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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.