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HomeMy WebLinkAbout1998-05-28 MinutesMINUTES OF FIRE PENSION BOARD A meeting of the Fayetteville Firemen's Pension and Relief Board was held on Thursday, May 28, 1998 at 11:00 a.m. in room 326 of the City Administration Building, 113 W. Mountain, Fayetteville, Arkansas. Present: Mayor Hanna, Marion Doss, Pete Reagan, Ron Wood, Darrel Judy, and Heather Woodruff. Absent: CALL TO ORDER 4 Mayor Hanna called the meeting to order. APPROVAL OF MINUTES Mr. Reagan requested an excused absence from the last meeting. He was attending a conference. With the requested change, he moved to approve the minutes. Mr. Judy seconded the motion. The motion carried unanimously. PENSION LIST Ms. Woodruff noted Larry Freedle had been added to the pension list. Mr. Reagan moved to approve the pension list. Mr. Wood seconded the motion. The motion carried unanimously. INVESTMENT REPORT Mr. Yada, Merrill Lynch, explained the investment report through the end of April. He noted there was a growth from December 31, 1997 from 11.1 million to 11.8 million. All investments were doing well. The income account was a defensive account If interest rates were to come down it should preform better. In response to comments from Mr. Reagan, Mr. Yada explained the Japanese Yin was going down compared to the American dollar. • Fire Pension May 28, 1998 Page 2 Mr. Williams felt the trend would continue. He explained Japan was an export driven country, which had to make their currency cheaper than the dollar to support their economy. He thought it could cause the other Asian currencies to devalue, which was a concern because to would affect our economy in a few months. The trade numbers released two weeks ago were worst than people had expected. Southeast Asia was not buying our goods. They could not afford them. Another round of devaluation would make the US currency and products more expensive in relation to theirs and would further weaken the economy. The US growth had been driven by internal investments and exports. Mr. Reagan asked when they planned to pull out of Japan. Mr. Yada replied they had not renewed the January Series. Overall, the pension fund continued to grow. They were in the 8% range for the first four month of this year, which was ahead of the overall program. The plans original projection had been to hit 10 million by 1999. They were currently near 12 million. They should be receiving their actuary report between June and August. He suggested the retirement plan provide individual retirement plans for the firemen. Merrill Lynch had custom financial plans which would cover net worth, income taxes, education plans. spouse protection. This retirement planning would help set each individual's goals. The plans would go into detail for each individual. The cost for each plan was $250.00. He felt every individual should have a retirement plan to help make financial decisions. Once the plan was done for an individual it was down loaded into their computers and they owned it from then on. They could change any of the parameters as time went on, if an individuals situation changed. Mr. Reagan asked if there was a one time fee? Mr. Yada replied there would be no charge to update. There was normally no need to update, unless there was a large inheritance or a divorce. Mr. Reagan thought it was a good idea. He suggested sending a letter with the retirement checks to the retirees to see if they were interested. Mr. Williams did not believe some of the retirees had a need for the full financial plan. They could do a retirement analysis for free. Mr. Yada stated they would have to meet with each person individually. Mr. Doss liked the idea and thought they should send an informational letter out to all the firemen. Mr. Reagan asked Mr. Yada to compose an informational letter so they could send it out with a • • • • Fire Pension May 28, 1998 Page 3 questionnaire. Mr. Williams stated they would need an hour and half for each person of their turn around time would be four to six weeks. Mr. Reagan moved to table the item, until they could send out letters and get more information. Mr. Wood seconded the motion. Mayor Hanna requested the retirement date of each fireman be added to the pension list. He • suggested the month and year be added next to the name. OLD BUSINESS Mayor Hanna reported the result of the election for the retired position. Darrell Judy had received 20 votes; and Carl Springston had received 16 votes Mr. Reagan moved to reelect Darrell Judy. Mr. Wood seconded the motion. The motion carried unanimously. NEW BUSINESS Mr. Reagan stated he had attended NCEPERS conference in Denver. He presented a booklet which summarized the conference. He believed it was a great benefit to be a member of the organization. Their main goal was to keep track of Municipal and State pension systems and how the legislator affected them. He recommended they stay an active member of the organization. Mayor Hanna stated there was a strong effort being made to remove the State's property tax. He questioned how it would affect the fireman retirement. Mr. Reagan thought they received approximately $200,000 a year from the tax. Mayor Hanna questioned the affect on the retirement plan if they were to loose those funds. Mr. Reagan stated if the property tax were to get on the ballot and passed the retirement plan would be out of approximately $200,000 a year. Fire Pension May 28, 1998 Page 4 Mayor Hanna stated their interest was small compared to the millage that went to the schools. He did not want people believing the schools would be the only one affected. It would not affect the Fayetteville because they had removed their millage, but a lot of cities used the millage for their operations. He questioned where those cities would get their money. There were some small cities that did not have a sales tax base. Mr. Reagan asked Mr. Yada to work up an idea of how it would affect their pensions in the long term. Mr. Reagan stated there were some cities which did not have as good of a pension plan as Fayetteville, and they were receiving a full mill for both the Firemen and the Police. For other business, Mr. Reagan moved to send a letter to all the senators supporting the RAP Act. Mr. Judy seconded the motion. The motion carried unanimously. The meeting adjourned at 11:50 a.m. •