HomeMy WebLinkAbout1996-01-19 - Agendas - FinalFAYETTEVILLE
•
E CITY OF FAYETTEVILLE, ARKANSAS
TRACI PAUL, CITY CLERK
TO: Firemen's Pension Board Members
'FROM: Traci Paul, City Clerk/Treasurer 712
DATE: January 19, 1996
SUBJECT: Firemen's Pension Board Meeting
The next Firemen's Pension Board meeting is Thursday, January 25,
1995, at 11:00 a.m., in room 326 of City Hall. Attached, please
find a copy of the agenda for the upcoming meeting, the minutes
from the December 28 meeting, and the pension list for February,
1996.
Attachments
113 WEST MOUNTAIN 72701 501 575-8323
AGENDA
FIREMEN'S PENSION AND RELIEF BOARD
January 25, 1996
11:00 a.m.
City Hall Room 326
1. Approval of the minutes of December 28, 1995.
2. Approval of Pension List for February 1996.
3. Old Business
A. DROP plan report
New Business
A. Investment Report, Merrill Lynch
Adjournment
4
MINUTES OF A MEETING OF THE FIRE PENSION BOARD
A meeting of the Fayetteville Firemen's Pension and Relief Board
was held on Thursday, December 28, 1995, at 11:00 a.m. in room
326 of the City Administration Building, 113 W. Mountain,
Fayetteville, Arkansas.
PRESENT: Marion Doss, Ron Wood, Darrell Judy, Pete Reagan, and
City Clerk/Treasurer Traci Paul.
ABSENT: Mayor Fred Hanna and Howard Boudrey
CALL TO ORDER
Pete Reagan called the meeting to order.
MINUTES
Paul explained that Howard Boudrey was absent at the November 30
meeting and stated that change would have to be made.
Reagan, seconded by Doss, made a motion to approve the minutes of
the November 30, regular meeting. The motion passed unanimously.
PENSION LIST
In answer to a question from Reagan, Paul stated there were no
changes in the pension list.
Judy, seconded by Doss, made a motion to approve the January
pension list. The motion passed unanimously.
OLD BUSINESS
DROP PLAN
Reagan explained that he had not met with Jerry Rose to discuss
the DROP Plan. Reagan stated he would have something for the
Board at the January meeting.
STATUS OF PENSION RECIPIENTS
Doss stated at the last meeting the Board discussed the
possibility that Ms. Barnes and Ms. Lain had passed away. Ms.
Lain is still alive and lives in a nursing home. Doss explained
that he did not know the status of Ms. Barnes. Doss stated the
Board should know for certain after the affidavits are mailed out
in January.
Reagan pointed out that pension affidavits will be mailed with
the January pension checks.
t
• NEW BUSINESS
•
December 28, 1995
INVESTMENT REPORT
Paul distributed copies of
December 22, 1995 that was
Reagan stated Richard Yada
January meeting.
the portfolio performance as of
faxed from Merrill Lynch.
plans to make a year-end report at the
The Board reviewed and briefly discussed
KEYSTONE
the report.
Paul explained she received a letter from Keystone asking if the
Board wants a copy of a report which provides background
information about Keystone.
Reagan stated it would be good to have the report on file.
PROXY MATERIALS
Paul explained that she received some proxy materials from the
Accounting Division. Paul stated former City Clerk Sherry Thomas
left instructions to throw away the materials, that it was not
necessary to do anything with them. The Accounting Division
wants verification from the Board that these materials can be
thrown away.
Doss pointed out that Merrill Lynch probably takes care of the
proxy materials for the Board.
Reagan suggested calling Richard Yada for his input.
Paul stated she would contact Richard Yada.
Reagan stated it might be good to keep the portfolios that are
included in the proxy materials.
NM CAPITAL FEES AUTHORIZED
Paul stated she needs each member of the Board to sign several
letters authorizing Merrill Lynch to pay quarterly management
fees to NM Capital.
•
OTHER BUSINESS
December 28, 1995
BILL MORRIS
Wood stated Bill Morris is still unhappy about the recent pension
increase. Retirees receive an extra $5 per month for every year
they stay in over twenty. Morris had twenty three years. He
receives an extra $15 per month. His argument is that when the
increase went into affect, the people who had extra years were
penalized. Retirees who did not put in extra years received an
increase while those who did stay longerthan twenty years did
not receive an increase.
Reagan stated the people who stayed the extra years are not
getting credit for it at this point. The increase was required
by State statute because we are actuarily sound.
Paul pointed out that the statute would have needed to say
something about those people who served extra years being
eligible for the increase also even though they were already
receiving more than the minimum pension payment.
In answer to a question from Judy, Wood stated Morris believes
that he should be receiving an additional $5 per month.
•' Doss stated that in order to give an increase, the Board would
have to go the Pension Review Board.
Reagan stated he would talk to Bill Morris about the issue.
With a motion by Judy and a second by Doss, the meeting adjourned
at 11:20 a.m.
FIREMEN'S RELIEF AND PENSION FUND
FEBRUARY 1996
TRACI PAUL, TREASURER
aTHE FOLLOWING ARE THE OBLIGATIONS OF THE FIREMEN'S RELIEF FUND FOR THE
MONTH OF FEBRUARY 1996. YOU ARE HEREBY INSTRUCTED TO ISSUE CHECKS TO THE
PAYEES, IN THE AMOUNTS SHOWN, AND FOR THE PURPOSE SO STATED.
EMF'# 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
GROSS FED. TAX
916.20 100.00
50.00
55.00
55.00
1,266.21 66.21
1,066.66
837.68 287.68
50.00
75.00
909.50
50.00
375.00 32.50
55.00
377.50
50.00
707.84
953.38 100.00
55.00
55.00
1,192.17
837.68
828.42 100 00
1,131.00 130.00
50.00
417.50
55.00
837.68
439.16
439.17
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
50.00
60.00
70.00
1,114.11
1,284.63 160.00
965.81 65.81
1,201.98 200.00
50.00
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
•
ST. TAX NET
816.20
50.00
55.00
55.00
1,200.00
1,066.66
50.00 500.00
50.00
75.00
909 50
50.00
342.50
55.00
377 50
50.00
707.84
10.00 843.38
55.00
55.00
1,192.17
837 68
10.00 718.42
1,001.00
50.00
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
50.00
60.00
70.00
1,114.11
1,124.63
900.00
30.00 971.98
50.00
55.00
915.78
763.74
650.00
390.00
50.00 1,450.00
609.88
540.36
27 TUNE, MILDRED MRS.
26 TUNE, BILLIE SUE
28 WATTS, DONALD
59 WATTS, WAYNE
52 WRIGHT, RANDALL
70.00
70.00
400.00
921.17
877.68
96.17
150.00
70.00
70.00
400.00
825.00
727.68
32,034.91 2,236.24 170.00 29,628.67
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.
SECRETARY CHAIRMAN AND PRESIDENT
ACKNOWLEDGEMENT
STATE OF ARKANSAS )
COUNTY OF WASHINGTON) )SS
• SWORN TO AND SUBSCRIBED BEFORE ME THIS DAY OF , 1996.
NOTARY PUBLIC
MY COMMISSION EXPIRES:
w
kEVI5EI7
FIREMEN'S RELIEF AND PENSION FUND
FEBRUARY 1996
TRACI PAUL, TREASURER
•THE FOLLOWING ARE THE OBLIGATIONS OF THE FIREMEN'S RELIEF FUND FOR THE
MONTH OF FEBRUARY 1996. YOU ARE HEREBY INSTRUCTED TO ISSUE CHECKS TO THE
'-' PAYEES, IN THE AMOUNTS SHOWN, AND FOR THE PURPOSE SO STATED.
EMP# NAME
43 BAIRD, RICHARD H.
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
27 TUNE, MILDRED MRS.
GROSS FED. TAX
916.20 100.00
55.00
55.00
1,266.21 66.21
1,066.66
837.68 287 68
50.00
75.00
909.50
50.00
375.00 32.50
55.00
377.50
50.00
707.84
953.38 100.00
55.00
55.00
1,192.17
837.68
828.42 100.00
1,131.00 130.00
50.00
417.50
55.00
837 68
439.16
439.17
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
50.00
60.00
70.00
1,114.11
1,284.63 160.00
965.81 65.81
1,201.98 200.00
50.00
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
ST. TAX NET
816.20
55.00
55.00
1,200.00
1,066.66
50.00 500.00
50.00
75.00
909.50
50.00
342.50
55.00
377.50
50.00
707.84
10.00 843.38
55.00
55.00
1,192.17
837.68
10.00 718.42
1,001.00
50.00
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
50.00
60.00
70.00
1,114.11
1,124.63
900.00
30.00 971.98
50.00
55.00
915.78
763.74
650.00
390.00
50.00 11450.00
609.88
540.36
70.00
i
26 TUNE, BILLIE SUE
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
31,984 91 2,236.24 170.00 29,578.67
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.
CHAIRMAN AND PRESIDENT
ACKNOWLEDGEMENT
STATE OF ARKANSAS )
COUNTY OF WASHINGTON) )SS
SWORN TO AND SUBSCRIBED BEFORE ME THISa9 DAY OF January , 1996.
MY COMMISSION EXPIRES 3 - / - a ooS
•
pOTAgy
3 • 9 ole y:
N . 'ueuc ".
so, •
•
FIREMEN'S RELIEF AND PENSION FUND
JANUARY 1996
TRACI PAUL, TREASURER
• THE FOLLOWS.
ARE THE OBLIGATIONS THE FIREMEN'S RELIEF FUND FOR THE
• MONTH OF JANUARY 1996. YOU ARE HEREBY INSTRUCTED TO ISSUE CHECKS TO THE
PAYEES, IN THE AMOUNTS SHOWN, AND FOR THE PURPOSE SO STATED.
•
EMP# NAME
43 BAIRD, RICHARD H.
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
27 TUNE, MILDRED MRS.
GROSS FED. TAX
916.20 100.00
55.00
55.00
1,266.21 66.21
1,066.66
837.68 287 68
50.00
75.00
909 50
50.00
375.00 32.50
55.00
377.50
50.00
707.84
953.38 100.00
55.00
55.00
1,192.17
837.68
828,42 100.00
1,131 00 130.00
50.00
417.50
55.00
837.68
439.16
439.17
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
50.00
60.00
70.00
1,114.11
1,284.63 160.00
965.81 65.81
1,201.98 200.00
50.00
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
ST. TAX
50.00
10.00
10.00
20.00
30.00
50.00
42EV 13E17
t3Al2NES CHECK FOS
JAN. WAS VOlt,e17.
NET
816.20
55.00
55.00
1,200.00
1,066.66
500.00
50.00
75.00
909.50
50.00
342.50
55.00
377.50
50.00
707.84
843.38
55.00
55.00
1,192.17
837.68
718.42
1,001.00
50.00
41750
55.00
837.68
439.16
439.17
1,274.38
800.00
791 62
25.00
835.14
738.01
55.00
50.00
60.00
70.00
1,114.11
1,124.63
900.00
971.98
50.00
55.00
915.78
763.74
650.00
390.00
1,450.00
609.88
540.36
70.00
•
26 TUNE, BILLIE SUE
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
31,984.91 2,236.24 170 00 29,578.67
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.
1,,,,e; 7Q2L
SECRETARY CHAIRMAN A' 1 PRESIDENT
Apnnv
ACKNOWLEDGEMENT
STATE OF ARKANSAS )
COUNTY OF WASHINGTON) )SS
SWORN TO AND SUBSCRIBED BEFORE ME THIS ( DAY OF
z�2z,iC
YPUBLC
MY COMMISSION EXPIRES: ,3 -/- 07005-
Fe/
11996.
November 29, 1995
City Clerk of Fayetteville
113 West Mountain Street
Fayetteville, AZ 72701
/ INVESTMENTS
KEYSTONE
I -22-9C0
kEQUESr<=12 A coPY
OF -m4 AljJJ.
• Dear City Clerk:
Each year Keystone, -like all registered investment advisors, files a document with the Securities
and Excliange Commission called "SEC Form ADV" which provides background information
about Keystone. If you would like a copy of our ADV, please advise us in writing and we'll be
pleased to send you one.
If you have any questions, please do not hesitate to call.
Sincerely,
Andrew G. Baldassarre
Vice President and Portfolio Manager
AGB/kas
Mr. Curtis Curtis Williams
Mr. Richard Yada •
200 Berkeley Street, Boston, Massachusetts 02116-5034 Phone: (617) 338-3200
01/23/96 10:04 JONES HIXSON 4 1 501 575 0257
LEWIS O. JONES
GREGORY D. JONES•
J, SCOTT HARDIN
•BOARD RECOGNIZED
:;RECIALIUT IN ins LAW
November 1, 1995
LAW OFFICES
JONES, JONES a IIARTJIN, P.L.C.
P. 0. BOX 1284
112 S. EAST AVENUE
FAYETTEVILLE, ARKANSAS 7270 2-12 84
Board of Trustees
of Fayetteville Fireman's
Pension & Relief Fund
Attn: Mr. Pete Reagan
1015 Lake Sequoyah
Fayetteville, AR 72701
RE: The Fayetteville Fireman's
Deferred Retirement Option Plan
Dear Pete:
N0.256 P02
AREA COOS (601)
TELEPHONE 443.4313
TELEFAX 676.0626
Please find enclosed a statement for services rendered. if you
have any questions or comments please do not hesitate to contact
me.
01/23/96
10:04 JONES HIXSON -4 1 501 575 8257
LAW OFrrCF9
JONES, JONES & HARDIN; P.L.C.
117 S. eAST AVF.rlllr.
r'ATE7'TRvJ!.LE, ARKA.N.SAS 72101
LEWIS D. JONES
DREGORT D. .TONES
J. SCOTT HARDIN
November 1, 1995
Fayetteville Firemen's Pension and Relief Fund
ATT: Mr. Pete Reagan
1015 Lake Sequoyah
Fayetteville, AR 72701
RE: GENERAL FILE
NO. 256 1703
AREA CODE (501,
TELEPHONE 443.1317
TAX S.D. 171.0641105
TA. Pnreld 1.01 uo. 71-0641105 Vs CHAIN.[ 1NTLIIEST ON AI.I, A000111r1C OvNY 30 OATS Al' •KKANDAS' 111LII89T I.µ'NL wee
FOR PROFESSIONAL SERVICES
• 3-27-95
3-27-95
5-01-95
6-28-95
7-10-95
7-25-95
9-11-95
9-14-95
10-25-95
10-26-95
10-30-95
Correspondence with Beth Long
Correspondence with Pete Reagan
Correspondence with Beth Long
Phone conference with Beth Long; phone
conference with Pete Reagan
Correspondence with Beth Ann Long
Correspondence with Beth Ann Long
Phone conference with Pete Reagan X 2
Correspondence with Fayetteville Fire
Firefighters
Phone conference with Catherine Hinshaw;
Phone conference with Don Bailey
Review Fayetteville Fire Fighters DROP Plan
File Plan; Presentation to Pension Review Board
Correspondence with Jerry Rose (city attorney)
setting forth tax paragraph for disclosure
TOTAL HOURS
0.3
O .3
O .3
O .6
O .3
0.3
O .6
O .6
O .8
1.1
O :6
5.8
01/23/96 10:04 JONES HIXSON 4 1 501 575 0257
•
,FEES:
5.8 Hours X $100.00/hour = $580.00
COSTS:
NO.256 004
TOTAL FEES $580.00
6 Copies @ $.20 each = $ 1.20
Long Distance Calls = $ 0.77
TOTAL COSTS $ 1,97
BALANCE DUE ON ACCOUNT $581.97
•
FAYETTEVILLE FIREMEN'S PENSION AND RELIEF FUND
RULES AND REGULATIONS
FOR FAYETTEVILLE FIREMEN'S DEFERRED RETIREMENT OPTION PLAN
(DROP)
ARTICLE I
Purpose
The purpose of these rules and regulations is to implement and administer the Deferred
Retirement Option Plan (DROP), authonzed by Act 1004 of 1993, and adopted by Resolution
of the Board of Trustees on January 26, 1994? These rules and regulations are promulgated
under the authority of Ark. Code Ann. §24-11-803(a)(3), 1992.
ARTICLE II
Effective Date
The effective date of the DROP shall be January 25; 1996.
ARTICLE III
Administration
The plan shall be administered by the staff of the Board of Trustees of the Fayetteville
Firemen's Pension and Relief Fund (the "Fund").
1
ARTICLE IV
Employee Election and Application Process
Section 4.01. Service Requirement: Applicants for DROP must have a minimum of
twenty (20) years accredited service with the Fayetteville Firemen's Pension and Relief Fund
on or within sixty (60) days succeeding the date of application for participation m DROP.
Section 4.02. Application: Applications for participation in DROP must be received at the
Fund office at least thirty (30) days prior to the effective date of participation.
Application must be made on forms provided by the Fund. Participants will be notified in
wnting of the conditions of participation in DROP. A copy of these rules and regulations will
constitute wntten notification. Participation in DROP is contingent upon completion of all
applications and forms required by the Fund. If married, spousal signature is required.
ARTICLE V.
Contributions to DROP Account
Section 5.01, DROP Credit: Each participant's DROP account shall be credited with the
following items during the term of DROP.
(a) DROP Payments: • The DROP account is credited at the end
of each month of DROP with the DROP payments. The amount
of the DROP payment is equal to the pension benefit the
participant would have received if they had elected service
retirement on the first day of the participant's DROP. This
amount shall not change during participation in DROP regardless
•
aor
•
of interim salary increases, except under the limited circumstances
described in Section 6.03.
(b) Employer Contributions: One-half (1/2) of the employer
matching contnbutions are credited to the DROP account.
(c) Interest: Simple interest shall be credited to individual DROP
account balances of the member on an annual basis, based upon an
average annual balance computed on the date the member began
participation. Said account shall earn interest at a rate of two (2)
percentage points below the rate of return of the investment
portfolio of the Fund but no less than the actuarial assumed interest
rate as certified by the actuary for the Fund.
Section 5.02. Employee Contribution: The participant continues to make the required
employee contributions during DROP. These employee contributions are credited to the Fund
and not the individual's DROP account.
ARTICLE VI.
Conclusion of Drop
Section 6.01. Time of Conclusion of Drop: The DROP period will conclude at the date
of termination of employment which shall be no later than five (5) years after the date that the
individual member began participation in DROP. Termination of employment means leaving
the employment of the department for any reason.
3
•
Section 6.02. Notification of Termination: At least thirty (30) days prior to termination
of employment, the participant must select a payment method and notify the Fund administrator
of that selection.
Section 6.03. Distribution of DROP Account: At the conclusion of the DROP period,
the DROP account will be distributed. Distribution options are described in Article VH of these
Rules and Regulations.
Section 6.04. Retirement Benefit: The monthly benefit received by the member after the
DROP penod concludes is the retirement benefit as calculated at the date the member began
DROP. The monthly benefit does not change after the DROP period. The same monthly
amount is now paid to the individual member instead of into the DROP account.
The retirement benefit at the end of the DROP penod:
(a) Does not change with increases in salary during DROP;
(b) Does not change with extra service during DROP; and,
(c) Is the same amount as was being credited, monthly, to the
DROP account.
There are two (2) exceptions:
(a) Age sixty (60) longevity bonus pursuant to A.C.A. §24-11-826
(based on having over twenty-five (25) years of service earned
before the DROP period) starts at age sixty (60); and,
(b) Any retiree raises granted to all retirees, or overall benefit
increases, shall also be given to persons on DROP.
4
Section 6.05. Line of Duty Disability Benefits: If a member of the Fire Department who
has elected DROP becomes disabled in the line of duty during the DROP period, and if he is
otherwise entitled to disability retirement, he may elect a disability retirement based upon current
salary upon approval by the Board of Trustees. If such disabled member elects to receive a
disability retirement based upon current salary, he shall forfeit his accumulated DROP account
and shall, instead, be considered a disability pensioner who never went on DROP.
Section 6.06 Death Benefits: If a member of the Fire Department dies during the penod
of participation in the DROP, a lump sum payable equal to the balance of the DROP account
will be paid to either a designated beneficiary or to the decedent's estate. The widow's benefits
will be paid pursuant to existing law.
ARTICLE VII
Distribution of DROP Account
Section 7.01. Method of Distnbution: A member who has DROP may elect to receive
his or her DROP account in either a lump sum, a true annuity, or a combination thereof as
described below:
(a) Lump Sum. A lump sum amount equal to the accumulation of
the DROP account as defined in Article V of this Rule, as of the
date DROP concludes.
(b) True Annuity: A true annuity which is chosen based on the
participant's own research and investigation. If this method of
distribution is selected, the member shall notify, in writing, the
5
•
•
Board of Trustees of the insurance company selected by the
applicant to furnish the annuity. The Board shall authorize the
staff to forward the lump sum in the DROP account to said
insurance company. The Fund shall not be subject to any fees or
charges by any annuity provider.
(c) A combination of lump sum and annuity: The member may
select to apportion his distribution between a lump sum and an
annuity.
Section 7.02. Release of Liability. The payment of the balance of the participant's
account to an annuity provider, to the participant, or to a combination thereof pursuant to written
authorization by the participant shall constitute a full release of the Fund, its Board of Trustees,
its agents and employees.
ARTICLE VIII
Reporting Requirements
Section 8.01 Annual Reports: Each member who has elected DROP will receive an
annual report of the amount of their DROP account within sixty (60) days following the crediting
of interest to the member's account.
6
1
r.
ARTICLE IX
Disclaimer of Liability for Tax Consequences
The Fayetteville Firemen's Pension and Relief Fund Board of Trustees (the "Board")
assumes no responsibility for any adverse tax consequences which may accrue to a participant
in DROP. The Board has been provided with a copy of a private letter ruling from the Internal
Revenue Service making a favorable determination of the application of the Oklahoma Police
Pension and Retirement Board's submission of a plan very similar to the Fayetteville plan. The
Board has instituted this plan in reliance on that letter. No independent ruling or opinion has
been obtained. Participants in the plan are encouraged to seek advice from their own tax
advisors prior to enrolling for participation
determines that Fayetteville Firemen's DROP
in this plan. If the Internal Revenue Service
PENIS 1 ON1
is not a qualified, deferred eempoasatren plan, a
participant may have liability for not only the tax due on the funds deposited in their DROP
account, but also substantial penalties and interest may be applicable. The Fayetteville
Firemen's Pension and Relief Fund assumes no liability for such adverse consequences.
7
FAYETTEVILLE FIREMENS PENSION AND RELIEF FUND
BALLOT FOR DROP PLAN
JANUARY 25, 1996
WE THE ACTIVE MEMBERS OF THE FAYETTEVIT TP FIREMENS PENSION AND RELIEF
FUND HAVE HAD THE OPPORTUNTTY TO REVIEW THE CURRENT PROPOSED COPY
OF THE DEFERRED RETIREMENT OPTION PLAN. LISTED BELOW IN THE APPROPRIATE
COLUMN IS THE VOTING TABULATION.
YES
1. EDDIE BACHMAN CG{ N 7
2. MICHAEL BONADUCE Yh b �c
3. GARY JOHN DILL
4. MARION DOSS
5. LARRY FREEDLE
6. TOMMY GAGE
7. JOHN JENKINS
8. ROBERT JOHNSON
9. MARSHALL MAHAN
10. KENNETH MILLER J
11. LONNIE NAPIER yo -i%
/
12. TEDDY O'NE_AL
13. LARRY PHILIPS
14. JOEY PIERCE
15. PETE REAGAN
16. GLEN SHACKELFORD
17 RALPH TATE
18. THOMAS WARFORD
19. RON WOOD
X ICA(
X 1,-P
JdL
X fir
Xi()
20. DENNIS LEDBJI tut Olikkal
21. DANNY FARRAR F
NO
ABSTAIN
•
RESOLUTION
A RESOLUTION TO ELECT PARTICIPATION
IN THE ARKANSAS FIREFIGHTERS'
DEFERRED RETIREMENT OPTION PROGRAM
(DROP)
WHEREAS, Act 1004 of 1993 established the Arkansas Firefighters' Deferred
Retirement Option Program (DROP) subject to the approval of each local pension board; and,
WHEREAS, the Board of Trustees of the Fayetteville Firemen's Pension and Rehef Fund
(the "Board") beheves that it is to the advantage of the members of the Fund for this option to
be made available to the members.
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF TRUSTEES OF THE
FAYETTEVILLE FIREMEN'S PENSION AND RELIEF FUND:
SECTION 1: The Board hereby adopts the Deferred Retirement Option Plan (DROP)
as authorized by Act 1004 of 1993.
SECTION 2; A copy of this signed resolution will be filed with the Arkansas Fire and
Police Pension Review Board.
ADOPTED: , IAPJUAt2i 25 > I qq CO
eta AJ
City Clerk
Mem er
APPROV ► • FORM:
Jerry ' ose, City Attorney
/,,,, „yang
Member
1°:iAX
ember
Agis
Member
1
FAYEJ. IEVILLE FIREMEN'S PENSION AND RELIEF FUND
DEFERRED RETIREMENT OPTION PLAN (DROP)
MEMBER ELECTION FORM
I hereby elect the DROP as my retirement benefit option from the pension plan in place of
normal -retirement benefit. I understand that in electing DROP, I have agreed -to -the following
statements:
* 1. The amount of the DROP payments will be $ per month. This
amount includes all service and age 60 bonuses that I have earned to this date.
This amount is the same as if I retired today.
2. I understand that the monthly benefit that I will receive at the end of the
DROP period. is the exact same amount stated in Item 1, regardless of any pay
raises I receive or extra years of service I may. work.
3. I understand that at the end of the DROP period I will have the option to
receive the DROP account as a lump sum or convert the DROP account to a
monthly annuity account or any other method of payment as provided for in the
current Rules and Regulations of DROP.
4. I understand that the DROP account will remain in the pension fund until
withdrawn in accordance with the Rules and Regulations of the DROP plan. I do
not have the ability to withdraw from the DROP account until the time of my
departure.
5. I have elected to begin the DROP on . DROP will
end at the earlier of when I resign or , (5 years from
the above date, unless authorizations to participate in DROP shall -be specifically
extended by the Arkansas Statutes).
6. I understand that neither the pension fund nor the Department has given any
tax advice concerning the way the DROP account is taxed. I have, or will
consult, my own tax advisor for this mformation.
7. I have read the Rules and Regulations pertaining to DROP.
*Two exceptions to these rules: Age 60 bonuses (for members with over 25 years of service when they go on to DROP)
begin at age 60 whether still on DROP or not; raises given to retirees are also given to DROP participants.
Member Signature Date
Spouse Signature Date
Plan Representative Date
IMPORTANT•
NOTICE
Attorneys for the Fayetteville Fireman's Pension and Relief
Fund Board of Trustees has advised that there may be serious
potential tax consequences as a result of participating in the
Deferred Retirement Option Plan (DROP, A.C.A.§24-11-830) as
follows:
AN APPLICATION FOR A LETTER OF DETERMINATION AS TO THE
TAX DEFERRAL STATUS OF THE FIREMAN'S PENSION AND RELIEF
FUND PLAN AND TRUST HAS NEVER BEEN FILED WITH THE IRS.
ALSO, NO DETERMINATION REQUEST HAS BEEN MADE FOR THE
DEFERRED RETIREMENT OPTION PLAN (DROP), AN AMENDMENT TO
THE PENSION AND RELIEF FUND PLAN AND TRUST. RELIANCE ON
ANOTHER STATE'S QUALIFICATION IS NOT PERMITTED. AN
ADVERSE RULING ON THE TAX DEFERRED STATUS OF .THE PLAN
COULD HAVE SERIOUS DETRIMENTAL TAX CONSEQUENCES TO EACH
PARTICIPANT. DROP DISTRIBUTIONS WILL BE TREATED AS
ORDINARY INCOME IN THE YEAR CONSTRUCTIVE RECEIPT OCCURS
AND ROLLOVER INTO AN OTHERWISE QUALIFIED PLAN, IRA OR
OTHER INVESTMENT MAY NOT BE POSSIBLE. BY NOT ACTING TO
FORMALLY TAX QUALIFY THE PLAN, AN ARRAY OF POSSIBLE
OPTIONS FOR THE DROP PARTICIPANTS MAY NOT BE AVAILABLE.
We strongly urge you to seek advice from a competent tax
accountant and/or attorney before participating in the DROP
program. You assume the risk of such adverse tax consequences if
you elect to participate.
•
•::
FAYETTEVILLE FIREMEN'S PENSION AND RELIEF FUND
DEFERRED RETIREMENT OPTION PLAN (DROP)
MEMBER ELECTION FORM (Beneficiary Designation)
Member SSN ' A• DOB
Address City State Zip
Spouse
Years of Service
SSN DOB
Date of Employment Witness Date
DESIGNATION OF BENEFICIARY
I hereby designate the following beneficiary to receive any benefits from the DROP plan if I die
prior to my termination of employment:
Name Relationship
Signature of Member Date
Please select one of the following (if spouse is not selected as beneficiary):
I certify that to the best of my knowledge, the above-named member
is single or that his spouse cannot be located.
Signature of Plan Representative/Notary Date
I certify that I have agreed with my spouse on the selection of the
above-named beneficiary or beneficiaries I understand that if I am not named
beneficiary, I will not be entitled to benefits under the Plan.
Signature of Spouse
Date
I certify that I have witnessed the above spouse's signature.
Signature of Plan Representative/Notary
Date
•
To: Drop (Fire Pension) File
From: Don Bailey
Date: September 14, 1994
Subject: Notes to File
Closed plan - small number of participants funding requirements to satisfy obligations becomes
critical. Realistic and objective actuarial assumptions are of key importance to planning. Should
be done annually.
It is not uncommon for defined benefit plans to prohibit lump sum withdrawals because of the
adverse effect it may have on the trust and projected trust income which actuarially must be
projected over the lifetimes of participants and their beneficiaries.
A prudent board will not assume a bottomless well of money with which to fund the plan.
Participants typically are inclined to take a lump sum without regard to their own long term
welfare constraints(1) constitutional limitations, statues and contract law "impairment of contract"
rules; (2) cannot prospectively limit benefits for persons already employed.
Above items were subject of discussions with Ben Mayes A.S.D. and Jerry Rose City Attorney,
September 14, 1994.
September 14, 1994 Mrda Neff - Jeff Harper
Springdale adopted and then rescinded the drop. Catherine Hinshaw is faxing list. No guidance
on what can or cannot be included in drop amendment.
Next Pension Meeting September 29,1994
Final draft of a letter provided to Pete Reagan to submit to Pension Board via Ms. Hinshaw
attached hereto.
RECEIVED
FSM btP4 »AILEY
APR 1 8 1996
CITY OL RK'S BICE
FOIc FI:13 FILES
•
September , 1994
Ms. Catherine Hinshaw, Executive Director
Arkansas Fire and Police Pension Review Board
P. O. Drawer 34164
Little Rock, AR 72203
Dear Ms. Hinshaw:
The Fayetteville Fireman's Pension and Relief Fund Board is engaged
in preliminary discussion with regard to adopting the Deferred
Retirement Option Plan (DROP) authorized by Act 1004 of 1993.
Adopting (DROP), of course, would constitute a significant
amendment to our plan. Thus we invited comments from Finance,
Legal and Personnel Officials of the City. Our discussions, and
the comments received, haveraised some questions which cause
concern.
All our questions ultimately relate to the technical need for
having a tax qualified plan. We understand that an application for
a letter of determination as to the tax deferral status of the
Fireman's Pension and Relief Fund Plan and Trust has never been
filed with the I.R.S. We also understand that a similar Oklahoma
plan is qualified and that reliance has been placed on that
qualification. We believe this to be an unrealistic assumption
unless the I.R.S. has deemed it a prototype plan. The fact that
problems have yet to appear without the existence of a letter of
determination does not lend assurance that this situation will not
change.
With respect to DROP, it is clear that under current tax law a DROP
distribution (excluding employees after tax contributions) will be
treated as ordinary income in the year constructive receipt occurs
This brings up a question pertaining to the purchase of an annuity
with a DROP lump sum distribution. Since the plan and trust are
not tax qualified, we believe the purchase of an annuity by the
participant may constitute constructive receipt and hence may be a
taxable event. Furthermore, we do not believe a tax deferred
purchase of any annuity, or a tax deferred rollover of a DROP lump
sum distribution to an otherwise qualified plan, I.R.A. or other
investment is possible. By not acting to formally tax qualify the
plan, an array of possible options for DROP participants may not be
available. We also suggest there is a distinct possibility the
average plan participant may not adequately understand the tax
implications of their actions before electing DROP.
Irrespective of the disclaimers accompanying election forms, we
believe there is a fiduciary responsibility to plan and act in the
best interest of plan participants and formally initiate action to
request a letter of determination. We understand the plan to be
categorized as a multiple employer plan, and as one employer, the
City of Fayetteville could not unilaterally act to request a
letter of determination or amend the plan if so required to
qualify. However, does not the Arkansas Fire and Police Pension
Review Board have the authority to act on behalf of all
participating employers? Surely, if the filing fee is an issue, it
could be prorated in some equitable manner between the trusts as an
ordinary plan expense with little individual cost impact.
Thank you for addressing this issue. Your assistance will be
sincerely appreciated.