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HomeMy WebLinkAbout2000-09-21 MinutesMINUTES OF A MEETING OF THE FAYETTEVILLE POLICE PENSION AND RELIEF FUND BOARD SEPTEMBER 21, 2000 A meeting of the Fayetteville Police Pension and Relief Fund Board was held on September 21, 2000 at 1:30 p m in Room 326 of the City Administration Building located at 113 West Mountain, Fayetteville, Arkansas. PRESENT: Mayor Hanna, Hollis Spencer, Jerry Friend, Randy Bradley, Eldon Roberts, and City Clerk Heather Woodruff. MINUTES Mr. Spencer moved to approve the minutes. Mr. Friend seconded the motion. Upon roll call the motion carried unanimously. PENSION LIST Mr. Roberts stated Mr. Schuster had been added to the pension list. The gross pay under his name was not what he will be drawing per month, but this had a fraction of a month added onto it. He had retired in the middle of a month. Mr. Roberts moved to approve the pension list. Mr. Bradley seconded the motion. Upon roll • call the motion carried unanimously. • INVESTMENT REPORT Ms. Elaine Longer, Longer Investment, stated they had cut off at the quarter for their report. They had also included an update up to August 31. As of June 30, their equity weighting was 42-43% mutual funds and common stock. Total market value was 11.28 million dollars. The August 31, 2000, report for the same portfolio increased the equity exposure to 49%. The Market value on August 31 was approximately 11.62 million dollars. The realized gains year to day were approximately $145,000. Net income was approximately $156,000. Summary of expenses, the total expense ration in 1997 was 1 49%, in 1998 was 1.32%. Since the consolidation of the account the total expense ratio has dropped to about a 1.1%. That included all of their expenses. As the assets went up in size the fee schedule goes down. The Bond Fund, during March, April, and May they were rolling all of their maturities forward that they could roll forward so they could capture those higher interest rates. Now that those rates were going down they did not really have any maturity risk in the portfolio. They did not have anything maturing until the first quarter of next year. Those maturities only amounts to about 4% of the total portfolio. They were well structured as far as their corperate bonds went. Government bonds, most of those maturities went past 2002. Government agencies were the same way. The first maturity came up in May of next year. Income Yield on book value of bonds was approximately 6.5%. The income yield on the total portfolio was 4 5%, including stock. Their target there was to try and keep it at a 4% income yield on book value. The weighted average maturity on their bonds was only four years. They had approximately • • • Police Pension Minutes September 21, 2000 Page 2 6.5% yield in the four-year maturity. That compared to the ten-year yield which was at 5.9%. The thirty-year yield was approximately 5.85%. They had a good strong yield, without a lot of risk of a lengthy maturity structure. The bonds were 55% of portfolio. Mr. Roberts stated a complete study had been authorized to the distribution of the Insurance Tumback. It was going to be later in the year before they received their check. They did not know what to expect yet. Ms. Longer stated the next report was the summary of preformance. The average annual return thru August 31, 2000 was approximately 13.3% on Stock, 6.8% on Bonds and 9% overall. That is net of all expenses. Thru August 31, Bonds were 4.6%. This year there was a declining interest rates they had the income on bonds, plus a little bit of capital appreciation. It was the opposite of last year. Last year the total return on bonds for the year was only 2.8%. This year we were starting to see a decline in interest rates. They had the reverse of that happening. They were eaming income plus a little bit of capital appreciation. Their account was up approximately 2%. The market was relatively flat to down thru August 31. The S&P was up approximately 2%. The NASDQ and the Dow were down approximately 3-4%. Total investment return, was 3.81%. The portfolio was well balanced. Eaming should be up 13-18% for the year. Their technology weighting was approximately 39%. Their financial stock had done well. OTHER BUSINESS Mr. Roberts stated the people who were retired received a State supplement. The last legislative session passed a law to provide that for two -years. They had sent the money for one-year. We had not received the money for the second year. We did not receive the money in time for one of the pension checks. The supplement money has now come in and has been put on the next check for both this month and last month. That was only a two-year supplement. The legislature would have to rededicate the month in order for them to continue to receive the money. It was only good for another year. That money came from the State and not our Pension Fund. Meeting adjourned at 2:05.