HomeMy WebLinkAbout1981-08-14 Minutesi
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MINUTES OF A POLICE PENSION BOARD MEETING
A meeting of the Police Pension Board was held on August 14, 1981, at
9:00 a.m. in the Office of the Finance Director, City Administration Building,
Fayetteville, Arkansas.
PRESENT: Dan Epperly, Dr. James Mashburn, Eldon Roberts, Ronald Bumpass,
Bob Jones, Scott Linebaugh, and Vivian Koettel
ABSENT: None
INVESTMENTS
Chairman Bumpass called the meeting to order and opened the floor
for discussion on investments in Savings and Loans. Mr. Linebaugh explained
that in order to be insured for more than the $100,000 maximum by FSLIC,
each member covered must be vested, which would mean having twenty years
of service.
Linebaugh reported that the City has pulled completely out of Savings
and Loans now and that the Fire Pension is considering a policy of investing
only the maximum of $100,000 in each Savings and Loan. This would mean a
loss in interest, but should investments be made over the insured amount
and the institution go bankrupt, then an even greater loss would be experienced.
Mr. Linebaugh informed the Board that he was recommending that the Police
Pension invest in Savings and Loans only up to the insured amount of $100,000.
Also, Linebaugh stated that he felt the Police Pension Board should ask
the Savings and Loans to pledge government securities to cover any deposits
which are not insured by FSLIC.
Director Bumpass stated that there are three funds which should each be
eligible for insured deposits of up to $100,000. These are the City's General
Fund, the Police Pension Fund, and the Fire Pension Fund.
Dr. Mashburn.asked if investing in Savings and Loans is a legal action
for pension funds and Linebaugh answered that it is legal for pension funds to
be invested in Savings and Loans but not City funds.
Dr. Mashburn stated that he would like to see the funds invested in the
Savings and Loans which have home offices in Fayetteville, and not the ones
with branch offices only. He said he does not want the funds to be sent
out of the state for higher interest rates, but would like to see the money
used in the Fayetteville and Northwest Arkansas region. Director Bumpass agreed.
Upon further discussion, Dr. Mashburn moved that funds be invested in
Savings and Loans with home offices in Fayetteville up to the insured amount
of $100,000, that the City Funds be separated from the Police Pension Funds
as discussed, and that the Savings and Loans be asked to pledge government
securities for any deposit not insured by FSLIC. Mr. Epperly seconded the
motion and the motion passed unanimously.
PAYMENT FOR ACTUARIAL VALUATION
Mr. Linebaugh stated that he had received a statement from Benefit
Administration Services, Inc. for payment of the actuarial valuation and
certification. The amount of the original statement was $640.20. However,
Linebaugh stated that he had talked to Bob Hall, and the amount to be paid
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-Minutes-
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is $490.20. The Board was promised that the charge for this service would
not be more than the charge if the Municipal League had performed the service.
Dr. Mashburn, seconded by Roberts, moved that payment be authorized in
the amount of $490.20 as recommended by Treasurer Linebaugh.
The motion passed unanimously.
PENSION LAWS
Linebaugh stated that no Attorney General's opinion had yet been
received an the case of the amount of pension for Karen McWhorter. At the
present time she is receiving the $250.00, with the understanding that if
the Attorney General rules that she should be receiving more, then she
will receive backpay.
ACTUARIAL STUDY
Discussion was held on the actuarial study which showed that the pension
fund is not actuarially sound, but probably should be within two years.
At the present time more money is being paid out than is being contributed.
The amount paid in will change in 1982. The policement will put in 6% and
the City will be required to contribute 3%, with a 1% increase each year
until the City is also contributing 6%. Also, funds should be received from
the liability insurance premiums in the State.
It was decided that a letter should be written to the persons retired,
explaining to them that the fund should be actuarially sound in a few years
and then the Board would have the option of increasing benefits.
Discussion was also held on the new pension fund to go into effect.
Linebaugh explained that all new policemen would be in the new police pension
controlled by the State beginning in 1983.
Chief Jones explained that under the new pension plan, an officer cannot
retire after twenty years of service, but must at least be 55 years old. The
Board -discussed this and decided to try and get an opinion fromithe Board of
Directors on trying to get legislation to change this back to twenty year
retirement.
BONDS
Discussion was held on the bonds which the Police Pension Fund has that
are not legal. The Board asked Linebaugh to check again with the authorities
on this and get some idea on the bond market and how much money would be lost
if the bonds are sold now. Also, discussion was held on how long it would
take to recover a loss if one was experienced now.
ADJOURNMENT
There being no further discussion, the meeting adjourned.