HomeMy WebLinkAbout1992-07-31 MinutesMINUTES OF A SPECIAL MEETING OF THE POLICE PENSION BOARD
A special meeting of the Fayetteville Police Pension and Relief
Fund Board of Trustees was held on Friday, July 31, 1992, at 9:00
a.m. in Room 326 of the City Administration Building, 113 W.
Mountain, Fayetteville, Arkansas.
PRESENT: Eldon Roberts, Rick Hoyt, and Jerry Friend; Retiree
Hollis Spencer; Dr. James Mashburn; Administrative
Services Director Ben Mayes; and City Clerk Sherry
Thomas.
ABSENT: City Manager Scott Linebaugh
STATE INSURANCE TURNBACK
The meeting was called to order by Director of Administrative
Services Ben Mayes. He explained the reason for this meeting was
to discuss the State insurance turnback received a few days after
the last regular Police Pension and Relief Fund Board. The amount
of the turnback attributable to the Police Pension Relief Fund was
$150,011.74, compared to $115,000 in 1989, $130,000 in 1990, and
$135,000 in 1991. He reported that in addition to the $150,011.74
in the bank, the fund already had approximately $30,000 in an
interest .bearing account earning 3 to 31/2%. In addition, Dean
Witter is holding approximately $170;000 in their cash management
account, after withdrawal of the $200,000. Combined, there were
total funds of $350,000.00 of liquid assets. Mayes stated they pay
out approximately $22,000 per month for pension. October and
November will produce the next big influx of monies with property
taxes of approximately $85,000 to $90,000 and will coincide with
the next regular board meeting. Mayes stated the purpose of this
meeting was to discuss the possibility of giving another $150,000
to $200,000 to Longer Investments or Acorn or divided between the
two. He reported the board voted at their last meeting to give
both Acorn and Longer Investments $100,000 each. Mayes suggested
they maintain $100,000 to $150,000 in the cash fund, and invest up
to $200,000.
In response to Hoyt's question regarding whether they could
maintain their ratio if they repeated their actions from the
previous meeting by giving $100,000 each to Longer Investments and
Acorn, Ben Mayes explained that it was hard to tell since Acorn is
a balanced account, while Longer Investments is not, even though it
is the highest equity and maintains some fixed income. He stated
the fund's ratio policy is between 20% and 40% and had reached 33%
at the last meeting. Therefore, the suggestion to give $100,000
each to Acorn and Longer Investments would keep them within 40%
maximum. At the last meeting, Longer Investments had $150,000 and
Acorn $380,000 in fixed income. Mayes suggested that they take
$150,000 of the City's and $50,000 of Dean Witter's cash management
accounts and give it to one of the managers, either Acorn, Madison
or Longer Investments.
•
•
Hoyt, seconded by Spencer, made a
Investments and $100,000 to Dean
motion passed unanimously.
motion to give $100,000 to Longer
Witter to place with Acorn. The
Ben Mayes verified that he would remove $150,000 from the checking
account and $50,000 out of Dean Witter, which would give them the
$200,000 to invest. This would leave $30,000 in cash in the bank
and $120,000 in Dean Witter's management account for a total of
$150,000.
MEETING DATE CHANGE
City Clerk Sherry Thomas announced that the next regular Police
Pension and Relief Fund meeting would be held on October 29th at
2:00.
BENEFITS INCREASE
In response to Hoyt's question, Ben Mayes verified that the actuary
report they recently received was their regularly scheduled two
year report through the end of 1991. The special actuary report
that they requested 11 years ago cost them approximately $2,500.
Hoyt asked if they would benefit by spending little money around
January 1993, and run a special actuary report at that time to see
if they were actuarially sound.
Ben Mayes responded that it would depend where they were in the
market. If Longer Investments cashed in all their monies, the fund
would be sound for that day. He suggested they may want to request
a cash flow analysis, to determine what they needed to earn to be
actuarially sound by the year 2003. Mayes stated they were
projected to have assets of $5,125,000 at the end of 1992. He
stated that an update is required on the off years for financial
statement disclosure, and they may be able to obtain an actuary
report for something less than $2,500.
Hoyt stated if they do request such an actuary report, he would
like to see it done in a format like the other state systems when
they request scenarios to be drawn of possible increases for the
retirees.
Roberts stated at one time, they were discussing the possibility of
raising the minimum to $350.00 for the 12 to 14 retirees. For a
very little amount, the fund could make a big difference to these
retirees.
Ben Mayes explained that they cannot raise their benefits until the
fund is considered actuarially sound. At the end of 1992, they
would need to be at 50% of cost at the last figure.
• Hoyt suggested that they raise the minimum to $350 which would help
11 retirees, and then give a percentage raise to everyone else.
July 31, 1992
Hoyt suggested the actuary should address the different scenarios
of 1) raising the minimum; 2) raising the minimum for the eleven
retirees, and a percentage for the rest; and 3) do all of that,
plus an additional amount.
Hoyt reminded the board that LOPFI, the state pension system, in
past years the City paid 16.52% as their share of salaries to the
state system, compared to this year at 11.56%. The City raised the
Police Pension & Relief Fund Board's active members to 12%, which
is higher than they pay to other funds.
Roberts suggested they should be advising the City Board members of
how well the actuary for the Police Pension & Relief Fund Board is
doing, and express appreciation for their contribution, which is
more than required.
Ben Mayes stated that this information would be provided to the
City Board in their report packet.
Roberts reported
reaching actuary
across the board
following year.
Pension & Relief
sound status.
that the Fire Pension & Relief Fund Board upon
soundness at one time, granted benefit increases
of $100 one year, $200 the next year, and $50 the
He further stated his understanding that the Fire
Fund Board had since returned to an unactuarially
Ben Mayes stated that the Fire Pension & Relief Fund Board was at
31% in 1989.
Dr. Mashburn stated this is the reason he would like to see raising
the minimum for widow's benefits to start with, and then maybe give
a percentage increase to others at a later date.
ADJOURNMENT
The meeting adjourned at 9:36 a.m.