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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. • • 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.