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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.