The URL can be used to link to this page

Home My WebLink About1997-07-31 - Agendas - FinalFAYETTEVI LLE THE CITY OF FAYETTEVILLE, ARKANSAS _ TRACI PAUL, CITY CLERK TO: Firemen's Pension Board Members FROM: Traci Paul, City Clerk/Treasurer DATE: July 23, 1997 SUBJECT: Firemen's Pension Board Meeting Tiv The next Firemen's Pension Board meeting is Thursday, July 31, 1997, 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 June 26 meeting, and the pension list for August, 1997. Attachments 113 WEST MOUNTAIN 72701 501 5754323 • AGENDA FIREMEN'S PENSION AND RELIEF BOARD July 31, 1997 11:00 a.m., City Hall Room 326 1. Approvalofthe minutes of June 26, 1997. 2. Approval of Pension Lists for August, 1997. 3. Investment Report, Merrill Lynch 4. Old Business A. Report of results - Retired Member Election 5. New Business 6. Adjournment 1 MINUTES OF A MEETING OF THE FIRE PENSION BOARD A meeting of the Fayetteville Firemen's Pension and Relief Board was held on Thursday, June 26, 1997, at 11:00 a.m., in room 326, of the City Administration Building, 113 W. Mountain, Fayetteville, Arkansas. PRESENT: Pete Reagan, Marion Doss, Ron Wood, Darrell Judy, and City Clerk/Treasurer Traci Paul ABSENT: Mayor Fred Hanna and Howard Boudrey CALL TO ORDER Marion Doss called the meeting to order. MINUTES Reagan, seconded by Judy, moved to approve the minutes of the May 29, 1997 meeting. The motion passed unanimously. PENSION LIST Doss stated there is a change in the pension list. The benefit increase was released, as requested by the Board, to Roger Lewis and Marvie Lewis. The pension list for June includes back pay. The pension list for July lists their currents benefits. Reagan, seconded by Judy, made a motion to approve the pension lists for June and July, 1997. The motion passed unanimously. OLD BUSINESS Attorney General's Opinion - Interest on Insurance Turnback Reagan explained he attended the Pension Review Board meeting on the 12th. Reagan stated the Pension Review Board received an Attorney General's opinion on the request for interest on the delayed insurance turnback check. The Pension Review Board asked for comments. Reagan explained he did not make any comments because he had not been given a copy of the opinion. Reagan stated the opinion has been out since May. Cathyrn Hinshaw was instructed to mail a copy of the complete Board packet. Reagan explained neither he nor the Mayor's office has received a copy yet. Reagan, seconded by Judy, made a motion to request the City Attorney write a letter to Cathyrn Hinshaw requesting a copy of the Pension Review Board packet dealing with Fayetteville's problem with interest on insurance turnback funds for 1996. The motion passed unanimously. 1 • • June 26, 1997 Reagan reported that the next Pension Review Board meeting is scheduled for September 10 at 10:00 a.m. NEW BUSINESS Active Member Ron Wood Reappointed Doss stated Ron Wood's term as an active member on the Board is up. Gene Warford nominated Ron Wood for another term. That was the only nomination submitted. Reagan, seconded by Judy, made a motion to accept the nomination and appoint Ron Wood to serve another two year term on the Board. The motion passed unanimously. Retired Member Election Paul stated a letter was mailed with the June pension checks requesting nominations for a retired member to serve on the Board. Nominations were to be submitted to the City Clerk's office by June 23. Bill Morris was nominated by Paul Blackard on June 18. Howard Boudrey was nominated on June 25. In answer to a question from Judy, Paul explained Howard Boudrey told her that he did not have the time to serve another term. Reagan explained Boudrey decided he did want to serve another term. There was some discussion regarding the question of the Board accepting the late nomination. Judy, seconded by Reagan, made a motion to accept both nominations and have an election. The motion passed unanimously. In answer to a question from Doss, Paul stated she would mail a ballot to each retiree. Doss explained that there are several retirees who have their checks sent directly to the bank. Information mailed to the retirees in their checks does not always make it to them. Doss suggested Paul obtain mailing addresses for those retirees. Doss stated members of the Board could help get the addresses. Paul stated she would ask the Accounting Division for a list of the retirees who have their checks sent to the bank. Paul stated she would send the ballot directly to the retirees. Reagan suggested notifying all of the retirees that it will be their responsibility to contact the Board with their mailing address if they plan to have their checks sent to the bank. 2 • • • June 26, 1997 Reagan explained he talked to Howard Boudrey about serving another term during the first part of June. The nomination was just delayed for some reason. INVESTMENT REPORT Paul stated a copy of the investment report has been distributed to each member. The Board briefly reviewed and discussed the Portfolio Performance Report dated December 31, 1996 through June 25, 1997. There being no further business, the meeting adjourned at 11:17 a.m. 3 WIREMEN'S RELIEF AND PENSION FUND AUGUST 1997 TRACI PAUL, TREASURER THE FOLLOWING ARE THE OBLIGATIONS OF THE FIREMEN'S RELIEF FUND FOR THE MONTH OF AUGUST 1997. 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 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. 26 TUNE, BILLIE SUE GROSS FED. TAX 1,191.06 100.00 55.00 55.00 1,641.57 180.00 1,383.66 1,088.98 287.68 55.00 75.00 1,182.35 55.00 55.00 377 50 55.00 707.84 1,171.39 100.00 55.00 55.00 1,525.81 1,088.98 1,008.97 100.00 1,131.00 130.00 55.00 417.50 55.00 1,088.98 570.91 570.92 1,902.69 175.00 1,078.16 29.35 1,159.11 100.00 55.00 30.00 886.19 50.00 863.01 125.00 55.00 55.00 70.00 80.00 1,448.31 1,646.01 160.00 1,255.55 65.81 1,556.57 200.00 55.00 55.00 923.01 1,007.92 20.00 692.50 42.50 390.00 1,626.02 126.02 609.88 50.00 590 36 50.00 80.00 80.00 ST. TAX NET 1,091.06 55.00 55.00 1,461.57 1,383.66 50.00 751 30 55.00 75.00 1,182.35 55.00 55.00 377.50 55.00 707.84 10.00 1,061.39 55.00 55.00 1,525.81 1,088.98 10.00 898.97 1,001.00 55.00 417.50 55.00 1,088.98 570.91 570.92 20.00 1,707.69 1,048.81 1,059.11 25.00 836.19 738.01 55.00 55.00 70.00 80.00 1,448.31 1,486.01 1,189.74 30.00 1,326.57 55.00 55.00 923.01 987.92 650.00 390.00 50.00 1,450.00 9.88 550.00 540.36 80.00 80.00 • • 28 WATTS, DONALD 59 WATTS, WAYNE 52 WRIGHT, RANDALL DROP EMPLOYEES JOHNSON, ROBERT MILLER, KENNETH WARFORD, THOMAS BONADUCE, MICHAEL 400.00 1,191.51 1,128.98 96.17 150.00 400.00 1,095.34 978.98 .37,713.20 2,367.53 179.88 35,165 79 2,042.47 2,129.57 1,659.70 1,975.38 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 SER ICES OR SUPPLIES. itms SE RETARY CHAIRMAN AN ' RESIDENT ACKNOWLEDGEMENT STATE OF ARKANSAS ) COUNTY OF WASHINGTON) )SS SWORN TO AND SUBSCRIBED BEFORE ME THIS y/4 DAY OF grtct,sf 1997. itcyl 1C noa ARY PURL C MY COMMISSION EXPIRES: 3-/',7004- =a paullOuuufn VK% L il ••'pM/v1. • H s• c F• . `OTAR). _ ;.%.; PU6%;( .,�p4 FAYETTEVILLE FIRE DEPT PENSION AND RELIEF FUND PORTFOLIO PERFORMANCE 12/31/96 TO 06/30/97 NM CAPITAL MANAGEMENT INCOME ACCOUNT KEYSTONE ASSET MGNT 3 - MONTHS TREASURY BILLS DJIA W/DIV REINVESTED S & P 500 W/DIV REINVEST LONG TERM TREASURY BONDS H IGH GRADE CORP BONDS CPI CAPRI NM CAPITAL (tirne wtd) INCOME ACCOUNT KEYSTONE ASSET MGNT 12/31/96 $3,987,776 4,518,042 1,201,845 12/31/95 + 5.46 +35. 53 +34. 94 +27.63 +23.51 + 2.67 +15.68 + 15. 61 January 1996 original inv. Dow United Kingdom Japan Hong Kong..(3/97) MAY 1996 DOW United Kingdom Japan Hong Kong SEPT 1996 Dow United Kingdom Japan Hong Kong $75,000 75,000 75,000 75,000 $75,000 75, 000 75, 000 75,000 $751000 75,000 75, 000 75,000 06/30/97 $4,446,484 4,659,657 1,381,936 /0,43)7,077 12/31/96 + 5.31 +29. 49 +22.98 - 1.21 + 1.61 + 3.32 + 11.37 + 4.25 + 17.91 05/31/97 $ 101,155 76, 620 51, 747 77,204 $ 93,918 87, 909 54, 891 83, 954 $ 90,350 80, 967 57,687 82, 777 •201•G7 y, N7t, 26z- yr42,G•I °/7.3 Tice to, 49V, 5o 06/30/97 + 2.65 +20.10 +20.55 + 2.11 + 2.70 + 1.20 +11.78 + 3.60 +15.26 06/30/97 $ 103, 535 79,814 53, 796 79,497 3i 4,cs s. $ 951835 911534 57,154 84,703 32-9, y. 4 $ 94,212 84,081 59,205 82,025 3i%J$3 ARKANSAS FIRE & POLICE PENSION REVIEW BOARD June 12, 1997 The Honorable Fred Hanna Office of the Mayor City of Fayetteville 113 W. Mountain Fayetteville, AR 72701 Dear Mayor Hanna: P.O. DRAWER 34164 LITTLE ROCK, ARKANSAS 72203 TELEPHONE (501) 682-1745 FAX: (501) 682-1751 RECEIVED JUN 16 1997 CITY OF FAYETTEVILLE MAYOR'S OFFICE The Arkansas Fire and Police Pension Review Board (PRB) is a State board charged with responsibility for regulating various aspects of local fire and police pension matters. The PRB met today, and an item under old business was a discussion of the Fayetteville fire pension fund's non-compliance with State law and procedures for increasing benefits from the pension fund. The PRB wanted you to be provided with this chronology of events, and the supporting materials to it, in order that you may be informed of the situation regarding your fire pension fund. Please call me with questions. Respectfully, Cathyrn E. Hinshaw Executive Director encls. CC w/o encl.: The Honorable Arnold Feller, Chairman Arkansas Fire and Police Pension Review Board • • Chronology of Fayettteville Fire Pension Fund Non -Compliance with Benefit Increase Laws and Procedures 1. During FY95, the Fayetteville Fire Pension Fund granted an increase to volunteer retirants and survivors to a base of $50/month. We received a compliance notice on this from Osborn, Carreiro, and Associates on May 6, 1996. 2. On June 5, 1996, I wrote the Fayetteville Fire Pension Board of Trustees, in care of Chief Mickey Jackson, that they were in non-compliance with the legal procedures for increasing benefits. This letter was sent with. the Fayetteville Fire Pension actuarial valuation. 3. On July 8, 1996, the Insurance Commission allowed us to add Fayetteville Fire to the non-compliance list to hold insurance tax turnback. 4. At the Pension Review Board meeting on July 11, following a request from Pete Reagan of the Fayetteville Fire Pension Fund, a motion was made and carried that the Board release Fayetteville's turnback. 5. After the meeting on ally 11, I called Connie Hagemeier of the Arkansas Insurance Commission to request the release of the turnback. She agreed to do so. 6. On July 25, the Fayetteville Fire Pension Board of Trustees passed a resolution asking for a benefit increase. 7. On September 18, following a call from the City of Fayetteville indicating that they had not yet received their turnback, I wrote to the Insurance Commission, asking for the release of the money. After calling to ensure that the Commission had received the letter, and learning that they could not locate it, I resent the letter by fax on September 26. 8. On October 3, Osborn, Carreiro, and Associates issued two benefit increase letters, using the traditional method of valuing benefit increases, which indicated the Fayetteville Fire Pension Fund could not afford the increases sought in their July 25 resolution. The benefit increase failed on the income test, the short condition test, and the funded percentage test. 9. On November 4, after a conversation with the City in which it was noted that the pension fund wanted the benefit increase proposals costed using a cash flow method, I paid Osborn, Carreiro, and Associates the additional fee for processing cash flow studies, having billed the pension fund the difference November 1. As of November 13, the additional fee to run a cash flow study had not been received by the Pension Review Board, nor had the cash flow study indicating that the pension fund could afford the higher level of benefits. (The payment for the cash flow study was received December 4, 1996.) 10. The Cash Flow study was received December 10, 1996, and indicated that the plan could afford a 6596 base for paid personnel and the $55/base for volunteers. al STATE OF ARKANSAS Office of the Attorney General Winston Bryant Attomey General To: Cathyrn Hinshaw • • From: Tom Gay --0- - February 20, 1997 MEMO Re: Pension Review Board/Fayetteville Firefighters Pension & Relief Fund This is in response to your request that I review certain documents regarding a Telephone: (501) 682-2007 demand by the above referenced fund for the payment of interest because of a purported delayed payment of tumback funds. I understand that the fund had paid increased benefits to its retirants and survivors prior to obtaining approval of such increases from the Review Board pursuant to A.C.A. 524-11-102 (Supp. 1995). After these unauthorized increases came to its attention, the Board notified the Insurance Department which added the fund to a list of non-compliant entities which would not receive insurance tax tumback payments. The Insurance Commissioner is required to withhold all monies due until the plan has complied with §24-11-102. Thereafter, at a July 11, 1996 meeting of the Board, fund representatives requested a release of the tumback monies although the fund had not yet requested or received approval of the previously granted benefit increases. The Board approved this release. Following this meeting you telephoned the Insurance Department to request that it remove the fund from the list of non -complying entities so it would receive turnback 200 Tower Building, 323 Center Street • Little Rock, Arkansas 72201-2610 • • • payments. You were advised that the Department would do so. In September you were notified by the fund that it had not received its tumback payment and again called the Insurance Department. Pursuant to their request, you sent a letter asking that the tumback monies be released to the fund. You faxed a copy of this same letter several days later because you called the fund to confirm receipt of payment and were advised that it had not been received. The fund received the tumback payment on or about October 7, 1996. In October the Board's actuaries reported that the fund could not afford the requested benefit increases. Finally, a December 9, 1996 report based on another method of analysis concluded that the fund would remain actuarially sound if benefits were • increased as requested. The fund now demands payment of $2,763.74 representing lost interest at the rate of 4.8% for 89 days resulting from a purported delay from the time of the Board's approval until the receipt of the payment. It appears that the fund's demand is without merit for multiple reasons. First, the fund had no legal right to the funds until after the December actuarial report that the fund would remain actuarially sound if the benefit increases were paid. That is because 124-11-102 (Repl. 1995) states that the fund can increase benefits only by strict compliance with the provisions of that statute and that the Insurance Commissioner shall withhold all monies until the fund is in compliance with 524-11-102. Those requirements include that the fund obtain an actuarial study from the Board's actuary reporting that the proposed action would be actuanally feasible as set forth in the statute. As Executive Director for the Board, you are to then certify to the fund board the appropriate action to be taken. The fund then files a copy of its resolution with the Executive Director who shall determine whether the actuarial evaluation has been made pursuant to this statute and whether it determined that the proposed benefits may be funded as stated therein. Upon such a determination the executive director may approve the proposed increase in benefits. The Executive Director's actions are subject to the review and acceptance of the Board. Because there was no actuanal evaluation that the proposed benefits could be paid pursuant to 524-11-102 until December 9, 1996, the fund had not complied with the provisions of that statute; it had no claim to the tumback monies until after the December 9 report. Next, because the fund had no right to receive the tumback payment until after December 9, it has not lost interest but has received interest on the deposit of monies which it had no legal right to receive. Thus, the fund has been unjustly enriched by the receipt of this interest and should pay to the state treasurer the interest which it earned on the deposit of these funds prior to the date that its proposal would have been approved and monies paid pursuant to 524-11-102 subsequent to the December 9 actuarial report. Also, at least two factual issues exist. First, you telephoned the Insurance Department on July 11 to request that the appropriate tumback monies be released to the fund. You were advised that the monies would be paid. You did not learn that the fund had not received its payment until September. If the fund has any claim, it appears that it is not against the Board. You took action immediately after the June 11 Board meeting to have the payment made. In addition, the tumback momes would not have been paid on July 11. You report that similar tumback payments were received by other entities on August 15 and 19. Thus, if there was any delay, the period was not the 89 days as asserted by the fund but approximately one-half of that time. • • Finally, in regard to the forum in which the fund would bang a claim against the Board, that decision would be made by the fund and its attomey. However, it appears that the Board should be considered an agency of the state. As such it should be immune from suit in Arkansas courts, Arkansas Constitution, Art. 5,120; the proper forum appears to be the State Claims Commission. A.C.A. 119-10-204. After you have had the opportunity to consider the above, please call me if you want to discuss any of these issues further. - Osborn, Carrelro & Associates, Inc. • ACTUARIES • CONSULTANTS • ANALYSTS • • • ri Ay 6, ,se,t. Mn. Cat yrn Hinshaw, Executive Director Arkansas Fire and Police Pension Review Board Suite 940 Union National Plaza Little Rock, AR 72201 VIAFAX 682-1751 One union National Nw.Stjte 1690 124 West Capitol Avenue Uttle Rodt, Arkansas 77201 (30113768043 RE: ye )ev1ile 1vn7t.rs Dear Catlyrn: In preparing the 12/31/95 valuation, it was found that the following retirees are receiving the wrong benefit. This appears to be a compliance problem for this plan. We will value the retirees as follows unless otherwise notified. See Netr PkFe Sin • Alb yrn • S 4 IA!" John . Robbins Jr. .41 UeIante #r Act. e. amp �6t a.� t • • Name gta46 Blackard Bolain Cambrian Counts Dearing Harris Hants Lane Lee McChristi Moore Monts Monis Morrison Polly Reed Tune Tune Sex Fayetteville Volunteer or Pad -Mild Flrefightem Retiree Dating As Of December31, 1996 Date of Date of Benefit Monthly Birth Retirement Option Benefit ,Et ,� loroe M 6/21 ,L M 10/26 ,F M 0/19 M 10/15 5/72 ,A M 10/18 4/00 ,W M 12/26 10/78 ,E 2/08 2/66 ,B M 8/92 5/80 .,J M 4/81 8/79 ,H F 1/19 3/80 ,H M 2/25 7/74 .0 M 12/39 2/82 ,J M 10/37 2/116 ,C / F , 6122 2/68 W M 2/18 4184 ✓E F") 2/19 ,A 4/10 12/52 ,J M 0/25 4/78 1 2/15 3/71 8/38 ; 9/75 5/72 1 5/87 1 1 1 1 0 1 M 11/12 3/66 1 50.00 Spouse 006 N/A 55.00 4/25 55.00 12/25 0/25 75.00 9/17 9/19 moo 1/28 50.00 N/A 55.00 3134 55.00 6/30 50,00 N/A 55.00 9/28 55.00 9/41 55.00 12/38 5000 N/A 60.00 11/10 70.00 50.00 N/A 55.00 5/29 70.00 N/A 70.00 11/24 BenefitOpdon: 1 -Service Retirement 2 -Disability, 9 --Survivor Benefit CATEMP\RET1REEDF171 VR1.FIL 1 (API \-€4to 5v fo XW. • VIMI -Commons9mallip KS -•/n Atx- r/ 9 7 7S 7f 9$ GS o 7S Oki 7s 01s 45 15- 5 et UAL$ 504"e 845e N." 1-14v:M v.S1 Pr" do PS Arc'.ARP'% to 7S 115 ear at 1,14.4". i<'". 143 #1.51.1.°. 73 e>Kseesesta 40 1 • • t Fayetteville Volunteer or Part—Paid Firefighters Retiree Listing As Of December 31, 1990 Date of Date of Benefit Monthly Spouse Name Sex Birth Retirement Option Benefit DOB Comments Barnes ,E F 10/98 8/38 Blackard ,P M 6/21 3/75 Bolain ,L M 10/26 5/72 Carl ,F M 0/19 6/67 Case!man ,A M 10/15 5/72 1 Christie ,A M 10/18 4/68 Counts ,W M 12/26 10/76 1 Dearing ,E F 2/08 2/66 Harris ,B M 6/32 5/80 Harris ,J M 4/31 - 6/79 Lane ,H F 1/19 3/60 Lee ,H M 2/25 7/74. McChristi ,D M 12/39 2/82 Moore ,J M 10/37 2/86 Moms ,C F 6/22 2/66 Morris ,W M 2/18 4/64 Momson ,E F 2/16 Polly ,A F 4/10 12/52 Reed ,J M 0/25 4/73 Tune ,M F 2/15 3/71 Tune ,J M 11/12 3/66 3 45.00 N/A 1 55 00 4/25 1 55.00 12/25 1 45.00 0/25 75.00 9/17 45.00 8/19 55.00 1/28 50.00 N/A 55 00 3/34. 55.00 6/30 45.00 N/A 55.00. 9/26 55.00 3/41 1 55.00 12/38 45.00 N/A 1 60.00 11/18 3 70.00 3 45.00 N/A 1 55.00 5/29 3 70.00 N/A 1 70.00 11/24 1 ARKANSAS FIRE & POLICE PENSION REVIEW BOARD June 5, 1996 • P.O. DRAWER 34164 LITTLE ROCK. ARKANSAS 72203 TELEPHONE (501) 682.1745 FAX: (501) 682.1751 Board of Trustees Fayetteville Fire Pension and Relief Fund c/o Fire Chief Mickey Jackson City of Fayetteville 113 W. Mountain Fayetteville, AR 72701 Dear Board of Trustees: The Arkansas Fire and Police Pension Review Board is the State agency charged with regulatory responsibility for the 280 local fire and police pension funds in the State. Every year the local funds are required to submit financial reports to this agency, and we in turn review the reports to ensure compliance with the laws governing fire and police pension benefits. Our review of the 1995 Fayetteville Fire Pension Fund financial report revealed that the board of trustees has increased benefits for three volunteer surviving spouses from a base of $45/month to $50/month in a manner contrary to State law. The spouses are Mrs. Barnes, Mrs. Morris, and Mrs. Polly. Their benefit payments should properly be $45/month. Every retirant other than Mr. Carl and Mr. Christie should be raised $20/month, because retirants went to a $50/month base. The $50/month base applies only to retirants Mr. Carl and Mr. Christie should properly be paid $65/month The penalty for non-compliance with legal procedures for increasing benefits is suspension or termination of the State insurance tax turnback, which is released by the State to the pension plans every July. We will hold the Fayetteville 1996 fire turnback until compliance with the law is achieved. Attached please find your copy of the 1995 actuarial valuation of your pension plan. The valuation demonstrated that the plan is actuarially sound according to State standards and is therefore eligible to apply for a benefit increase. If the local board wishes to pay these spouses $50/month instead of at the legal level of $45/month, the board must process a benefit increase at this time. Once we have received the benefit increase resolution of the board, and the fee required to process it through the actuaries, we will release the 1996 tax turnback. If, however, the actuaries do not determine that the pension fund can support the $50/month base payment, the local board must immediately roll benefits back to the legal base levels. Failure to do so will result in a permanent loss of State funding to the plan. The Pension Review Board appreciates your respect for the financial integrity of the pension fund which is entrusted to you, and thanks you for your willingness to comply with State law. If my staff or I may be of any assistance to you or your Board on these or other matters, please let me know. Respectfully, • Cathyrn B. Hinshaw Executive Director CC: Mr. John Robins Osborn, Carreiro, & Associates • ti ARKANSAS FIRE & POLICE PENSION REVIEW BOARD MEMORANDUM TO: Ms. Connie Hagemeier Arkansas Insurance Department FROM: Cathyrn E. Hinshaw, Executive Director Arkansas Fire and Police Pension Review Board RE: Non -Compliance with Act 700 of 1979, as amended DATE: July 8, 1996 FAX (371-2618) In addition to the pension funds listed for non-compliance in, a previous fax, the following pension fund has not yet complied with Act 700 of 1979, as amended, for fiscal and calendar year 1995, and under Arkansas Statutes Annotated Section 24-11-202, is not currently eligible to have its 1995 insurance tax turnback released. PO DRAWER 34164 LITTLE ROCK, ARKANSAS 72203 TELEPHONE (501) 682-1745 FAx: (5011682.1751 • Fire Pension Fund 1. Fayetteville Fire Thank you for allowing me to add this pension fund to the list today. • NIX/ -04-1996 11:16 FROM Divisions Administration 1-501-371-2620 1-501-371-2629 Fax Accounting 1-501-371-2605 Consumer Services 1-501-371-2640 1-800-852-5494 Data Processing 1-501-371-2657 Finance 1-501-371-2665 Human Resources 1-501-371-2815 Legal •1-501-371-2820 License 1-501-371-2750 • Life & Health 1-501-371-2765 Property & Casualty 1-501-371-2800 Risk Management 1-501-371-2690 Senior Insurance Network 1-501-371-2782 1-800-852-5494 Workers' Compensation Fraud Unit 1.501-371-2790 1-501-371-2799 Fax TO 86821751 P.001/001 Arkansas Insurance Department Lee Douglass Commissioner November 4, 1996 Cathyrn Hinshaw Executive Director LOPFI Post Office Drawer 34164 Little Rock, AR 72203 RE: Firemen's Turnback City of Fayetteville 1996 Turnback Check 1200 West Third Street Little Rock, AR 72201-1904 1-501-371-2600 1-800-282-9134 Fax 1-501-371-2618 Dear Ms. Hinshaw: This is to confirm that I received a phone call from you in the month of July to verify that the City of Fayetteville's fire turnback: had not been released. You indicated to me at that time a release would be forthcoming. The release was received in our office by fax on September 26, 1996, The Department does not process any release without written confirmation so that Legislative Audit can verify our vouchers. Sincerely, l h't�v�stJ Z lµ'.t "IIA 1 Connie Hagemeier Insurance Examiner Accounting Division (501) 371-2605 cc: Lee Douglass, Insurance Commissioner Pam Looney, Assistant Commissioner Sob Ridgeway, Assistant Commissioner TOTAL P.001 RESOLUTION A RESOLUTION OF THE FIREMEN'S PENSION AND RELIEF BOARD OF TRUSTEES INCREASING THE BASE BENEFIT FOR RETIRED FIREFIGHTERS TO 65% OF FINAL SALARY. • WHEREAS, the Firemen's Pension and Relief Fund for the Fire Department of the City of Fayetteville, Arkansas (hereinafter referred to as the "Fund") if governed by a Board of Trustees which, among other things, is empowered to increase benefits paid to retired members and beneficiaries of the Fund pursuant to A.C.A. 24-11-102, 24-11-802, and 24-11-803; WHEREAS, it has been determined by'said Board of trustees that it is imperative to increase base benefits for present and future paid retired firefighters who are retired from the Fayetteville Fire Department, or their surviving spouses, to increase their standard of living to keep pace with the increased cost of living, and to show the Department's sincere appreciation for the services they performed'for the City of Fayetteville during their careers as firefighters; and WHEREAS, it is expressly determined by the. Board of Trustees that it is consistent with their goals to be able to periodically increase benefits paid to members and beneficiaries should it be determined by said Board that benefits currently paid are not insufficient to the needs of the members and beneficiaries and that the Fund's actuarial soundness will not be detrimentally effected by said proposed increased benefits; and WHEREAS, the Board of Trustees has further determined that their. proposed increase in base benefits shall be in addition to any •., other benefits that would accrue due to each retiree's time in.::; service and/or any other benefit increases previously granted by the Board of Trustees, and shall be the only such increase in benefit unless and until further proper action is taken by the board to cause other such increases to any member or beneficiary, and that the increases proposed herein shall affect only present and future paid firefighters who are retired, and only in the amounts herein stated; and WHEREAS, the proposed increases in benefits shall be made in strict accordance with the provisions of A.C.A. 24-11-102 and shall be conditioned upon the positive results of actuarial evaluations performed in accordance therewith; and NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF TRUSTEES FOR THE FAYETTEVILLE FIREMEN'S PENSION AND RELIEF FUND: Page 2 Pension Section 1. That the benefits paid from the Firemen's Relief and Pension Fund to present and future retired, full time, firefighters or their surviving spouses shall be increased to a base rate of sixty-five percent (65%) of the firefighters final base salary on the day of retirement from the Fayetteville Fire Department. Section 2. That widows benefits would be increased for volunteer firefighters, the same as their spouses benefits. y Section 3. That volunteer firefighters minimum be raised to a minimum of $55.00 for twenty (20) years service. Section 4. That the actuary computed the proposed benefit increases using the cash flow valuation method. If it is determined the fund cannot withstand the proposed 65% increase, we ask the actuary to figure using a 60% increase. /af CHAIRMAN � �7 CITY CLERK / Ci �f7/�X ASSISTANT CHIEF ACTIVE MEMBER y % Ana/ ACTIVE MEMBER /et24^. / RETIRED MEMBER �Y'cS 6++�„ RETIRED MEMBER �� G PAST AND APPROVED THIS DAY OF JULY 25, 1996. ARKANSAS FIRE & POLICE PENSION REVIEW BOARD FAX: 3hl-aslatig• MEMORANDUM '20: Mrs. Pam Looney Arkansas Insurance Commission FROM: Cathyrn E. Hinshaw Executive Director P.O. DRAWER 34164 LITTLE ROCK. ARKANSAS 72203 TELEPHONE (501) 682.1745 FAX: (501) 682.1751 a RE: Compliance with Act 700 of 1979 • DATE: September 18, 1996 The following pension fund has new complied with Act 700, as amended, for fiscal and calendar year `1995,`and is eligible to have its Turnback released: Fayetteville Fire Pension Fund Thank you for your assistance in this matter. CC: Ms. June Barron Office of Legislative Audit Arkansas State Capitol Room 172 Little Rock, AR CC: By FAX to Mr. Pete Reagan 501-575-8257 September 26, 1996 • • Osborn, Carreiro & Associates, Inc. ACTUARIES • CONSULTANTS • ANALYSTS City of Fayetteville Firemen's Relief and Pension Fund PROPOSAL TO INCREASE RETIREMENT BENEFITS The cost of this proposal is calculated using the same methods, assumptions, and data as were used in the December 31, 1995 actuarial valuation. "Previous benefit provisions" refer to the provisions in effect on December 31, 1995. Proposal 1: Increase the basic formula for full -paid firefighters from 50% of Final Salary to 65% of Final Salary (the additional amount for service over 20 years is unchanged), and change the basic formula for volunteer firefighters to a $55/mo. base. Increase due Previous After Proposal to Proposal Paid Volunteer Paid Volunteer Paid Volunteer Normal Cost $ 201,692 $ 0 $ 259,344 $ 0 $ 57,652 $ 0 Unfunded Accrued Liab. Active Lives 12,320 0 107,461 0 95,141 0 Retired Lives 0 0 230,560 2,263 230,560 2,263 Total $ 214,012` $ 0 $ 597,365 $ 2,263 $ 383,353 $ 2,263 Less Member Contrib. - 40,611 - 0 - 40,611 - 0 0 0 Net Employer Contrib. $ 173,401 $ 0 $ 556,754 $ 2,263 $ 383,353 $ 2,263 Employer Rate 25.6% 82.3% 56.7% Short Condition Test Portion of Liabilities Computed Actuarial Liabilities Covered by Assets (1) (2) (3) Active Retirees Actives Member and -Employer Valuation (1) (2) (3) Funded Contrib. Inacuves Financed Assets Percent Previous 418,412 5,101,995 3,525,576 8,897,591 100% 100% 96% 98.4% Proposed 418,412 6,595,951 4,671,523 8,897,591 100% 100% 40% 76.1% Sincerely, Steve Osborn, F.S.A. October 3, 1996 Actuary • • Osborn, Carreiro & Associates, Inc. ACTUARIES • CONSULTANTS • ANALYSTS City of Fayetteville Firemen's Relief and Pension Fund PROPOSAL TO INCREASE RETIREMENT BENEFITS The cost of this proposal is calculated using the same methods, assumptions, and data as were used in the December 31, 1995 actuarial valuation. "Previous benefit provisions" refer to the provisions in effect on December 31, 1995. Proposal 2: Increase the basic formula for full -paid firefighters from 50% of Final Salary to 60% of Final Salary (the additional amount for service over 20 years is unchanged), and change the basic formula for volunteer firefighters to a $55/mo. base. Normal Cost Unfunded Accrued Liab. Active Lives Retired Lives Total Less Member Contrib. Net Employer Contrib. Employer Rate Previous Increase due Previous After Proposal to Proposal Paid Volunteer Paid Volunteer Paid Volunteer $ 201,692 $ 0 $ 239,394 $ 0 $ 37,702 $ 0 12,320 0 77,626 0 0 0 153,706 2,263 $ 0 $ 470,726 $ 2,263 $ 214,012 - 40,611 $ 173,401 25.6% - 0 - 40,611 $ 0 $430,115 63.5% Short Condition Test Computed Actuarial Liabilities (1) Active Member Contrib. 418,412 (2) Retirees and Inactives 5,101,995 Proposed 418,412 6,102,299 Sincerely, Steve Osborn, F.S.A. Actuary (3) Actives -Employer Valuation Financed Assets 3,525,576 8,897,591 4,312,175 October 3, 1996 - 0 $ 2,263 65,306 0 153,706 2,263 $ 256,714 $ 2,263 0 0 $ 256,714 $ 2,263 37.9% Portion ofLiabilities Covered by Assets (1) 100% (2) (3) 100% 96% Funded Percent 98.4% 8,897,591 100% 100% 55% 82.1% •LOPR T.1.3 D ARKANSAS LOCAL POLICE & FIRE RETIREMENT SYSTEM ARKANSAS FIRE & POLICE PENSION REVIEW BOARD • November 4, 1996 Mr. Steve Osborn Osborn, Carreiro, and Associates 1690 One Union National Plaza 124 West Capitol Avenue Little Rock, AR 72201 Dear Steve: Union National Plaza 124 W. Capitol. Suite 940 Little Rock, Arkansas 72201 P.O. Box 34164 Little RoCk. Arkansas 72203 Telephone (501)682.1745 Fax: (501)682.1751 Enclosed please find a check in the amount of $850 to cover the cast of performing a cash flow for Fayetteville fire pension fund and $900 to perform a benefit increase for the Foreman Fire Pension Fund. We have received the 1995 actuarial valuations for the plans, and they have tested as sound. The Fayetteville volunteer fire base is new $50/month for beth retirants and spouses. Please include the cast of this new benefit in your calculations. Thank you for your assistance in this matter. Respectfully, Cathyrn Hinshaw Krone Executive Director enols: benefit increase request (1) and cash flow study (1) check #7202 F14-/ 5o1- 57S- 80157 • jA u • eity UAL STATEMENT For Actuarial Services Date: Vlov&ubg,r City: ra-yaffeu;(le_ • TYPE OF FUND Police Paid. Fire Paid/Volunteer Fire Volunteer Fire • ()Standard ()Standard ()Non -Standard ()Standard QQNon-Standard: ()Standard . ()Non -Standard ()Non -Standard Actuarial Fee: Processing Fee: ril Total Fee: $ R 50 G S(t 'elimi.. l lowest ;or Gall. -Flow sk.4 ) $ -� $ `250 PLEASE MARE CHECKS PAYABLE TO: ARKANSAS LOCAL POLICE & FIRE RETIREMENT SYSTEM SEND ALL INFORMATION. AND. CHECK TO: ARKANSAS FIRE & POLICE PENSION REVIEW BOARD P.O. DRAWER 34164 LITTLE ROCK, ARKANSAS 72203 • ARKANSAS PROFESSIONAL FIRE FIGHTERS c: 3'11— ;(D/Q Affiliated with AFL -00 -CLC INTERNATIONAL ASSOCIATION OF FIRE FIGHTERS 8619 CHICOT ROAD LITTLE ROCK, ARKANSAS 72209 (501) 565-1660 •®u President PETE REAGAN 1015 Lake Sequoyah Fayetteville, AR 72701 4424131 Fire Station 521.7542 Home Mayor Arnold Feller Chairman , PRB P.O. Box 448 Mulberry, Ar 72947 Dear Arnold, 10/26/96 Legislative Chakman BILL LUNDV 7 Apple Tree Circle Little Rock, AR 72209 883-9172 Fire Station 4560834 Home In my letter dated 9/30196 to Strib Boynton concerning Fayetteville's Insurance turn back funds I was concerned about two items. 1. The amount of time lapse between the PRB meeting ( July 11,1996 ) and the memo from Cathryn Hinshaw dated Sept. 18, 1996. A total of (89) days passed before we received our Insurance turn back check in the amount of S 235,798.64 on October'? ,1996. The Fayetteville Fireman's Pension and Relief Fund, and The City of Fayetteville; have both lost interest on this money because of the delays in notification. I would appreciate it if you would contact the appropriate agency in an effort to re -coup our losses in interest . As a Trustee of The Fayetteville Fireman's Pension and Relief Fund I feel it is my fiduciary responsibility to seek these losses. If I can be of any further assistance in this matter , please feel free to contact me. Pete Reagan , Trustee Fayetteville Fireman's Pension and Relief Fund 2340 N. Green Acres Rd. Suite 16 Fayetteville Ar. 72703 (501) 973-0053 cc: Cathryn Hinshaw FFD Pension Board Bill Lundy xi' 3 1 1995 LOPF FAYETTEVILLE • THE CITY OF FAYETTEVILLE, ARKANSAS TRACI PAUL, CITY CLERK TO: Fire Pension Retirees FROM: Traci Paul, City Clerk/Treasurer Tp DATE: July 8, 1997 SUBJECT: FIRE PENSION BOARD ELECTION I received two nominations to the retired position on the Firemen's Pension Board. The nominees are Howard Boudrey and Bill Morris. The position, currently being held by Howard Boudrey, has a two year term ending May 1, 1999. Please mark your choice on the ballot below and return it to the City Clerk's Office by July 23, 1997. Please call me at 575-8323 if you have any questions. Thank you. BALLOT RETIRED MEMBER - FAYETTEVILLE FIREMEN'S PENSION BOARD: o Howard Boudrey ti /W 0 Bill Morris 113 WEST MOUNTAIN 72701 501 575.8323