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HomeMy WebLinkAbout1985-05-02 MinutesMINUTES OF A POLICE PENSION FUND BOARD MEETING A meeting of the Police Pension Board was held on Friday, May 2, 1985 in Room 313 of City Hall. PRESENT: Pension Board Members Ron Bumpass, Dan Epperley, Scott Linebaugh, James Mashburn, Eldon Roberts; Police Chief Bob Jones, City Clerk Suzanne Kennedy CALL TO ORDER The meeting was called to order by Ron Bumpass at 9:20 A.M. APPLICATION FOR PENSION: R..D,. ARNOLD The Board considered R. D. Arnold's request that hee-be paid retirement benefits based on his highest compensation year which he feels should be 1984, including overtime. Finance Director Scott Linebaugh noted that the law does not define "the highest compensation year". Linebaugh quoted from the letter in the agenda from the Special Assistant Attorney General George Harper dated September 13, 1982 where he states, "The statute has been amended to change the term "half—pay" to its current language...Therefore, overtime pay would also now appear to be included...Sick leave could not be construed as compensation since it is only used if one is sick when he or she would otherwise be compensated." Linebaugh pointed out that the state legislature never intended for overtime to be included when determining pension benefits and that they are now amending the law to clarify the meaning of compensation for purposes of determining benefits. Linebaugh noted that a copy of House Bill 96 is included in the agenda. Linebaugh quoted from the Fayetteville City Attorney's letter in the agenda dated April 26, 1985 where he states, 4- " If retirement occurred after the effective date of the 1985 Amendment, overtime pay should not be included. If retirement occurred before the 1985 amendment and after the 1957 amendment, ovetime pay should be included. If retirement occurred before the 1957 amendment, overtime pay should not be included." • • Police Pension Fund Board May 2, 1985 Page 2 Director Bumpass quoted from House Bill 96 which states, "The term salary, as used herein, shall mean regular salary only, and shall not include overtime pay, payments for unused accrued sick leave or annual leave, of the cash value of any non-recurring or unusual remuneration. Provided, that the overtime exclusion shall not apply to a benefit computed at any time on a salary year prior to the effective date of this Act. Provided, the minimum monthly pension paid to said retired members shall not be less than the amount presently' provided by law." After considerable discussion, and it being the consensus of the Board, the following motion was made by Dan Epperley, seconded by Mashburn, and passed unanimously: That the Board recommends Arnold's retirement be based on his 1985 base pay, of $1,676 per month, as this is the procednie this Board has followed for the past 15 years. APPLICATION FOR PENSION: GENE•PHILLIPS The Board considered Gene Phillips' application for retirement. It being the consensus of the Board, the following motion was made by Roberts, seconded by Epperley, and passed unanimously: That the Board grant retirement to Gene Phillips based on his 1985 base pay of $1,676 per month. FINANCIAL STATEMENT FOR 1984 Linebaugh reviewed the Police Pension Financial Statement for 1984 concerning the assets and amount expended for pension benefits and other miscellaneous charges. Linebaugh noted a correction to the Balance Sheet, in that Income Control and Expense Control should each show -0-. Ron Bumpass asked about the policy on securities and Linebaugh explained that the city's policy is stated in a letter to the bank or savings and loan association that any investment over $100,000 must be col- lateralized, or pledged, and the city must hold a safekeeping receipt, meaning securities may be released only with the permission of the city. Linebaugh added that he is in the process of getting a ruling on a new interpretation that $100,000 of FDIC insurance is "per organi- Police Pension Fund Board May 2, 1985 Page 3 zation". Linebaugh explained that he would. obtain a ruling on whether the city and the pension fund are considered to be one organization or separate organizations. Epperley, seconded by Roberts, made a motion to appiove the management of the fund for the past year and the status of the current investments. The motion passed unanimously. INVBSTMENTS'FOR 1984 AND THROUGH MARCH,1985 Linebaugh reported that the city has saturated the local banks with ,_investments to the point that they aie purposely bidding low interest .rates because they don't want to be awarded the investments. Linebaugh made the following recommendations: That the Board get into the governmental securities market by investing in Treasuiy Bills and Notes with six-month coupons. Linebaugh reported that these securities are currently paying 10.77%. 2. That the Board invite other local savings and loan associations to bid on our investments, such as First South whose financial situation Linebaugh has reviewed. Linebaugh also raised the matter of whether or not to consider hiring an investment firm to handle the investments. Linebaugh pointed out that most investment firms deal in stocks which he felt was too speculative for pension fund moneys. Ron Bumpass suggested the Board consider investments at county banks, such as the Bank of Lincoln. Eldon Roberts commented that he had no problem with investing in Treasury Notes or Bills but didn't want to get involved with investment firms. Linebaugh explained that Treasury Notes or Bills would be purchased through the local banks from the Federal Reserve Bank; that the fund would have to pay some accrued interest which would come back later. Linebaugh also recommended that no more than 30% of the fund's assets go to long-term investments, because of the current interest rate structure. Dan Epperley commented that he thought there would be a greater burden placed on Linebaugh if the Board should decide to approve the recommen- • • Police Pension Fund Board May 2, 1985 Page 4 dations and he asked that the Board be kept more informed by scheduling quarterly meetings. After further discussion, and with no objections expressed, Surpass noted it was the consensus of the Board that Linebaugh be authorized to include a number of County banks on.the bid list and is authorized to invest up to 302 of the fund in Treasury.Bills for terms no longer than five years. CHANGE IN MEMBERSHIP OF BOARD Eldon Roberts reported that House Bill .24_which is expected „to. pass sometime in June will require that the Police Pension Fund Board membership be made up of the following: The chief executive officer of the municipality The Finance Director Four police officers to be elected by members of the Board, one of which is to be a retired officer A physician to be elected by the chief executive officer and the Finance Director Roberts pointed out that this law would eliminate Dan Epperley's position ADJOURNMENT With - no further business, the meeting adjourned at about 11:00 A.M.