HomeMy WebLinkAbout1998-04-23 - Agendas - FinalAGENDA
FIREMEN'S PENSION AND RELIEF BOARD
Thursday, April 23, 1998
11:00 a.m.
City Administration, Room 326
1. Approval of the March 26, 1998 minutes.
2. Approval of the May 1998 Pension List.
3. Investment report, Merrill Lynch.
OLD BUSINESS
4. Election of members.
5. Executed Investment Advisory Agreement with Ashland Management.
NEW BUSINESS
6. Monthly monitor.
7. Other business.
•
• MINUTES OF
FIRE PENSION BOARD
•
A meeting of the Fayetteville Firemen's Pension and Relief Board was held on Thursday, March
26, 1998 at 11.00 a.m., in room 326 of the City Administration Building, 113 W. Mountain,
Fayetteville, Arkansas.
Present: Marion Doss, Bill Monis, Ron Wood, and Heather Woodruff (City Clerk).
Absent: Mayor Fred Hanna, Pete Reagan, and Darrell Judy.
CALL TO ORDER
Marion Doss called the meeting to order.
APPROVAL OF MINUTES
Mr. Ron Wood moved to approve the minutes. Mr. Bill Morris seconded the motion. The
motion carried unanimously.
PENSION LIST
Mr. Doss noted the addition of Mr. Gage and Mr. Dill to the pension list as drop participants.
Mr. Moms moved to approve the pension list. Mr. Wood seconded the motion. The motion
carried unanimously.
INVESTMENT REPORT
Mr. Yada stated the retirement plan was up to $11,530,195. He noted the Keystone account had
good performance in 1997, but had changed ownership and management. He suggested
switching the money to another growth company. He recommended terminating Keystone and
switching to Ashland Management Company.
Mr. Wood moved to terminate Keystone Company and to move to Ashland Management. Mr.
Morrisseconded the motion. The motion carried unanimously.
OLD BUSINESS
Mr. Doss explained to Mr. Rose, City Attorney, that the Board had questions regarding the use of
their money for advertising purposes in reference to rollback.
Mr. Rose did not believe the rollback legation would affect them. He stated the City of
Fayetteville, was a minor player in the law suit. While some refunds might be necessary, it did
not affect the present millage. The present millage would not be rolled back. He reassured if a
•
•
refund was required it would not affect their fund. All refunds Would come out of the General •
Fund.
NEW BUSINESS
Mr. Doss noted the pension board elections were in May. Darrell Judy's and Pete Reagan's terms
were up.
Mr. Doss stated the Board had received a DROP application from Mr. Freedle.
Mr. Wood moved to approve the application. Mr. Morris seconded the motion. The motion
carried unanimously.
The meeting adjourned at 11:35.
•
•
FIREMEN'S RELIEF AND PENSION FUND
MAY 1998
•THE FOLLOWING ARE THE OBLIGATIONS OF THE FIREMEN'S RELIEF FUND FOR THE
MONTH OF MAY 1998. 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 50.00
1,902.69 200.00
1,078.16 78.16
1,159.11 100.00
55.00 30.00
886.19 80.00
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
1,556.57 210.00
55.00
55.00
923.01
1,007.92 57.00
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
10.00 510.92
25.00 1,677.69
1,000.00
1,059.11
25.00
806.19
738.01
55.00
55.00
70.00
80.00
1,448.31
1,486.01
1,189 74
60.00 1,286.57
55.00
55.00
923.01
950.92
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
DILL, GARY
GAGE, TOMMY
FREEDLE, LARY
400.00
1,191.51
1,128.98
96.17
150.00
400.00
1,095.34
978.98
37,713.20 2,568.34 224.88 34,919.98
2,042.47
2,129.57
1,659.70
1,975.38
2,396.21
1,716.25
2,550.40
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.
•
RETARY
CHAIRMANND PRESIDENT
ACKNOWLEDGEMENT
STATE OF ARKANSAS )
COUNTY OF WASHINGTON) )SS
SWORN TO AND SUBSCRIBED BEFORE ME THIS,3{�DAY OF 3G,4 c , 1998.
NOT PUBLIC
MY COMMISSION EXPIRES* 3 -/-,?Cor
```lp . �4 iuH fly'',
.1, nn.
• LoM F,`:2, •
NOTARY
:11:0
«�
s' PUBLIC
APR 29 '98 91:30PM MERRILL LYNCH L R
/-F71N . rzFjrc.
e:7Y CLERK
FAYETTEVILLE FIRE DEPT PENSION AND RELIEF FUND
PORTFOLIO PERFORMANCE 12/31/97 TO 3/31/98
12/31/97 2/28/98 3/31/98
NM CAPITAL MANAGEMENT 4,647,115 4,800,675 4,964,836
INCOME ACCOUNT 4,897,448 5,085,472 5,104,929
KEYSTONE ASSET MGNT 41,561.424 1.644.048 1.713.646
11,106,027 11,530,195 11,783,411
3 -MONTHS TREASURY BILLS
DJIA W/DIV REINVESTED
S & P 500 W/DIV REINVEST
LONG TERM TREASURY BONDS
HIGH GRADE CORP BONDS
CPI {feb)
NM CAPITAL {time wtd)
INCOME ACCOUNT
KEYSTONE ASSET MGNT
JANUARY 1996
Dow
United Kingdom
Hong Kong
MAY 1996
Dow
United Kingdom
Japan
, Hong Kong
SEPT 1996
Dow
United Kingdom
Japan
. Hong Kong
P.1
12/31/95 12/31/96 12/31/97 3/31198
+ 5.46
+35.53
+34.94
+27.63
+23.51
+ 2.67
+15.68
+15.61
+ 5.31
+29.49
+22 98
- 1.21
+ 1.61
+ 3.32
+11.37
+ 4.25
+17.91
+ 5,33
+24.87
+33.36
+15.38
+13.42
+ 1,70
+16.97
+ 6.38
+30.80
original inv, 2/28/98 3/31/98
$75,000
75,000
75,000
$75,000
75,000
75,000
75,000
$75,000
75,000
75,000
75,000
+1.30
+11.73
+13.95
+1.51
+1,83
+0.37
+7.10
+3.49
+9.74
$114,776 $ 118,025
97,490 105,614
57,160 54,709
$104,969
116,862
37,914
58,463
$107,567
105,334
44,872
56,972
$108,857
123,303
34,519
55,613
$11I,655
113,578
38,795
54,381
•
INVOICE
NM CAPITAL MANAGEMENT, INC.
6501 AMERICAS PARKWAY, SUITE 950
ALBUQUERQUE, NM 87110
April 16, 1998
•
Mr. Richard Yada
Merrill Lynch
425 W. Capitol, Suite 200
Little Rock, AR 72201
NM CAPITAL
MANAGEMENT, INC.
INVESTMENT COUNSEL
Re: City of Fayetteville Fire Pension & Relief Fund
Account #563-96346
STATEMENT OF MANAGEMENT FEES:
For the period from January 01, 1998 through March 31, 1998
CITY.OF_,FAYETTEVILLE FIRE„PENSION AND RELIEF FJND.
Portfolio Valuation as of 03-31'98 ” `' ` `*" $F4;-926, 148:•x30:'.
$ 4,926,148.30 @ 0.50001 per annum $ 6.157.69
Quarterly Management Fee $ 6,157.69
Past Due 4th Qtr 1997 $ .5,980.77
TOTAL DUE AND PAYABLE
- 12,138.46
ALL INVOICES ARE DUE UPON RECEIPT. TO INSURE PROPER CREDIT,
PLEASE INDICATE ACCOUNT NAME ON CHECK.
*Portfolio Valuation used`for'fee computation has been' -reduced-00y
- accrual;s.; amounting. to ,$41, 931.42.
�,A-copy of this invoice has been sent to the client for their review and record. Client is responsible to verify the information provided hereon.
FAYETTEVI LLE
THE CITY OF FAYETTEVILLE, ARKANSAS
TO: Fire Pension Retirees
FROM: Heather Woodruff, City Clerk/ Treasurer
DATE• April 1, 1998
SUBJECT: FIRE PENSION BOARD ELECTION
The Firemen's Pension and Relief Fund Board of Trustees is now accepting nominations for one
retired member position. The position has a two-year term beginning in May of 1998 and ending
in May of 2000. The position is currently held by Darrell Judy, who is seeking re-election. Mr.
Judy is currently serving his third term.
Please remit all nominations to:
City of Fayetteville
City Clerk
113 W. Mountain Street
Fayetteville, AR 72701
OR CALL:
Heather Woodruff
501-575-8323
ALL NOMINATIONS MUST BE RECEIVED BY APRIL 20,1998
113 WEST MOUNTAIN 72701 501-521-7700
FAX 501-575-8257
FAYETTEVI LLE
•
THE CITY OF FAYETTEVILLE, ARKANSAS
TO: Fire Pension Retirees
FROM: Heather Woodruff, City Clerk/ Treasurer
DATE: April 1, 1998
SUBJECT: FIRE PENSION BOARD ELECTION
The Firemen's Pension and Relief Fund Board of Trustees is now accepting nominations for one
retired member position. The position has a two-year term beginning in May of 1998 and ending
in May of 2000. The position is currently held by Darrell Judy, who is seeking re-election. Mr.
Judy is currently serving his third term.
Please remit alt nominations to
��-
City of Fayetteville
City Clerk
113 W. Mountain Street
Fayetteville, AR 72701
OR CALL:
Heather Woodruff
501-575-8323
ALL NOMINATIONS MUST BE RECEIVED BY APRIL 20, 1998
113 WEST MOUNTAIN 72701 501-521-7700
FAX 501-575-8257
-177ezems-- •96729----
YIP
•
FAYETTEVI LLE
THE CITY OF FAYETTEVILLE, ARKANSAS
TO: Fire Pension Retirees
FROM: Heather Woodruff, City Clerk/ Treasurer
DATE: Apnl 1, 1998
SUBJECT 'FIRE PENSION BOARD ELECTION --
The Firemen's Pension and Relief Fund Board of Trustees is now accepting nominations for one
retired member position. The position has a two-year term beginning in May of 1998 and ending
in May of 2000. The position is currently held by Darrell Judy, who is seeking re-election. Mr.
Judy is currently serving his third term.
Please remit all nominations to:
City of Fayetteville
City Clerk
113 W. Mountain Street
Fayetteville, AR 72701
OR CALL:
Heather Woodruff
501-575-8323
�'" "ALLNOMINATIONS MUST BE RECEIVED BY APRIL 20, 1998
•
113 WEST MOUNTAIN 72701 501-521-7700
FAX 501-575-8257
C)opiiit't
FAYETTEVILLE
..HE CITY OF FAYETTEVILLE, ARKANSAS
TO: Active Fire Pension Members
FROM: Heather Woodruff, City Clerk/ Treasurer
DATE: April 1, 1998
SUBJECT:= FIRE PENSION BOARD ELECTION --
The Firemen's Pension and Relief Fund Board of Trustees is now accepting nominations for one
active member position. The position has a two-year term beginning in May of 1998 and ending
in May of 2000. The position is currently held by Pete Reagan, who is seeking re-election.
Please remit all nominations to:
Manon Doss
Central Fire Station
303 W. Center Street
Fayetteville, AR 72701
OR CALL:
Heather Woodruff
501-575-8323
ALL NOMINATIONS MUST BE RECEIVED BY APRIL 20, 1998
113 WEST MOUNTAIN 72701 501-521-7700
FAX 501.575-8257
Nut
FAYETTEVI LLE
•THE CITY OF FAYETTEVILLE, ARKANSAS
•
TO: Active Fire Pension Members
FROM: Heather Woodruff, City Clerk/ Treasurer
DATE April 1, 1998 _ �_.
SUBJECT: FIRE PENSION BOARD ELECTION
The Firemen's Pension and Relief Fund Board of Trustees is now accepting nominations for one
active member position. The position has a two-year term beginning in May of 1998 and ending
in May of 2000. The position is currently held by Pete Reagan, who is seeking re-election.
Please remit all nominations to:
Marion Doss
Central Fire Station
303 W. Center Street
Fayetteville, AR 72701
OR CALL:
Heather Woodruff
501-575-8323
.._ALL NOMINATIONS-MUST_BE RECEIVED BY APRIL 20,1998.. — - -
T NOeel(N4i✓ Pe'tt Fol e-G-Lamoo
?_ 'Fte ar SIGN so 6.2A
113 WEST MOUNTAIN 72701 501-521-7700
FAX 501-575-8257-'
•
NCPER S
NATIONAL
CONFERENCE
ON PUBLIC
EMPLOYEE
RETIREbIINC
SYS1F
O Representing the Retirement Interests of Over 5 Million Public Workers 4 -
The
The Monthly Monitor
Tracking Government Legislation and Regulations February/March 1998
Circuit Breaker Debate Continues
On October 27, 1997, the Dow Jones plunged more than 550 points, causing the circuit breakers put into effect in
1987 to be activated for the first time. This has triggered a heated debate as to the positive and negative effects of these cir-
cuit breakers. NCPERS is keeping a close watch on this debate as it will have a strong impact on our membership.
Congress held a hearing concerning this matter on January 29, 1998. Among those testifying at the hearing were:
Honorable John D. Hawke, Jr., Under Secretary of Domestic Finance, Department of Treasury; Honorable Arthur
Levitt, Jr., Chairman, SEC; James Cochrane, Senior VP, NYSE and M. Scott Gordon, Chairman, Chicago Mercantile
Exchange.
Background
Circuit Breakers were developed in October of 1987 by the securities and stock index futures markets in response
to the stock market crash that month. They were introduced based on recommendations made by the President's Working
Group on Financial Markets. The report found that when the stock
market experiences large losses, investors tend to panic, causing the
market to drop further. In order to avert another stock market crash,
the New York Stock Exchange adopted circuit breakers, whichwould
cause a trading halt if the market begins to plunge. Ori October 27,
1997, the market dropped and the circuit breakers were triggered for.
the first time, closing the market 45 -minutes early.._
Pro -Circuit Breakers
Some officials in the stock market industry argue that the trig-
gers have a calming effect and allow time for investors to regroup.
They also believe that circuit breakers are positive for the following
reasons:
• A halt in trading allows time for banks to contact payers and
payees to help them make rational decisions.
• The circuit breakers afford payers time to invoke credit
lines," said James Cochran, Senior VP, NYSE.
• The circuit breakers avert the possibility of breakdowns in
market infrastructure such as computer systems. -
Anti -Circuit Breakers
Many leaders of the nation's securities industry believe the
market's fall was too modest to Justify the halt in trading. They feel that the early trigger of circuit breakers can be harm-
ful to the market for the following reasons:
• Early shut -down of the market causes the final market value to be off.
• Halts in trading could have negative affects on the world markets.
• Circuit breakers can be destabilizing if they prevent markets from closing through the scheduled end of day.
Conclusions
Some consensus has been reached in this debate.
• James Duffy, Executive Vice President, American Stock Exchange, believes that the circuit breakers should be
widened to represent between 10-20 percent of the index's value.
• Members of the Chicago market feel that it would be best to eliminate the first 30 -minute halt during the final
hour of trading. -
Effects to NCPERS and our Membership
NCPERS is keeping a close watch as this
debate heats up. Often, managers of pen-
sion funds are interested in buying when
,the stock market is low. CALPERS', the na- _
tion's largest public pension fund, views
the plunging stock market as a good thing.
"I can only tell you in the 1987 crash, it was
a fire sale for us. We bought a lot. It was a
good opportunity for us," says spokes-
woman Patricia Macht in the San Diego
Union -Tribune. When circuit breakers go
off early, however, investors often times
miss out on the lowest price.
To obtain a copy of the Congressional testi-
mony, you may contact the NCPERS office
at (202) 429-2230.
National Conference On Public Employee Retirement Systems
1620 Eye Street, N.W. • Suite 220 • Washington, D.C. 20006:•=(202) 429-2230
News :from
State Ca ® [tori
In hresidentClinton's State of the Union Address, he
presented,a',pro,posall to lige (federal 'budget isurpluses ;to
ikeep Amentia'rsSodiallSecunty'S}stern+in;tacl: Ntit expe.et-
'Mg any leg:istat`ive action to this•problam in Congress
1999 1998 is siure to theaFear ofIdebate and .disagreement
on [how to;refiirm �Sociaill'Security.The [prospect ;for .reform
icontaining;mandaton S:ocralSecunty icoverage'iforrill ploy:ees ]coins heavy In the air. Anticipating fhis fate, 'state
Rep Stille in the South (Carolina :General Asstnblv,has
,introduced [Concurren'eResolution; [TIB(4Ci7.'The 'resolu-
tion 'Ms emoiralrzes";(,pehtions`)the(CongressIof t.he(US.ito
amend theSocial Security Act.to:a1Ipw states tobbegiven
:a
waiver so they :Can :design 'and implement :alternative
Itirement roptions. The Ww'herea s";s ;include statements that
1the;Social fSecurrq iS'ystem `has may be Ibreke;by
:2029:;;and ltha`.t investment returns Conreon'tributons •are'sig-
:riificantly belbw:other sources.
Many Estates'aaT;iilii haue.a'sbort'le•g'islativeseason prig
;year. The states ;tha't will bot have icegular']:9:98 session
are Arkansas; MontanaAorth'Dakota; Neyada;;Oregon,
and Texaso:On or, before .Match 31„7998; :el even [stale ras-
ssernFare adl}ourn. Ther mcluel 1Georgia;
;Idaho, Sndiana, NewMexito, South Dakota, Zatnesset;
+lltah, yirg:inia; YVashington, West Viiginia, and
Wyoming.
Each Of those [sta'tes:have ;introduced [some legislation
(thatw.oll appros;eicostpilligarigadjustments, create a/ori=
ops new pension systems:(e:g.,'for:non-teaching school
employees)land either increase tor (decrease)the (age lit
which someone can ;tell re. 'There Late lsomellarget issues
iooming:intstates that these.leg'ilatures rare (tadkling.
Georgia's'].egislature put [Fon the"Goz;ernor's d:esk;a hitt
that will allow cent.] oyes who avgrked full time for the
kecutiveiBranchrofthe ICoa.ernmOpt fbetw:eeijanuary 1,
11980., :end Januar, 1„'1986 ito;purehase,upIto;three:Year:s
creditable;seryice 'for'service That was previously.tincred-
ited'(Georgia, I`Iouse.Bill:1944).
?InVirginia fa bill 'has been lintrbdaced in the Mouse I'M
4250 which yiillallow The ipurehasetot up:10 lour wears
service credit for a leave;of'absence dile to the bicfh or
adoption of ;a :child, ;for;any leave Jae to;iilness Cor disabil=
?ifv, rand for lease (taken:Tot educationallpu reposes nor (for
(employment'it+;i:th the iGenerai IAsseitibty.'The (bill ;contains
ipr..orilisions:'for credit 'for:mil§tary(.seprice and allows'tea:ch=
ens to purchase(credits for service rendered pin,non-teach=
ing provisions,
] ndianas'Senate .passed ;a lb'il] that {is rcurren tly lin ;the
st'ate's House: Committee. on Ways and Means thatmake."s
the folrow:ing five changes to the:[pub re:retirement funds:
Removes4ead'lines:ontithe available topuirehase
certain [tripes of 'sem co cred its an Sth0,Piiblic Ern -
ploryees Retirement iF,und ((PERF) and'State
Teacher i`s;RehrementT.und {(on):
i Adds ,a :claims- period tot:death in set -vice benefits in
PERE.
Allows ;transfer :Of [partial tser\ iteFin;PERF±arid TRF.
:Specifies:disability payments procedures.lot:PERT'
and 1813
<• Allows (credi tff or adoption lease und'er'TiRE
`The bill,'S 127, also contains credit for ,prior service :by
police or fire (employees who Ns Ler.e,participants in a Iprev;i-
ious Irma (Creferred to the31477?fund iin Ithepac't):
(Nest V.irgiriia;has `ntrodneed sr..elahngto'The
:puirchase:of :service credits 0s well. The bill :(1 i 407) al-
lowsis$raiisferofs-i ice[credits"and :retirernentaccounts
Ito theIPiib`]ie.lEniployees'Retirement!System Efroin the
:Teacher' ]DeTmed (Contnbution iRefiremen%'System •if .a
Reacher:somploy-
ment :is terminated
Ihv the existing (em-
ployer .and
em-ployer.and Ilaterem-
ployed by a state
agency. West
gi nit ;also has Ca bill
fin': the iHoasc'Ciom-
mittee on Finance
that, if passed, re-
quires,a(divorced
[fund [member to
pr we :that tli ere. i s
'no qualified c oiries-
'tic ?elationSt corder
tfi:effect ito elect eer-
'tainire firenient :an-
nuity options (H
',2495,). You tray :re-
iinernber,ilast year
West Virginias
electorate own.
whehn• ingly passed
a; const'itatioaall
amend Merit ,a1lo:ty-
ing the states pub-
lic •pension :funds, to
lei est ;in the stock
smar,ket. 'Wi th [the
.ii k''] ardly dry' on
the amendment ;
Federal. Developments
PSLRA UPDATE: Last October the Monitor reported that the Securities Litigation Uniform Standards Act had been intro-
duced in the House (H.R. 1689) and was heading for introduction in the Senate (S. 1260). Currently, both bills are enjoying
wide bipartisan support with 173 co-sponsors in the House and 27 in the Senate. NCPERS is urging its membership to call
or write their Representatives and Senators and ask them not to support these bills. If passed, the lav will adversely affect
public pension funds by prohibiting class
action suits alleging fraud with regards to
covered securities and taking away the
states' ability to implement their own laws.
Since October, a group of 28 legal scholars
urged Congress not to support the pending
legislation. In a letter sent to every member
of Congress, the legal professors warned
that the legislation was "overkill" and said
that Congress should wait to "ascertain the
effects" of the similar 1995 Private Securi-
ties Litigation Reform Act. A study re=
leased by Price -Waterhouse concluded:
"(I)t is too soon to draw any firm conclu-
sions about the effect of the Reform Act on frivolous litigation, or for that matter, on meritorious litigation." The Senate
Majority Leader Trent Lott (R -MS) has made passage of the Senate version of the bill a priority. NCPERS has been told by
Senate sources that Sen. Lott would like to have action on this before the Easter recess.
RAP ACT — Rep. Earl Pomeroy will be introducing the Retirement Account Portability (RAP) Act early this session. Dur-
ing a briefing attended by the NCPERS Legislative coordinator, Rep. Pomeroy's staff said that portability between defined
benefit plans and 401(k), 457, and 403(b) plans "makes sense." Working in coalition with other groups, NCPERS sup
orted the portability proposal. The portability provisions of the RAP Act would d o two things, allow amounts in 403(6);
service credits in defined benefit plans and allow the rollover of refunds from de 't`-•
fined benefit plans to 403(b) or 457 plans. The proposed changes would increase the portability of retirement savings and
create an incentive for people to use savings intended for retirement for retirement, instead of spending these savings
prior to reaching retirement age. Two other provisions of the Act would allow for reduced vesting schedules and boost the
penalty tax for early withdrawal from these funds from 10% to 15%. NCPERS will continue to report on the RAP Act as it
moves through the legislative process.
SOCIAL SECURITY PANEL — The Bipartisan Panel to Design Long -Range Social Security Reform Act of 1998 (HR
3095), was introduced in Congress by Representatives Archer (R -TX) and Kasich (R -OH). The act has two purposes, to cre-
ate a bipartisan panel that will design a single set of legislative and administrative recommendations and to keep social
security solvent. By implementing the panel's recommendations, the act seeks to maintain retirement income security in
the United States. The panel is to consist -of eight members, two to be appointed by the President, four by leadership of
both parties in Congress and the remaining two by the leadership in the House Ways and Means Committee and Senate
Finance Committee. A report will be issued by the panel no later than February 1, 1999, detailing the panel's findings and
is to include its recommendations. As of this writing, the Act was referred to the Committee on Ways and Means and has
two co-sponsors. Sources at the Ways and Means Committee have told NCPERS that there currently is no activity sched-
uled (e.g., hearings, etc.) on the Act, but they expect some action in March.
CLARIFY OBJECTIVES — The British -North American Committee (BNAC) recently issued a policy statement stating
the pension systems of the United States, Canada and the United Kingdom need to clarify their objectives and clearly dis-, .
tinguish what the roles of the government, individuals and employers should be. The statement was published in The Fu-
ture of Pension Policy: Individual Responsibility and State Support, which included a background report. BNAC recom-
mended three courses of action:
• Governments should explore ways to ensure that state-run plans are adequately funded and are able to provide future benefits.
• Employers should promote cost-effective provisions of retirement savings as an element of employees' compensation.
4111,
People should take responsibility for saving for a long retirement to ensure an adequate standard of living.
or information on obtaining the full statement, contact the NCPERS office at (202) 429-2230 or fax (202) 223-8323.
Action on H.R.1689 and 5.1260 is expected soon in both the House
and Senate. Time is running out to make our voices heard. Please call
or write your Senator or Congressional Representative and ask them
not to support these bills. If passed, states will not be able to
implement laws with regard to covered securities. You should contact
your Governor and let him/her know that this legislation would be
bad for your state. Ask your elected officials: "What's the hurry?" If
you need more information, a copy of either bill, a list of the co-
sponsors or assistance in drafting correspondence, call the NCPERS
office at (202) 429-2230 and ask for Ed Braman. Ed will be glad to
assist you.
Meeting the Challenge
By Haro'l.d Strhv itherger
As you dati :t611;from!thisMoriitor issues
sttiaf w%ill a'fteci
public pension planare beginning :to through the
] cgisla'tiaie process: A coalition rof ]groups tepresenting ad:
[forint icon Seituentiesrol public (pension [funds met §it iWash-
Ington,;DiC.,ifor Three [days (df ilriliby:ing. ilegislafia.e!strate.gy
•:development and issue education NCPERS w;as weIlrep-
resented .61- 'the .winter meeting of the P.i lilie Pension Coor=
dinating',Committee(GPPCCI byth-e resident (Jay lBixby, fhe
First'ice?Presi en't :Elmer Raid, [the Treasurer iRichard
Wachsman,,and !Ed 1Braenan, ILegislatry efCoordlaator.
:N:CPERS President, Jay 'Bixby seryes,as :the :Chairman:
Of the PPCC Legislative .Committee. The, Leglglathe:C.om=
,mittee :reported on four issues to the (Board Of the ?FCC.
'Th esodhOlud ed ;pen& n ,ponta'bi ] 1 ty Socia I'ISecu rite ;reform;
[the Uniform :'Management ro• •1;P;ublic (Employee Retiremeril
ESVstems .tt UM'PERSA) and d:efined`.benefit \'s.rdefined
..contribution .plans.
NCPERS peas[inncitee' [to give a (presentation on
UMPERSAIto the full lPPCC iBoard, the lP'.PCCibegisiafi[Ve
(Crommat•tee, and ilhelDrrectorsMeeh fig ro .INASRA, 'The
:Act has now:been 'introdueed.inNebraska and Oklahoma:
'We have been polling :our:Ezecutive Board and National
Cortiniit$eeto get opiMons from our leadership [a hOu t
U1Y PERSA Solar,+p+-ehave revel tied :a Jew responses and
,remieW, !are [mixed. NCPERSpviii11contmue to watd]i
thIVIPERSA Lana [we w [give ;:a report tot( our Annua
IGon'fetence [in:A•pril.
:AtThe ]oinf Leg]slativk Meeting can Public Retifement
i ssues,'members of the Staffs of ;Senators Orrin iHa'ttlh nand
Bob [Graham gave bnefi ng on [upcoming pension Ctak IS-
[ -sues. Congressman Porn eroyls;staff outlined the portab'i1=
ti:tyilegislaliefuthat'he "v'i11 Soon:in.•troduce in'the.Hiiuse
(see related story :on the "Federal Page .). Re.presen. lattices
from the Administration, Gov'ernmentAccounting.Office,
Pan dotherrexpertsInlet ac`tedlias'ithIthelgI i paiscussing
[their L\ieS [6f SS that Will a'ff'edt?pub'Iis:pension laps.
+NCPERS']ead'crshipiand:stall vroallibe taut front Pon
these issues You tali do acour part by 2ttending :th@ op=
coming Annual .Conference at ,the Ad ani `s ;Mark Hotel Tin
Den\er;Colo rado, Apri159 X23. +t1'e;arerals01ann`img your
LegiSlatiMe!Conferentei +1'S'as`hmgton;?DJC :from iJune;75-
].71at fheWashiilgfonCourf'Hotel Yon: j]1 be:milled 'tig=
rstratioii'hktmatio, next month.
•
;NCPERS
.1:620 Eye:Street, N>W.
;Su 11E7220
'WaSIUtig'ton, it iCe.`2000'6
Fayetteville;Fire rFigh'ler.L:P,ensibn (& (Rebel
IL4:11iei-k
;�17d \WeSl Mount SSu:eel
Fayeltevi0e -, -AR 72701
PRESORTED
FIRST:GLASSIviAIL.
IUS P.OSTAGE IpAID
(WA• S MINGSON. (GG
[Rerniit',Nb.189Z2
'The Mortfhlp ionitbr'i1.�ptliths`hoit!ujl'tht Riio7�iona((Cori,fr,rtnceCon'Pu'blir;atifleyeeRct. t1tnt.Sysicnts, i»1a"fenialipl4hi!shediin
'Trrlie..Monfhly,Menrtor :may the ireproduced;mi}h,prior•martten!yerrmsston,from'N C•PUR=S..
57"' ANNUAL CONFERENCE & EXHIBITION
ADAM'S MARK HOTEL
DENVER, COLORADO
APRIL 19 — 23, 1998
•
Fayetteville Fire Fighters Pens
ATT: Llty Lierk
113 West Mount Street,
Fayetteville, AR 72701
CERTIFICATION OF DELEGATES
FOR ANNUAL MEETING
M
MEMBERSHIP ID DATE
ember ID: 001396 02/27/98
PLEASE NOTE THAT THIS FORM MUST BE RECEIVED NO LATER THAN APRIL 3, 1998, TO QUALIFY YOUR
ORGANIZATION FOR ALL VOTING PROCEDURES AT THE CONFERENCE. NO EXCEPTIONS WILL BE MADE FOR LATE
FILINGS. •
Official delegates to the Annual Meeting are required to file their credentials with the Secretary of the Conference no later than 15 days
prior to the Annual Meeting. This document shall serve as proper notice in accordance with the bylaws Article 3, Section 2.
1. Only delegates or their assigned altemates are eligible to vote on matters before the Conference. Altemate delegates are authorized to
vote only if the registered delegate is unable to attend the Conference. No person shall be a delegate for more than one member
group or organization.
2. All registration fees and membership dues must be paid in full prior to the conference. Delegates may not participate in the National
Committee Election on Monday, April 20, 1998, if fees are not paid in full.
3. Once the list of delegates has been filed with the Secretary, any changes must be received in writing no later than April 3, 1998.
4. Complete and return this certification no later than April 3, 1998. KEEP A COPY FOR YOUR FILES.
5. The authorized names submitted will be selected in numerical order from the official delegate list until your voting entitlement is
exhausted. Other persons listed WILL NOT have a vote unless the persons listed previously are not registered at the Annual Meeting.
, Official Delegates/Alternate Delegates
1. Pi< V
/C PE 479/
2.
3.
5.
1.
2.
3.
4.
5.
7. 7.
8. - - 8.
Title
Authorized Signature
(Signature and title of
rson with authority to certify del tes and alternates delegate
the above organization)
FOR CREDENTIALS COMMITTEE USE ONLY — DO NOT WRITE IN THIS SPACE
ENTITLEMENT TO VOTE
Above affiliated organization is entitled to delegates and a like number of alternates.
Date
_ody Ferguson, Secretary
MAIL TO: NATIONAL CONFERENCE ON PUBLIC EMPLOYEE RETIREMENT SYSTEMS
1620 EYE STREET, NW, SUITE 220, WASHINGTON, D.C. 20006-4005
•
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4,
ASHLAND MANAGEMENT
INCORPORATED
NEW YORK TELEPHONE: (212) 425-2803
NEW YORK FACSIMILE: (212)425-6026
Ms. Heather Woodruff, City Clerk
City of Fayetteville
Fayetteville Fire Pension and Relief Fund
113 West Mountain Street
Fayetteville, AR 72701
Dear Ms. Woodruff:
26 Or nza oa� ✓deur Pt410004 -1795
April 6, 1998
•
Re: Fayetteville Fire Pension and Relief Fund
Enclosed please find the executed Investment Advisory Agreement for the above referenced account. We
have retained one original for our files.
If you have any questions, please do not hesitate to call.
•
Thank you.
MPH/kk
Enclosure
Sincerely,
cc: Mr. Richard Yada, Assistant Vice President
Merrill Lynch
Murri P. Hester
Vice President
•
•
INVESTMENT ADVISORY AGREEMENT
between
FAYETTEVILLE FIRE PENSION AND RELIEF FUND
and
ASHLAND MANAGEMENT INCORPORATED
Ashland Management Incorporated
26 Broadway
New York, NY 10004
•
Gentlemen:
•
•
Please establish an Investment Advisory Account (the "Account") in the name of
Fayetteville Fire Pension and Relief Fund
'(the "Client"). The account is to be governed by the following agreement (the "Agreement"):
1. Ashland Management Incorporated (the "Adviser") will give advice, based on Ashland's
investment strategy, of which the Client is aware, on a continuing basis, with respect to the investment
and reinvestment of all cash, securities and other property in the Account, taking into consideration the
specific investment needs and objectives of the Client as the Client communicates them to the Adviser.
.In addition to the continuing supervision of the portfolio of the Account by the Adviser, the Client will
receive the benefit of the Adviser's quarterly valuation of the Account, including a valuation of the
Account at current market prices or upon such other method of valuation as the Client shall reasonably
request. Representatives of the Adviser will also be made available to meet the Client periodically and
to review with the Client the Account and its performance.
2. The Account shall consist of such cash, securities and other property, listed on the attached
Schedule A, which has been or will be delivered to the following: (1) a custody account, in the case of
a bank or trust company or (2) a brokerage account, in the case of a member firm of the New York
Stock Exchange Inc.:
It is understood that the Adviser will have trading authorization during the term of the retention
hereunder. The Client may add or withdraw cash and/or securities from the Account from time to time,
upon giving the Adviser five (5) days notice as to such changes. ,
9/96
3. The Adviser is hereby granted complete, unlimited and unrestricted authority by the Client with
respect to the investment of the Account. Such authority shall include, without limitation, the
authority, at the Client's expense: (i) to invest and reinvest the assets in the Account at such time and in
such manner as the Adviser in the complete and unlimited exercise of its discretion shall determine or
elect; (ii) to purchase and sell securities and/or other investments including option contracts in the
Client's name, for the Client's account at the Client's sole risk; (iii) to arrange for the delivery of and
payment for any such investments, including securities, bought and sold for the Client's Account; and
(iv) in effecting any such investments, reinvestments, purchases and sales, andunless the Client
designates in writing a particular firm or firms, to use and obtain the assistance and services of such
brokers, dealers, investment bankers, underwriters and other firms, enterprises and services as the
Adviser in the complete and unlimited exercise of the Adviser's discretion shall designate or select.
The Client hereby grants to and confirms that the Adviser has the authority to act as the Client's
attorney under a power of attorney for the purposes of effecting or accomplishing in the name of and
on behalf of the Client any of the foregoing matters or any matters which are the subject matter of this
Aereement.
4. The Adviser shall receive as compensation for its services a fee at an annual rate of the greater
of one -(1) percent of the average quarterly net assets in the portfolio, or $10,000, payable quarterly in
arrears. The initial fee shall be pro -rated to the last day of March, June, September or December
which shall occur after the retention is commenced. In the event of termination, the advisory fee will
be pro -rated based on the number of days this Agreement is in effect during the quarter. Unless
otherwise directed by the Client in writing, the Adviser is authorized to charge the amount of the
quarterly fee payment by a deduction from the Account and to send to the Client a statement indicating
the amount of the fee charged.
5. The Adviser shall use its best efforts in the performance of the investment advisory services.
All recommendations and instructions made by the Advisor will be based upon information from
sources which it believes to be reliable, but whose accuracy is not and cannot be guaranteed. Such
information may or may not have been independently verified by the Adviser. The Adviser shall not
be liable for any loss arising from any action, omission, information or recommendation in connection
with the Client's investments or this Agreement unless such loss is caused by gross negligence, willful
misconduct or violation of law on the part of the Adviser.
6. The Adviser will keep in strict confidence all information about the financial affairs of the
Account. The Client agrees to use the Adviser's information and advice only in connection with the
operation of the Account which the Adviser is managing.
7. The Client agrees and understands that unless the Client designates a brokerage firm through
which securities transactions for the Account of the Client will be effected as contemplated by the
• 9/96
-2-
•
•
immediately succeeding paragraph, the Adviser has the right to select the broker to execute orders to
buy and sell securities for the Account, and that the Adviser shall use its best efforts to select a
brokerage firm whose commission charges are reasonable in relation to the value of the brokerage and
other services as the Adviser determines in good faith.
The Client has designated /f £P/L.ii.i_ L,y„t i/ as the brokerage firm through which
securities transaction for the Account will be effected. The Client agrees that the negotiation of the
brokerage commissions and other fees to such brokerage firm shall be the sole responsibility of the
Client and that the Adviser shall have no liability or obligation with respect to such brokerage firm or
to commissions or fees payable to such firm.
The Client further agrees and understands that any such commission charges, whether to a
brokerage firm designated by the Client or selected by the Adviser, shall be in addition to any advisory
fee it pays to the Adviser, and shall not be used to offset any such advisory fee.
,
8. The Adviser represents that it is registered as an Investment Adviser under the Investment
Advisers Act of 1940.
9. The Client understands that differing investment objectives, tax and other factors affect the
desirability and timing of particular transactions, and the Clients of the Adviser, as well as the Adviser
itself, its officers and employees and members of their families and affiliates, may hold and have
transactions in securities which are purchased or sold for the Account or with respect to which
investment advice is given hereunder. The Client consents to such transactions, if not in violation of
applicable law, provided that the investment advice hereunder is at all times given in good faith.
The Client has been furnished information regarding the Adviser's strategy of investing and
represents that he or she understands and is aware of the Adviser's method of operation of such
strategy. However, nothing contained herein shall require the Adviser to adhere to any strategy if, in
good faith, it determines that a change is warranted.
10. As required under the Investment Advisers Act of 1940, it is understood that the Adviser will
not make any assignment of this Agreement without the Client's consent. However, the Client hereby
consents to transactions in the shares of Ashland Management Incorporated between the two founding
principals of the Adviser, Charles C. Hickox and Parry v. S. Jones.
11. The Client has set forth on Schedule B of this Agreement: (a) any specific investment
objectives or any funding requirements of the Client which are applicable to this Agreement, (b) any
restrictions imposed by law or by any constituent document of the Client on the types of investments
which may be made by or for the Account of the Client.
9/96
•
•
12. The term of this Agreement shall commence on the date hereof and shall continue until
terminated at any time by either party uponnot less than thirty (30) days prior written notice to the
other party.
13. This Agreement shall be governed by and construed in accordance with the laws of the State
of New York.
•
14. If any provision of this Agreement is found to be illegal or void, all other provisions to this
Agreement will remain in full force and effect. Nothing contained in this Agreement shall in any way
constitute a waiver or limitation of any rights which either the Client or the Adviser may have under
any applicable federal or state securities laws or regulations.
Very truly yours,
tAyirt u;lit tta Ser
tPrint Name) pc,0 , oA q' Apt - Fui3D +�
Address
•
Agreed to:
Ashland Management Incorporated
9/96
•
•
•
NATIONAL
CONFERENCE
ON PUBLIC
EMPLOYEE
RETIREMENT
SYSTF
ac e
O Representing the Retirement Interests of Over 5 Million Public Workers 4 -
The
The Monthly Monitor
Tracking Government Legislation and Regulations February/March 1998
Circuit Breaker Debate Continues
On October 27, 1997, the Dow Jones plunged more than 550 points, causing the circuit breakers put into effect in
1987 to be activated for the first time. This has triggered a heated debate as to the positive and negative effects of these cir-
cuit breakers. NCPERS is keeping a close watch on this debate as it will have a strong impact on our membership.
Congress held a hearing concerning this matter on January 29, 1998. Among those testifying at the hearing were:
Honorable John D. Hawke, Jr., Under Secretary of Domestic Finance, Department of Treasury; Honorable Arthur
Levitt, Jr., Chairman, SEC; James Cochrane, Senior VP, NYSE and M. Scott Gordon, Chairman, Chicago Mercantile
Exchange.
Background
Circuit Breakers were developed in October of 1987 by the securities and stock index futures markets in response
to the stock market crash that month. They were introduced based on recommendations made by the President's Working
Group on Financial Markets. The report found that when the stock
market experiences large losses, investors tend to panic, causing the
market to drop further. In order to avert another stock market crash,
the New York Stock Exchange adopted circuit breakers, which would
cause a trading halt if the market begins to plunge. On October 27,
1997, the market dropped and the circuit breakers were triggered for
the first time, closing the market 45 minutes early.
Pro -Circuit Breakers
Some officials in the stock market industry argue that the trig-
gers have a calming effect and allow time for investors to regroup.
They also believe that circuit breakers are positive for the following
reasons:
• A halt in trading allows time for banks to contact payers and
payees to help them make rational decisions.
• "The circuit breakers afford payers time to invoke credit
lines," said James Cochran, Senior VP, NYSE.
• The circuit breakers avert the possibility of breakdowns in
market infrastructure such as computer systems.
Anti -Circuit Breakers
Many leaders of the nation's securities industry believe the
market's fall was too modest to justify the halt in trading. They feel that the early trigger of circuit breakers can be harm-
ful to the market for the following reasons:
Effects to NCPERS and our Membership
NCPERS is keeping a close watch as this
debate heats up. Often, managers of pen-
sion funds are interested in buying when -
the stock market is low. CALPERS', the na-
tio" n's largest public pension fund, views
the plunging stock market as a good thing.
"I can only tell you in the 1.987 crash, it was
a fire sale for us. We bought a lot. It was a
good opportunity for us," says spokes-
woman Patricia Macht in the San Diego
Union -Tribune. When circuit breakers go
off early, however, investors often times
miss out on the lowest price.
To obtain a copy of the Congressional testi-
mony, you may contact the NCPERS office
at (202) 429-2230.
• Early shut -down of the market causes the final market value to be off.
• Halts in trading could have negative affects on the world markets.
• Circuit breakers can be destabilizing if they prevent markets from closing through the scheduled end of day.
Conclusions
Some consensus has been reached in this debate.
• James Duffy, Executive Vice President, American Stock Exchange, believes that the circuit breakers should be
widened to represent between 10-20 percent of the index's value.
• Members of the Chicago market feel that it would be best to eliminate the first 30 -minute halt during the final
hour of trading.
National Conference On Public Employee Retirement Systems
1620 Eye Street, N.W. • Suite 220 • Washington, D.C. 20006 • (262) 429-2230
•
News from
State Capitols
In President Clinton's State of the Union Address, he
presented a proposal to use federal budget surpluses to
keep America's Social Security System in tact. Not expect-
ing any legislative action to this problem in Congress until
1999, 1998 is sure to be a year of debate and disagreement
on how to reform Social Security. The prospect for reform
containing mandatory Social Security coverage for all em-
ployees looms heavy in the air. Anticipating this fate, state
Rep. Stille in the South Carolina General Assembly has
introduced Concurrent Resolution, HB 4407. The resolu-
tion "memorializes" (petitions) the Congress of the U.S. to
amend the Social Security Act to allow states to be given a
waiver so they can design and implement alternative re-
tirement options. The whereas's include statements that
the Social Security System has failed, may be broke by
2029, and that investment returns on contributions are sig-
nificantly below other sources.
Many states will have a short legislative season this
year. The states that will not have a regular 1998 session
are Arkansas, Montana, North Dakota, Nevada, Oregon,
and Texas. On or before March 31, 1998, eleven state as -
blies are scheduled to adjourn. They include Georgia,
ho, Indiana, New Mexico, South Dakota, Tennessee,
tah, Virginia, Washington, West Virginia, and
Wyoming.
Each of these states have introduced some legislation
that will approve cost of living adjustments, create vari-
ous new pension systems (e.g., for non -teaching school
employees) and either increase (or decrease) the age in
which someone can retire. There are some larger issues
looming in states that these legislatures are tackling.
Georgia's legislature put on the Governor's desk a bill
that will allow employees who worked full time for the
Executive Branch of the Government, between January 1,
1980, and January 1, 1986, to purchase up to three years
creditable service for service that was previously uncred-
ited (Georgia, House Bill #944).
In Virginia a bill has been introduced in the House (H
425) which will allow the purchase of up to four years of
service credit for a leave of absence due to the birth or
adoption of a child, for any leave due to illness or disabil-
ity, and for leave taken for educational purposes or for
employment with the General Assembly. The bill contains
provisions for credit for military service and allows teach-
ers to purchase credits for service rendered in non -teach-
ing provisions.
Indiana's Senate passed a bill that is currently in the
e s House Committee on Ways and Means that makes
t e following five changes to the public retirement funds:
• Removes deadlines on time available to purchase
certain types of service credits in the Public Em-
ployees' Retirement Fund (PERF) and State
Teacher's Retirement Fund (TRF).
• Adds a claim period for death in service benefits in
PERF.
• Allows transfer of partial service in PERF and TRF.
• Specifies disability payments procedures for PERF
and TRF.
• Allows credit for adoption leave under TRF.
The bill, S-127, also contains credit for prior service by
police or fire employees who were participants in a previ-
ous fund (referred to as the 1977 fund in the act).
West Virginia has introduced a bill relating to the
purchase of service credits as well. The bill (H 4087) al-
lows a transfer of service credits and retirement accounts
to the Public Employees Retirement System from the
Teachers' Defined Contribution Retirement System if a
teacher s employ-
ment is terminated
by the existing em-
ployer and later em-
ployed by a state
agency. West Vir-
ginia also has a bill
in the House Com-
mittee on Finance
that, if passed, re-
quires a divorced
fund member to
prove that there is
no qualified domes-
tic relations' order
in effect to elect cer-
tain retirement an-
nuity options (H
2495). You may re-
member last year
West Virginia's
electorate over-
whelmingly passed
a constitutional
amendment allow-
ing the state's pub-
lic pension funds to
invest in the stock
market. With the
ink hardly dry on
the amendment, Gov. Underwood has included a budget
that will trim the teachers pension fund His rationale, the
funds will see increased earnings from stock market in-
vestments. The catch however, is it will take months be-
fore any of the funds that are invested in the market see
any return.
NCPERS intends the Monitor
to be informative to you. It is
meant to provide you with
information about national
and state legislative
happenings. You can help us
by calling theNCPERS
legislative staff and letting
them know what important
legislation is being considered
in your state. We track federal
developments as well as
developments in all 50 state
legislatures. Call Ed Braman,
NCPERS Legislative
Coordinator, and tell Ed if you
have an issue in your state
that will affect your fund
(either positively or
negatively). Furthermore, Ed
would be glad to provide you
with copies of bills that are
currently working their way
through your state houses.
The NCPERS phone number
is (202) 429-2230 or email Ed at
ejbraman o aol.com.
•
Federal Developments
PSLRA UPDATE: Last October the Monitor reported that the Securities Litigation Uniform Standards Act had been intro
duced in the House (H.R. 1689) and was heading for introduction in the Senate (S. 1260). Currently, both bills are enjoying
wide bipartisan support with 173 co-sponsors in the House and 27 in the Senate. NCPERS is urging its membership to call
or write their Representatives and Senators and ask them not to support these bills. If passed, the law will adversely affect
public pension funds by prohibiting class
action suits alleging fraud with regards to
covered securities and taking away the
states' ability to implement their own laws.
Since October, a group of 28 legal scholars
urged Congress not to support the pending
legislation. In a letter sent to every -member
of Congress, the legal professors warned
that the legislation was "overkill" and said
that Congress should wait to "ascertain the
effects" of the similar 1995 Private Securi-
ties Litigation Reform Act. A study re-
leased by Price -Waterhouse concluded:
"(I)t is too soon to draw any firm conclu-
sions about the effect of the Reform Act on frivolous litigation, or for that matter, on meritorious litigation." The Senate
Majority Leader Trent Lott (R -MS) has made passage of the Senate version of the bill a priority. NCPERS has been told by
Senate sources that Sen. Lott would like to have action on this before the Easter recess.
RAP ACT — Rep. Earl Pomeroy will be introducing the Retirement Account Portability (RAP) Act early this session. Dur-
ing a briefing attended by the NCPERS legislative coordinator, Rep. Pomeroy's staff said that portability between defined
benefit plans and 401(k), 457, and 403(b) plans "makes sense." Working in coalition with other groups, NCPERS sup-
-'orted the portability proposal. The portability provisions of the RAP Act would do two things, allow amounts in 403(b)
nd 457 plans to be used to purchase service credits in defined benefit plans and allow the rollover of refunds from de-
fined benefit plans to 403(b) or 457 plans. The proposed changes would increase the portability of retirement savings and
create an incentive for people to use savings intended for retirement for retirement, instead of spending these savings
prior to reaching retirement age. Two other provisions of the Act would allow for reduced vesting schedules and boost the
penalty tax for early withdrawal from these funds from 10% to 15%. NCPERS will continue to report on the RAP Act as it
moves through the legislative process.
SOCIAL SECURITY PANEL — The Bipartisan Panel to Design Long -Range Social Security Reform Act of 1998 (HR
3095), was introduced in Congress by Representatives Archer (R -TX) and Kasich (R -OH). The act has two purposes, to cre-
ate a bipartisan panel that will design a single set of legislative and administrative recommendations and to keep social
security solvent. By implementing the panel's recommendations, the act seeks to maintain retirement income security in
the United States. The panel is to consist of eight members, two to be appointed by the President, four by leadership of
both parties in Congress and the remaining two by the leadership in the House Ways and Means Committee and Senate
Finance Committee. A report will be issued by the panel no later than February 1, 1999, detailing the panel's findings and
is to include its recommendations. As of this writing, the Act was referred to the Committee on Ways and Means and has
two co-sponsors. Sources at the Ways and Means Committee have told NCPERS that there currently is no activity sched-
uled (e.g., hearings, etc.) on the Act, but they expect some action in March.
CLARIFY OBJECTIVES — The British -North American Committee (BNAC) recently issued a policy statement stating
the pension systems of the United States, Canada and the United Kingdom need to clarify their objectives and clearly dis-
tinguish what the roles of the government, individuals and employers should be. The statement was published in The Fu-
ture of Pension Policy: Individual Responsibility and State Support which included a background report. BNAC recom-
mended three courses of action:
• Governments should explore ways to ensure that state-run plans are adequately funded and are able to provide future benefits.
• Employers should promote cost-effective provisions of retirement savings as an element of employees' compensation.
• People should take responsibility for saving for a long retirement to ensure an adequate standard of living.
For information on obtaining the full statement, contact the NCPERS office at (202) 429-2230 or fax (202) 223-8323.
Action on H.R. 1689 and S. 1260 is expected soon in both the House
and Senate: Time is running out to make our voices heard. Please call
or write your Senator or Congressional Representative and ask them
not to support these bil s. If passed, states will not be able to
implement laws with regard to covered securities. You should contact.
your Governor and let him/her know that this legislation would be •
bad for your state. Ask your elected officials: "What's the hurry?" If
you need more information, a copy of either bill, a list of the co-
sponsors or assistance in drafting correspondence, call the NCPERS
office at (202) 429-2230 and ask for Ed Braman. Ed will be glad to
assist you.
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•
•
Meeting the Challenge
By Harold Schaitberger
As you can tell from this Monitor issues that will affect
public pension plans are beginning to move through the
legislative process. A coalition of groups representing dif-
ferent constituencies of public pension funds met in Wash-
ington, D.C., for three days of lobbying, legislative strategy
development and issue education. NCPERS was well rep-
resented at the winter meeting of the Public Pension Coor-
dinating Committee (PPCC) by the President, Jay Bixby, the
First Vice President, Elmer Kahl, the Treasurer, Richard
Wachsman, and Ed Braman, Legislative Coordinator.
NCPERS President, Jay Bixby, serves as the Chairman
of the PPCC Legislative Committee. The Legislative Com-
mittee reported on four issues to the Board of the PPCC.
These included pension portability, Social Security reform,
the Uniform Management of Public Employee Retirement
Systems Act (UMPERSA) and defined benefit vs. defined
contribution plans.
NCPERS was invited to give a presentation on
.UMPERSA to the full PPCC Board, the PPCC Legislative
Committee, and the Directors Meeting of NASRA. The
Act has now been introduced in Nebraska and Oklahoma.
We have been polling our Executive Board and National
NCPERS
1620 Eye Street, N.W.
Suite 220
Washington, D.C. 20006
eta
Committee to get opinions from our leadership about
UMPERSA. So far, we have received a few responses and
reviews are mixed. NCPERS will continue to watch
UMPERSA and we will give a full report at our Annual
Conference in April.
At the Joint Legislative Meeting on Public Retirement
Issues, members of the staffs of Senators Orrin Hatch and
Bob Graham gave a briefing on upcoming pension tax is-
sues. Congressman Pomeroy's staff outlined the portabil-
ity legislation that he will soon introduce in the House
(see related story on the "Federal Page"). Representatives
from the Administration, Government Accounting Office,
and other experts interacted with the group discussing
their views of issues that will affect public pension plans.
NCPERS leadership and staff will be out front on
these issues. You can do your part by attending the up-
coming Annual Conference at the Adam's Mark Hotel in
Denver, Colorado, April 19-23. We are also planning our
Legislative Conference in Washington, D.C., from June 15-
17 at the Washington Court Hotel. You will be mailed reg-
istration information next month.
PRESORTED
FIRST CLASS MAIL
US POSTAGE PAID
WASHINGTON. DC
Permit No. 8972
Fayetteville Fire Fighters Pension & Relief
Lily Lierk
113 West Mount Street
Fayetteville , AR 72701
The Monthly Monitor" is published by the National Conference on Public Employee Retirement Systems. Material published in
"The Monthly Monitor" may be reproduced with prior written permission from NCPERS.
4