HomeMy WebLinkAbout2000-09-21 - Agendas - Final t
POLICE PENSION AND RELIEF FUND BOARD
• AGENDA
SEPTEMBER 21 , 2000
A meeting of the Fayetteville Police Pension and relief Fund Board will be held on September 21 ,
2000 at 1 :30 p.m. in 313 of the City Administration Building located at 113 West Mountain
Street, Fayetteville, Arkansas.
1 . Approval of the minutes
2. Pension list
3. Investment report
4. Other business
5. Information`. Revised Actuarial Report for 1999.
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MINUTES OF A MEETING •
OF THE
FAYETTEVILLE POLICE PENSION AND RELIEF FUND BOARD
A special meeting of the Fayetteville Police Pension and Relief Fund Board was held on May 25,
2000 at 1 :30 p.m . Room 313 of the City Administration Building located at 113 West Mountain
Street, Fayetteville, Arkansas.
PRESENT: Mayor Hanna, Eldon Roberts, Randy Bradley, Dr. Mashburn, Jerry Friend, Hollis
Spencer and City Clerk Heather Woodruff.
ANGELA MUNSON
Mayor Hanna stated the meeting had been called to consider Angela Munson' s medical
retirement.
Dr. Mashburn stated he had spoken with her doctor. She was at risk in her present occupation.
She would be at risk in an emergency situation, such as drawing a weapon. Any sudden force to
her shoulder could put ,her .at risk.
Mr. Roberts stated Ms. Munson also has the potential to 'have problems with her other shoulder.
She has not had surgery on it yet. She has completed nineteen years. She is asking for medical
retirement, not work related retirement.
Dr. Mashburn recommended the board make her eligible for retirement for non-work related •
health reason. Mr. Roberts seconded the recommendation. Upon roll call the motion carried
unanimously.
Retirement would be affective as of the 28' of June.
TIM HELDER
Mr. Roberts explained there had been a law passed during the 1960's which allowed a police
officer that had worked at a sheriffs office then transferred to a municipal police agency in the
same county to use their sheriff's time to round out their twenty years at the municipal agency
they were working at. They had people take advantage of the law several years ago. At first
there were no provisions in the law that required those people using their County time to pay any
monies into the City's plan. In 1983, the Police Pension Board had met and decided to adopt a
sunset clause to allow people working for the department with County time to buy into the plan.
The cut off date they had selected had cut Tim Helder out .of the deal. Mr. Helder would like to
have the option to use his County time.
Mr. Bradley moved to table the issue until they were able to find out the capacity in which Mr.
Helder had worked for the County. Mr. Spencer seconded the motion. Upon roll call the motion
carried unanimously.
Meeting .adjourned at 2 :00 p.m. •
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► MINUTES OF A MEETING
epI THE
► FAYETTEVILLE POLICE PENSION AND RELIEF FUND BOARD
. JUNE 169 2000
A regular meeting of the Fayetteville Police Pension and Relief Fund Board was held on June 15,
2000 at 1 :30 p.m. in Room 326 of the City Administration Building located at 113 West
Mountain, Fayetteville, Arkansas.
PRESENT: Mayor Hanna, Eldon Roberts, Hollis Spencer, Randy Bradley, Dr. Mashburn and
City Clerk Heather Woodruff.
ABSENT: Jerry Friend.
MINUTES
Dr. Mashburn moved to approve the minutes with the addition of Hollis Spencer to the Election
Results. Mr. Bradley seconded the motion. Upon roll call the motion carried unanimously.
PENSION LIST
The addition of Angela Munson to the Pension List was noted.
OTHER BUSINESS
• Mr. Roberts stated he had met with Jerry Rose in regards to Tim Helder: He presented Mr.
Helder's work record from the County. Mr. Helder had served as a patrolman from July 1980 to
February 15, 1982. Mr. Helder did not have any intentions of retiring early, but would like to
have the option. He noted Mr. Helder would have in twenty years soon.
Mr. Bradley moved to allow Mr. Helder the use of County time, but if he decided to use it he
would have to pay into the City plan. Mr. Spencer seconded the motion.
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Mr. Roberts noted he had estimated his pay-in to be approximately six percent. He added Mr.
Helder was the last officer with County time and that this could not come up again.
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Upon roll call the motion carried unanimously.
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INVESTMENT REPORT
Ms. Longer stated they were holding even. She felt the market would be volatile for a while, with
no leader this year. Last year, Technology Stocks were the leader. The Feds had increased fifty
base points, which was the sixth rate increase for the year. She felt the economy was going to
slow down.
• Market value of their portfolio was 11 .6 million dollars. Realized gains year to date were
$59,000. The Realized gains for the stock account was $59,000 during the first quarter. Net
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increase of $81;000. Their expense report: total for this year was 1 . 13%, last year 1 .2%. Before
they had consolidated their accounts with her their costs had averaged 1 .5%. Their bond
portfolio income yield was at 6.3% with a total increase in yield of 4. 1%. She noted they had
been rolling bonds into higher maturities. Contributions and withdraws were at $86,000. The
total return history was 14%. Equity and Mutual Funds were 48% stock. There were strong
opportunities with stock, especially in the mid cap. They were heavily weighted in value stocks.
Meeting adjourned at 2 :00 p.m.
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MINUTES OF A MEETING
1 OF THE
FAYETTEVILLE POLICE PENSION AND RELIEF FUND BOARD
AUGUST 15, 2000
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A special meeting of the Fayetteville Police Pension and Relief Fund Board was held on August
15, 2000 at 1 :30 p.m. in Room 326 of the City Administration Building located at 113 West
Mountain Street, Fayetteville, Arkansas.
PRESENT: Mayor Hanna, Hollis Spencer, Randy Bradley, Jerry Friend, Dr. Mashburn, Eldon
Roberts, and City Clerk Heather Woodruff.
JOHN SCHUSTER
Mayor Hanna stated the only item on agenda was the retirement of John Schuster.
Mr. Roberts stated Mr. Schuster had in over twenty years of service. It was a voluntary
retirement. He started out as a dispatcher, but went to work as a police office in October of
1979.
Mr. Bradley moved to grant Mr. Schuster retirement affective August 18, 2000 at the end of that
work day. Mr. Roberts seconded the motion. Upon roll call the motion carried unanimously.
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Meering Adjourned at 1 :45 p.m.
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Osborn,, Carreiro & Associates, Inc . one Union National Plara.5ulte 1690
124 West Capitol Avenue
Uttle Rodc, Arkansas 72201
ACTUARIES CONSULTANTS ANALYSTS (501 )376-80430
August 17, 2000
Ms. Cathyrn Hinshaw, Executive Director
Arkansas Fire and Police Pension Review 'Board
One Union National Plaza
124 West Capitol, Suite 940
Little Rock, AR 72201
Dear .Cathyrn:
Enclosed is a revised actuarial report for the Fayetteville Police Pension Fund as of December 31 , 1999.
The valuation was revised because the original report used the 100% of pay benefit level that was
approved. However, the city only increased benefits to 90% of pay.
I apologize for any inconvenience this may have caused.
Sincerely, •
'-�tA 04
Steve Osborn, F.S.A., M.A.A.A.
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' r FAYETTEVILLE POLICE PENSION FUND
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ACTUARIAL VALUATION
AS OF DECEMBER 31 , 1999
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' Osborn , Carreiro & Associates , Inc . One Union National Pla Capitol
A 1690
enue
i 24 West Capitol Avenue
LittleRock, Arkansas 7220
ACTUARIES CONSULTANTS ANALYSTS (501 )376-1304
' August 17, 2000
Board of Trustees
' Fayetteville Police Pension Fund
Gentlemen:
This report presents the results of our actuarial valuation of the assets and liabilities of the
Fayetteville Police Pension Fund as of December 31 , 1999.
This valuation is required by Arkansas Code Annotated 24-11 -205. The purpose of this report is to
(1 ) evaluate the actuarial status of the Fund, .(2) determine the level contribution requirement needed, •
(3) review the development of the Fund over the past several years, and (4) present certain actuarial
items on page 9 for disclosure under Governmental Accounting Standards. This report is not
intended for any other purpose.
The member and financial information used in this report was supplied by the Arkansas Fire &
Police Pension Review Board, whose cooperation is appreciated. We did not audit this information,
although we did review it for reasonableness and consistency.
' I certify that this report has been prepared in accordance with generally accepted actuarial principles
and practices. In my opinion, the actuarial methods used are appropriate and the actuarial
assumptions produce results which, in the aggregate, are reasonable.
Sincerely,
)Z�� 014�
Steve Osborn, F.S.A., M.A.A.A.
Actuary
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' TABLE OF CONTENTS
EXHIBIT 1 CONTRIBUTIONS
f EXHIBIT 2 COST AND LIABILITIES
I` EXH03IT 3 SUMMARY OF FINANCIAL INFORMATION
EXHIBIT 4 COMPARISON WITH PRIOR YEARS
EXHIBIT 5 SHORT CONDITION TEST
• I EXHIBIT 6 EMPLOYEE AND RETIREE PROFILES
EXHIBIT 7 PRINCIPLE PROVISIONS OF THE PLAN
EXHIBIT 8 ACTUARIAL METHODS AND ASSUMPTIONS
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' EXHIBIT 1
CONTRIBUTIONS
The following contribution level reflects the payment of the current year Normal Cost for benefits
' attributable to said year (see Exhibit 2) plus an amount sufficient to pay off the Unfunded Actuarial
Liability over a 8-year period (5-year period for any unfunded retiree liability). These costs DO
NOT include the contributions due to the Local Police and Firefighters Retirement System ("LOPFI")
' for persons 'hired after 1982.
2000 Necessary Annual Contribution to pay:
1 Normal .Cost, plus $ 218,094
2 Pay off the Unfunded Actuarial
Accrued Liability 658 411
' 3 Total necessary $ 876 505
Less •
4 Expected Employee Contribution 28,947
(6.00% of salary)
Necessary Employer Contribution $ 8479558
(This is the amount needed in
addition to investment income)
' Covered Payroll $ 482 457
' Necessary Employer Rate 175.68%
These contributions assume that the dollar contribution grows at a rate of 4% per year. The
contributions are assumed to be made continuously throughout the year.
The actual 1999 contribution was $618,023 from the employer.
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' • ' EXHIBIT 2
1 COSTS AND LIABILITIES
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' December 31 , 1999
A Normal Cost Dollar Percent
(Cost to fund current active members) Amount of nay
1 I Regular Retirement Benefits $ 202, 144 41 .90%
i 2 Voluntary Termination Benefits 3,673 0.76%
3 Survivors' Benefits 5,981 1 .24%
(((( 4 Disability Benefits 6,296 1 .306/o
' TOTAL $ 2182094 45.20%
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B Actuarial Accrued Liability
c 1 Active Lives
Regular Retirement Benefits $ 5,3112233
Voluntary Ternination Benefits 0
i Survivors' Benefits 474
Disability Benefits 1 ,703
TOTAL ACTIVE LIVES $ 5,313,410
' 2 Inactive Lives
!� Retirees ' $ 51830,658
' I Disability Retirees 31495,696
Widows & Children 721 ,416
TOTAL INACTIVE LIVES $ 10,0472770
3 Total Liability $ 155361 , 180
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C Assets $ 10,5722573
rD Unfunded Actuarial Accrued Liability $ .4,788,607
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rEXHIBIT 3
SUMMARY 'OF 'FINANCIAL INFORMATION
(Items D-E, and G determined by Osborn, Carreiro and Associates, Inc.)
Year Ended Year Ended Year Ended
A. ;INCOME 12/31/1997 12/31/1998 12/31/1999
1 -Contributions
tEmployee $ 315663 $ 31 ,882 $ 291,940
it Donations 420 401 331
Employer/Court Fines/Other 1921,089 189,475 183,581
Insurance Tax 158;283 1693271 170,356
Local Millage 237,469 246,287 264,086
Adjustment to prior year 0 0 0
asset value
r2 Net Investment Income 874,170 838,702 3873891 •
TOTAL INCOME $ 12494,094 $ 124763018 $ 12036, 185
B. EXPENSES
1 ;Administrative $ 39000 $ 3,725 $ 43825
r2 Benefits 453,553 479,245 650,771
r3 Refunds 0 0 0
TOTAL EXPENSES $ 4562553 $ 482,970 Is 655,596
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i • EXHIBIT 3 (Continued)
iC ASSETS (at book value) 12/31/1997 12/31/1998 12/31/1999
1 Cash & Checking Accounts $ 0 $ 0 $ 0
i2 Bank Deposits 16,086 3,476 22,846
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i3 Savings and Loan Deposits 0 0 0
4 Other Cash Equivalents 9112757 4965526 50,981
i5 US Govt. Securities 31032,039 33701 ,380 32592,780
6 Non-US Govt Securities 0 0 0
7 Mortgages 0 0 0
i8 Corporate Bonds 1 , 174,980 12740,520 2,1613348
9 Common Stocks 319075641 4,050,975 4,573,841
i • 10 Other 835946 126,620 104,739
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i11 Payables 0 0 (65449)
TOTAL ASSETS $ 911265449 $ 10,119,497 $ 10,500,086
iD. RATIO OF ASSETS TO
} ANNUAL EXPENSES: 20.0 21 .0 16.0
' E. NET INVESTMENT RETURN: 10.7% 9.1% 3.8%
} (Book Value Basis)
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' Exhibit 3 (Continued)
' 12/31/1995 12/31/1996 12/31/1997 12/31/1998 12/31/1999
' F. TOTAL MARKET VALUE
I . Market Value, end of year 7,675,316 8,4551191 9,9701550 112374,032 11 ,665,225
(Used for GASB calculations, page 9)
2. Market Value, beginning of year 77675,316 81455,191 93970;550 11 ,374,032
G. DEVELOPMENT OF ACTUARIAL VALUE OF ASSETS
1 . Actuarial'Value of Assets, beginning of,year 7, 187,710 7,806,933 82655,598 91692,117
2. Non Investment Net Cash Flow 147,798 1639371 1547346 (72302)
3. Development of Investment Income
(a) Total Market Investment Income (FI -F2-I) 632,077 13351 ,988 1 ;249;136 298,495
(b) Amount for Immediate Recognition.(6% G) 431,263 468,416 519,336 5812527
(c) Amount for Phased In Recognition (11-12) 200,814 883,572 7293800 (283,032)
(d) Phased In Recognition
Current year : 20% of 3(c) 0 40163 176,714 1452960 (56,606)
First Prior Year 0 40, 163 1763714 145,960
Second Prior Year 0 40,163 176,714 •
Third Prior Year 0 40.163
Fourth Prior Year 0
' Total Phased In Recognition 40, 163 216,877 362,837 3069231
(e) Actuarial Value Investment Income 4719425 685,293 882, 173 8871758
' ( 3(b) + 3(d) )
4. Actuarial Value of Assets, End of year
( 1 + 2 + 3(e) ) 7, 187,710 7,806,933 816559598 9,692, 117 10,5721573
5. Net Investment Return on the 6.49% 8.69% 10. 10% 9. 16%
Actuarial Value of Assets
Note: The Pension Review Board's Board Rule #11 first applies this methodology to determine the Actuarial Value
' of Assets for the 12/31/99 actuarial valuation report. Different methods were used to determine the Actuarial
Value of Assets for the 12/31/98 and earlier reports.
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' EXHIBIT 3 (Continued)
I ACCOUNTING INFORMATION
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This page is included to provide the information required by the Governmental Accounting Standards Board
Statement No. 25 and 27, effective January 1 , 1998. The values below are based on the assumptions contained
' in Exhibit 8.
The Annual Pension Cost disclosed in this exhibit will almost always differ from the actual cash contribution to
the fund. We must emphasize that these disclosures are shown in the city's financial statements; Sound
actuarial projections should be used to determine the actual cash contribution requirements.
IRECONCILIATION OF NET PENSION OBLIGATION (NPO)
1998 1999 2000
' 1 . Actuarially Required Contribution 0 0 697,323
2. Interest on NPO (138,229) (1672336) (1952708)
{ 3. Adjustment to (1) (2585144) (312,502) (4485481)
' q 4. Annual Pension Cost (1)+(2)-(3) 1193915 145,166 9502096
5. Actual Contribution Made 605,033 618,023
6. Increase in NPO (4)-(5) (485, 118) (472,857)
7. NPO Beginning of Year (213039818) (217882936) (322612793)
8. NPO End of Year (21788,936) (32261 ,793)
REQUIRED SUPPLEMENTARY INFORMATION
' (a) (b) (c) - (d) (e) M (g)
Unfunded
Entry Age Accrued rUAL as a %
Actuarial Market Actuarial Liability Funded Annual of Covered
' Valuation Value of Accrued (UAL) Ratio Covered Payroll
f Date Plan Assets* Liability (c)-(b) (b)/(c) Payroll (d)/(f)
12/31/1993 62293,999 715263922 1 ,232.,923 83.6% 536,070 230.0%
12/31/1995 7, 1873710 8,1773365 989,655 87.9% 518,643 190.8%
12/31/1997 921265449 8,870,503 (2555946) 102.9% . 491 ,422 -52.1%
' 12/31/1999 1126655225 15,361 , 180 3,6953955 75.9% 4822457 766. 1 %
* Note: 12/31/1993 and 12/31/1995 are at amortized cost value.
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IEXH031T 4
COMPARISON WITH PRIOR YEARS
This exhibit compares current valuation results with those of prior years.
Full Paid Actuarial Computed
' Active Members Employer Contribution Total Plan
Unfunded Normal
Valuation Annual Percent Dollar Actuarial Cost Funded
Date No. Payroll of Pay Amount Assets Liability Percent Percent
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12/31/1982 * 48 775,875 30.8% 2399145 1 ,9681196 1 ,564,043 23.5% 55.7%
i� 12/31/1984 38 691 ,245 32.9% 227,671 2,637,566 1 ,6851881 23 .7% 61 .0%
12/31/1986 29 604,566 35.5% 214,342 3,2511235 1 ,7122937 23 .9% 65.5%
12/31/1987 • 28 6667941 37. 8% 252,114 3,374,250 2,0651775 24.6% 62.0%
I' 12/31/1989 25 634,711 38.8% 246, 132 4009,866 22175,493 27.2% 64.8%
'12/31/1991 24 675,900 35.9% 242,541 5,144950 15632,194 28.2% 75.9%
12/31/1993 17 536,070 37.2% 199,314 63293,999 1 ,232,923 27.8% 83.6%
12/31 /1995 '* 15 5189643 37.5% 194,517 7, 187,7110 989,655 27.7% 87.9%
i' 12/31/1997 12 4912422 15. 1 % 74, 142 9, 126,449 (255,946) 26.9% 102.9%
12/3.1 /1999 " 11 4822457 175.7% 847,558 10,572,573 43788,608 45.2% 68.8%
' * Benefits or assumptions changed •
Note: Normal cost prior to 12/31/89 is net of 6% employee contributions.
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• EXHIBIT 5
SHORT CONDITION TEST
The Arkansas General Assembly has stated that the funding objective for these plans is to pay for
' benefits with contributions that remain level as a percentage of employee payroll. Thus, the long-
term condition test is met when the actual contributions are fairly level and are paid when due.
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A short condition test can be used to measure a plan's progress. Under the short condition test, the
fund's assets are compared with:
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1) Active member contributions;
' 2) The liabilities for future benefits to the present retirees and inactive members;
3) ' The liabilities for service already rendered by active members.
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' If the plan has been following level cost funding, liability (1) and liability (2) above will almost
always be fully covered by the rest of the present assets. In addition, liability (3) above will at least
partially funded. The larger the funded portion of liability (3), the stronger the condition of the fund.
For a closed fund i.e., one like yours, where no new members are admitted), the funded portion of
' • liability (3) should be steadily increasing.
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The following table illustrates the history of the short condition test for this plan:
Computed Actuarial Liabilities Portion of Liabilities
covered by Assets
(1 ) (2) (3)
Active Retirees Actives-
Valuation Members and Employer Valuation
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Date Contributions Inactives Financed Assets (1) (2) (3)
' 12/31/1982 1415635 115382508 1 ,852,096 12968, 196 100% 100% 16%
12/31/1984 186,492 22220,660 119162295 22637,566 100% 100% 12%
IV31/1986 200,487 2,982,120 1 ,781 ,565 , 312512235 100% 100% 4%
12/31/1987 2295457 3,0955232 221155336 35374,250 100% 100% 2%
12/31/1989 266,726 3,719,388 221995245 4,0092866 100% 100% 1 %
12/31/1991 336,940 32674, 180 227665024 53144,950 100% 100% 41 %
12/31/1993 299,612 428343716 2,3923594 6,2931999 100% 100% 48%
12/31/1995 .319,728 5,3585162 2,4991475 711873710 100% 100% 60%
12/31/1997 3173594 529442842 2,6083067 951265449 100% 100% 110%
12/31/1999 3479267 10,0472770 4,9662144 102572,573 . 100% 100% 4%
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Exhibit 6
Employee Profile •
Employee data needed for the valuation was obtained from the records furnished
by the Arkansas Fire and Police Pension Review Board. The following table
shows a detailed breakdown of the present participants by the number of
participants and total salary.
Actives
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Years of Service
' 30 and
Age 0-5 5-10 10-15 15-20 20-25 25-30 Over Total
Under Count 0 0 0 0 0 0 0 AI�: r .'• "U�
25 Salary 0 0 _ 0 0 0 0 0 M-00 N'Q ,
t 25-29 Count 0 0 0 0 0 0 O ',e �pzwg
Salary 0 0 0 0 0 0 0 �a Nl
' 30-34 Count 0 0 0 0 0 0 o 0
Salary 0 0 0 0 0 0 0 > o_ , 01
'35-39 Count 0 0 0 0 .0 0 0 A;
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Salary. 0 0 0 0 0 0 0 �;' ,',�YOa
40-44 Count 0 0 0 4 1 0 0 gt;" CcyVt , ;sS •
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Salary 0 0 0 154,495 .30,264 0 0 ;1!84;759;
45.49 Count 0 0 0 1 1 0 0 " 7 '
Salary 0 0 0 40,575 573554 0 0 vhm98129
50=54 Count 0 0 0 2 0 0 1 �
Salary 0 0 0 70,664 0 0 619540 :
' 55-59 Count 0 0 0 0 0 0 0 s`_
Salary 0 0 0 0 0 0 0 S zOf
60-64 Count 0 0 0 0 0 0 1 ""
' Salary 0 0 0 0 0 0 67,364 ,�,.r67; '
65 & Count 0 0 0 0 0 0 0 Ol
Over Salary 0 ;0 0 0 0 0 0 , :
' Unknown Count 0 0 0 0 0 0 0 0,'
Age Salary 0 0 0 0 .0 0 0 ' : tD;.
Total Count M : P * �0 as * 7 it ' 2 tea" r, �, 1
Sal k` ww� i . 0 x 2G 73A, ,. 87,818 " U *� r 8,9 4p�482,45• J
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EXIBBIT6
' • Inactive Profile
Employee data needed for the valuation was obtained from the records famished by the
Arkansas Fire and Police Pension Review Board. The following table shows a detailed
breakdown of the present payees by the number of payees and total annual benefit.
' Retirees and Survivors
' Years Since Retirement
10 and
Age 0-1 1-2 2-3 34 4-5 5-10 Over Total
' Under Count 0 0 0 0 _ 0 0 1
40 Benefit 0 0 0 0 0 0 4,800 t` 1R ,�4It �800r
40-44 Count 0 0 0 1 0 1 142-%0
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' Benefit 0 0 0 31,914 0 212364 28,513 81,7A1
45.49 Count 0 .. 0 0 0 0 1 0 1.u1
Benefit 0 0 0 0 0 219545 0 ,ip21i;548`
' 50-54 Count 0 1 0 0 1 3 0
Benefit 0 382226 0 0 32,814 80,685 0 yx„s� 1�51;725 '
55-59 Count 0 0 1 0 0 3 8 S- 10,2
Benefit 0 0 265934 0 0 66,116 127,0081,} 220,088:
60-64 Count 0 0 0 0 0 1 5
Benefit 0 0 0 0 0 24,043 96,513 „ ,120,5, 56,
65-69 Count 0 0 0 0 0 1 5 x"� �t ", ” Irl "
Benefit 0 0 0 0 0 33,380 61 ,759 €9 95,139a
70-74 Count 0 0 0 0 0 0 6 gp6`
Benefit 0 . 0 0 0 0 0 48,266 .141x48,266''
75-79 Count 0 , 0 0 0 10 0 5 PIk 'aPi"Ixi�lr�r' tS�I
Benefit 0 0 0 0 0 0 50,643 ;I,?;ilt,�50;G43
Ill
80-84 Count 0 0 0 0 0 0 0 € a �4 4f0l
' Benefit 0 0 0 0 0 0 0Ti ; ,j§0`
85 & Count 0 0 0 0 0 0 2 ' r2"
Over Benefit 0 0 0 0 0 0 13,544 3''S4,4k
Unknown Count 0 0 0 0 0 0 0 +
Age Benefit 0 0 0 0 0 0 0 4 , 0'
Total Count tjb7ky; 4,dUiNk #%t l li a1S it e �3� 1�1 �r o-i1 .i ti 10 r� ka F 33k �; h4 49€
Benefit C N k � Flzt?6,934 y3�i 914 a jkkii 8141 24 133` ,43is 0,46 808 067.+
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,, i„ 38;226
This includes 22 retirees with annual benefit of $454,908
' This includes 15 disableds ' with annual benefit of $282,297 .
This includes 10 survivors with annual benefit of $70,862 .
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' EXHIBIT 7
PRINCDPLE PROVISIONS OF THE PLAN •
' EMPLOYEE Member of Police Department
EMPLOYER Fayetteville Police Department
' MEMBERSHIP Condition of Employment. Police officers hired after 1982 must join the
statewide Local Police and Firefighters Retirement System
' CREDITABLE SERVICE Determined on basis of service since employment
CON71RIBUTIONS
Employee 6.00% of salary. Refundable if member terminates before retirement
eligibility.
' Employer 1 . Matching contribution equal to employee contribution
2. State Insurance Premium Tax tumback
3 . Local Millage
' 4. 10% of all fines & forfeitures collected by the Police Department.
FINAL SALARY Highest salary for any continuous twelve-month period of time worked
prior to retirement. .
RETIREMENT BENEFITS
' Ehizibility 20 Years of Service regardless of age.
IBenefit 90% of Final Salary, but not less than $4,200. If service exceeds 20 years,
the annual benefit is increased by $240 for each year over 20, up to 51 ,200/
year extra.
' If service is more than 25 years, member receives an extra 1 .25% (for each
year over 25) of Final Salary, payable once the retiree reaches age 60. The
benefit cannot exceed 100% of Final Salary.
' DEATH BENEFITS
Eligibili1y Death of an active member or member receiving benefits.
lBenefit 1 . Widow receives same amount as member is receiving or eligible
for, excluding the 1 .25% additional formula for service over 25
' years.
2. Each child under age 18 (23 if still in school) receives $ 1 ,500/year.
I3 . If no widow or children, widowed mother receives $1 ,500/year.
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• EXIIIBIT 7 (Continued)
DISABILITY BENEFITS
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Ehizibility Permanent physical or mental disability. Five year service requirement
unless disability is incurred in the line of duty.
1 Benefit Non-duty disability
Retirement benefit but not less than $4,200/year.
1 Duty related disability
Retirement benefit but not less than 65% of Final Salary and not
less than $4,200/year.
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' EXMIT 8 •
' ACTUARIAL METHODS AND ASSUMPTIONS
' The assumptions for this valuation have been selected in accordance with Actuarial Standards of Practice No. 27.
The asset valuation method is prescribed in Arkansas Code Annotated 24-11-207 to be the amortized cost
method. This prescribed asset valuation method directly impacts the investment return assumption. The
' assumed salary growth is restricted by A.C.A. 24-11 -205 in relation to the investment return assumption.
ACTUARIAL COST METHOD The "entry age normal' cost method has been used.
' PRE-RETIREMENT MORTALITY Deaths have been projected on the basis of the 1971 Group
Annuity Table for Males, set back five years for females.
Mortality rates at a few sample ages are:
Age Mortality rate ver 1 .000
' 25 0.619
35 1 . 122
45 2.922
55 8.519
POST RETIREMENT MORTALITY The 1971 Group Annuity Mortality Table was used. For
females, the male table was used with a five-year setback. The
' life expectancy according to this table is as follows: •
Age Males Females
' 55 22.71 27.99
65 15. 11 19.24
' VOLUNTARY TERMINATIONS Annual termination rates at a few sample ages are:
Age_ Termination rate ver 1 ,000
' 20 50
25 45
30 39
' 35 23
40 9
45 5
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50 5
55 5
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EXHIBIT 8 (continued)
When a person had less than 4 years of service, we assumed
that his chances of voluntary termination were a multiple of
' thereafter rates, with the following multiples being used:
lst year 2.85
2nd year 2.00
3rd year 1 .50
4th year 1 .15
' ASSUMED INVESTMENT RETURN 6.0%
' DISABILITIES We continued the disability rates used in prior reports.
Disability rates at a few sample ages are:
Ag Disability rate ner 1 .000
20 0.8
25 0.8
30 0.8
' 35 0.8
40 2.0
45 2.6
_• 50 4.9
55 8.9
60 14. 1
One third of the disabilities were assumed to be service related.
' For mortality after disability, we assumed rates based on the
Eleventh Actuarial Valuation of the Railroad Retirement
System, for occupational disabilities
' ASSET VALUATION Book Value
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' EXHIBIT 8 (continuedl
ISALARY GROWTH We have used the salary scale used in prior reports. Annual
assumed growth at a few sample ages is:
' ANNUAL SALARY INCREASE
Age Base Merit Total
I 20 4.0% 4.0% 8.0%
25 4.0% 3.2% 7.2%
30 4.0% 2.8% 6.8%
' 35 4.0% 2.5% 6.5%
40 4.0% 2.2% 6.2%
45 4.0% 1 .7% 5.7%
' 50 4.0% 1 .2% 5.2%
55 4.0% 0.7% 4.7%
60 4.0% 0.2% 4.2%
' EXPECTED RETIREMENT PATTERN Since the plan allows full benefits at ages younger than the
traditional "65", an assumption that will have an important
impact is what percentage of people who are eligible for this
I early retirement will actually take advantage of it.
This will depend on intangible things such as the economy,
health, financial ability to retire, Social Security eligibility, and
' work patterns. Based on recent experience, we are using the •
following assumed rates, effective 12/31/91 :
' Retirement rate ner 1.000
Age
40-44 200
' 45-50 250
51 250
52-58 250
' 59 250
60+ 1 ,000
' Note: A member was assumed to be eligible for
retirement after attaining age 40 with 20 years of
' service. It is also assumed that twice the normal
number will retire in the first year of eligibility.
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POLICE PENSION FUND
OCTOBER, 2000
EMP# NAME GROSS FED, TAX ST. TAX NET
154 ALLEN, CHARLES 2,244.53 220.00 66.89 19957.64
152 ARNOLD, WILLADEAN 853.00 853.00
130 BAYLES, DON 19384.31 1 ,384.31
107 BLACK, JOE P ' 985.99 100.00 20.00 865.99
120 BOWEN, J R 613. 19 10.00 603. 19
147 BRADLEY, GERALD 4,172.85 840.53 117.32 3,215.00
139 BRADLEY, RANDALL 2,482.20 2,482.20
101 BROOKS, BILL 1 ,325.79 11325.79
157 CARROLL,RONALD L 3, 132.22 435.00 180.00 2,517.22
151 COLE, RUSTON 2,659.53 600.00 200.00 1 ,859.53
109 COOPER, ADRIAN 565.71 565.71
111 DAY, LUCILLE 400.00 400.00
108 DENNIS, WARREN 1 ,202.71 1 ,202.71
125 FLOWERS, HAROLD 759. 10 759.10
140 FOSTER, BILLIE D. 2,781 .68 300.00 120.00 2,361 .68
148 FRIEND, JERRY 2,734.53 350.00 150.00 2,234.53
145 HANNA, MARK 2,376. 11 225.00 75.00 2,076. 11
124 HASKINS, RONALD 689.73 689.73
146 HUTCHENS, BERNICE 889.85 130.00 759.85
143 JOHNSON, CHARLES 2,133. 14 42.67 2,090.47
103 JOHNSON, WENDELL 690.55 690.55
118 JONES, BOB 2,862.00 2,862.00
144 KILGORE, DONALD 1780.31 19.72 11760.59
129 LAWSON, FORREST 1 ,367.48 200.00 1 , 167.48
150 LITTLE, PATSY R 400.00 400.00
153 LORCH, DONNA G 400.00 400.00
156 MARTIN, KENNETH 3200.49 1000.00 140.00 2,060.49
128 MCCAWLEY, LARRY 1 ,476.94 180.00 20.00 1 ,276.94
116 MCCHRISTIAN, MARIE 400.00 400.00
126 MCWHORTER, KAREN 500.02 500.02
136 MITCHELL, MICHAEL 2,003.56 150.00 11853.56
141 MUELLER, ROSEMARY 1 ,795.38 1 ,795.38
158 MUNSON,ANGELA 3,621 .36 500.00 183.00 21938.36
112 MURPHY, JAKE 400.00 400.00
137 PERDUE, LARRY 2,018.55 200.00 25.00 1 ,793.55
132 PHILLIPS, HOMER GENE 1 ,528.40 300.00 1 ,228.40
105 PRESTON, GEORGE DAVII 1 ,396.37 67.43 196.37 1 , 132.57
135 RICKMAN, LOREN 1 ,939.54 230.00 65.00 1 ,644.54
104 RIGGINS, RAYMOND C 1 ,455.01 125.00 25.00 1 ,305.01
+ 159 SCHUSTER,JOHN H. 3,838.40 340.00 110.00 3,388.40
122 SKELTON, FRANK 728.67 728.67
123 SPENCER, HOLLIS 1 ,201 .65 150.00 36.65 1 ,015.00
155 STOUT, BETTY 430.25 430.25
133 SURLES, JERRY 2,362.50 412.50 50.00 1 ,900.00
142 TAYLOR, DENNIS 1 ,795.38 65.00 65.00 19665.38
106 UPTON, FRANKLIN 926.84 10.00 916.84
110 WATTS, BEULAH 400.00 400.00
149 WILLIAMS, JOYCE 13232.07 217.07 1 ,015.00
134 WITT, DON 1 ,539.09 64.00 115.00 1 ,360.09
127 WOOD, PAUL J 11378.72 1 ,378.72
-----------------• ------------------- --------------- -------
x $79,455.70 $7,421 .53 $2,022.62 $70,011 .55