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HomeMy WebLinkAbout2003-10-03 - Agendas - Final• • Firemen's Pension And Relief Fund Meeting Agenda October 3, 2003 A Special meeting of the Fayetteville Firemen's Pension and Relief Fund will be held at 11:00 a.m. on October 3, 2003, 2003 in Room 326 of the City Administration Building. 1. Approval of the Minutes: • August 28, 2003 2. Approval of the Pension List: • October, 2003 Pension List Approval 3. Investment Report: • Longer Investments will not be here this month. They have sent a copy of the report for review. 4. Old Business: • LOPFI Plan • Skelton College Enrollment • Gust Requirements • Martin & Kieklak Letter 5. New Business: • Arkansas Municipal League Ballot • PRB Information • • Fire Pension Meeting August 28, 2003 Page 1 of 4 Firemen's Pension and Relief Fund Meeting Agenda August 28, 2003 A meeting of the Fayetteville Firemen's Pension and Relief Fund was held at 11:00 a.m. on August 28, 2003 in Room 326 of the City Administration Building. Present: Danny Farrar, Pete Reagan, Robert Johnson, Marion Doss, Ronnie Wood, Mayor Dan Coody, Chairman, Sondra Smith, Secretary, City Attorney Kit Williams, Steve Davis, Marsha Farthing, Attorney Kent Kieklak, and guest. The meeting was called to order by Mayor Coody. Approval of the Minutes: Pete Reagan moved to approve the minutes. Danny Farrar seconded. The motion pissed unanimously. Approval of the Pension List for September, 2003. Sondra Smith: There will be one change to the Pension List. Marion Doss: Edward Osbum passed away; he was one of the retirees. Pete Reagan: He did not leave a surviving spouse? Sondra Smith: I do not show on the last affidavit that he completed that he has anyone listed except his children and they are all above the age of 23. Pete Reagan moved to approve the Pension List. Robert Johnson seconded. The motion passed unanimously. Investment Report: Mayor Coody: Elaine Longer is not going to be here she has sent a copy of the report for your perusal, you can look at that at your leisure, I can't image that there would be any changes on that. • Fire Pension Meeting August 28, 2003 Page 2 of 4 Old Business: LOPFI Plan: Mayor Coody: 1 know that we were looking to send the old pension plan down to the State, but according to the actuarial report, we would be leaving a bunch of money on the table, Steve do you want to bring everyone up to speed on the details on that? Steve Davis: We presented the information to the City Council and the City Council had some questions at the agenda session, but at the City Council meeting all the new business was tabled because of the smoking debate. I then asked for this agenda item to be tabled until October 7, 2003 City Council meeting. We received a fax from Osborn and Carreiro that indicated that if the City moved the old plan to the LOPFI plan in their opinion this pension fund would lose a significant amount of the State turn back over the next five years. It also indicated that there was a possibility of a 3% temporary COLA under the circumstances that Carreiro sets forth. That's where we are right now. There are a couple of questions that Pete has asked about, going to a ten year drop and working after the drop period is over. City Council would have to go along with both of those options. Pete Reagan: It would also have to go through the PRB process, Arkansas Pension Review Board. Just so we understand and it gets in the minutes Steye, Osborne and Carreiro who is the actuarial for the Arkansas Pension Review Board and LOPFI is saying that we keep this Board in tact in Fayetteville, so that we can receive a higher amount of insurance turn back funds because the fund is not actuarially sound, we will be receiving an increased amount over and above what we would normally receive and I think that amount is close to one half a million dollars this year. Have we received that check yet? • Steve Davis: I don't know what the amount is, what they recommended was that because of the State Legislature change to the formulas this legislature session that we wait at least two years because the next legislature session could change the turn back formula again and would change their recommendation, because the tum back formula.is based on needs basis now where it was based on some other basis. The legislature may change their distribution policy at the next session in 2005. Pete Reagan: Just for the record we will be intensely fighting that, the reason we requested this change this year and part of it was a resolution out of the Arkansas Professional Firefighters Convention is we had small cities in the State of Arkansas that were receiving monies over and above what it cost for their entire Police and Fire LOPFI cost and they were having to put that in the bank. We received less, the big cities are the ones that got hurt, Little Rock was a million and a half and I think it was 80 something thousand that we lost on the new calculation in 2001. • • Fire Pension Meeting August 28, 2003 Page 3 of 4 Kit Williams: That was probably done by the small cities. Pete Reagan: It was actually done by ULAR, they changed the formula and used 60% land area and 40% population, and we flip flopped those numbers. It is also now based • on need, those cities that have monies in the bank will not receive any money and we, because we are not actuarially sound, we are receiving their portion. Steve Davis: The net benefit to the Pension Board Fund following the Osborn and Carreiro analysis is $1.6 million. Kit Williams: Over the next two years or five? Steve Davis: 5 years. Kit Williams: Assuming the formula doesn't change. Hopefully also within two years we will have this case settled too with Merrill Lynch and there won't be a problem as to what to do with that. Steve Davis: They estimate you could only do a 1% COLA at this time. If you stay independent for another three years with that additional State tum back you could do the 3% COLA. Kit Williams: Not only that but we might have some sort of settlement by then from Merrill Lynch. Pete Reagan: This will greatly enhance the bottom line. I would like to thank Steve Davis, I know he has put a lot of time in on this and I would like to thank him for his expertise and Marsha. • New Business: Kent Kieklak on line log in with Northern Trust: Kent Kieklak: As you know we are going to monitor the fund beginning as soon as possible. What we need from the Board is,authority so that we can go to Northem Bank again establish a direct log -in, so that we can begin monitoring daily your account. We've already into some road blocks with Northern, these days you have to be so careful with providing inforniation. What we would like is a resolution authorizing us to establish a log in so that we can begin monitoring the fund. Pete Reagan moved to approve the drafting of a resolution to give authority to the attorneys to waive any privacy concerns the Northern Trust Bank might have and allow them as our attorneys to have complete access to our financial records. Marion Doss seconded. The motion passed unanimously. • • Fire Pension Meeting August 28, 2003 Page 4 of 4 Other: Budget Report from Accounting was handed out for review. Copy of the Monitor was given to the Board. • Pete Reagan: The Joint Retirement Committee with the Arkansas Legislature is meeting today and tomorrow at the Springdale Holiday Inn. Today the meeting is at 4:00 and tomorrow morning it begins at 9:00. Tomorrow morning is the public sector retirement system and there is going to be a legislative update and I plan on being in attendance. Kit Williams: Are they taking public comment tomorrow morning? Pete Reagan: Yes Meeting Adjourned at 11:20 AM. FIREMEN'S RELIEF AND PENSION October 2003 OLLOWING ARE THE OBLIGATIONS OF THE FIREMEN'S RELIEF FUND FOR THE OF OCTOBER 2003. YOU ARE HEREBY INSTRUCTED TO ISSUE CHECKS TO THE P ES, IN THE AMOUNTS SHOWN, AND FOR THE PURPOSE SO STATED. DATE OF EMP# RETIREMENT NAME REGULAR Year To Date MO BENEFIT REG BENEFIT FED. TAX ST. TAX NET 79 11/99 ARMSTRONG (DILL), PAMELA 1,658.91 74 3/86 BAIRD, JULIA 1,649.16. 2 3/75 BLACKARD, PAUL 100.00 • 63 5/72 BOLAIN, ANN 100.00 68 7/99 BONADUCE, MICHAEL 2,735.14 44 9/86 BOUDREY, BETTY MRS. 2,267.18 45 9/86 BOUDREY, HOWARD 1,911.99 49 7/88 BOUDREY, JACK 1,507.82 4 6/67 CARL, FLOYD JR 100.00 5 5/72 CASELMAN, ARTHUR 120.00 57 5/90 CATE, ROY 1,637.10 6 4/68 CHRISTIE, ARNOLD 100.00 84 03/01 CIRCT CLRK WA CO 85 03/01 CIRCT CLRK WA CO 8 10/76 COUNTS, WAYNE • 100.00 �-+ 61 6/66 DAVIS, BEULAH F. 377.50 78 11/99 DILL,GARY JOHN .1,658.92 11 2/76 FARRAR,ALONZO 914.10 38 5/84 FRALEY, JOSEPH G. 1,618.08 170 5/03 FREEDLE, LARRY 3,492.86 92 03/02 GAGE,TOMMY 2,376.34 34 6/79 HARRIS, JAMES E. 100.00 70 11/99 HARRIS, MARY RUTH 100.00 9.3 06/02 JENKINS, JOHN 3 273.93 86 07/01 JOHNSON,ROBERT 2,812.66 64 4/95 JORDAN, CHARLIE 2,081.90 76 5/88 JUDY, JAN 1,507.82 37 3/84 KING, ARNOLD D. 1,393.18 54 5/89 KING,ARVIL 1,566.00 12 3/60 'LANE, HOPE MRS 100.00 13 . 10/67 LAYER, MERLIN 417.50 14 7/74 LEE, HAROLD 100.00 51 10/88 LEWIS, CHARLES 1,507.82 55 12/89 LEWIS, ROGER (DECEASED) • 40 9/85 LOGUE, PAUL D. 2,624.88 50 9/88 MASON, LARRY 1,492.83 39 4/85 MC ARTHUR, RONALD A. 1,604.92 35 - 2/82 MC CHRISTIAN, DWAYNE 100.00 15 4/77 MC WHORTER, CHARLES 1 221 26 29 8/81 MILLER, DONALD 1,193.41 73 2/00 MIL LER,KENNETH - 2,910.17 42 2/86 MOORE, JAMES H. 100.00 17 2/66 MORRIS, WILKIE MRS. (DECEASED) 16 4/64 MORRIS, WILLIAM H. 115.00 62 10/68 MORRISON, ELIENE . 125.00 48 7/88 MULLENS, DENNIS W. 2,005.35 58 9/90 . OSBURN, EDWARD (DECEASED) 46 5/88 OSBURN, TROY 1,738.46 81 02/01 PHILLIPS,LARRY 2,530.45 53 2/89 POAGE, LARRY 2,147.56 22 4/73 REED, JOE 100.00 30 3/81 SCHADER, EARVEL 1,268.40 41 9/85 SCHADER, TROY 1,395.58 82 03/01 SKELTON,KELLY 1,114.17 •83 03/01 SKELTON, KIMBERLY 1,114.17 23 4/71 SKELTON, LAWRENCE BURL (DECEASED) 66 8/98 SKELTON, PAULINE 390.00 36 5/76 SPRINGSTON, CARL 737.78 90 03/02 STOUT, IMOGENE W. 702.65 25 2/75 STOUT, ORVILLE (DECEASED) 165 12/02 TATE, RALPH 3,356.83 14,930.19 14,842.44 585.00 585.00 24,616.26 20,404.62 17,207.91 13,570.38 585.00 765.00 14,733.90 585.00 0.00 0.00 585.00 3,397.50 14,930.28 8,226.90 14,562.72 17,464.30 21,387.06 585.00 585.00 29,465.37 25,313.94 18,737.10 13,570.38 12,538.62 14,094.00 585.00 3,757.50 585.00 13,570.38 0.00 23,623.92 13,435.47 14,444.28 585.00 10,991.34 10,740.69 26,191.53 585.00 55.00 720.00 810.00 18,048.15 17,986.64 15,646.14 22,774.05 19,328.04 585.00 11,415.60 12,560.22 10 027 53 10,027.53 3,482.00 3,510.00 6,640.02 6,323.85 300.00 350.00 475.38 300.00 287.68 100.00 75.00 200.00 500.00 226.00 700.00 500.00 200.00 240.00 130.00 75.00 325.00 78.16 150.00 150.00 125.00 325.00 200.00 300.00 57.00 125.00 125.00 70.00 30,211.47 300.00 100.00 1,258.91 145.00 1,154.16 100.00 100.00 2,259.76 50.00 1,917.18 1,911.99 50.00 1,170.14 100.00 120.00 1,637.10 100.00 0.00 0.00 100.00 377.50 1,558.92 839.10 15.00 1,403.08 100.00 2,892.86 50.00 2,100.34 100.00 100.00 200.00 2,373.93 100.00 2,212.66 2,081.90 50.00 1,257.82 100.00 1,053.18 1436.00 100.00 417.50 100.00 25.00 1,407.82 0.00 75.00 2,224.88 1,414.67 50.00 1,404.92 100.00 1,071.26 25.00 1,043.41 75.00 2,510.17 100.00 0.00 115.00 125.00 2,005.35 0.00 38.00 1,500.46 2,530.45 100.00 1,747.56 100.00 1268.40 1,338.58 25.00 964.17 25.00 964.17 0.00 390.00 17.00 650.78 702.65 0.00 100.00 2,956.83 DATE OF EMP# RETIREMENT NAME • 26 3/66 TUNE, BILLIE SUE 27 3/71 TUNE, MILDRED MRS. 71 1/00 WARFORD,THOMAS 28 7/68 WATTS, DONALD 59 5/91 WATTS, WAYNE (DECEASED) 88 01/02 WOCD,RONNIE D 52 9/88 WRIGHT, RANDALL DROP DATE DROP EMPLOYEES 02/01/99 05/01/99 04/01/00 07/01/00 01/01/01 03/01/03 03/01/03 03/01/03 04/01/03 LEDBETTER, DENNIS BACHMAN, EDDIE NAPIER,LONNIE REAGAN PETE DOSS,MARION MAHAN, MARSHALL PIERCE, JOEY SHACKLEFORD, GLEN O'NEAL TEDDY REGULAR Year To Date MO BENEFIT REG BENEFIT FED. TAX ST. TAX NET 125.00 125.00 2,290.35 400.00 2,816.02 1,547 82 76,778.97 810.00 810.00 20,61315 3,600.00 25,344.18 __ 13,930.38 693,207.93 300.00 800.00 200.00 8,289.22�- 125.00 125.00 1,990.35 400.00 0.00 200.00 1,816.02 25.00 1,322.82 66, 749.75 NEW BENEFITS 3,455.40 2,396.34 3,219.73 3,235.68 4,920.63 3,731.29 3,337.69 3,337.69 3,771.29 WE, THE UNDERSIGNED, DO SOLEMNLY SWEAR TI -IAT 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 SECRETARY CHAIRMAN AND PRESIDENT ACKNOWLEDGEMENT STATE OF ARKANSAS ) COUNTY OF WASHINGTON) SWORN TO AND SUBSCRIBED BEFORE ME THIS DAY OF . 2003. NOTARY PUBLIC MY COMMISSION EXPIRES : • 6810-9810-5335-00 YTD 693,207.93 • • Office of the Registrar School Code: 001108 KIMBERLY L SKELTON 1659 E ANSON FAYETTEVILLE, AR 72701 • UNIVERSITYq'ARKANSAS orno Enrollment Verification This is to verify that KIMBERLY L SKELTON 3 ■ ■ N ■ ■ 146 Silas H. Hunt Hall Fayetteville, AR 72701 (479) 575-5451 is currently enrolled at the University of Arkansas, Fayetteville was enrolled at the University of Arkansas, Fayetteville. has pre -registered at the University of Arkansas, Fayetteville. has no record of enrollment at the University of Arkansas, Fayetteville. Officially Withdrew enrollment at the University of Arkansas, Fayetteville other: for the Fall 2003 term, extending from 8-25-2003 TO 12-17-2003, for 15 semester hours credit This is full-time. Date: Friday, September 12, 2003 • Seal This certification is valid only when signed by an authorized official of the Office of the Registrar and the certificate is embossed with the seal of the Registrar. RECEIVE• D SEP 15 2003 CITY OF FAYETTEVILLE r -RV CLERK'S OFFICE f OLIDIS p h cir c O 0 0 o '�'.1 » z o w i t vijk i 11IR 5 Vz O .� ^ .J. cD I� 0 5 r p n . 7 J l • t 3 . c on W_ feT ei MA N.„ IN3J4U IOUN310, NOI:LVDLII I3A FAYETTEVI LLE THE CITY OF FAYETTEVILLE, ARKANSAS •KIT WILLIAMS, CITY ATTORNEY DAVID WHITAKER, ASST CITY ATTORNEY DEPARTMENTAL CORRESPONDENCE LEGAL DEPARTMENT TO: Dan Coody, Mayor Police Pension Board Fire Pension Board Steve Davis, Finance & Internal Services Director FROM: Kit Williams, City Attorney DATE: September 8, 2003 RE: GUST Amendment Requirements Attached please find Ms. Longer's letter in response'to,my request for • assistance concerning some possible changes or amendments to pension plan documents. My office does not have the expertise to advise the pension boards on these complex IRS regulations and changing requirements. If our Accountmg Department, which first received the Merrill Lynch notice on August 5th, cannot accomplish whatever is needed, the pension boards need to immediately obtain a CPA or attorney with specialized knowledge and expertise in the area of federal pension funds and the new GUST law: According to the Merrill Lynch notice, all changes must be done by September 30'h (just three weeks away). Pkar\ eAry. _lam"` 1+""tK Merrill Lynch szl""1'h C5'' 2002/2003 GUST RESTATEMENT PERIOD Dear RCMA Plan Sponsor. Retirement Group Mailing address: 1400 Merril Lynch Drive Pennington, NJ 08534 RECEWED AUG 0 2003 ACCTG. DEPT We would like to advise you ofactions you should take to preserve the qualified status of your retirement plan. • As a result of a group of laws referred to collectively as 'GUST", the Internal Revenue Service ("IRS") requires that plan sponsors amend and restate their plan for the changes made by GUST by September 30, 2003: •A review of our records indicates that you are not using a Merrill Lynch prototype retirement plan document. As a result, you are not scheduled to receive a Merrill Lynch Plan restatement package and should work with your plan document provider to take the. necessary steps to amend and restate' your plan to comply with GUST, Plan Sponsors who do:not amend and restate their documents on time risk disqualification of their plan and' substantial taxes and penalties foryou and your employees. Therefore,we urge you to act immediately to amend and restate your plan for GUST. Thank you for your cooperation. If you have any questions, please contact your Merrill Lynch Financial Advisor. Sincerely, Merrill Lynch Retirement Group if you are not the Plan Sponsor, please give this letter to your employer. ROMA = GUSTO' ark L. Martin enneth J Kieklak Stephatti Brady Jungmeyer Aaron L. Martin September 25, 2003 Sondra Smith City Clerks Office 113 W. Mountain Fayetteville, AR 72701 MARTIN & KIEKLAK . Zi%orn ys a/Saw Mailing Address P. O. Box 3597 Fayetteville, Arkansas 72702 Street Address 2059 Green Acres Road Fayetteville, AR 72703 Re: Fayetteville Firefighters Pension Board Meeting Dear Sondra: Telephone: (479) 4422244 Facsimile: (479) 442-0134 RECEIVED SEP 2 6 2003 CfrY OF FAYETTEVILLE • CITY CLERK S OFFICE Facsimile Letter 479-718-7695 And First Class Mail I received the message that you called my office recently to inform us that the next meeting of the Fayetteville Firefighters pension board has been scheduled for October 3, 2003. We are currently working with our expert, Elizabeth Fallc who is the president and founder of Financial Out Source from San Rafael, California. While we expect to receive the final calculations from Ms. Falk in the near future, we will not have that information by October 3, 2003. Therefore, we will not be attending the meeting, as we will have nothing new to report. As soon as we receive the final report from Ms Falk and arbitration papers are completed, I will call you in hopes that a special meeting can be arranged where we will be able to give a final report to the pension board. Thank you for your assistance. Sincerely, �� iLtCr `'sem Mark L. Martin MLM:ejb opetu 105, afl-cio cc: Darrin Williams Chuck Stutte • Arkansas Municipal League August 27, 2003 Honorable Sondra Smith, City Clerk City of Fayetteville 113 W. Mountain Fayetteville, AR 72701 SUBJECT: BALLOT — CASH MANAGEMENT BOARD P.O. Box 38 North Little Rock, AR 72115-0038 Phone: 501-374-3484 Fax: 501-374-0541 www.arml.org The Arkansas Local Govemment Cash Management Trust (CMT) (article IV section 4.2) provides that there be an annual election of trust board members to fill vacancies. The total board membership must be no less than seven or more than nine. There are currently four vacancies. The League's Executive Committee has approved a combination/merger of the newly :formed Pension Management (PMT) board with the CMT board. The PMT has no active members to bring to the merger. Due to the merger and the desire to include PMT participants (likely uniformed employees) on the combined board as new local pension plans Join the PMT, it has been suggested that only two of the four vacancies be filled at this time. • The CMT/PMT joint committee nominates the following individuals to fill two of the current vacancies: • League at: Mayor Jim Dailey of Little Rock (has been on the CMT, term expired May 2003) Clerk / Treasurer Susan Maynard of Cherokee Village APPROVE DISAPPROVE Please vote by filling the above blanks as appropriate and mail back to the ARKANSAS MUNICIPAL LEAGUE Attn: Lori Sander P.O.Box 38 North Little Rock, AR 72115 Sincererours, RECEIVED SEP 0 3 2003 CITY OFFAYET tVILLE CITYCLEHK`3OFFICE ' mmerman President Mayor Robert Patrick St. Charles First Vice President Maya Gene Yarbrough Star City District Vice Presidents District No. 1 District No. 3 Coundlmember Afros Baker White ClerWireasurer Barbara Blackard Helena Clarksvfe District No. 2 Mayor Belinda taForce Searcy District No. 4 Mayor Steve Northcutt Malvern Executive Director Don A. Zimmerman pillsARKANSAS FIRE & POLICE PENSION REVIEW BOARD SEP , 4 223 ,ACCTG. DEPT To: Local Pension Fund Board of Trustees • • • From: Arkansas Fire and Police Pension Review Board Re: 2003 Legislative Changes Date: September 2003 P.O. DRAWER 34164 LITTLE ROCK, ARKANSAS 72203 TELEPHONE: (501) 682 - 1745 Fax: (501) 682 - 1751 email: info@lopfi-prb.com website: www.lopfi-prb.com RECEIVED SEP 3 0 2003 CINOF FAYETIIVILLE CLERKS OFFICE Following is a brief summary of five Acts from the 2003 Legislative Session and an explanation on how to employ them. In each case four steps are necessary to properly implement the provisions of the Act, except for Act 1371, which does not require actuarial soundness. The four steps are: 1) A fund must be actuarially sound, by either test in PRB Board Rule 4. (Act 1371 excepted). 2) Local board resolution, which states the benefit provision to be implemented. 3) Actuanal determination of soundness. (Act 1371 excepted). 4) Notice of approval from local governing body. Act 1278 (Senate Bill 43) Duty Widows and Retiree Rerharriage—Fire Plans If a firefighter dies a benefit is paid to his surviving spouse (50% of pay, if the plan is actuarially sound, $250 per month otherwise) until she dies or remarries, provided they were married at the time of his retirement. In other words, if a firefighter marries after retirement, that widow is not entitled to a survivor benefit. This ' married at time of retirement" is consistent with the other statewide systems, except for municipal polite. Under closed police plans, a widow's benefit is paid to a widow if either (1) they.were actually married at the time of retirement, or (2) if married after retirement, they were married for at least 5 years, and the local plan can actuarially afford to pay such widows. Section 2' of Act 1278 now allows local fire plans to have this same provision as local police plans. In other words, Act 1278 would allow a local fire plan to cover widows, even if they were not married to the firefighter at the time of retirement, provided that (1) they were man-ied at least 5 years, and (2) the local plan can actuarially afford to pay such widows. • Local Pension Fund Board of Trustees September 2003 Page 2 of 3 Section 1 of Act 1278 addresses firefighters who are killed to the line of duty. In such cases, the remarriage "penalty" is removed. In other words, the surviving spouse of a firefighter killed in the line of duty can remarry and continue to receive her benefits. This provision appears to also apply to those surviving spouses whose benefits have already ceased due to remarriage. hi order to reinstate this benefit the local board must approve such action by vote. NOTE• Notification of the reinstatement must be filed with the PRB as part of the annual financial reporting process. Act 1369 (House Bill 1218) 10 -Year DROP—Fire Plans Prior law limited firefighters to a 5 -year DROP. Act 1369 allows a municipality to extend the 5 -year DROP period to 10 years. During the second 5 -year period the member's account is credited with 75% of their monthly benefit, down from the 100% credit of their monthly benefit in the first 5 -year period. The DROP balance continues to earn 2% below the rate earned by the local plan with a minimum rate of 0%. Act 1371 (House Bill 1226) DROP Account left on deposit—Fire and Police Plans Pnor law did not explicitly allow members to leave their DROP account on deposit with the pension plan after they actually Left employment. This Act allows a member that has left the employment of their department to defer receipt of their DROP balance. This is a one=time deferral and the DROP account must be paid out as lump sum or converted to an annuity by December 31 of the year the member attains age 70 %z. The. DROP balance left on deposit continues to earn 2% below the rate earned by the local plan with a minimum rate of 0%. NOTE- This Act does not require actuarial soundness, but does require proper notification filed with the PRB as listed in items 2 and 4 on the first page of this memo. • • Local Pension Fund Board of Trustees September 2003 Page 3 of 3 Act 1372 (House Bill 1228) Continued Employment after DROP—Fire and Police Plans Prior law required a member to separate employment at the conclusion of the DROP period. This Act allows members to remain employed after their DROP period has concluded. During the post -DROP employment several things occur: a. The member contribution to the plan ceases. b. The employer matching contribution ceases, however, other employer contributions continue. c. The member does NOT receive any monthly retirement benefit until actual separation of employment. d. Benefits are no longer added to the DROP account. e. The DROP balance will continue to earn 2% below the rate earned by the local plan with a minimum rate of 0%. Act 1372 also repealed the penalties that previously applied to the second 5 -year period of police DROP. Act 1736 (House Bill 1243) Remarriage Penalty—Fire and Police Plans Prior law required a cessation of benefits if a widow remarried. This Act allows local plans to permit benefits to continue in the event of remarriage. Retroactivity is not mentioned, so it appears this provision is only available to current and future retirees and widows, but not to widows who have had their benefit stopped because of remarriage; however, Act 1278 may apply. Should you need assistance or clarification regarding these Acts please contact Denise Reed at 1-800-482-5850 extension 21745. Also, for a copy of the PRB Board Rules please go to www.lopfi-prb.com and click on the PRB tab. PR B ARKANSAS FIRE & POLICE PENSION REVIEW BOARD P.O. DRAWER 34164 LJTrLE ROCK, ARKANSAS 72203 TELEPHONE: (501) 682 - 1745 FAx: (501) 682 - 1751 email: info@lopfi-prb.corn website: www.lopfi-prb.com To: Local Fire Pension Board of Trustees From: Arkansas Fire and Police Pension Review Board Re: Future Supplement Fund Distribution Date: September 23, 2003 Enclosed is the Future Supplement Fund Distribution for your Fire pension fund. The distribution amount is in accordance with the provisions of Act 1373 of 2003. The amounts listed below are to be distributed equally to each current retiree, beneficiary, or DROP participant as of December 31, 2002. The effective date for the distribution is July 1, 2003. It is important to remember the amount to be distributed in future years will vary. It may increase or decrease; therefore, for ease of administering this supplement we are recommending a single one-time payment be made to each eligible participant. The total amount to be distributed to each paid fire retiree is: $ 218.40 The total amount to be distributed to each volunteer fire retiree is: $ 43.68 Should you have questions please contact Candy Campbell at 501-682-1745. RECPP'fED SEP 2 4 2003 ACC TG. DEPT.