HomeMy WebLinkAbout1996-04-18 Minutes•
MINUTES OF A POLICE PENSION BOARD MEETING
A meeting of the Police Pension Board was held on April 18, 1996
at 2:30 p.m. in room 326 of the City Administration Building, 113
West Mountain, Fayetteville, Arkansas.
PRESENT: Mayor Fred Hanna, Randy Bradley, Hollis Spencer, City
Clerk/Treasurer Traci Paul
ABSENT: Eldon Roberts, Jerry Friend, and Dr. James Mashburn
CALL TO ORDER
The meeting was called to order by Mayor Hanna
MINUTES
Spencer moved to accept the minutes. Bradley seconded. The
motion passed unanimously.
OLD BUSINESS
Jerry Friend - Appointed as Retired Member
Mayor Hanna presented a letter written by Spencer stating he had
the votes to keep Jerry Friend on as a retired board member.
Spencer stated it was a unanimous vote for Friend filling that
slot.
Mayor Hanna asked that the letter be made part of the minutes.
List of Retirees
s
Paul presented a rough draft of a list of retirement dates and
salaries at retirement, as was requested at the special meeting
in February. This should be in its final format by the next
meeting.
NEW BUSINESS
INVESTMENT REPORTS
Longer Investments
Kim Cooper, Longer Investments, reviewed the reports included in
the agenda packet.
46.6% of the combined portfolio is in stock. Of that, the
Barrick Gold and Inco, Ltd, the Mobile, and Placer Dome are
considered cash reserves as opposed to equity. The total account
value is $3.913 million. Regarding the stock portfolio alone,
22% is in bonds and 12% is cash. About 35% of the stock
1
•
portfolio is being held in reserves.
Bond interest rates have been coming up, but Elaine Longer thinks
there is a chance for a peak, and later in the year there will
probably be a much better buying opportunity in bonds than in
stocks. We are waiting on the sidelines now with a lot in cash
reserves.
Stocks and bonds are down a little bit because of the rise in
interest rates, so the total portfolio is down a little.
Dean Witter
Mike Kirkland, Dean Witter, asked for any questions. There
being none, he reviewed the reports as presented in the agenda
packet.
The cash account report shows $67,000 in cash; but all the CD's
mature in a couple of months, $204,000. We will not be able to
replace that with the way CD's are now. If we bought anything
new right now, we would stagger maturities because rates are so
low we would not want to tie anything up long term.
Kirkland explained the activity in the bond account, the Madison
account. Rates have gone up in the bond market. This has
affected all the fixed-income investments. Rates have gone up
and bond values have gone down. In this case it is about 1.5% in
the first three and a half months of this year. The treasury
note matured at the end of March and has not been put back to
work yet, which is wise. They have about 23% in cash now. The
$378,000 is in money market funds and the $1.2 million•is still
in bonds.
Regarding the TCW account, the balanced account, the stock market
continues to do well. The account is up about 2% since the end
of the year. In this account 64% is in stocks, 31% is in bonds,
and only 5% is in cash, much as it has always been.
In the three accounts at Dean Witter, the total amount as of the
close yesterday was $3,728,581. Of those three accounts, 20% is
in cash, including the soon to mature CD's; 31.4°% is in the stock
market; and 48.6% is in the bond market.
Kirkland recommended having a comfortable figure in some
international management. With our markets having done so well
and the international markets lagging ours, you have increased
return and decreased volatility when you have a mixture of a
little international. He recommended a specific manager, Lazard
Freres. Essentially, it would be like hiring another manager
with additional expertise and means further diversification. The
fee structure would not go up
•
In response to a question, Kirkland stated Merrill Lynch has come
out with its own Japan fund: Japan is the second largest economy
in the world. They are coming out of a banking crises and for
diversification it would not be unwise to have a little more
exposure in ,Japan. Many global funds will have some exposure in
Japan anyway.
Kirkland read from the investment policy: "Investments in
international securities shall be made only after securing the
approval by the majority of the Board at a regularly scheduled
meeting." This could be discussed more at the next meeting.
In response to a comment, Kirkland stated investments would be
spread all over the place and not weighted in any one country.
There was general discussion regarding foreign investing.
The meeting adjourned at 3:20 p.m.