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HomeMy WebLinkAbout1998-01-29 Minutes• • MINUTES OF THE FIRE PENSION BOARD A meeting of the Fayetteville Firemen's Pension and Relief Board was held on Thursday, January 29, 1998, at 11:00 a.m., in room 326 of the City Administration Building, 113 W. Mountain, Fayetteville, Arkansas. PRESENT: ABSENT: Marion Doss, Bill Morris, Darrell Judy, Ron Wood, Pete Reagan, and Deputy City Clerk Jane Heth. Mayor Fred Hanna CALL TO ORDER Marion Doss called the meeting to order. MINUTES Reagan, seconded by Wood, moved to approve the minutes of the December 11, 1997, meeting. The motion passed unanimously. PENSION LIST There were no changes to the pension list. Reagan, seconded by Wood, moved to approve the pension list for February, 1998. The motion passed unanimously. INVESTMENT REPORT Richard Yada and Curtis Williams of Merrill Lynch were present to review the portfolio performance. Yada reported that New Mexico Capital gave a return last year of 16.970. It probably under -performed the market a little, but is. not bad for a conservative portfolio. The income account was up 6.380. Keeping money available will be even more critical now that the DROP program is in place. The Keystone Account had a 30o return rate, which is excellent. Yada gave an update on the Select 10 Program. To try to get some diversification, we put some money into the Dow, United Kingdom, Japan, and Hong Kong high-quality stock funds. The Dow and United Kingdom are excellent. Hong Kong was excellent until about November. Japan never has done anything. We will not renew the Japan. Hong Kong will probably bounce back with a vengeance. We are down about $39,000. We have 46.% of our assets in the stock market. Fixed Income has 470. Cash is 61. One percent is in the "other" category. We are almost right on our target. • Keystone is managing 14% of our portfolio. New Mexico Capital Management has 42%. Our income account is 44%. • Yada reported the actuary will be run as of the end of 1997. It should be back by August. He reviewed the last one done in 1995, before we approved the DROP and benefit increases. Then, we were sound in all categories. For the short-term test, we have to have $173,000 coming into the account, plus enough to reduce the unfunded liability of the plan. We are not supposed to be fully actualized until 2003. We have used up the cushion we had. The total liability of the plan is $9,045,983 and assets at the time were $8,897,000. The unfunded liability was only $148,000. He reviewed the insurance turn backs over the last three years and the local millage. The investment return for 1993 was 10.9%, 1994 was 6.9%, and 1995 was 13.4%. 1997 will probably have a 7% to 8% rate of return range. Yada explained that we try to diversify our investment styles as we do our investments. The two styles of investing are growth and value. Keystone is a growth style. New Mexico is a value style. Reagan asked about replacing Japan. Williams replied we have to have global diversification. We need to find the most efficient and least troublesome way of doing it. OLD BUSINESS VOLUNTEER PAY Reagan reported he requested information from the Pension Review Board regarding what other cities pay their volunteers. He has not received an answer yet. OSBORN, CARREIRO & ASSOC., INC. LETTER Reagan suggested writing a letter to Cathyrn Hinshaw of the PRB about a letter dated October 3, 1997, from Osborn, Carreiro & Associates that was not received by the board until recently. This was regarding 1996 DROP Interest Rate Certification. Doss explained he'd been told by Cathyrn Hinshaw that a copy of this letter had been sent earlier and may have been misdirected. In the future, it should come addressed to the board. NEW BUSINESS ATTORNEY GENERAL OPINIONS Reagan stated that in the future he would like to see Attorney General opinions before the pension board meeting. It was decided the City Clerk would provide each board member with information like this in the agenda packet. These opinions will • • be discussed at the nekt meeting. LIST OF DROP PARTICIPANTS Doss reported that the finance department sends him a list. of DROP participants and their investments. He sends a copy of it to them. He suggested keeping the originals in the City Clerk's office. He turned the originals over to the Clerk. NCPERS Reagan stated he'd received information on the National Conference on Public Employee Retirement Systems (NCPERS). Membership would be $100 annually. They send out a monthly monitor of what is happening on Capitol Hill. They have a conference once a year. Their mission statement• states they were formed over 50 years ago to take a stand against mandatory social security coverage for public employees. He stated the annual conference would be held in Denver in April. Reagan moved to join NCPERS. Wood seconded. The motion carried unanimously. Reagan offered to be considered as a delegate to the Denver conference. It was thought this would be paid for by the pension fund. Judy moved to send Reagan to the conference. Reagan seconded. The motion carried unanimously. DROP FORM Doss reported that Marilyn Crammer has prepared a form showing the formula used for the DROP, which is available for anyone who is interested in it. TWENTY-YEAR CERTIFICATE A twenty-year certificate was signed for Eddie Bachman. ADJOURNMENT The meeting adjourned at 12:06 p.m.