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HomeMy WebLinkAbout1984-09-25 MinutesMINUTES OF A POLICE PENSION FUND BOARD MEETING A meeting of the Police Pension Board was held on Vednesday, September 25, 1984 in Roan 313 of City Hall. PRESENT: Pension Board Members Don Grimes, Scott Linebaugh, Lt. Eldon Roberts, Sgt. Rick Hoyt, Sgt. Mike Mitchell, Hollis Spencer CALL TO ORDER The meeting was called to order by Don Grimes at 4:00 P.M. APPROVAL OF MINUTES The Board reviewed and approved the minutes of the May 2, 1985 meeting, with the following corrections and changes: Page 4 - Change In Membership of Board (1) Line 6 which reads "Four police officers to be elected by members of the Board. . ." should read "Four police officers to be elected by members of the Police Department . . ." (2) Line 8 which reads "A physician to be elected by the chief executive officer and Finance Director" should read "A physician to be elected by the Board." (3) The last line in this section which states: "Roberts pointed out that this law would eliminate Dan Epperley's position" should also indicate that Ron Bumpass' position is also eliminated. ADDITIONAL $5 PER MONTH: GENE -PHILLIPS The Board considered Gene Phillips request that he be paid $5.00 per month for one year extra service retroactive to his retirement date of May, 1985. With no discussion on this matter, Sgt. Hoyt, seconded by Lt. Roberts, made the following motion: That the Board grant Gene Phillips the additional $5.00 per month for the extra year of service retroactive to his retirement date of May, 1985. The motion passed unanimously. PENSION FUND RECIPIENTS LIST The Board reviewed the list of present Pension Fund recipients. It being the consensus of the Board, the following motion was made .by Lt. Roberts, seconded by Sgt. Mitchell, and passed unanimously: That the Board accepts the pension list. • Police Pension Fund Board September 25, 1985 Page 2 REPORT OF PENSION FUND ASSETS The Board considered the report of Pension Fund Assets. Finance Director Scott Linebaugh noted this is a statement as of August 31 and shows the total investments at that time. Mr. Grimes stated that according to his calculations, if this statement represents 2/3 of a year and adding another 1/3 of a year based on the $359,253 fund total, after deducting expenses, it appears we are accumulating funds at the rate of about $338,000 per year. Linebaugh concurred with this. Linebaugh pointed out that we just got more money than we anticipated getting in Municipal Court, not because the judge is collecting more but because of a split -out that has been made in the computer system. Grimes asked whether the pension share comes out of the court cost. Linebaugh answered affirmatively. Sgt. Hoyt, seconded by Lt. Roberts, made a motion that the report on Pension Fund Assets be accepted. The motion passed unanimously. PENSION FUND INVESTMENTS The Board considered for approval two schedules of Police Pension investments. Finance Director Linebaugh pointed out that the schedules show all investments made from January to September 19, 1985, but the only ones the Board needs to act on are the ones dated from May 1st to now because the last Pension Board meeting was held in May. Linebaugh stated that these investments are made following the policy that the "old Pension Board" passed which includes investing in treasuries, savings and loans, and banks, depending on which one bids the highest interest rates. Linebaugh also noted that the Pension Fund now has the potential to earn more because it can now go into more different types of investments. He suggested that the Board look into investing with money managers or federal government pools. The federal government pools do not charge a fee as they are invested through a bank and would earn higher interest than we get on some of the local banks. Linebaugh went on to explain the investment process and concluded that all investments are backed by the Government. • Police Pension Fund Board September 25, 1985 Page 3 Mr. Grimes noted that since all investments must be secured this becomes a burden for the financial institutions. Linebaugh stated that the Federal Deposit Insurance just covers the fund as a lump because it secures only up to the vested amount. If a police officer leaves before his 20th year, he will not receive anything frau the Police Pension Fund except his own contribution. He is therefore not considered as vested until that point. Lt. Roberts noted that a law was passed stating an officer can get out of police work at 10 years,leave his contributions in the fund, and be vested and draw his retirement at the age of 55 if the fund is actuarily sound. Sgt. Mitchell addressed the Board about the use of money managers and asked Linebaugh to elaborate on how these work. Linebaugh stated you have to pay two different fees, one to the money manager and one per transaction. This averages out to about 3 1/2% of the fund's assets to the money manager. Linebaugh also stated that he could set up interviews with some money managers for the Board. He also noted that if we decide to use a money manager, the Board should diversify and invest some money in treasury, some with banks and sane with a money manager. Linebaugh then noted that the Board could go to a Double A or Triple A insurance company and get a guaranteed interest which would be a pretty safe investment. After considerable discussion, and it being the consensus of the Board, the following motion was made by Sgt. Hoyt, second by Lt Roberts, and passed unanimously: That the Board approves the investments made from May 1 to September 19, 1985 and that Finance Director Linebaugh is directed to continue with the present policy on investing. RE-ITRalENT CREDIT: JERRY SURLES The Board%considered the request by Jerry Surles that he be given credit for 17 months active duty time with the Washington County Sheriff's Department without being required to pay any additional money into the Pension Fund. Linebaugh pointed out that at the April 22, 1983 meeting the Board voted to adopt a resolution which would allow Washington County Sheriff's Department time but would require the officer to make contributions to the Police Pension Fund for that time used. The resolution also stated that Washington County Sheriff's Dept. time would not be allowed for new employees hired after September 1, 1979. He responded to a question stating that City Attorney Jim McCord rendered an opinion on the legality of this which stated it is completely within the rights of the Board to do this. • rilh • Police Pension Fund Board September 25, 1985 Page 4 After considerable discussion, and it being the consensus of the Board, the following motion was made by Mr. Grimes, seconded by Mr. Linebaugh, and unanimously passed: That the Board will grant Mr. Surles retirement credit for active duty time with the Washington County Sheriff's Department if the additional money is paid into the Pension Bind at 6% of his present salary. ACTUARIAL VALUATION REPORT The Board reviewed the Actuarial Valuation Report. Linebaugh summarized the report and it was agreed that the Board cannot grant additional benefits until the fund is actuarily sound. Linebaugh also pointed out that although the plan is not actuarily sound, that does not mean that it is in trouble. With considerable discussion on this matter, there was no action taken. PENSION BDARD MEMBER: PHYSICIAN The Board discussed appointing a physician to the Board as is required by law and some members of the Board commented that Dr. James Mashburn, who was a member of the "old Board" is very well qualified for this position. Hollis Spencer, seconded by Sgt. Hoyt, made a motion that Dr. Mashburn be designated as a Board member. The motion passed unanimously. PENSION BDARD MEMBER: SECRETARY As required by law, the Board must select one of the police members as secretary of the Board to serve for a period of two (2) years, as noted by Lt. Roberts. A motion was made by Sgt. Hoyt and seconded by Mr. Spencer that Lt. Eldon Roberts be designated as secretary to the Police Pension Board. The motion passed unanimously. • Police Pension Fund Board September 25, 1985 Page 5 F01URE MEETINGS The Board considered when would be a suitable time for future meetings. Mr. Grimes pointed out that the minutes from the last meeting indicated. a suggestion that the Board meet quarterly. After further discussion, and with no objections expressed, it was the consensus of the Board that future meetings will be held quarterly on Wednesday afternoon at 4:00. OTHER BUSINESS: ELECTION PROCEDURE Sgt. Hoyt stated that the Board at some time needs to address the issue of haw to handle the nextelection of the police members. It was suggested that ideas could be sent to an impartial party, such as the Personnel Director and she could suggest some guidelines to follow. Lt. Roberts suggested that the Board should have some election rules and regulations in writing. POLICY Lt. Roberts reported that Chief Jones would like the Board to adopt a policy stating that once a person presents a retirement application to the Board, that the Board has to act on this application within a certain amount of time. A motion was made by Sgt. Hoyt and seconded by Lt. Roberts that future retirement applications will be acted on within 30 days. The motion passed unanimously. RETIRED OFFICER MEMBERSHIP Lt. Roberts noted that the law does not clarify how the retired officer is to be elected to the Board. He suggested that the retired officers should be allowed to elect their awn member. Mr. Grimes stated that he agreed with this as long as the retired members are active. Roberts suggested the Board think about this issue and it be addressed at the next meeting. ADJOURNMENT With no further by Lt. Roberts, at approximately business, a. motion was made by Sgt. Hoyt, seconded that the meeting be adjourned. Meeting adjourned 5:30 P.M.