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HomeMy WebLinkAbout2000-09-28 Minutes• • • • MINUTES OF A MEETING OF THE FIRE PENSION AND RELIEF FUND BOARD SEPTEMBER 28, 2000 A meeting of the Fayetteville Fire Pension and Relief Board was held on September 28, 2000 at 11:00 a.m. in Room 326 of the City Administration Building located at 113 West Mountain Street, Fayetteville, Arkansas. Board Members Present: Pete Reagan, Marion Doss, Mayor Hanna, City Clerk Heather Woodruff, and Mr. Richard Yada, Merrill Lynch representative. John Dill, absent. APPROVAL OF THE MINUTES Mr Pete Reagan moved to approve the minutes. Mr. Marion Doss seconded the motion. Upon roll call the motion carried unanimously. PENSION LIST Mayor Hanna asked if there were any more changes besides Darrell Judy being replaced with Jan Judy. Mr. Reagan suggested they make a note of Darrell Judy passing away on September 24, 2000. Marilyn Cramer, Accounting Manager, said that was the reason for her being at the meeting. She did not have a copy of that pension list with the changes on it. She just learned yesterday at a recent pension board meeting there was an approval to allot a portion of Samuel Watts' pension benefits to Jeanne Watts and all of the other allocations that the pension benefits before have all been because of a court order or a qualified divorce order. The information we have received so far in payroll to do this is that we don't have a court order supporting it. We have the approval of this Board to do it but I don't know that this Board has any legal backup to support that. There is a letter from the attorney who said he was the attorney for Mr Watts. We don't have anything from Mr. Watts. We don't have anything showing a power of attorney from either the attorney or from Mr. Watt's sister. So I guess I've got a couple of concerns. One is that, we don't have backup, legal backup to do this. I guess the Board would have the right to do whatever they want me to do. I think you need a legal decision on that. But the other thing, if this is not a court order to have a portion of the pension benefits allocated to an ex-spouse. I believe this is just like any kind of a voluntary withholding. The entire benefit would be taxed to the pension recipient and then we would show that it was a withholding. Now what that does in my estimation is kind of opening a can of worms. Then next, I mean where do you cut it off. The next pensioner may say, I travel a lot, can you just write a check to my bank for my • mortgage payment each month. Withhold that and write a check. The next one says, I have an outstanding balance with MasterCard, can you send $200.00 a month as a payment to MasterCard as voluntary withholdings and so that then becomes a lot more time consuming, a lot more records to keep track of and I believe we need to think about that also to whether that is what you want to be doing, taking voluntary withholdings from the pensioners. At this point we can do it and we can separate it the way it is shown on this list based on your approval of the minutes, but there may be some legal recourse from these or someone else coming back and saying, I never gave authorization for anything to be withheld from my pension. Mayor Hanna said he did not realize this when we discussed this at the last meeting. I don't guess any of us did. As far as we know there is no court order or signed order from a guardian, or something like that. I think we probably would be better to vote to hold off on that pending a court order. We could have some liability from the pension fund. Mr. Reagan asked if he could shed some light on the situation. In the minutes under the Pension List, the fifth aragraph, we have Mr. Rose's legal opinion on that In the past he has given us one on the Lewis and the Roy Skelton, where both of those went through a divorce and it a court order. This one is a little different in that, once again, Darrell Judy brought this to us at our last meeting and asked us to do this. This is his wife's brother and she is the caretaker of him because of his health and mental condition and both Darrell and Jan asked for this because of the problem they are having with the ex-wife. We went ahead and approved that at Darrell's request. There wasn't a court order that said any payment to her would come directly from the Pension Board to her. But I do understand now Marilyn's problem with the tax liability end of it. I do know the State Statute states that it has to be a, I guess a retiree of the system to receive the check. In the past Jerry's legal opinion was that a court order overrides a State Statute on that issue. He asked Marilyn Cramer if a check had been written to her yet. • Ms. Cramer answered again, this is the first month and she just happened to see the list regarding this question. She stated they do not have anything in their files that give them any legal basis to take part of his money to give to his ex-wife. If a divorce decree exists stating this, they need a copy. In answer to a question from Mayor Hanna, Mr. Reagan said that Wayne lives by himself on a property owned by Jan.and Darrell. He stated he was unsure what his disability is but he does know that Jan and Darrell are taking care of his legal affairs. Mr. Doss said they were up at the station about a month or two ago and it seemed like from talking to them that Wayne wanted them to take care of everything. I see what Marilyn is saying . and I kind of had that question when Heather first told me about that and I asked if it was a court order because I knew the others, with my understanding, were court orders. I was kind of concerned with that too. I guess if she had a copy of that divorce decree that sets that dollar amount, it might be one thing. I am sure that what he is doing is wanting them to pay his bills and stuff. That is what Darrell told him at one time. I think it is just more or less where they make sure she gets it because that saves Jan having to do it or Wayne forgetting. Ms. Cramer said since we have no court order from them and if you still want to do it, we have • opened up the possibility for a lot of other voluntary withholdings from pension checks which get to be very time consuming. The other thmg is that based on what we have, this letter from the attorney saying please do it or some information from Jan Judy asking us to do it. I think to protect the Pension Board we need a document that shows that they got called by the attorney to ask us to comply. Those were my concerns. Mr. Doss asked if a copy of the divorce decree was public record? Mr. Reagan answered, yes. Mr. Doss said if Heather could get a copy of the divorce decree, would that satisfy our immediate problem of liability? Would it state a dollar amount that she would be getting? Ms. Cramer answered, if it particularly states it comes from his pension check. If it just says that each month he pays her that, that to her does not say it comes out of the pension because it could come from any of his other assets. Mr. Reagan stated that he did not think the decree says that. I think the way to go is, and I hate to be creating more work for Jan at this point, but I think that if we had a power of attorney, would that work? Ms. Cramer answered if it showed that either the attorney who wrote the letter has the power of. attorney or if she has the power of attomey to act on his behalf - but then that raises the question of voluntary withholding. This would be considered a voluntary withholding and the entire benefit would be passed to the former firefighter. Mr. Reagan asked Ms. Cramer on the other two, if she could recall from memory, Roy Skelton and Ro Lewis, are those taxed individually? Ms. Cramer answered they are taxed individually. We sent out the 1099 to the ex -firefighter and the 1099 to the ex-spouse because the divorce decree says that that income will never go to the firefighter. Pete Reagan asked if for tax reasons it would be better to have the court decree. Ms. Cramer said that had been her interpretation. • Mr. Doss said in this case it looks like both of them should be taxed because if not, you are going to have to tax Wayne for that full amount and he is being taxed for money that he did not get. So she should be taxed. Ms Cramer said that it was the same sort of thing that if you get your paycheck, and you pay $100.00 to MasterCard, you are taxed on the whole thing. That's Just plain old withholding. We make no distinction as to whether it is going to an ex-spouse to to any other creditor. Mr. Reagan said he believed what they needed to do at this point is to approve the Pension List. They will combine Jeanne Watts and Wayne Watts together and pay it to Wayne until we are in • receipt of a court order or power of attorney. Mayor Hanna asked Marion Doss if he would second that motion. Mr. Doss seconded that motion and it was approved. Mr. Reagan asked Ms. Cramer asked about the insurance premium turnback. Ms. Cramer said she would call the Pension Review Board and see if she could get some background on the computations. If she does not get any response from the telephone calls she will write a letter. Mr. Reagan suggested she go straight to the Insurance Commission. Ms. Cramer agreed to do that. INVESTMENT REPORT Mr. Richard Yada, Merrill Lynch was at a funeral in Little Rock. 1999 ACTUARIAL VALUATION Mayor Hanna stated that the 1999 Actuarial Valuation indicates that the Pension Fund is sound. He asked if anyone had any discussion about the report. Mr. Reagan questioned if a figure on Page 6 is the City contribution. There was some discussion about this but no one had an answer. Ms. Woodruff said she would check with Ms. Cramer regarding this donation. TURNBACK Mr. Reagan said in regards to their insurance checks, he had spoken earlier with Ms. Cramer before the meeting and asked her to contact them and see how it was figured this year. There has to be a reason for the premiums being down. OTHER BUSINESS The Board discussed the replacement of Darrell Judy with an active member. Mr. Doss made a motion for Pete Reagan to fulfill Darrell Judy's term and to request a member from an active firefighter to replace Pete Reagan. Motion was seconded by Pete Reagan. Motion was approved. Mayor Hanna made a motion to have a proclamation to Jan Judy for Darrell's service in the Fire Department. Motion was approved. Pete Reagan moved for the meeting to adjourn. 11:30 a.m.