HomeMy WebLinkAbout1994-10-19 - Agendas - Final FAYETTEVI LLE
*E CIT/ OF FAYETTEVILLE, ARKANSAS TRACI PAUL, CITY CLERK
TO : Polimen ' s Pension Board Members
FROM : Traci Paul , City Clerk TP
DATE : October 19 , 1994
SUBJECT : Next Meeting
Attached is a copy of the minutes from the July 21 , 1994 , meeting
and an agenda for the next meeting . The next meeting will be on
Thursday , October 27 , 1994 , at 2 : 30 p . m . , in room 326 of City
Hall .
• Attachment
c : Mayor Fred Hanna
Glyndon Bunton
Eldon Roberts
Dr . James Mashburn
Clint Hutchens
Jerry Friend
Hollis Spencer
113WESTMOUNTAIN 72701 501575.8323
AGENDA
POLICEMEN ' S PENSION AND RELIEF BOARD
October 27 , 1994
2 : 30 p . m .
City Hall Room 326
1 . Approval of the minutes of the July 21 , 1994 meeting
2 . Old Business
3 . New Business
A . ELAINE I.AO " (:rE1?
B. MjKE: KIIZKLgn1D
4 . Adjournment
5
MINUTES OF A POLICE PENSION , BOARD MEETING
A meeting of the Police Pension Board was held on July 21 , 1994 , at
2 : 30 p . m . in Room 326 of the City Administration Building , 113 W .
Mountain , Fayetteville , Arkansas ,
PRESENT : Eldon Roberts , Jerry Friend , Hollis Spencer , Clint
Hutchens , Dr , James Mashburn , Mayor Fred Hanna , Deputy
City Clerk Lois Day , City Treasurer Glyndon Bunton , and
Administrative Services Director Ben Mayes .
ABSENT : City Clerk Sherry Thomas
CALL TO ORDER
The meeting was called to order by Mayor Hanna ,
MINUTES
Roberts stated the Mayor called the meeting to order and not him .
With this change , Roberts , seconded by Mashburn , made a motion to
approve the minutes . The motion passed unanimously .
OLD BUSINESS
• ELECTIONS
Roberts stated Jerry Friend was reelected for a two year term , May
of 1996 , to the Pension Board .
NEW BUSINESS
LONGER INVESTMENTS REPORT
Longer stated the interest rates on short term maturities have been
going up . Part of the reason is because the Federal Reserve keeps
tightening credit . This keeps applying pressure to the stock
market on the favorable side of the market .
With interest rates rising , we have been keeping cash reserves to
be able to take advantage of that . We have added quite a bit on
the income side of the portfolio , and have built in a lot of
flexibility .
The overall income yield on the portfolio is about 4 . 6% on market
value and about 4 . 75 % on book value . Government notes and bonds
make up about 40% of the portfolio .
The stock portfolio report shows about 73 % of it is in equities .
We have purchased 2 and 3 year treasuries that are easily
convertible to cash . The overall market value of the stock part of
• the portfolio is $1 . 906 million with a yield of 3 . 4 % on the market
value . The S &P yield for the same time was 2 . 4 $ .
July 21 , 1994
• Longer stated the stock portfolio consists of 14 . 28 in large
capital growth stocks and 16 . 48 in small capital growth stocks .
Corporate bonds represent about 318 of the total bond portfolio .
Treasuries represent . about 578 , and the average yield is 6 . 88 on
market value . The weighted average maturity of this bond portfolio
is about 6 . 8 years . The bond portfolio is down about 4 . 18 . But ,
the interest is still coming in .
The stock account is down 6 . 78 year to date , and the bonds are down
4 . 18 . The combined account is off 5 . 6 $ on market value . The
income brought in during the rest of the year will help offset that
decline . The account is still having a positive return of 4 . 68 .
There are about $85 , 000 of realized gains . The S &P 500 is off
about 2 . 78 , and the over the counter index is down about 7 . 48 .
From inception to date , the equity account is 39 . 28 , with an
average annual return of 9 . 88 . The bonds have had an annual return
of about 9 . 98 . The total account is about a 32 . 28 , with an average
annual return of 8 . 08 . These figures are net of all expenses .
About 548 of the total portfolio on the equity side is small to
medium capitalization companies .
• Bunton stated he had heard concrete was being rationed . He asked
if there were any investments in that market .
Longer stated she did not believe there were any in this portfolio .
The total portfolio annual income is $ 140 , 137 , or 4 . 68 . The cash
flow for the account has improved .
The management fees year to date have been $ 15 , 519 . 36 , custody fees
have been $2 , 818 . 50 , commissions are $8 , 270 . 72 making a total
expense of $26 , 608 . 72 . She stated earnings growth have been great
this year . Volatility will continue in the bond market until the
Federal Reserve tightening loosens . She stated the dollar decline
is inflationary .
Dr . Mashburn stated he understood as long as the fund was getting
a 5 -68 return , the fundwould be financially sound . So he feels
the fund is earning sufficiently .
Longer stated that was correct if you only want to meet your
expectations . However , if you want to try and get more money for
the retirees , investments need to be made to earn greater than that
required .
Ben Mayes stated the account was at 488 funded , and it is supposed
to be 558 as of December 31 , 1993 . The actuarial allowed 758 of
• the market value to be used instead of cost .
July 21 , 1994
Friend asked if the law that stated the pension funds could not
invest in companies doing business in South African has been
changed .
Longer stated she was not aware of any change . However , this is
not causing any problems at this time .
Mayes stated there was a new Investment Advisor Agreement that
needs to be signed . Friend , seconded by Bunton , made a motion to
authorize the Mayor to sign this agreement . The motion passed
unanimously .
DEAN WITTER INVESTMENT REPORT
Mike Kirkland stated the cash account has $92 , 151 in the money
fund . There is $ 180 , 000 in CD ' s earning 8 . 025% .
The S&P 500 is down about 3 . 4 % for the year . The portfolio is down
about 43 . So , it is doing about the same as the markets . He
stated there are a lot of good companies in the portfolio . Several
of them are more growth oriented companies . The TCW account is
valued at $ 1 , 503 , 964 .
Roberts asked Kirkland to check into the law regarding investments
in South African affiliated stocks .
• Kirkland stated they feel short term interest rates will go higher .
They feel this will be a positive to the stock market .
Kirkland stated the Madison account is down 1 . 2 % for the year .
There have been three consecutive down markets in the bond market .
This has not happened in quite a while . However , the other
comparable indices are down 2 -3 -4 times more . So , they feel
Madison ' s strategies have worked to keep the decline less than the
norm this quarter . Kirkland stated he feels they have done a
pretty good job holding the values . Regarding inflation , it is
thought interest rates going up will help this .
The longest maturity Madison has is 10 years . The average maturity
on the portfolio is about 3 -4 years , so it is pretty conservative
duration wise .
ACTUARY REPORT
Mayes stated the actuary report states the fund is at 48 % sound ,
and it is supposed to be 55 % sound .
Roberts stated the fund is actually losing ground because in 1991 ,
the fund was only 4 % away from the required percentage . He asked
what has contributed to make the fund go down hill .
• Mayes stated the active member contribution is declining . There
v
C
i
July 21 , 1994
w, are more retirees . And third , the valuation of assets has
increased significantly over the last two years , but the fund ' s
actuarial liability has gone up .
Dr . Mashburn asked how many active people were contributing .
Roberts stated there are 16 active police employees on this plan .
Dr . Mashburn stated he feels the pension board should just continue
as is with the investments that it currently has and ride out the
storm .
Mayor Hanna stated if the pension _ funds get into a real jam , he
feels the citizens would vote to increase the millage allocation to
the police and fire pension funds . He feels the City has a place
in the tax structure , and the schools are asking for 4 mills at
this election . He feels this request by the school will set a
precedent by special interest groups to get a millage increase
election before the people .
ADJOURNMENT
The meeting adjourned at 4 : 27 p . m .
•
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y
•
October 14 , 1994
Board of Trustees
Police Pension & Relief Fund
Fayetteville , Arkansas 72701
Dear Members ;
Recently I discovered that I should be entitled to additional benefits
e regards to t_ hc pension that I ' m currently receiving . from the rolice
Pension by buying two y _ ars of my military time ( USMC from May 60 to
May 64 ; DD- 214 included ) . This is reference Arkansas Code 24 - 11 - 418
( as amended in 1991 ) particular ( 3 ) ( B ) .
I began career with the Fayetteville Police Department June 19 , 1967
and was a member of the local Police Pension until my retirement on
January 29 , 1986 ( a total of 18 years and 7 months ) . In addition I
purchased ( as required by the Police Pension Board of Trustees ) 1 year
and 5 months of deputy sheriff ' s time . This constitutes " participation
into the system for at least twenty years " .
itrequest the Police Pension Board of Trustees determine that I do in
fact qualify as having twenty years participation ; what my eligibility
date should be ( 6 - 19 - 87 ; the date I would have had twenty years under
the system or 7 - 13 - 91 ; the date amended Arkansas Code 24 - 11 - 418 became
effective ) ; what my cost to buy the military time would be ; and the
amount I would receive from the pension system .
I do appreciate your consideration and efforts reference this matter
and am eagerly awaiting your reply .
Si cerelyy,�,
err S"u �ies
303 Sandra
Fayetteville , AR 72704
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None ENTRY INTO CURRENT ACTIVE SERV IC
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23. HOME OF RECORD AT TIME OF ENTRY INTO ACTIVE SERVICE
(StI MD, Cy, Crary III Suu) y���.yy JJ((�� .,}., .y 24. STATEMENT OF SERV ICE YEARS MONTHS DAYS
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. 0-61820 \ TOTAL ACTIVE OSRVICE 0 .OD 00
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B. OECOgATIONS, MEDALS. BAOGfiS, COMMENDATONS• CITATIONS AND CAMPAIGN RIBBONS AWARDED OR AUTSIORIZED
Good Conduct Medal (1st Award) SharpeShooters Rifle Marksmanship Badge, Markeman
Pistol Marksmanship Badge
27. WOUNDS RECEIVED AS A RESULT OF ACTION WITH ENEMY FORCES IPlrer rad drr V Yaul,•1 '
None
20. SERVICE SCHOOLS OR COLLEGES. COLLEGE TRAINING COURSES AMO/OR
SCHOOL OR COURSE POST-CIMOUATE COURSES SUCCESSFULLY COMPLETED 20. OTHER SERVICE TRAINING
DATES (TII Ts) MAJOR COURSES COURSES SUCCESSFULLY
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SI VA BENEFIT6 PREVIOUSLY APPLI fiOFOR MpI qp)
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Recommended For Reenlistment
Lump-Sum Leave Settlement for 5 Days
Q Social Security Number 4291111,70. 84.71
S Good Conduct Medal Period Commences 301fay63
Time lost Current Tour Of Active Duty None i
< 33. PERMANENT ADDRESS FOR AILING PURPOSESAFTER TRANSFER OR {, GNATURE OF PERSO EING TRAN F REO DISCHARGED
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1 NOV $3 14 WHICH IS OBSOLETE,
REPORT OF TRANSFER OR DISCHARGE
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— - d
24-11-418. Credited service — Purchase for military service by
past or present members generally.
'R (a) Any person who is or was a member of the policemen's pension
and relief fund, as established by this subchapter, and who was not
• receiving benefits under the system on June 17, 1981, shall be entitled
to purchase credited service in the system for a period not to exceed two
(2) years for service rendered by the member while on active duty in
the armed forces of the United States prior to the member's employ-
ment covered by the policemen's pension and relief fund, as established
by this subchapter, but only if:
(1) The person received an honorable discharge from the armed
forces;
(2) He is not receiving federal military service retirement pay based
upon nineteen (19) or more years of active duty; however, disability .
federal retirement pay shall not disqualify a member from purchasing
credit; and
(3) He does one of the following:
(A) If he has participated in the policemen's pension and relief
fund for at least eighteen (18) years, he contributes to the member's
deposit account a sum of money equal to the amount of the combined t
employee and employer contribution made by or on behalf of the
3
member to the system based upon the contributions for the last
month of the employee's eighteenth year of service, multiplied by the
. . .number of months of military service the member is eligible for. and
desires to purchase under this section with interest thereon at the
rate of six percent (6%) per annum from the date of eligibility to d. .;
purchase the service to the date of purchase; or i.
(E) If he has participated in the policemen's pension and relief a
fund for at least twenty (20) years, he contributes to the member's 3,
deposit account a sum of money equal to the amount of the combined
employee and employer contribution made by or on behalf of the
member to the system based upon contributions at the time he first
became a member of the retirement system, multiplied by the num-
her of months of military service the member is eligible for and
desires to purchase under this section with interest thereon at the
rate of six percent (6%) per annum from the date of eligibility to
purchase the service to the date of purchase. I
(b) A member , who purchases credited service in the system as au-
thorized in this section shall not be entitled to receive retirement bene-
fits under the system until the date on which he or she has twenty (20)
years of actual service under the system or would have had twenty (20)
years of actual service under the system if the member had continued
his or her employment.
(c) When a member purchases credited service as authorized in this I
section and terminates employment before his or her twentieth anni-
versary as a member of the system, that portion of the insurance pre-
mium tax returned to the employing city for credit to policeman pen-
sion funds which was previously credited to the policemen's pension
and relief fund for the position held by the member shall continue to be
credited to that fund until the date on which the member would have
been a member of the system for twenty (20) years had he or she
continued employment.
I
• History. Acts 1981, No. 514, § 1; Amendments. The 1991 amendment I
A.S.A. 1947, § 19-1828; Acts 1987, No. rewrote (a)(3) and deleted former (a)(4).
811, § 1; 1991, No. 371, § 1.