HomeMy WebLinkAbout1986-07-17 Minutes•
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MINUTES OF A POLICEMEN'S PENSION BOARD MEETING
A quarterly meeting of the Policemen's Pension Board was held on
Thursday, July 17, 1986 at 4:00 p.m. in Room 326 of City Hall.
PRESENT:
Pension Board Members Don Grimes, Rick Hoyt, Scott
Linebaugh, Mike Mitchell, Eldon Roberts and Hollis
Spencer; City Clerk Suzanne Kennedy
ABSENT: Dr. James Mashburn
Call to Order
The meeting was called to order by City Manager Grimes.
Minutes
The minutes of the May 13 and May 20 meetings were considered. It was
moved by Spencer and seconded by Roberts to approve the minutes. The
motion passed, 5-0-1, with Grimes abstaining because he had not been
present at those meetings, and with Mashburn absent.
Pension List
It was noted that there were no changes to the Pension List.
Investments
Linebaugh distributed information on investments made up to June 30,
1986 by the City staff. The Board considered approval of these
investments as well as investments made by A. G. Edwards and Merrill -
Lynch.
It was moved by Eldon Roberts and seconded by Hollis Spencer to approve
investments made by the City, and by A. G. Edwards and Merrill -Lynch to
date. The motion passed, 6-O.
Linebaugh reported that corporate bonds which were sold on May 25 had a
face value of $279,000 and were sold for $225,779. Linebaugh noted
that this sale was made for almost $5,000 better than was anticipated.
Linebaugh reported the proceeds were used to purchase Treasury
obligations earning 8.06%.
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Police Pension Board
July 17, 1986
Page 2
Linebaugh asked the Board to decide how to invest approximately $2
million in funds remaining beyond the $1 million being handled by the
investment firms. Linebaugh noted that there had been discussion
regarding turning more funds over to a money manager in a more
conservative account, or investing in Treasury obligations. Linebaugh
reminded the Board that the staff cannot handle any investments other
than Treasury obligations, Zero coupons or State bonds, without working
through a money manager. Linebaugh noted that interest rates on such
investments are now quite low.
Mike Mitchell commented that investing in Zero coupons would be safe.
Linebaugh recommended that, if the Board chooses to invest in this way,
they should consider changing the policy to open up investments to any
U. S. government -backed security.
Mitchell suggested since the Board had already decided to use both A.
G. Edwards and Merrill -Lynch to invest $1 million, that this policy
should be followed again with any further investments.
Eldon Roberts asked how much of the fund the Board wished to invest.
He suggested an additional $1 million be invested.Linebaugh agreed
and suggested the Board obtain quotes from both investment firms in
order to obtain the best deal. Mitchell said he did not think it a
good idea to continue to pit both firms against one another. Linebaugh
explained that obtaining competitive quotes has been the standard
practice of the City of Fayetteville in working with banks and savings
and loan associations. After further discussion, the Board seemed
generally in favor of the idea of obtaining quotes.
Grimes asked for a motion to authorize the Finance Director to invest
the funds, as they mature, in any U.S. government -backed security, by
taking quotes from A. G. Edwards and Merrill -Lynch.
Rick Hoyt, seconded by Mike Mitchell, made the motion as stated by
Grimes. It was clarified that $1 million would be invested. The
motion passed, 6-0.
Pledging policies
Linebaugh informed the Board that the City is changing its pledging
policy, and will be asking the Pension Board sometime in the near
future to change its pledging policy. Linebaugh explained the City's
new policy will allow any political subsidy group to pledge any U.S.
Treasury obligation, any Arkansas obligation, any municipal obligation,
and any C.D.'s which are $100,000. Linebaugh said this would be
explained in more detail at a future meeting.
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Police Pension Board
July 17, 1986
Page 3
Turnback Funds
Eldon Roberts reported a check had been received from the State
Insurance Commissioner in the amount of $113,927.93. Roberts noted
that some of the money must be sent back to Little Rock for the new
pension program. Linebaugh explained that, on June 30, there were 49
employees in the Police Department, 19 of whom belong to LOPFI.
Linebaugh said that, based on that percentage, $44,176.14 goes to LOPFI
and the City retains $69,751.79.
Holiday Pay Lawsuit
Eldon Roberts said he had been contacted by some older retirees who
have been involved in receiving money as a result of the holiday pay
lawsuit. Roberts said these persons want to know where they stand on
receiving a raise in their retirement benefits. Roberts said there
were five or six retirees who were working during the years covered by
the lawsuit, and there is some question as to whether additional pay
from the lawsuit makes their yearly salary larger.
Actuarial Study
Linebaugh reported on the expense for obtaining a special actuarial
study, from cost information obtained from several firms:
Wyatt Company, Memphis Tn.
Benefit Administration Services, L.R.
Werntz & Associates, L.R.
J. W. Emming
Pension Actuarial Consultants
$2,500-$3,500
$1,500-$2,000
$800-$1,000
$700 + minimum of
$15 per participant
$1,900
Linebaugh reported the last State actuarial study cost approximately
$350.
Linebaugh asked the Board if they felt
Gabriel, Roeder, Smith & Company which
studies and which would probably be less
Linebaugh said the names of other firms
Hall Consulting.
comfortable with the firm of
conducts the State actuarial
expensive.
were given to the staff from
Grimes asked for a motion that Linebaugh and Hall be asked to check on
the firm which submitted the low quote and, if they feel confident, to
then ask them to proceed with an actuarial study as quickly as they
can.
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Police Pension Board
July 17, 1986
Page 4
Linebaugh suggested that, after checking with Hall, Kathryn Hinshaw
should be contacted to make sure she has no problems with the firm.
Hollis Spencer moved the recommendation as stated by Grimes. The
motion vas seconded by Roberts and passed, 6-0.
Grimes suggested, if everything checks out, a memorandum be distributed
to inform the Board.
Adjournment
It was moved by Spencer, seconded by Roberts, and passed, 6-0, to
adjourn the meeting at 4:45 p.m.