Loading...
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 • u1rN 0 H n r 1 0 1 1 0 wr .-mx N O° z O r O 2; N N n m a 07C {- 0 vo aa; zx^ 22 -1 a: N N sur N -i m VI man; 1 23.1 '3 i r.m 5g A „0 Ea goo C 2 .0 m$ is a I -,z m a= {wnr{- m O tl m - i E 3 m - - I m m -14 M 3 m: c O a m < _ H c n c w ✓ z n z r r -100r m a c m = S[ > z -i \ m a > H -aal .11 o m-_ -.1 o - -u ea o m I ! f+ irk Z H. \ 0 , Fa 1s• 1 N. • z _ 3 F ei a7 a• a _ 0 sr ry 3g ig C m mm toric -11 mm de aa` 0• •O• A n H• 2 n H r w 0 0 10SWAS IW Dr 0 MM rm D x m m c v N cV)�••Im 1. nnm- -I m' azO-In' Vl"Ti am M 1-1 z 0 n 3 m O O V) -i z w m 2 T 1••1 2 c 2 zmzo 2 O Z Va0 £ a -r 7c r m o r z O m O O XI -1 r� r .•1 EZ ori M 0 Z r n r 0 3 m 'S3I213S M3N 3111 01 m c z O 0 r r O cC `+m 0 hWV06R'om 0 z c 0 0 0 m z 0 co 2 m 0 S O O 33A DNISS3 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. 3 /ff7 F • • 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