HomeMy WebLinkAbout1997-09-25 MinutesMINUTES OF A MEETING OF THE FIRE PENSION BOARD
A meeting of the Fayetteville Firemen's Pension and Relief Board was held on Thursday,
September 25, 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, Bill Morris and City
Clerk/Treasurer Traci Paul
ABSENT: Mayor Fred Hanna
CALL TO ORDER
Marion Doss called the meeting to order.
MINUTES
Judy, seconded by Wood, moved to approve the minutes of the August 28, 1997 meeting.
The motion passed unanimously
• PENSION LIST
Paul reported there were no changes in the pension list.
Reagan, seconded by Judy, made a motion to approve the pension list for October, 1997.
The motion passed unanimously.
OLD BUSINESS
State Insurance Tumback Funds
Doss explained that the Board has $140,000 in State Insurance Turnback funds to invest.
Reagan made a motion to place 8140,000 into a fixed income account with Merrill Lynch.
Morris seconded the motion. The motion passed unanimously.
Judy questioned the difference between the $154,000 that was available and the $140,000 that
is now available for investing.
Paul stated she would ask Ben Mayes and report to the Board at their next meeting.
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September 25, 1997
INVESTMENT REPORT
Richard Yada, Merrill Lynch, distributed the Portfolio Performance Report dated December 31,
1996 through September 23, 1997.
Yada explained that with the DROP program and the benefit increases that have been given over
the last two years, the fund will probably be right at or barely actuarily sound when the actuary
comes out at the end of the year.
Yada reviewed the performance of the select ten strategy.
Yada stated the last actuary report was good.
Yada stated Keystone was bought out by First Union Bank. Our portfolio manager, Andrew
Baldassarre, left Keystone. Merrill Lynch has been investigating any changes that have occurred.
Yada recommended removing Keystone as an asset manager and reallocating the assets to another
manager.
Curtis Williams, Merrill Lynch, explained that past performance is an important factor in
considering an investment advisor. There have been some dramatic changes with Keystone. The
size of the firm has been greatly reduced, our portfolio manager is gone, and a considerable
number of the research staff is gone. The people still with Keystone may do a great job going
forward, but we have no track record. We determined in the investment policy and guidelines
that we were going to intrust our money to those people who could show us a superior long term
track record. The Keystone that exists today is not the Keystone that existed a year ago.
Williams explained that the consolidation of financial services will continue. Williams explained
that Merrill Lynch is an investment firm that will be the same in the future as they are today.
Merrill Lynch Asset Management is an independent arm of Merrill Lynch. Williams stated they
are a value manager. If this market corrects, value will hold up better than growth. They can
also manage our global assets within the single portfolio. We would not have to have a separate
portfolio to manage global assets. They will manage our global assets in a value oriented way
to the extent that we tell them to do it. Merrill Lynch has the largest global research staff m the
industry. Williams stated we can get fixed income management in the same portfolio should we
choose to go that route.
Williams explained that in the search process for another manager, Merrill Lynch just came out
on top. Williams distributed brochures on Merrill Lynch Asset Management. He stated they
have a seventeen year track record. They manage from a value standpoint.
Reagan expressed his support for the recommendation to go with Merrill Lynch Asset
Management.
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September 25, 1997
Yada reviewed the performance data for Merrill Lynch Asset Management as presented in the
brochure.
Reagan asked if the recommendation was to drop Keystone and put the $1.5 million in equities
with Merrill Lynch Asset Management.
Yada stated yes.
Judy explained the Board should support the recommendation of Richard Yada and Curtis
Williams.
Reagan made a motion to move the assets out of Keystone Management and into Merrill
Lynch Asset Management. Wood seconded the motion. The motion passed unanimously.
It was decided that a representative from Merrill Lynch Asset Management would attend one of
the next two meetings of the Fire Pension Board.
There being no further business, the meeting adjourned at 11:40 a.m.
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