HomeMy WebLinkAbout1995-03-30 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, 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.
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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
Reagan, seconded by Doss, made a motion to pay
$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.
to Mr. Jones.
Gregory D. Jones
ADJOURNMENT
The meeting adjourned at 11:30 a.m.