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HomeMy WebLinkAbout1998-01-15 MinutesMINUTES OF A POLICE PENSION BOARD MEETING A meeting of the Police Pension board was held on January 15, 1998 at 1:00 p.m. in room 326 of the City Administration Building, 113 West Mountain, Fayetteville, AR 72701. PRESENT: Eldon Roberts, Randy Bradley, Hollis Spencer, James Mashburn, and City Clerk/Treasurer Traci Smith MINUTES Mr. Mashburn moved to approve the minutes from the October 23, 1997 meeting. Mr. Spencer seconded the motion. The motion carried unanimously. OLD BUSINESS Benefit increase will be discussed under New business. LONGER INVESTMENT REPORTS Ms. Elaine Longer presented reports for Combined, Stock, Bond, and Large Holdings accounts. She explained the portfolio parameters, bond portfolio and asset class performance. Performance summary, Realized Gains, and Income and expense were also discussed. Ms. Longer explained next years performance would be closely tied to the earnings will do. She explained the market was so volatile because of the Asian market. She felt a more moderate rate of expansion would ensue The small cap stocks had a higher growth rate estimate, however their price earning multiple was equal to the S &P 500. Ms1 Longer stated her business was doing well and she felt comfortable handling more of the Police Pension money. They now had a portfolio manager, a research analysis and a research assistant. If they were to manage more of the pensions funds their fees above six million mark would drop to .65% on their graduated fee schedule, which would be a considerable savings verses the 1.78% they were currently paying to other managers. In response to questions from Mr. Masburn, Ms Longer explained they were a tax-free account. They did not have to sell anything. They could transfer securities in. Mr. Roberts believed the larger population of Baby Boomers were going to keep investing and were going to lean toward equity. He did not believe the Baby Boomers were going to be satisfied with 5.75% return. Ms Longer agreed that the Baby Boomers would have the same impact on the equity market as they had on the housing market in the 70's, when they moved in mass into the housing market. Police Pension Board January 15, 1998 Page 2 She noted the peak years for savings were between the ages of 45 and 65. After 65 people tended to be net liquidators of stocks. Mr. Roberts thanked Ms. Longer for a clear report and her professionalism. He felt much safer and more secure as a member on the board because she was making sure the board was meeting all the requirements. NEW BUSINESS Mr, Roberts stated Morgan Keegan higher minimum did not affect them, however, they were going to have to sign some papers. Mr. Mayes explained his numbers were slightly different from Ms. Longer's because the city held $80,000 in a checking account to cover the pension checks. Mr: Roberts stated he was interested in applying for 60% and 55% increases. He wanted to ask for 60%. He felt they needed to grant benefit increases when they could. He noted the cost was $675.00 to ask for the first amount no matter what the percentage. It was $250.00 for every • request after the first. If they were to ask for three, 60%, 55% and 53%, the cost would be a little over $1,000. In response to questions, Mr. Mayes stated the city would send in both the market and the cost. They normally received a response back in May or June. He noted this was an actuary year. MOTION Mr. Bradley moved to apply for 60% increase to retired and future retiring officers, excluding surviving widows and officers drawing more than 100% of retiring salaries. In the event that 60% increase is not possible, then a 55% increase. Mr: Mashburn seconded the motion. The motion carried unanimously. YEAR END FIGURES/TOTAL ASSETS The year end figures for Police Pension and Relief Fund for 1995 was 7,098,000. The year end figures for 1996 were $8,001,000. The year end figures for 1997 were 9,021,000. Mr. Mayes added 1997 year end projection was $ 7,2401,000. The meeting adjourned.