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HomeMy WebLinkAbout1986-07-17 Minutes• • 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%. 40+ • 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. • • 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. • 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.