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HomeMy WebLinkAbout1995-05-10 Minutes• MINUTES OF A POLICE PENSION BOARD MEETING A special meeting of the Police Pension Board was held on May 10, 1995, at 2:30 p.m. in room 313 of the City Administration Building, 113 West Mountain, Fayetteville, Arkansas. PRESENT: Mayor Fred Hanna, Eldon Roberts, Randy Bradley, Hollis Spencer, Jerry Friend, Dr. James Mashburn, City Clerk/Treasurer Traci Paul, and Administrative Services Director Ben Mayes. CALL TO ORDER The meeting was called to order by Eldon Roberts. GERALD BRADLEY RETIREMENT Roberts explained that. Assistant Police Chief Gerald Bradley will be retiring voluntarily and has submitted his application for pension purposes. Roberts stated the application has been reviewed and has been found to be fair and accurate. Bradley has been in the Department 22 years and has purchased two years of military time. The military time will increase his benefit by $40.00 a month. Bradley's total retirement benefit is $2,345.47 per month. Board members discussed their appreciation for Bradley's dedication and loyalty. Mashburn arrived. Roberts restated the details of Bradley's retirement. Mashburn, seconded by Hollis, made a motion to retire Gerald Bradley with appreciation and a special thank you from the Board. The motion passed unanimously. PENSION BENEFITS Roberts distributed a list of monthly benefits. The pension benefits total $410,692 per year. Currently, there are 44 retired members and 15 active members on the old plan. Mashburn expressed concern that some of the older members of the plan were not receiving very much money compared to recently retired members. Bradley asked if the lower amounts had been raised once. Roberts stated that the minimum was raised to $250.00. Mashburn asked if there was a chance for another raise in the future. May 10, 1995 Roberts explained that he attended a pension board meeting in Little Rock. Roberts stated the pension board in Little Rock asked the actuary if the actuarial soundness term could be looked at and redefined. A board rule was passed in 1985 that spells out the requirements to meet actuarial soundness. Because of a recent change in the law regarding insurance turnback money, there is an additional source of income that should be considered. The actuary has reviewed the information and has come up with a new method. Under the new method, the two police plans that would become actuarial sound are Fayetteville and Russellville. There is a public meeting scheduled for July 18 to allow for discussion on changing the board rule. There will also be a Pension Review Board meeting to possibly adopt the new actuarial soundness definition. Act 1197, passed in 1993, raised the monthly payment on actuarial sound police and fire pension plans to a minimum of $350.00. As soon as Fayetteville's plan becomes actuarial sound, each person who receives less than 350.00 will need a benefit raise. Raising benefits to $350.00 will cost $681.72 per month. Then the Board can discuss a possible benefit increase for all the retired people. A benefit increase would need to go through the board in Little Rock and would be reviewed by the actuary. The Board discussed the issue and decided that the information should not be forwarded to retirees. Mashburn stated an announcement should be made only after a decision has been made. Mayor Hanna pointed out that the people receiving below $350.00 have been collecting it a very long time. Their benefits were paid as a percentage of a much smaller salary. Spencer explained that he will have been drawing his small pension amount for 20 years in July. Mayor Hanna suggested, if the opportunity presents itself, giving each person a one or two percent increase rather than bringing each person up to a certain amount. Roberts stated benefit increases are always a percent of salary. In answer to a question from Mayor Hanna, Roberts stated the half mill that goes to retirement plans goes to the old plan. The Board discussed possible future benefit increases and the amount of caution that must be taken before increases are requested. • • May 10, 1995 Mayor Hanna suggested the Board review, at the next meeting, how much money is received from the half mill and the amount of money made from investments in the past five years. Friend arrived. In answer to a question from Mayor Hanna, Roberts stated there are 15 active employees on the plan. Roberts suggested the Board give benefit increases as soon as it is safe to do so. He stated the plan should not have millions of dollars in it when there are only two people left on the plan. Friend expressed concern about the benefit rules for first and second wives. ADJOURNMENT The meeting adjourned at approximately 3:'15 p.m.