does the manager intend to continue in the future to implement the strategy despite the temptation and pressures to change, which even the briefest periods of underperformance impose? If the answers to these questions are affirmative, then the manager is not "failing" and the investor should be able and willing to "stay the course" with the manager. For the investor to do otherwise is to inevitably and truly fail. Even the very best money managers experience periods during which they "lag". Again, John Neff's stellar career provides the classic proof of this assertion. On a yearly basis, Neff. underperformed the S&P 500 during 9 out of 25 years between 1970 and 1994. 1 1 1r 1 1 1 1 1 1 1 1 1 1 r 1 Yet, on a cumulative basis he still outperformed the S&P by an annualized average of 2.5% per year. A key reason for this success was having a clear strategy and sticking with it, no matter what. Investors who stayed with him through the bad as well as the good years were able to double results they would have achieved if they had simply been invested in an index fund over this time period. (Through the magic of compound interest, the 'Cumulative effect of a Z5% advantage compounded over 25 years leaves an investor with almost twice as much capital at the end of those 25 years.) At NMCM we consider periods of underperformance as opportunities to identify new investment bargains or add to stocks we found attractive at higher prices and which we find even more enticing at marked down, bargain basement prices. As the wonderful wit and wise investor, Warren Buffett, has observed, the stock market is the only market in the world where the long-term buyer of something becomes upset when the price of that something goes down. That's true of individual stocks, mutual funds, and money managers. If you like them at the .top and they get marked down, don't sell them, buy the heck out of them. There will be a tomorrow, there will be a recovery, and there will be a top That's where you sell, at the top, not at the bottom. FIXED INCOME STRATEGY It's the Long Tenn, Stupid One of the keys to Bill Clinton's White House victory was his focus on economic issues. It has been reported that to keep the entire team focused on this theme, there were signs prominently displayed everywhere that said, "IT'S THE ECONOMY, STUPID." At NM Capital, our fixed income strategy is to assume low levels of risk while providing a good relative return. We think this is best achieved by structuring the portfolio to take advantage of the interest rate cycles which generally develop over a 2 to 3 -year period. Maintaining focus on these long-term cycles is often difficult, especially in times like the fust quarter of 1995. During this tune, interest rates changed their direction for the first time since the third quarter of 1993 with 5 -year bonds falling from 7.8% to 7.1% and 30 -year bonds falling from 7.9% to 7.4%. It was not unusual to see bond prices move up or down 1% in one day during the quarter There were numerous reports that the economy is slowing, which many pointed to as the cause for the market's action. It does appear that the economy has slowed and it is possible that interest rates have begun a tong -term decline However, this slowing has been from an extremely high level and, therefore, we may be experiencing only a temporary decline in rates. Those forces which could put upward pressure on rates such as economic growth above trendline, high capacity utilization rates, tight labor markets, strong demand for credit, and downward pressure on the dollar are still very real. Our focus on the long term leads us to continue our strategy of using short to intermediate, high quality bonds as the best risk/return tradeoff at this time. 1 ICLIENT : FAYETTPP MANAGER: NTSC 1 NM CAPITAL MANAGEMENT, INC. Page 1 - CITY OF FAYETTEVILLE FIRE PENSION AND RELIEF FUND CASH ANO EQUIVALENTS EQUITIES IGOV'T/CORP BONDS ACCRUED INCOME PORTFOLIO COMPOSITION MARKET VALUE $53,959.92 3,015,529.89 1,302,706.56 37,837.21 % OF TOTAL 1.2 68.4 29.5 0.9 REPORTING PERIOD: 01/01/95 TO 03/31/95 STATEMENT OF CHANGES PORTFOLIO MARKET VALUE AT 01/01/95: DEPOSITS WITHDRAWALS INCOME EARNED CAPITAL APPRECIATION $4,243,702.08 0.00 (5,281.72) 48,277.14 123,336.08 ' TOTAL $4,410,033.58 100.0 PORTFOLIO MARKET VALUE AT 03/31/95: $4,410,033.58 ' THE FOLLOWING RETURNS ARE ' TOTAL PORTFOLIO ICASH AND EQUIVALENTS EQUITIES GOVT/CORP BONDS SHOWN PARATIVE INDICES NCED INDEX - I (60/35/5) US T BILLS IIS&P500 TOTAL RETURN GOVT/CORP INTERMEDIATE BOND CONSUMER PRICE INDEX GROSS OF MANAGEMENT FEES: 01/01/95 TO 03/31/95 YEAR-TO-DATE 4.0% 1.7% 4.0% 4.5% 7.5% 1.6% 9.8% 4.5% 0.7% 4.0% 1.7% 4.0% 4.5% 7.5% 1.6% 9.8% 4.5% 0.7% CUMULATIVE ANNUALIZED PAST TWELVE MONTHS SINCE INCEPTION SINCE INCEPTION INVESTMENT EARNINGS (APPRECIATION + INCOME) SINCE INCEPTION DATE 01/18/90: 7.9% 4.9% 9.6% 4.0% 11.6% 5.1% 15.6% 4.6% 2.7% $1,568,487.33 72.7% 30.0% 87.0% 55.4% 64.9% 30.7% 73.6% 49.5% 20.1% 11.0% NOTE: THE COMPARATIVE INDICES SHOW RETURNS FOR THE ENTIRE INDICATED PERIODS. . THESE MAY NOT BE DIRECTLY COMPARABLE TO ' 1 r YOUR RETURNS FOR SEPARATE SEGMENTS OF THE PORTFOLIO (CASH, EQUITIES, ETC) IF YOU THE ENTIRE INDICATED PERIOD. THESE SEGMENT RETURNS ARE SUPPLEMENTAL INFORMATION DID NOT OWN THE SEGMENT FOR TO THE TOTAL PORTFOLIO RETURN. 5.1% 12.7% 8.8% 10.0% 5.2% 11.1% 8.0% 3.5% 1 1 1 1 1 1 1 1 y 1 1 1 1 1 1 1 1r DATE PRINTED: 04/20/95 Cash and Equivalents MONEY MARKET FUNDS Fixed Income GOVERNMENT ISSUES Equities COMMON STOCKS ACCRUED INTEREST ACCRUED DIVIDEND TOTAL PORTFOLIO NM CAPITAL MANAGEMENT, INC. Portfolio Summary PRICING DATE: 03/31/95 DATE OF APPRAISAL: 03/31/95 FAYETTPP - CITY OF FAYETTEVILLE FIRE PENSION AND RELIEF FUND ESTIMATED MARKET % OF ANNUAL VALUE PORTFOLIO INCOME YIELD 53,959.92 1,302,706.56 3,015,529.89 34,856.21 2,981.00 4,410,033.58 1.2 29.5 68.4 0.8 0.1 100.0 3,038 101,400 72,754 5.6 7.8 2.4 177,192 4.0 1 1 1 1 1 1 y 1 1 1 1 1 1 1 1 NM CAPITAL MANAGEMENT, INC. DATE PRINTED: 04/20/95 Common Stock Summary PRICING DATE: 03/31/95 DATE OF APPRAISAL: 03/31/95 FAYETTPP - CITY OF FAYETTEVILLE FIRE PENSION AND RELIEF FUND X OF % OF MARKET COMMON TOTAL COMMON STOCKS VALUE STOCKS PORTFOLIO Capital Goods - Industrial Capital Goods - Technology Consumer Durables Consumer Non -Durables Energy Finance Basic Industry Transportation Utilities TOTAL COMMON STOCK 154,000.00 433,312.50 395,075.00 1,092,414.39 76,000.00 141,750.00 419,262.50 203,225.00 100,490.50 3,015,529.89 5.1 14.4 13.1 36.2 2.5 4.7 13.9 6.7 3.3 3.5 9.8 9.0 24.8 1.7 3.2 9.5 4.6 2.3 100.0 68.4 1 1 DATE PRINTED: 04/20/95 SHARES / FACE VALUE 1 1 1 1 1 1 b 1 1 1 1 1 1 1 1 53,959.92 320,000 100,000 100,000 100,000 400,000 250,000 5,500 DESCRIPTION NM CAPITAL MANAGEMENT, INC. Client Appraisal FAYETTPP - CITY OF FAYETTEVILLE FIRE PENSION AND RELIEF FUND Cash and Equivalents MONEY MARKET FUNDS MONEY MARKET FUND Fixed Income GOVERNMENT ISSUES US TREAS 8.500% 05/15/97 FNMA 9.550% 09/10/97 FNMA 9.150% 04/10/98 US TREAS 5.250X 07/31/98 US TREAS 7.875% 11/15/99 US TREAS 7.500% 11/15/01 TOTAL GOVERNMENT ISSUES Equities COMMON STOCKS Capital Goods - Industrial HARNISCHFEGER INDUSTRY Capital Goods Technology 3,500 BOEING CO 3,100 PRECISION CASTPARTS CP 1,300 ROCKWELL INTL CORP 4,000 THIOKOL CORPORATION 3,300 3,400 7,800 5,300 UNIT COST TOTAL MARKET COST PRICE 1.00 53,959.92 100.85 99.34 99.34 101.25 103.03 101.00 322,722.20 99,343.75 99,343.75 101,254.85 412,106.95 252,504.85 1,287,276.35 MARKET VALUE Page 1 PRICING DATE: 03/31/95 DATE OF APPRAISAL: 03/31/95 % OF % OF ASSET PORTFOLIO CLASS 1.00 53,959.92 103.22 105.47 105.16 94.91 103.13 101.75 18.86 103,848.18 28.00 40.78 12.66 23.28 26.78 TOTAL Capital Goods - Technology Consumer Durables ARVIN INDS INC BROWN GROUP INC CROSS (A.T.) COMPANY OUTBOARD MARINE CORP TOTAL Consumer Durables Consumer Non -Durables 7,685 ARCHER DANIELS MIDLAND 7,200 COORS ADOLPH 9,500 DELTA WOODSIDE 4,200 DOLE FOOD CO INC 7,200 GIBSON GREETINGS INC 5,600 GREAT ATLANTIC 8 PAC TEA CO 6,400 HANSON PLC SPONSORED ADR 2,300 MERCANTILE STORES 7,000 RUSS BERRIE 8 CO INC 7,375 RYKOFF-SEXTON INC TOTAL Consumer Non -Durables 22.08 30.94 14.56 18.44 14.07 19.19 12.46 27.52 17.20 20.50 19.43 34.97 15.54 14.14 142,736.60 39,259.28 30,258.72 107,104.85 319,359.45 72,874.20 105,179.14 113,561.55 97,710.92 389,325.81 108,113.32 138,172.85 118,362.05 115,567.85 123,874.85 114,776.85 124,371.40 80,426.66 108,799.70 104,249.75 1,136,715.28 53.75 26.13 39.00 28.38 21.25 29.00 14.75 21.00 18.63 16-38 8.38 29.00 8.88 22.63 18.75 44.63 14.38 15.75 330,300.16 105,468.80 105,156.30 94,906.30 412,500.00 254,375.00 ESTIMATED ANNUAL CUR INCOME YLD 1.2 100.0 3,038 5.6 7.5 2.4 2.4 2.2 9.4 5.8 25.4 27,200 8.1 9,550 8.1 9,150 7.3 5,250 31.7 31,500 19.5 18,750 8.2 9.1 8.7 5.5 7.6 7.4 1,302,706.56 29.5 100.0 101,400 7.8 154,000.00 188,125.00 80,987.50 50,700.00 113,500.00 433,312.50 70,125.00 98,600.00 115,050.00 111,300.00 395,075.00 143,133.14 117,900.00 79,562.50 121,800.00 63,900.00 126,700.00 120,000.00 102,637.50 100,625.00 116,156.25 3.5 5.1 4.3 1.8 1.1 2.6 6.2 2.7 1.7 3.8 9.8 14.4 1.6 2.3 2.2 3.3 2.6 3.8 2.5 3.7 2,200 1.4 3,500 744 1,404 2,720 1.9 0.9 2.8 2.4 8,368 1.9 2,508 5,440 4,92 2,120 3.6 5.5 4.3 1.9 9.0 13.1 15,060 3.8 3.2 2.7 1.8 2.8 1.4 2.9 2.7 2.3 2.3 2.6 4.7 3.9 2.6 4.0 2.1 4.2 4.0 3.4 3.3 3.9 769 3,600 3,800 1,680 0 1,120 6,386 2,438 4,200 277 0.5 3.1 4.8 1.4 0.0 0.9 5.3 2.4 4.2 0.2 1,092,414.39 24.8 36.2 24,270 2.2 DATE PRINTED: 04/20/95 r SHARES / FACE VALUE 1 1 1 1 1 1 1 1 1 1 1 1 1 1r DESCRIPTION Energy 16,000 PARKER DRILLING CO NM CAPITAL MANAGEMENT, INC. Page 2 Client Appraisal FAYETTPP - CITY OF FAYETTEVILLE FIRE PENSION AND RELIEF FUND Finance 6,000 ALEXANDER & ALEXANDER 11,800 6,700 6,300 Basic Industry CALGON CARBON CORP GLATFELTER COMPANY JANES RIVER CORP VA TOTAL Basic Industry Transportation 7,800 AAR CORP 5,300 OVERSEAS SHIPHOLDING GROUP 3,322 TOTAL Transportation Utilities SPRINT CORP TOTAL COMMON STOCKS ACCRUED INTEREST ACCRUED DIVIDEND TOTAL PORTFOLIO UNIT COST TOTAL MARKET COST PRICE 6.06 96,964.85 PRICING DATE: 03/31/95 DATE OF APPRAISAL: 03/31/95 % OF MARKET % OF ASSET VALUE PORTFOLIO CLASS 4.75 76,000.00 14.35 86,104.85 23.63 11.70 18.15 20.98 138,046.70 121,583.70 132,147.40 391,777.80 11.50 17.88 26.00 13.32 103,899.25 12.13 19.19 101,716.70 20.50 205,615.95 23.67 78,627.85 30.25 2,808,340.02 141,750.00 135,700.00 119,762.50 163,800.00 419,262.50 94,575.00 108,650.00 203,225.00 100,490.50 ESTIMATED ANNUAL CUR INCOME YLD 1.7 2.5t 0 0.0 3.2 4.7 600 0.4 3.1 2.7 3.7 4.5 4.0 5.4 3,540 2.6 4,690 3.9 3,780 2.3 9.5 13.9 12,010 2.9 2.1 3.1 3,744 4.0 2.5 3.6 3,180 2.9 4.6 6.7 6,924 3.4 2.3 3.3 3,322 3.3 3,015,529.89 68.4 100.0 72,754 2.4 34,856.21 0.8 2,981.00 0.1 4,149,576.29 4,410,033.58 100.0 100.0 177,192 4.0 • • RECEIVED APR 2 4 1995 CITY CLERK'S OFFICE I N I C E NM CAPITAL MANAGEMENT, INC. 7510 MONTGOMERY, NE SUITE 201 ALBUQUERQUE, NM 87109 April 20, 1995 Merrill Lynch 425 W. Capitol, Suite 200 Little Rock, AR 72201 .,Re: City of -Fayetteville -'__e Pension Account -563-96346 ea sae 'la ra • • aS la al a arm amist Nm CAPITAL MANAGEMENT. INC. & Relief Fund STATEMENT OF MANAGEMENT FEES: For the period from January 01, _995 through March 31, 1995 CITY OF FAYETTEVILLE FIRE PENS= AND RELIEF FUND * $ Portfolio Valuation as of 03-3 $ 4,372,196.37 @ -0.5000% per annum Quarterly Management Fee TOTAL DUE AND PAYABLE 4,372,196.37 5,465.25 5,465.25 $ 5,465.25 ALL INVOICES ARE DUE UPON RECEIPT. TO INSURE PROPER CREDIT, PLEASE INDICATE ACCOUNT NNE ON CHECK. • *Portfolio Valuation used for fee computation h accruals amounting to $37,837.21. A copy of this invoice has been sent to the client for their record. • MINUTES OF A MEETING OF THE FIRE PENSION BOARD A meeting of the Fayetteville Firemen's Pension and Relief Board was held on Thursday, March 30, 1995, at 11:00 a.m. in room 326 of the City Administration Building, 113 W. Mountain, Fayetteville, Arkansas. PRESENT: Marion Doss, Pete Reagan, Ron Wood, Mayor Fred Hanna, City Clerk/Treasurer Traci Paul, and Fire Chief Mickey Jackson ABSENT: Darrell Judy and Howard Boudrey CALL TO ORDER Mayor Hanna called the meeting to order. MINUTES Reagan, seconded by Doss, made a motion to approve the minutes of February 23, 1995. The motion passed unanimously. PENSION LIST In answer to a question from Mayor Hanna, Paul stated there were no changes in the pension list. Doss, seconded by Wood, made a motion to approve the pension list for April, 1995. The motion passed unanimously. NEW BUSINESS Reagan suggested that the Board discuss new business before old business so that the representatives from Merrill Lynch could leave in time to make another appointment. INVESTMENT REPORT Curtis Williams, Merrill Lynch, distributed a summary of the portfolio performance as of February 28, 1995. Richard Yada, Merrill Lynch, explained that things ended up fairly decent considering that last year was the worst year in history for bonds. In reviewing the summary of portfolio performance, Yada stated that in 1994 New Mexico Capital was up 1.27 and the income account was down 2.44. Long term treasury bonds were down 7.70 and high grade corporate bonds were down 5.08. Through the end of February, the value of the New Mexico Capital Account was $4,342,564. The value is $4,320,147 as of March 28. • • March 30, 1995 Through the end of February, the income account was at $3,387,387. It is up to $3,420,664 as of March 28. In the market, the growth stocks are outperforming value stocks. Through the end of February, the New Mexico account was up 2.53 and the income account was up 4.01. The Dow Jones was up 5%, the S & P 500 was up 6.5%, long term treasury was up 5.5%, and high grade corporate was up 4.79. In explaining some changes in the maturities of the portfolio, Curtis Williams stated that last year the portfolio was shortened. The reason we outperformed the long term treasury bond last year was because the maturities were much shorter. The long term treasury bond has more volatility to interest rate swings on the up or down side. The reason for the under performance now is that interest rates are falling and long term treasury has more upside potential. We can get 85% - 90% of the yield of the long term maturities by staying in the eight to twelve year range. Most of our maturities lie in that range. We have been extending the maturities in the portfolio and locking in some rates at the 7% - 8.25% range. In answer to a question from Reagan, Williams stated long term means ten years to fourteen years. Yada added that there would not be much in the fifteen to twenty year range. Williams stated that in 1994 the account did not go down in value every month. It will not go up in value every month this year. There may be one more spike in rates. That would have a short term negative impact. The Board should not expect that every month will be better for the next two years. In answer to a question from Yada, Reagan stated the Board is still discussing the DROP. Yada stated he was going to meet with the Actuary, Steve Osborne. He is with the company that does the rest of the actuaries. The Fire Department Actuary will be effected negatively once the DROP Plan in adopted. The DROP Plan may cause some fire fighters to leave at twenty years instead of staying for 30 years. In answer to a question from Doss, Reagan stated there is no justification for the numbers in the Little Rock actuary. Reagan stated he planned to attend the Pension Review Board meeting on May 3, 1995. OLD BUSINESS March 30, 1995 DROP PLAN Reagan explained that the correspondence passed out before the meeting was from Gregory D. Jones, the attorney hired to look into the Fund. In referring to a letter date March 15, Reagan stated the seventeen funds that now have a DROP Plan have asked the IRS for a letter of determination. The old Fund does have a letter of determination. They are asking for an amendment to that letter of determination regarding the DROP Plan. We are going to wait for that letter. We are in the process of putting our DROP Plan on paper. The Board will be presented with a copy of the DROP Plan at a later date. Reagan explained that payment needs to be made to Mr. Jones. Reagan, seconded by Doss, made a motion to pay Gregory D. Jones $1,443.61. The motion passed unanimously. PENSION AFFIDAVITS In answer to a question from Reagan, Paul stated there would be a report of the outstanding pension affidavits at the next meeting. ADJOURNMENT The meeting adjourned at 11:30 a.m. FAYETTEVI LLE THE CITY OF FAYETTEVILLE, ARKANSAS • DEPARTMENTAL CORRESPONDENCE T41_ Board of Trustees Firemen's Relief and Pension Fund Eros: Mickey Jackson, Fire Chief /f" Date: April 27, 1995 RBI Retirement of Charlie Jordan Firefighter Jordan has tendered his resignation from the Fayetteville Fire Department, effective April 30, 1995, to take his retirement. According to our records he will have twenty-four (24) years, eight months, and twenty days credited service with the Department. Charlie's monthly salary at the time of his $2,224.33. One half of this amount, plus the $80 extra which he is entitled for completing four years gives him a total monthly pension of $1,192.17. approved to begin drawing his pension in this amount, 1, 1995. retirement is .00 per month above twenty, He should be effective May If you need anything additional on this, feel free to call upon me. Thank you very much. MJ/ca RECEIVED APR 2 8 1995 CITY CLERK'S OFFICE Mit IL 1 rint ucrAf i nncn 1 303 MIST FAYETTEVILLE. ARKANSAS f171111•0111I August 4, 1986 On this date we have researched Charley Jordan's personnel records with the City to ascertain his beginning date for continuous employ- ment with the City for longevity purposes and continuous employment with the Fire Department for retirement purposes. According to records kept by the City Personnel Department, Charley started his last continuous employment with the City as an employee of the Water Department on October 25, 1971, and that is the date his longevity cuj',lvyment is caic\llatrd from. The records show that Charley joined the Fire Department as a 'Pull Paid" on 10-9-67, then left the department on 3-14-68, accumulating 5 months and 5 days He then rejoined the department on 8-7-68 and stayed until 9-9-69, a total of 13 months and 2 days, increasing his total accumulation to 18 months and 7 days He rejoined the department as a 'part paid' again on 2-17-72, continuing until 12-3-73 on which date he became a full paid fire'department employee, such employment continuous to present. According to these dates, Charley's total accunulated time is from 2-17-72 to present plus 18 months and 7 days which he had when he began his continuous employment (2-17-72). Eighteen months and 7 days prior to 2-17-72 would be 8-10-70, making as dateeligiblefor retirement from the department 8-10-90 (August I have reviewed the information available concerning this matter, and I accept the information as contained herein as correct and accurate. Mickey Jackson, Chief Fayetteville Fire Department Charley Jordan, Firefighter Fayetteville Fire Department • • ti • /c+ -s it 7/ Cat- /ra'q CIa d - rAs‘°"4" cobsiraiuseel 4'40• 4Q -e1 FIRE DEPARTMENT FAYETTEVILLE. ARKANSAS 72701 Jan.7,1977 Fire depart. time of Charles Jordan On Full Paid 10-9-67 8-7-68 2-17-72 12-3-73 H n Part paid Full paid Left 3-14-68 9-9-69 12-3-73 ifu11 `L Time 5no.5 days 1 yr.1 mo 2 da: paid) lyr.9 z o.15 Total tisk befcri-the:last date of 12-3-73 is 3 yrs. 3 mo. 22 daps •Total time to this date 1-7-77 is 6 yaara 4 mos. 26 days. • • • • • • a% Oi- r • FA` FETTE`7I LLE THE CIT' OF FAYETTEVILLE. ARKANSAS • DEPARTMENTAL CORRESPONDENCE To: Don Bailey, Personnel Officer Through: Ben Mayes, Accounting Supervisor From: Marilyn Cramer, Account Clerk II Date: December 12, 1989 Subject: Charles Jordan's Length of Service It: anticipation of retirement, Charles Jordan has requested a •determination of length of service with the City of Fayetteville for Fire Pension retirement purposes. Attached are copies of Charles Jordan's records. He would like a determination in particular on the period of time from October 25, 1971 to December 31, 1973. He indicated that during this time he was employed by the Water Department and responded to off duty fires for which he was paid in a single payroll check. If you have any questions or need additional information, please call Charles Jordon or Danny Farrar (443-1105 or 442-3860). • cc: Charles Jordan Danny Farrar FAY:. JT T EY LE THE CITY OF FAYETTEVILLE. ARKANSAS DEPARTMENTAL CORRESPONDENCE TO: FROM: DATE: SUBJECT: Mr. Charles Jordan Don Bailey, Personnel Officer December 26, 1989 Your Firemen's Relief ana Pension Funds Service Credit I have thoroughly reviewed your personnel file to factually determine your pension service credit. This was done pursuant to your reouest for a aetermination directea to Marilyn Cramer. A personnel action form dated 10-12-71 shows the effective date of your re- employment by the City as a Dist. !.:an III in the Water and Sewer department to be October 25, 1971. Further. there are three personnel act'on fcrms initiated by the W & S department dated April 1, 1972, November 6, 1972, ana April 19, 1973 denoting pay increases.// `'efe riV& [;2- 3 - 73 A transfer was effected from the & S department to t'ie Fir_ decartrcant on December 3. 1973 by a personnel. tion fora dated November 19, 1972. A oerscnne- action form dated November 20, 1973 denotes a status chance from a Cart pain fireman to a full paid fireman. Although this document establisr.es that you were in fact part paid bafare your transfer to the fire department on December 3, 1973, there is no eauivaient documentation in the file as to the initial date you became part paid. A memo in your personnel file dated January 7, 19 7- jz Ui!r fe-` 77 ou& frr47- �O. written cy Fire Chief McWhorter indicates your part paid service commenced.on February 17, 1972. This is the only statement in your file indicating a beginning date of your oars paid service. The Fire Pension Board will unaoubtedly have tc rely on this memo in determining your cumulative service. If you have, or can suggest where information exists which will corroborate an earlier part paid status, please so advise me. cc: Sherry Thomas. Secretary of Firemen's Pension and Relief Fund Mickey Jackson, Fire Chief DE/jd • • • • Orf L*11) o- q - 67 Fitt iw pao�—�- t 8 %ef PAID a - 17- • 4 12Til Ate? Tac Ad> rAD • <eh -r 3- 19- 6? 9-9- (09 1a-3-73 5#7O St"as� lyr Imo ys l yr 9no Di4ys From 1Z-3-73 con-iinou5 To 12---3 89 rs I`Yrs ABove time. 1s 3yr 3mo►,r++s /.2 DR.ys z f9y.s lmo'7,ts fle-7; nee c r Decre_ we v z.v be fyuy vsr 8 a' /q2:0 , 10-2-5- 71 LO&Ter Lp r a -17-7a Parr gi4ID. SIACJLD 14 WE. Went on PRET git 6.� /o-cj' -L7 8-7- 6S" 10-25-i1 /0-025— q/ /y<r /mo 2 .2Mb 5enest ys 2 DAyr 29 nyys 31,x5 +-1MOnilS + 1SDAyS= I9r } !n0 f 6AAA/ S eta. PyrfaD T -o APQiI. 1S4 1990 - EMPLOYEE'S NAME CITY OF FAYETTEVILLE, ARKANSAS PERSONNEL ACTION Char.ee dordaa DATE ._/kb..141972 . V W TO: Finance Department VIA: City Manager POSITION: Paid Fireman NAME OF EMPLOYEE PREVIOUSLY IN • FULL THIS POSITION: ._JOhn..Mtller TIME St. SOCIAL SECURITY STEP AND NO. AMOUNT $3.00 per call A PART TIME MAILING ADDRESS: 922 Frisco .z .,ADDITIONAL INFORMATION: Working for the water dept, full tips he will be a big help O' R to usebecause he !mare water problems and fire dept. problems. • .a. • < ibis"mrnl H- -. r?You``. m:ert SUBMITTED: .�'n -.... l�J FINANCE OFFICE: ... �, Z$ 17-i ' RECEIVED3NrfDIN .5 k (Department Head) (date) , _ c"7 ^ ENTERED ON EARNING RECORD: ° EFFECTIVE DATE ... ,•.:• -M? • ..'(initial) DATE Z 7 VERIFIED: r .- '. APPROVED: .. ore.— 7 (City Manager) (Initial, City Clerk) • CHANGE IN LI'US • TO: Finance Department POSITION: VIA: Department: CHANGE REQUESTED: OLD STEP & AMOUNT ..... ......... NEW STEP & AMOUNT ....... _... .--_.__._. _......... EFFECTIVE DATE: (If Terminating) FUTURE MAILING ADDRESS REASON FOR TERMINATION: SUBMITTED BY: , TITLE: APPROVED: , CITY CONTROLLER DATE: — Received in Finance Office Entered on Earning Record (date) (initial) BI -WEEKLY VERIFIED: _.._.__.... HOURLY (Initial, City Clerk) (Submit any promotion or change in status which is not in the current budget to the City Manager for approval.) APPROVED- DATE: (City Manager) REL•T FOR TIME OFF DEPARTMENT I hereby apply for days leave to be charged against my • SICK LEAVE ANNUAL VACATION 0 • If sick leave amounts to more than 3 days, NATURE OF ILLNESS. give name of doctor treating patient and dates of treatment. DATES: DOCTOR TO BEGIN AND END (both dates inclusive) 0 Without Pay • With Pay APPROVED• VERIFIED ELIGIBLE: (Department Head) (Initial, City Clerk) (Submit requests for other than earned Sick Leave and Vacation to the City Manager APPROVED: for approval.) t - (City Manager) Date m ogee s Signature) MCR -MCN 2090! Return To Department Head • CITY OF FAYETTEVILLE, ARKANSAS • PERSONNEL ACTION . EMPLOYEE'S NAME ..Gbils 7et?...t!Orda><I DATE Nov 20 1973 TO: Finance Department VIA: City Manager •SOCI'AL SECURITY NO. POSITION: STEP. AND AMOUNT NAME QF EMPLOYEE PREVIOUSLY IN THIS POSITION: ❑ FULL TIME ❑ PART. TIME MAILING ADDRESS: r ti:t ' ADDITIONAL INFORMATION: 1 • SUBMITTED• RECEIVED IN FINANCE OFFICE: (Department Head) (date) EFFECTIVE DATE ENTERED ON EARNING RECORD: (initial) APPROVED- .DATE VERIFIED: (City Manager) (Initial, City Clerk) • TO: Finance Department POSITION: ...Finn= VIA: Department: Fire CHANGE REQUESTED. Fran part ..paid..fire anto...run:.p3iti c� L OLD STEP Sc AMOUNT 3.00 or 5.00 per call NEW STEP & AMOUNT .._ 5.00 per FID* EFFECTWE DATE: 1 »c.....3.1.923 Y (If Ten sting) FUTURE MAILING ADDRESS REASON FOR TERMINATION: SUBMIT»'•ED BY 6-1.2L..1214.4 , TITLE: F3re_. Chief n..f APPROVED: , CITY :CONTROLLER — DATE: Received in Finance Office Entered on Earning Record' (date) 1 (initial) !►owlp_t�s... BI -WEEKLY VERIFIED: A' ' R.3HOURLY 0 r 41.02 y (Initial, City Clerk) (Submit any promotion or c an in status which is not in the current budget to the City Manager for approval.) •7 APPROVED: .. DATE: Z j – j G - (City Manager) RE,' FOR TIME OFF DEPARTMENT I herel y apply for days leave to be charged against my SICK LEAVE ❑ ANNUAL VACATION 0 If sick leave amounts to more than 3 days, give name of doctor treating patient and dates of treatment. NATURE OF ILLNESS: DATES: DOCTOR TO BEGIN AND END (both dates inclusive) ❑ With Pay 0 Without Pay APPROVED VERIFIED ELIGIBLE: (Department Head) (Submit requests for other than earned Sick Leave and Vacation to the City Manager for approval.) APPROVED. (City Manager) NCa-MCN 20111 (Initial, City Clerk) Date (Employee's Signature) Return To Department Head RICHARD F. CAMUS AND ASSOCIATES, INC. • ACTUARIES • CONSULTANTS • ANALYSTS • • May 3, 1995 Arkansas Fire & Police Pension Review Board Suite 940 Union National Plaza Little Rock, AR 72201 RE: Benefits under Act 1197 of 1993 Ladies and Gentlemen: One Union National PlazaSulte 1690 124 West Capitol Avenue Utile Rock, Arkansas 72201 (501)376-8043 We were asked to determine which of the closed police and firefighter pension plans are eligible for the additional benefits provided by Act 1197 of 1993. The Board decided last year to determine eligibility for all plans at once and requested that we undertake this task after the regular December 31, 1993 valuations were complete. This report presents the key results of the actuarial valuations necessary to determine eligibihty for these additional benefits. The four exhibits show the results for police, paid firefighter, mixed firefighter, and volunteer firefighter plans. Background The General Assembly of Arkansas passed Act 1197 dunng the 1993 session. This bill increases minimum benefits in three categones. The minimum police retirement benefit was increased from $250 per month to $350 per month. The minimum paid firefighter benefit was also increased from $250 per month to $350 per month. The volunteer firefighter minimum benefit was increased from $30 per month to $50 per month. The Last section of the Act stated that to be eligible for these increased minimum benefits the pension plan must be actuarially sound after the inclusion of the new minimum benefit. The Attorney General Opinion number 93-258 included two pertinent items. First, that eligibility for Act 1197 benefits (ncreased minimums) should be determined before eligibility for Act 397 (mcreased widow benefits). The opinion also stated that once a plan is considered eligible for Act 1197 benefits, those benefits cannot be taken away. • Arkansas Fire & Police Pension Review Board May 3, 1995 - page 2 RICHARD F. CAMUS am ASSOCIATES, INC. ACTUARIES • CONSULTANTS • ANALYSTS Method for Determining Eligibility for Act 1197 Benefits Our review was limited to all pension funds that were actuarially sound at December 31, 1993 under the current definition of actuarial soundness. We then made the valuation calculations for all of these plans including the Act 1197 minimum benefits. The resulting calculated contribution was compared to the 1993 contribution and the short condition test was recalculated. If a pension fund was actuarially sound with the inclusion of these benefits, we show they are ehgible for the Act 1197 benefits Possible New Definition of Actuarial Soundness The board is currently considering changes to Board Rule #4 which defines actuarial soundness. Our letter of January 18, 1995 states that ten firefighter plans and two police plans would then meet the definition of actuarial soundness. These twelve plans are not included in this review. These plans would be reviewed after any changes in the definition of actuarial soundness is finalized. There is also the possibility that a plan that is not eligible as determined in this report would become eligible with a new definition of actuarial soundness. • Conclusion The exhibits show that all 16 police plans that are actuarially sound would be eligible for the Act 1197 benefits. There are no all -paid firefighter plans actuarially sound and therefore none are eligible. There are 22 mixed firefighter plans in this study and 18 of those plans would be eligible. There were 100 volunteer plans included in this study and 68 of those are eligible for this increased benefit. There have been several plans in each category that have increased benefits above the Act 1197 minimums These plans will not show an increase in calculated benefit or a decrease in the short condition test. There are some volunteer plans that have increased benefits to or above the $50 minimum but still have some "old" retirees with benefits below $50 per month. This has been included in the study and these plans would need to raise all benefits to at least $50 per month. We look forward to discussing this information with the board. If you have any questions or comments, please let us know. Sincerely, Steve Osborn, F.S.A. • Actuary