HomeMy WebLinkAbout2003-04-17 - Agendas - Final V
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Police Pension And Relief Fund
I Agenda
April 17, 2003
A meeting of the Fayetteville Policemen's Pension and Relief Fund Board was held on
April 17, 2003, at 1 :30 p.m. in room 326 of the City Administration Building located at
113 West Mountain Street,- Fayetteville, Arkansas.
1 . Approval of the January 16, 2003 minutes
2. Approval of the revised minutes from October 17 and July 18, 2002
3. Approval of retirement for: Tim Helder
4. Review of the pension list
• 5. Investment report — Longer Investment's
6. Steve Davis — Investment' s
7. Election of Policemen's Pension And Relief Board Of Trustees
8. Other business
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Police Pension Board of Trustees
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MINUTES OF A MEETING
OF THE
POLICE PENSION AND RELIEF FUND BOARD
JANUARY l6, 2003
A meeting of the Fayetteville Police Pension and Relief Fund Board was held on January 16, 2003, at
1 :30 p.m. in Room 326 of the City Administration Building located at 113 West Mountain Street,
Fayetteville, Arkansas.
PRESENT: Eldon Roberts, Randy Bradley, Mayor Coody, Ms. Longer, Kim Cooper, Kit Williams,
City Attorney and Gina Roberts, Deputy City Clerk.
MINUTES: There was no approval of the July 18, 2002 meeting due to lack of a quorum present.
APPROVAL OF RETIREMENT :
• Mayor Coody: Retirement for John R. Brown and Melvin W. Stanley. Any discussion on these
two additions to retirement?
Roberts: I think there's been a little controversy that they' ve had twenty years or a little over. So it's
just voluntary retirement. They're ready to leave law enforcement, January 19`" is their last day on
the city's payroll which is Sunday, I guess. We have something, it's in your packet today on back.
Williams: How many active members will it leave?
Roberts: Four. Chief Hoyt, myself, Chief Helder and Capt. Johnson, that' s all that is left.
Everybody else is on LOFPI.
Mayor Coody: Any other discussion on new additions to the retirement fund? All in favor.
Members: Yes
Mayor Coody: Opposed? (no response) The motion passes to approve these retirements. No. 3
review the pension list.
APPROVAL OF PENSION LIST:
• Mayor Coody: Are there any changes to the pension list?
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No response:
Mayor Coody: All in favor of approving this pension list please say aye.
Members: Aye
Mayor Coody: Any opposed? (no response). The pension list is approved. We move to the
investment report.
INVESTMENT REPORT :
Longer: 1 have a lot to tell you today. I' ll go quickly and then if you want me to move forward.
Williams: I 'm sorry you don't need me here for this so I going to go to my other meeting. Where
were choosing bond counsel and all that kind of wonderful stuff.
Bradley: You were getting us an opinion on something I think. •
Williams: Well no, that was back in July.
Roberts: Is that about the widow .
Williams: Yeah
Roberts: Have the attorney general's sent anything back?
Williams : What I did some more research and I think we're doing it right on.
Roberts : Okay.
Williams: I noticed that in July and was trying to remember.
Roberts : You had gotten something back from the attorney general's office.
Williams: I thought I had.
Roberts : You sent us a copy of it.
Williams: Okay. That' s right, that's right. 49
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Ms. Longer: Okay of the first page of your report is the current portfolio, well it' s not current it's as
of 12/31 /02, and it shows that your current equity rating was about 27.3% at year end. The policy
guidelines are for 35-50%. We just wanted to wait until earlier in the year and got that decision
approved through the committee. You're currently at about 30% equity and if you consider the
common stock plus the mutual funds that we've worked and what we've been doing is really
enhancing the number of stocks in the portfolio that have greater than a 2 '/z% dividend yield,
because we think that there' s some chance that President Bush's package, part of it will get past with
eliminating double taxation of dividends. What that is going to it will make the dividend streams
from stock investments more valuable than it is now, subject to taxation at the federal and state level.
He' s proposed a complete elimination of the double taxation of dividends. I don't know if there' s
fallback to this is going to be 50%.
Mayor Coody: So if you're going to take it off, take it off the State's
Ms. Longer: It will probably be taken off the state' s tax.
• Mayor Coody: Yeah, that' s great.
Roberts: It could be both of them by virtue of the federal government doing away with the State' s
Ms. Longer. continues with the investment report. She goes over the portfolio yields and asks for
any questions.
Mayor Coody: It looks good.
Ms. Longer: Continues report and goes over the policy.
Mayor Coody: I have a question. On the back page there's a space for my signature. We need to go
over and sign this today.
Ms. Longer: No. We can do it later.
Mayor Coody: It's something you present for discussion later?
Ms. Longer: Yes.
Mayor Coody: What we might do is get out of here and keep on working on this because I haven't
• got enough people here right now.
Q
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Ms. Longer: We just wanted to bring it and try to figure if anything had been decided, but it is
changes that would bring your policy more in to line wants actually being done.
Mayor Coody: Well, I' m going to make a number of people even fewer. Thank you for this too.
Mayor Coody: Thanks you' ve done a good job.
Roberts: We need to bring this up again when we have a lot more members present. 1 never thought
of this. What do you think we need. It' s not something that needs to be taken care of right away.
Ms. Longer: No, because everything that' s in here is in your minutes prior that we've gotten
approval to do this or do that. And so what we did we took your assets printed policy and just
brought it up to where everything is.
Roberts: It is about what you're doing anyway.
Bradley: Well okay. •
Ms. Longer: So the last page, page 5 is just under No . 2, Fixed Income being investment grade so
that it will match with the prior corrections and then 1 don 't know where they got the 15% because in
Sections 2c(4)(b) its actually l 1 % so we just changed that to 11 too, that' s not inconsistent with the
earlier part of the policy. We also put in a sentence there that it does not apply to U.S. treasury or
government guaranteed or agency death securities because we are limited to a 5% of portfolio on
corporate. So as far as treasuries, agencies, government guaranteed securities we don't lend them, so
that should probably be set aside. And then we just X ' ed out private placement are permissible
because I can't imagine a private placement that would be a good enough field to overcome the
fiduciary rut as going into a private placement. It would be awfully difficult. Then we struck on
page 6 E. payments can be made through directly commissioned which is an option that may be
chosen. I just struck that because 1 don't ' know how that would be accomplished or how you would
do that. I .think that comes from along time ago and 1 don' t know if it's ever been done. I wouldn't
know how to do it if it is in there so we struck it out. But that 's just for your review and as I said it's
not that we' re doing out of line because everything that we' ve done like going to this type of change
on rating your equities has all been approved from the beginning. And then the final report is just to
update you on the actuary assumptions.
Roberts: l watch it fall monthly. The last one I had was 10.300 something and yours is probably
more up-to-date than those are. But you're about a month behind when I finally get them and we're
down to 10. 1 million in your figures which are probably more on line then what I 'm getting so yeah •
we're going in the wrong direction but it can't be helped. Everybody else is to.
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Mr. Longer: The thing is, the only way to avoid flat years is having completely out of stock and
100% bond. Because the bond return in the last three years has averaged about 9% plus, of course
that' s been offset by equity return . If you'll look at your actuarial assumptions and you look at the
current interest rates available and the 10 year treasury at 4% on this type thing you can't advocate
leaving equities because then you can' t ever get the funds. So we've increased equities a little bit
judicially. Mostly because the yield differential between stocks and bonds has kind of come into
balance where you know the scales have tipped over a little toward the equity side but there is still a
long term political risks. I mean are we going to go to war with Iraq, will be short or will it be long
and nasty, so until we really know more about that and more about the earnings table I can't really
advocate that too much more aggressive. But you can't be too wise because of the fact that you
know we have to minimize the damage and now what you want to do is position to protect it on the
upside when it' s happening. So we're trying to just kind of jockey in thereto get position as much as
possible. But you really can't advocate leaving equity completely.
• Bradley: You' ve stated there's not been a full year period since 1929 thru 32 until now.
Ms. Longer: 1 don't know. I think it' s just, I try not to have any preconceive notions about what the
market is going to do because then you put your ego in front of what' s being told to you everyday.
So we're kind of trying to stay as balanced keeping equilibrium as good as we can. We'll probably
continue locking those yields again if the continuous plan comes through. I think if it comes through
the way it' s proposed or even close it is going to be good for stock, at least for a quarter or so. You
could have a situation here in the first half of the year where benefits out performs the stock relative
to bonds, it gives us the opportunity to do some more work on the bond side. It's just a balancing act
where you're trying to incorporate a prudent amount of risk but you have to recognize that at this
point there' s risk in the bonds too. If interest rates go up and you own a current ten year and interest
rates go up by I %, on that ten year treasury you can actually save the client 7% of the principle
value. So you know if you look at the history of returns in 1994, that's on page 18, bonds actually
gave a negative 5.7% return . You still received on the income of those bonds that the price decline
in the bonds more than offset the income that was generated so that the total return when the bonds
went off to market was minus 5 .7. This could be a year or is actually weak on a modest return on
stocks but could face raising interests and pressure on the bonds to give still another flat year. But
the part of the portfolio that hasn't worked may start working so you know that's the thing you can't
put all your eggs in one basket no matter what you try to pick.
Bradley: Another 1991 is all we need.
• Ms. Longer: That' s right. You know there were rumors out there about Hussein' s going into exile
and things like that. If something like that happened or if it became very apparent quickly that we
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weren't going to be there long 1 think you could have that actuarility right back . Because a lot of
people have sold down to the point they hold what they know they can go through war and
uncertainty with. It feels every much like 1990.
Bradley: They found warheads today.
Roberts: They did.
Ms. Longer: The market was up until that came across.
Roberts: I've been trying to figure what President Bush, what he is going to use when it comes. I've
seen so far that the UN inspectors arrived there late and found nothing. I didn't hear about today.
We're getting ready to have this massive troop built up, what was he going to use if they do finally
come with something. I guess this maybe the straw that broke the camel ' s back if they found some.
This war with Iraq does not have very many people behind it, as matter fact I've seen many against
it, actively against it as for it. 1 understand that guy has got be dealt with and the longer we go the
harder and tougher it is going to be to deal with so that' s where I stand. I guess I'm saying I'm for •
this. I don't know what the world opinion was going to be and what the President was going to use
to finally launch an attack on the guy if the inspectors didn't find anything but I hadn't heard about
today' s news. That' s what he' s been waiting for.
Ms. Longer: The European' s are really against it. From what the Wall Street Journal 's reporting
he' s coming under a lot of political pressure in this country for so along with President Bush.
Roberts: Great Britain's about the only one we can count on.
Ms. Longer: I think they can' t go in without UN support and allied support. If they were to go in on
their own I think that will be negative to the market.
Roberts: Which would be a big push they've found chemical and biological weapons. Bush will say
lets just destroy those.
Talk continues about war and market price.
Roberts: I see this page where you were going to ask the City Clerk, are you talking about the
money? The amount of money it takes to run the pension fund, or pay the pensioners a year. That' s
on page 4.
Mr. Longer: Yes, if we could get some kind of idea •
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Roberts: Okay like right here. Today we had a pension list approval, this one is January 2003 . But I
saw the total per year. You know we' ve got two guys going off retirement this month so they can
come up with that pretty close. Getting that at the first of the year helps you figure out what you
need to pay.
Ms. Longer: Because they have money coming in from other sources that go into the checking
account and so looking at that we can't really tell if that's going to hit the portfolio because they only
callus when they don't have money in the checking account. So if we can have some idea what the
net amount is and how it will fall through the year then we won't have to rush to have money.
Roberts: Gina can you work on that? You can come up with something? You can just take this
recent list, most recent list and multiply the gross by 12 and this period with two new guys in there,
that would be a pretty close figure when the rest of us retire as far as where it' s going to stay at. The
only time it is going to drop off is when someone passes away or some widow died or something like
• that. You can give us some kind of a number on that we can close the door on that right now. The
total amount of money this is going to be out. for 2003 , add those two new guys in there.
Ms. Longer: But that would have to be netted against what comes into that checking account the
amount that we don't see, because the money that comes from those various sources are paid out first
from the checking account and they don't come to the portfolio until they run out of money.
Bradley: Oh I see.
Roberts: We passed that they would keep at least three months or the amount it takes to pay the
pensioners on hand for three months at all times. .
Bradley: Have they called you before on the spare of the moment.
Ms. Longer: She calls just about every month about three days before they need it.
Roberts: That's not right, we passed it in the minutes. I don't have any idea where to look for it but
just go back in the minutes. It was in the minutes that they were to keep three months supply on
hand to pay the pensioners on time and my way of thinking was you use one months worth of that
then you start, you have two months insurance still in the bank that they start coming to you and say
by such and such time we need number of dollars or whatever.
• Ms. Longer: That would help a lot because when we get a call and we have to have money the day
after, then you can't pick a time to sell the bonds and you know sometimes you're selling something
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else the next day. So if we could do that it would be really helpful.
Roberts: Who does that Gina? Marsha?
Gina: I'm thinking its Marsha?
Ms. Longer: Emma is the one who calls and requests it.
Gina: Okay Emma.
Roberts: Well we need to try to figure out some way to remedy that. I don't like to see them put on
the spot when they get a phone call in three days and have to have it.
Gina: Yeah.
Roberts : Put $ 100,000 in the bank.
Bradley: And not have the market and have to sell out. •
Ms. Longer: The way the bonds are structured we always have some sort of security that we can sell
if we have to come up with it really fast but if we have more time that only works to the benefit of
account. Then we can pick and choose our time deadline.
Roberts: Will you visit with Marsha about that and ask her if there is some way that they can give
these people more notice than three days.
Gina: Okay. You'd really like to have three months.
Roberts: That's in the minutes of one of our meetings back down the road before you got to sitting
in on them. That the decision was keep three months to pay the pensioners, a total of three months in
an account somewhere that they could pay them out of on hand at all times.
Ms. Longer: And then if it drops down enough they can call us and tell us you've got a month to
raise X amount money. That would be real helpful .
Roberts : I don' t guess I knew that money that comes into the pension plan, I thought all money that
comes into this pension plan came to you and that all the money that pays the pensioner's came from
your place of business. That ' s not the case, huh? .
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Kim: There haven' t been any contributions to it. There weren't any in 2002 at all.
Roberts: What that's going to. Is that what they are using to pay pensioners with.
Bradley: Insurance turn back check that comes in every August or September has a hundred fifty,
sixty thousand dollars.
Roberts: You'll don't see that?
Longer: No.
Roberts: I thought all the money came to you and you were to use that to the best, do what you saw
best with but were to keep City Hall supplied with X number of dollars to keep the pension paid.
And that would be in three months of that.
• Bradley: What are we keeping here? Well we were keeping a $ 100,000.
Roberts: I think that was what that number was, 33,000 dollars per month to pay the pension people
and $ 100,000 would be three months of that amount. I still thought all the money went to you and
you invested it and did what you wanted to with it and then back to an account over here that was to
be equal to three months worth of pension payments.
Ms. Longer: If you look at the distribution and contribution report on page 17. You can see that
there is some months we don't get a call at all.
Roberts: I saw that and it doesn't add up to 12 months.
Ms. Longer: In May there was $75,000 that went out but then they wanted another seventy amount
until October so June, July, August, September must of have been taken care of by. .
Bradley: It must have been that turn back check. I thought the city was keeping money all long to
give them what they need to make up.
Ms. Longer: I think they just call us when the checks are due.
Roberts: That's how much it took guess that's the total for the whole year though. That $429,000.
We need more than that now for 2003 .
• Bradley: We need more than that already that's just what ya'll need.
,F
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Roberts: Yeah, that' s right. We need considerably more than that. These two guys going off--this
one is $42,000 a month and the other one is $37 .062 a month. So that ' s $8,000 a month, $46,000
more a year. Probably another $ 100,000 just on these two guys. I just thought the insurance tum
back checks came straight to you all and you did what you do with our money and then the
contributions that we pay out of our paychecks 1 guess they go into that account as well .
Ms. Longer: I guess they go into that account as well and are used to pay for benefits.
Roberts: 1 guess what you might visit with Marsha about let' s not run that checkbook down to the
wire and then call these people today and say by Monday I need $50,000 or $60,000 to make it. It
seems like Randy said they had to sell something they are really not crazy about selling. But we've
got to have the money so we have to sell it.
Bradley: We might need to take some kind of action, I don't that we need three months but 1 we
need a minimum of two months.
Roberts: Absolutely. •
Bradley: To fund it and pay the monthly retirement.
Ms. Longer: You know just say that we have to have one month' s notice of the distribution.
Bradley: Well two months which they are directed to do, keep two months, maintain two months
and in that second month you have got time to do something. And it looks like we're going to have
too.
Ms. Longer: On an account that size they might just think the cash is just sitting around but, we
really never have cash balances, cash just doesn' t stay that long, there' s always something better than
cash in my opinion. In fact everyday 1 think we are covering an overdraft before three o'clock.
Robert: Well anyway Gina you just need to mention something to Marsha. You see what the
problem is so just try to do something that gives these people more time. We don't have a problem
with calling these folks up and telling them we need money because that' s what the name of game is
that where the money comes to pay the pensioners with besides what we give. Let' s give them a
little more time because they don' t have the cash funds just sitting around that they can just write a
check out of to cover that. They have to start raking and scraping and hurrying and scurrying and
trying to sell something to generate that needed revenue and I' d just like to see them not get behind •
the 8 ball in that timeframe.
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Bradley: Do we need to do something to channel this along? Do we need to pass this information.
Ms. Longer: The other alternative is we can always block $ 100,000.00 that doesn't even show on
your trade, we just put it in the restrictive account and it is always there. But then it is earning a
lesser percent.
Roberts: No. There's no need to do that that way because it causes us to loose a little of money. We
just need to get our business in row over here and it obvious we are going to need the money every
month to pay the pensioners, and whenever they write two checks worth, two months worth out that,
its time to call the bank and say hey you know we're going to have to have some more money in
there and that would give you 30 days if we do the three months thing and tell them to give us some
money. I 'm' m like Randy, I don't want it sitting around in cash and that's probably what they think.
That is probably what the thought process is here at the city, is that well you know every manager
has cash accounts and they just call and all you have do is forward them a check. If you' ve got that
• money working for us then it' s not that easy. I don't see a problem with the city notifying them
ahead of time. It' s something that the city knows they are going to have to have.
Gina: Yeah.
Roberts: We're going to have to have it in the bank before we write the checks.
Gina: Do you think Marsha needs something in writing saying that from y'all?
Roberts: You see her all the time. Visit with her and tell her what our concern is and whatever she
needs we'll get.
Gina: Okay.
Roberts: We can get it. But I don't see that she would have to have anything. It' s just simple fact
not letting it run right down to the wire before they notify Longer to re-supply the account.
Gina. I' ll see if I can find out what the problem is. I don't know why.
Roberts: At least a minimum of 30 days.
Bradley: It's too bad our contributions don't equal our expenditures.
Roberts: Can you imagine only four people working down there, in terms of confusion how that
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amounts to.
OTHER BUSINESS :
Roberts: I' ve got something, sometimes there' s stuff that comes down to the police department in
our mail . It's from Northern Trust Securities, to the Fayetteville Police Pension Fund, attention
accounting department . Probably something you could look at in accounting first and then maybe
something that comes your way.
Gina : We send all that down to Shelly.
Roberts : We've been getting it forever. It's got our address on it, I think that the address here, 113
West Mountain, but it comes in our mailbox every once in awhile.
Gina; Yeah, some of them mail them I guess.
Roberts : We have a mailbox address instead of city hall . •
Roberts" Okay anything else we've got.
Ms. Longer: No, thanks we appreciate you.
Roberts : You .too. You're doing a very good job.
Roberts: The next meeting is third Thursday in April , whatever day that is, 16th or 171i I can tell you
that. Hopefully more people on board here and the weather won't be so messy.
Ms. Longer: We've got extra copies of that policy so if they want to see it before we come back in
and they may have questions that need further discussion.
Roberts: What ' s going to happen with the City Clerk, l understand Sondra. is interested in it.
Bradley: Are you interested?
Gina: No. I live outside the city limits. They are going to take applicants until the 21 " of this month
at 5 o' clock, that' s the deadline. The 27`h they are going to have a Special Council Meeting and
appoint a City Clerk.
Roberts: A lot of responsibility and a lot of hours. •
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Ms. Longer: I know so many times we've called for minutes to the prior meeting to be able to read
those before this meeting and she'd be working on them at home at night, and still not have them
done. I know that it' s a round the clock job, isn't it.
Roberts: That's true.
Meeting adjourned at 2: 50 PM.
•
•
-:A
LONGER INVESTMENTS INCORPORATED
ARegatrredhlvesftwifAdvisor
January 17, 2003.
Ms. Heather Woodruff
City of Fayetteville
113 W. Mountain
Fayetteville, AR 72702
Dear Heather: "
Gina provided a copy of the minutes for the July 18 and October 17 meetings of the City"
of Fayetteville Police Pension, Board at the meeting yesterday. We have reviewed these
minutes and made a few changes to the investment report. Will you please make these
changes and provide an amended copy for our files?
Congratulations on your new position with the City of Farmington. I realize you are
• probably in the process of training a replacement, but would appreciate it if you could
forward this information along to the appropriate person. Thank you for all your help.
Sincerely,
Kim Cooper U
Executive Administrator
/kmc
Enclosure
RECEIVED
Y.O. Boy 1269
• rnyettndlle, Maws 72702 '.IAN 24 2002 I
Telgrhone: 501-443-5951 CITY OF FAYETTEVILLE
CITY CLERK'S OFFICE .
Toll free: 900-927-7710
Far: 501443-7129
1Nrb site: umoelongrrim<rom , ,
FAYETTEVILLE
WE CITY OF FAYETTEVILLE, ARKANSAS
i'
4
March 27, 2003
Ms. Kim Cooper
Longer Investments Incorporated
P.O. Box 1269
Fayetteville, AR 72702
RE: Revised Minutes
Fayetteville Police Pension
October 17, 2002
July 18, 2002
Dear Kim,
I found the letter you sent to Heather in January asking for the minutes of the above 11
• meeting to be changed. I do not think this was completed. I have made the corrections 11
and have enclosed the minutes for you to review to make sure all necessary corrections
have been made. eve
Please review and let me know if the minutes can now be presented to the Police Board
as corrected. Thank you for your help.
Sincerely,
Sondra Smith
City Clerk
/ses
Enclosure
•
113 WEST MOUNTAIN 72701 479-521-7700 .
FAX 479-575-8257
R
• REVISED
MINUTES OF A MEETING
OF THE
POLICE PENSION AND RELIEF FUND BOARD
OCTOBER 17, 2002
A meeting of the Fayetteville Police Pension and Relief Fund Board was held on October 17, 2002
at 1 :30 p.m. in Room 326 of the City Administration Building located at 113 West Mountain Street,
Fayetteville, Arkansas.
PRESENT: Eldon Roberts, Randy Bradley, City Clerk Heather Woodruff, and City Attorney Kit
Williams.
MINUTES
There was no approval of the July 18, 2002 meeting due to lack of a quorum present.
PENSION LIST
STATE BENEFIT SUPPLEMENT
INVESTMENT REPORT
• The combined portfolio report as of September 30, 2002 has an 18-19% equity. The third quarter
was down, it was the worst quarter since 1987, this caused a wash out at the end of September. It is
good that we have bonds in treasuries and agencies. Last week Ford started to trade as junk bonds ,
and General Motors bonds were downgraded this week. We got out of these bonds last year causing
you to be unexposed to these corporate bonds. You have only about 11% of corporate bonds and
they are all investment grade bonds, with limited credit risk.
The stock account is 43% invested in equities. All the bonds are trading above the price we paid for
them so they are all convertible to cash which can be used to add to the stock side. We have
flexibility to continue to switch from the fixed income to the equity and back. The top five holdings
are high quality type stocks, it is a very blue chip equity portfolio.
Realized gains and losses: This year we have had net losses over gains, we have never had a year
like this before, we have always tried to keep it pretty much evened up. The net income has been
enough to offset the gains so that net the book value of the portfolio has not gone down.
Fixed income, securities and total portfolio: The yield on the book value as of September 30 was
5.9%, on June 30 it was6. 1 %. Rather than extending out into the longer maturities that did not offer
much yield for the amount of risk that we were tasking we ended up investing about $450,000.00 in
shorter maturities with about a 3% yield, So temporarily the yield dropped a little on the fixed
income side. The total portfolio that includes your stock has an income yield of 5%. We target
trying to keep that income yield at 4% on the total portfolio. The weighted average maturity is 6.9
• years and the weighted average duration is 5.2 years. The duration is the measure of price fluctuation
• when interest rate increases. If interest rates go up the price value of your bonds will drop.
Performance history summary: Annualized returns are holding together very well, because we have
had returns on bonds that offset the losses on stocks. For the year 2002 your stocks alone are down
36% but with the bonds the total account is down 4.2% for the year. Holding the principle together
is the most important part. This market through last week was the worst Bear market since the
depression.
Investment equity exposure is back to 25% or so equity weighting is moving toward the lower end
of your policy guidelines and your return objective is still intact.
Total portfolio is about $10 million.
Meeting adjourned at 2: 15 pm
•
. rte ,
Police Pension Minutes
r July 18, 2002
Page 1 of 4
• REVISED
MINUTES OF A MEETING
OF THE
POLICE PENSION AND RELIEF FUND
JULY 18, 2002
A meeting of the Police Pension and Relief Fund Board was held on July 18, 2002 at
1 :30p.m. in Room 326 of the City Administration Building located at 113 West Mountain
Street, Fayetteville, Arkansas.
PRESENT: Mayor Coody, Eldon Roberts, Hollis Spencer, Jerry Friend, Randy Bradley,
Heather Woodruff, Kit Williams and Marsha Farthing.
MINUTES
Mr. Bradley moved to approve the minutes. Mr. Roberts seconded. The motion carried
unanimously.
PENSION LIST
Ms. Woodruff stated Chief Watson had been added to the retirement list.
OTHER BUSINESS
Mr. Roberts stated there had been some miscommunication on how the widows are being
• treated on the fund. In 1999 when they went for a benefit increase, they had opted to
make the benefit increase a non-spousal benefit because of the cost. When the benefit
increase was granted in 1999 they moved everyone to 90% of salary. They had all been
under the assumption that the widows would revert back to 50% of salary. The actuaries
had been counting the widows at the same benefit level that they were after the police
officer passed away. The law had two parts to it. The actuaries were operating off the
one premise of the law that says that a spouse that becomes a widow after the raise in
benefits she would continue to draw the same amount. There was one person that they
had not treated that way. The actuary was telling them that if her husband and been alive
and received the 90% benefit, then she should receive that too.
Mr. Williams stated he will ask the Attorney General for an opinion.
Dr. Mashburn moved to have Mr. Williams ask the Attorney General for an opinion on
24- 11 -425. Mr. Roberts seconded. The motion carried unanimously.
INVESTMENT REPORT
Ms. Elaine Longer, Longer Investment, stated the S&P and the NASDQ was down and
the Dow was off about fifty. She thought a lot of companies that were coming under
increased scrutiny would berestating earnings. She had been concerned about some of
the actuary assumption behind some the defined benefit plans, were really to high.
During the ten years where the bull market was getting 20% the pension plans became
• over funded based on their actuary assumption of I Mo. The companies recaptured those
overfunded pension gains back into their corporate earnings. Now that they were sitting
Police Pension Minutes
July 18, 2002
Page 2 of 4
• there with 9 to 10% return assumption and the market analysts are projecting 6% is a
more reasonable return assumption. The corporations that did not adjust downward are
going to be accused of not being honest with their shareholding public. She thought they
were going to see the push to adjust these pension assumptions downward, so that would
work in reverse on the earning side because of the unfunded pension liability.
Mr. Friend asked how some retirements have become over funded.
Ms. Longer stated they could recapture that back into their earnings because their liability
is the discounted present value of their future obligations. When they were using a
discount rate of 10% and the market was clicking along at 20% they can get over funded.
They technically can bring that back in and recapture it in earning because their only
liability was what they were obligated for. Conversely, when they get the 10% discount
rate that gave them a lower present value. If they take the discount rate to 6%then it
really pushes up what their present value is under future liability.
She had talked with Eldon earlier this month because they had dropped below the
weighting range of equity. They had been holding at 35% to 33%, trying to hold that
lower range. They had been using options and hedgings. They had a very strict sale
discipline, which has really helped them to get through this bear market. Technically,
they were under their policy guidelines at this time of 35-50% equities. They had the
opportunity to sell right and they felt that the reserves are prudent at this time. As
conditions improve they could go back up to policy range. It would take a motion by the
board to allow them to be in violation of the policy on the equity side until they feel that
• the condition is right. Their second option, if they wanted to stay within their policy
range, would be to use the S&P Index Fund to get them back up into range. There was a
lot of single issue stock risk out there right now, that she thought it was best to
accomplish it through an index fund. Their equity range was 35% to 50%. They were
currently at 20%. Approximately 15% under weighted. The money was currently mostly
in bonds. They had 5% in cash reserves. They were earning about a 6.2% income rate of
return. They felt that as long as they could keep putting it into bonds, they could always
pull back out of bonds. She thought there would be a time to go back in and start
rebuilding the equity side, but right now the equity markets were off 9% on the S&P and
about 9% on the NASDQ, so they were not loosing anything by not being in there.
Mr. Friend moved to allow Longer Investment to be in violation of their investment
policy until Longer Investment felt that the environment was conducive to increasing the
equity weighting. Mr. Roberts seconded. The motion carried unanimously.
Ms. Longer stated looking at their account from where the bear market started, 12/31 /99
through June 30 of this year. During that time the S&P was down about 33%, the
NASDAQ was off about 64%. Their stocks have gone down about as much as the S&P
stocks about 36%, but the asset allocation has held the portfolio together. From that point
through June 30, 2002 their total portfolio was down 4.4%. When they look at their
historical returns, in the good times they had 29%, 19.6%, 19.6%. A 4% decline in a
• terrible market like this is not unrecoverable. When they get through this, they had every
bit of flexibility in this portfolio to run again. At this point they had the defensive team
r«
Police Pension Minutes
July 18, 2002
Page 3 of 4
• on the field. Their income that came in on just interest and dividends off bonds and
stocks was their cash flow that comes in regardless of the market is about $481 ,000 on
the total portfolio. That represented an income yield of 5%. That was on the whole
account, including stocks, which was approximately $40,000 per month. That did not
include the turnback and the matching funds etc.
Mr. Roberts stated he doubted that they were bringing in what they were spending.
Ms. Longer stated their distribution ran between $55,000 and $65,000 per month. Their
income cash flow on their bond part of the portfolio was approximately $40,000 per
month. To satisfy their actuary assumption they had to achieve a 6% rate of return.
Their historical rate of return has run about 7.5%.
Their combined portfolio was at 20% equities. Their corporate bonds represented
about 15% of the portfolio and the yield on the corporate bonds was about 6.5%. They
had been very cautious on the corporate bond market. They had seen an increase tide of
corporate credit risk. Everything that was in the bond portfolio is high investment grade.
Govemment bonds and government agencies. The treasuries represented about 15% of
the portfolio with a 6.2% yield on treasuries. Government agencies which was a
combination of federal home loans, federal national mortgage, represented about 42% of
the portfolio with a yield of about 6%. They had a very good yield. The way that they
had been able to manage that was by a ladder approach. The income yield on their bonds
has not changed over the last three years. The stock portfolio, there was a lot of reserves
• in there. they were yielding 6%, with very few exception all of their bonds that had been
purchased are trading above the purchase price. So they had earned not just the fixed
6.2% coupons, but also a capital appreciation while they wait out the storm. Realized
losses year to date, was at $81 ,000, net income was at $171 ,000. In the bond portfolio, in
the fixed income side of the account their yield was at 6. 1 %. The weighted average
maturity is 6.5 years, yield on cost was 6.2%. The average annual return has been about
9% on equities, and 7. 1% on fixed income and 7.5% on total portfolio. This three year
period that they were going through was a once in a generation type of an event. The
last time that they had three years back to back of negative market was in the 30's. The
equity return year to date was -18%. That compares to the S&P of -14.5%. NASDQ was
down 25%. Total was -2.3%. The stock part of the portfolio where they had allocated
reserves to the actual stock component of the portfolio was down 8.5%.
In response to questions, Ms Longer stated that a couple of years ago they had
asked for an update on the cash flow analysis that lead to the increase of benefits, there
were two way in which the fund can be evaluated. One was the actuary report, which is
done by the State, it was more of a static picture. The other was a cash flow analysis
which takes in more of the cash flows coming in from all the various sources and by that
valuation model, they actually had 5 million dollar over funding.
Mr. Roberts stated the actuary evaluation showed them to be in a sad state of affairs.
Carrio had refigured all of figures using. the cash flow method and Carrio had stated that
they were alright. There was two different ways of doing this.
•
Police Pension Minutes
- _ - July 18, 2002
Page 4 of 4
Ms. Farthing stated she would like to know if they would be making up the short fall. To
her it looked like they were going to be taking out money than they were putting in.
Ms. Longer stated she was not involved in their projections. She did not know all of the
assumptions or projections.
Meeting adjourned at 2: 15
•
APPLICATION FOR PENSION PURPOSES �+
DATE 3 0?5• 2003 RECEIVED
Board of Trustees MAR 2 7 2003
Police Pension and Relief Fund (IrFyOF FAYETTEVILLE
Fayetteville, Arkansas 72701 OPw CLERK'S OFFICE
Gentlemen:
I, //Yt 1 - have been employed by the Po ice epartment of
the City of Fayetteville, Arkansas, from o?////%�07 to ! G ' A0
I hereby request all bene/fits, due me fro
m the
Police Pension and Relief Fund as of 41471003 -
My
7 d03 .My beneficiary is �GLy /l • � GU��
My reasons for retirement are D
Signature
SNbser��dl�aWornlo before me this _ day of Q` ems_ 20 .
� 3en —
Notary Public . uPti -
• My-ct+mmissioi; eXpu�s; O t - � I - 0100
City Treasurer's Office
The annual salary of the above applicant for pension purposes is:
$ 66 , 880 . 32
Computation of Retirement Benefits
Ninety per cent (90%) of applicant's annual salary --------------- $ 609192 , 29
Additional annual benefits per AR Code Anna, 24-11-422 -------------. $ 240 . 00
*Additional annual benefits per AR Code Anno, 24- 11-432 --------- $ 0. 00
*(Payable only at age 60 with 26 or more years of service)
Total annefits ----------------------—-------—.......--_ Vi0 , 432 . 29
Total nCntlilyOLMrs ( )•fid if total annual retirement benefits) -------- $ 5036 . 02
`.y. Pueoo , �%C4� City Treasurer
Subscribe(4,iWtAefore me this 02.7 "day of /' aAzk. 20 03 .
Notary Public .�
My commission expires: p�s
POLICE PENSION FUND
April 2003 6800-9aoo 6900.9800
5335-e0 5335-05
EMP# NAME GROSS YTD Wages Suppl. YTD Suppl. Fed Tax ST. TAX NET
0 54 ALLEN, CHARLES 2,229.53 .6,688.59 50.00 150.00 220.00 66.89 1,992.64
52 ARNOLD, WILLAOEAN 838.00 2,514.00 50.00 150.00 888.00-
130 BAYLES, DON 1 ,369.31 4,107.93 50.00 150.00 1 ,419.31
107 BLACK, JOE P 970.99 2,912.97 50.00 150.00 100.00,. 20.00 900.99
120 BOWEN, J R 598.19 1 ,794.57 50.00 150.00 10.00 638.19
147 BRADLEY, GERALD 4,157.85 12,473.55 50.00 150.00 940.53 17.32 3,250.00
139 BRADLEY, RANDALL 2,46710 7,401 .60 50.00 150.00 382.00 100.00 2,035.20
167 BROWN, JOHN 3,762.70 9,009.92 0.00 600.00 200.00 2,962.70
157 CARROLL,RONALD L 1 ,816.69 5,450.07 50.00 150.00 250.00 105.00 1 ,511 .69
151 COLE, RUSTON 2,644.53 7,933.59 50.00 150.00 600.00 200.00 1 ,894.53
109 COOPER, ADRIAN 550.71 1 ,652.13 50.00 150.00 600.71
111 DAY, LUCILLE (Deoeased) 700.00 100.00 0.00
108 DENNIS, WARREN 1 ,187.71 3,563.13 50.00 150.00 0.00 1 ,237.71
160 DUGGER,GARY 2,729.07 8,187.21 50.00 150.00 300.00 120.00 2,359.07
125 FLOWERS, HAROLD 744.10 2,232.30 50.00 150.00 794.10
140 FOSTER, BILLIE D. 2,766.68 8,300.04 50.00 150.00 300.00 120.00 - 2,396.68
148 FRIEND, JERRY 2,719.53 8,158.59 50.00 150.00 725.00 150.00 1,894.53
161 HANNA, JANICE 1,688.55 5,065.65 175.00 50.00 1,463.55
145 HANNA, MARK 672.56 2,017.68 50.00 350.00 722.56
162 HASKINS. IRENE 374.85 1,124.55 50.00 150.00 424.85
103 HELDER, TIM 3,973.68 750.00 250.00 2,973.68
146 HUTCHENS, BERNICE 874.85 2,624.55 50.00 150.00 130.00 794.85
143 JOHNSON, CHARLES 2,118.14 6,354.42 50.00 150.00 42.67 2,125.47
103 JOHNSON, WENDELL 675.55 2,026.65 50.00 150.00 725.55
118 JONES, BOB 2,847.00 8,541 .00 50.00 150.00 0.00 2,897.00
144 KILGORE, DONALD 1,765.31 5,295.93 50.00 150.00 19.72 1 ,795.59
129 LAWSON, FORREST 1,352.48 4,057.44 50.00 150.00 350.00 1 ,052.48
150 LITTLE, PATSY R 350.00 1 ,050.00 50.00 150.00 400.00
LORCH, DONNA 350.00 1,050.00 50.00 150.00 400.00
MARTIN, KENNETH 3,185.49 9,556.47 50.00 150.00 500.00 140.00 2,595.49
128 MCCAWLEY, LARRY 1,461 .94 4,385.82 50.00 150.00 180.00 20.00 1 ,311.94
116 MCCHRISTIAN, MARIE 350.00 1 ,050.00 50.00 150.00 400.00
126 MCWHORTER, KAREN _ 485.02 1,455.06 50.00 150.00 535.02
136 MITCHELL, MICHAEL 1 ,988.56 5,965.68 50.00 150.00 150.00 1 ,888.56
141 MUELLER, ROSEMARY 1,780.38 5,341 .14 50.00 150.00 1 ,830.38
158 MUNSON,ANGELA 3,621.36 10,864.08 50.00 150.00 500.00 183.00 2,988.36
112 MURPHY, JAKE 350.00 1,050.00 50.00 150.00 0.00 400.00
137 PERDUE, LARRY 2,003.55 6,010.65 50.00 150.00 200.00 25.00 1 ,828.55
164 PERSHALL, ROBIN 1 ,315.53 3,946.59 290.00 92.00 933.53
132 PHILLIPS, HOMER GENE 1 ,513.40 4,540.20 50.00 150.00 300.00 1 ,263.40
105 PRESTON, GEORGE DAVID 1,381 .37 4,144.11 50.00 150.00 67.43 196.37 1 ,167.57
135 RICKMAN, LOREN 1,924.54 5,773.62 50.00 150.00 230.00 65.00 1 ,679.54
104 RIGGINS, RAYMOND C 1 ,440.01 4,320.03 50.00 150.00 125.00 25.00 1 ,340.01
159 SCHUSTER,JOHN H. 2,689.07 8,067.21 50.00 150.00 340.00 110.00 2,289.07
122 SKELTON, FRANK 713.67 2,141 .01 50.00 150.00 763.67 '
123 SPENCER, HOLLIS (Decease4)• 2,573.30 100.00 0.00
168 STANLEY, MELVIN 4,209.58 10,079.96 50.00 50.00 - 1,100.00 300.00 2,859.58
155 STOUT, BETTY 415.25 1 ,245.75 50.00 150.00 0.00 46515
133 SURLES, JERRY 2,347.50 7,042.50 50.00 150.00 412.50 50.00 1 ,935.00
142 TAYLOR, DENNIS 1 ,780.38 5,341 .14 50.00 150.00 105.00 40.00 .1 ,685.38
106 UPTON, FRANKLIN 911 .84 2,735.52 50.00 150.00 10.00 951.84
163 WATSON, RICHARD 6,811 .00 20,433.00 50.00 50.00 1 ,950.00 400.00 4,511 .00
110 WATTS, BEULAH 350.00 1 ,050.00 50.00 150.00 400.00
149 WILLIAMS, JOYCE 1,217.07 3,651 .21 50.00 150.00 217.07 1 ,050.00
134 WITT, DON - 1 ,524.09 4,572.27 50.00 150.00 115.00 64.00 1,395.09
127 WOOD, PAUL J 1 ,363.72 4,091 .16 50.00 150.00 0.00 1,413.72
95,730.08 273,715.54 2,500.00 7,700.00 12,624.53 3,171 .97 82,433.58
*szoo.00 paid fm aeatn benerns
60005800 6800.9800
sa3sto 53350.5 Total
Year to Date 273,715.54 7,700.00 281,415.54
POLICE PENSION FUND
May 2003 6800-9800 6800-98M
533500- 533505
EMP* NAME GROSS YTD Wages Suppl, YTD Suppl. Fed Tax ST. TAX NET
•54 ALLEN, CHARLES 2,229.53 8,918:12 50.00 200.00 220.00 66.89 1 ,992.64
152 ARNOLD, WILLADEAN 838.00 3,352.00 50.00 200.00 868.00
130 BAYLES. DON 1 ,369.31 5.477.24 50.00 200.00 1 ,419.31
107 BLACK, JOE P 970.99 3,883.96 50.00 200.00 100.00 20.00 900.99
120 BOWEN, J R 598.19 2,392.76 50.00 200.00 10.00 638.19
147 BRADLEY, GERALD 4,157.85 16,631 .40 50.00 200.00 940.53 17.32 3.250.00
139 BRADLEY, RANDALL 2,467.20 9,868.80 50.00 200.00 382.00 100.00 2,035.20
167 BROWN, JOHN 3,762.70 12,772.62 600.00 200.00 2,962.70
157 CARROLL,RONALD L 1 ,816.69 7,266.76 50.00 200.00 250.00 105.00 1 ,511 .69
151 COLE, RUSTON 2,644.53 10.578.12 50.00 200.00 600.00 200.00 1,894.53
109 COOPER, ADRIAN 550.71 2,202.84 50.00 200.00 600.71
111 DAY, LUCILLE (DOOeased) _ 700100 100.00 0.00
108 DENNIS, WARREN 1 ,187.71 4,750.84 50.00 200.00 0.00 1 ,237.71
160 DUGGER,GARY 2,729.07 10,91628 50.00 200.00 300.00 120.00 2,359.07
125 FLOWERS, HAROLD 744.10 2,976.40 50.00 200.00 794.10
140 FOSTER, BILLIE D. 2,766.68 11,066.72 50.00 200.00 300.00 120.00 2,396.68
148 FRIEND, JERRY 2,719.53 10,878.12 50.00 200.00 725.00 150.00 1 ,894.53
161 HANNA, JANICE 1,688.55 6,754.20 175.00 50.00 1 ,463.55
145 HANNA, MARK 672.56 2,690.24 50.00 400.00 722.56
162 HASKINS, IRENE 374.85 1 ,499.40 50.00 200.00 424.85
103 HELDER, TIM 5,036.02 3,973.68 750.00 250.00 4,036.02
146 HUTCHENS, BERNICE 874.85 3,499.40 50.00 200.00 130.00 794.85
143 JOHNSON, CHARLES 2,118.14 8,472.56 50.00 200.00 42.67 2,125.47
103 JOHNSON, WENDELL 675.55 2,702.20 50.00 200.00 725.55
118 JONES, BOB 2,847.00 11,388.00 50.00 200.00 0.00 2,897.00
144 KILGORE, DONALD 1 ,765.31 7,061 .24 50.00 200.00 19.72 1 ,795.59
129 LAWSON, FORREST 1 ,352.48 5,409.92 50.00 200.00 350.00 1 ,052.48
150 LITTLE, PATSY R 350.00 1,400.00 50.00 200.00 400.00
053 LORCH, DONNA G 350.00 1 ,400.00 50.00 200.00 400.00
56 MARTIN, KENNETH 3,185.49 12,741.96 50.00 200.00 500.00 140.00 2,595.49
128 MCCAWLEY, LARRY 1 ,461 .94 5,847.76 50.00 200.00 180.00 20.00 1 ,311.94
116 MCCHRISTIAN, MARIE 350.00 1 ,400.00 50.00 200.00 400.00
126 MCWHORTER, KAREN 485.02 1 ,940.08 50.00 200.00 535.02
136 MITCHELL, MICHAEL 1,986.56 7,954.24 50.00 200.00 150.00 1 ,888.56
141 MUELLER, ROSEMARY 1,780.38 7,121 .52 50.00 200.00 1,830.38
158 MUNSONANGELA 3,621.36 14,485.44 50.00 200.00 500.00 183.00 2,988.36
112 MURPHY, JAKE 350.00 1,400.00 50.00 200.00 0.00 400.00
137 PERDUE, LARRY 2,003.55 8,014.20 50.00 200.00 200.00 25.00 1 ,828.55
164 PERSHALL,ROBIN 1 ,315.53 5,262.12 290.00 92.00 933.53
132 PHILLIPS, HOMER GENE '1 ,513.40 6,053.60 50.00 200.00 300.00 1 ,263.40
105 PRESTON, GEORGE DAVID 1,381 .37 5,525.48 50.00 200.00 67.43 196.37 1,167.57 .
135 RICKMAN, LOREN 1,924.54 7,698.16 50.00 200.00 230.00 65.00 1,679.54
104 RIGGINS, RAYMOND C 1,440.01 5,760.04 50.00 200.00 125.00 25.00 1,340.01
159 SCHUSTER,JOHN H. 2,684.07 10,756.28 50.00 200.00 340.00 110.00 2,289.07
122 SKELTON, FRANK 713.67 2,854.68 50.00 200.00 763.67
123 SPENCER, HOLLIS (oeceased)• 2,373.30 100.00 0.00
168 STANLEY, MELVIN 4,209.58 14,289.54 50.00 - 100.00 1,100.00 300.00 2,859.58
155 STOUT, BETTY 1415.25 1,661 .00 50.00 200.00 0.00 465.25
133 SURLES, JERRY - 2,347.50 9,390.00 50.00 200.00 412.50 50.00 1 ,935.00
142 TAYLOR, DENNIS 1,780.38 7.121.52 50.00 200.00 105.00 40.00 1,685.38
106 UPTON, FRANKLIN 911 .84 3,647.36 50.00 200.00 10.00 951 .84
163 WATSON, RICHARD 6,811 .00 27,244.00 50.00 100.00 1 ,950.00 400.00 4,511.00
110 WATTS, BEULAH 350.00 1 ,400.00 50.00 200.00 400.00
149 WILLIAMS, JOYCE 1 ,217.07 4,868.28 . 50.00 -200.00 217.07 - 1 ,050.00
134 WITT, DON 1,524.09 6,096.36 50.00 200.00 1.15.00 64.00. 1,395.09
127
7 WOOD, PAUL J 1 ,363.72 5,454.88 50.00 200.00 0.00 1 ,413.72
96,792.42 369,245.62 2,500.00 10,20800 12,624.53 3,171 .97 83,495.92
-0-600.00 mid r0-cream seaes�s
6800-9900 6800-9800 -
533500 533505 TOW
Year to Dale 369,445.62 10,200.00 379,645.62
11 � �9i LOCAL POLICE & FIRE PENSION & RELIEF FUNDS 24- 11-405
CASENOTES (5) .The question on the ballot shall be as .follows:
ajority:of quill l p " i �...
'+n , "FOR Police Officer's Pension . . . . :. . . . . . . . . . . .0
1 an ectlomorrilif tl11 looality of Levy. '
V 4. In thOftlii ,' re-caty council had voted fun five mills tax authorized by Ark. AGAINST..Police Officer,'s. Pension. :. . . . . . . . . . . . . . . ..0"
era p .. et e,epf4idl Ilt?ArV'12; ¢ 4, an attempted levy of additional tax voted by the (6) The tax so levied shall not exceed one ( 1) mill on
n' the quell fl,s - fgrthe use of firemen's and policemen's pension and relief the dollar upon the assessed value ,of the real and
..violated the constitutional limitation. Adamson.v. City of Little personal property of the city or town. ,
co[lnection with i)i 10AA. 435, 134 S.W.2d. 558 ( 1939).
i the_ as ^" (c) The tax, once so approved,_ shall be -levied and
g'� p 9aga5pfi11 ilod.;Board of Trustees v. City of Little Rock, 295 Ark. 585, 750 certified in the-same manner a8 provided In this section
failure tosubmliN{ 3 ?d 950(1988); Hestandv. Erke. 227Ark. 309. 298S.W.2d44 (1957).
t.defeabthemghl'4N antic" ' and shall be collected and. turned over to the city or
tion. -, . t r town 'for the ' sole purpose of- making pa}m, exit for
!„ 11.404. Tax levy for pensions .in cities of first
" d second class.
coverage ( employees under the Arkansas Isocal Police
f board of elecl�ii and Fire Retirement System - r '
10)idays beforedWl ; l�lta ; + ,
la)( 1)'r�After being - once approved by. a majority of (d) 'A vote on the question of the tax provided for in
fried by twenty`flllpi : Mlewoting on' the questionaGany general or special this'section sball' be had iii the sarile 'manner that the
,.city"affected4p# "r' ,
9Ction,m-any city the oc,second class, a.tai not Constitution and laws of state provide fort e
ofHcers;.penslonp�bT' Oicee l one ( 1) mill on the dollar upon the assessed initiation of measures in municipalitiesr
:he county board ill , lue of•the real and personal property of the city shall I (e) The funds •provided for in this .section shall'. be
.question upon IM . levied annually by the city for the puipose.ofpaying supplemental, and: in :addition to, any funds provided
lice officera it6tirement salane§.and pensions, as well for by any laws in effect at the time of passage of this
son the :questionali p1.ensions to, the . surviving- spouses and minor chil- section and shall become part :of the policemen's pen-
Impim in),the 11'am( peorof.. deceased police officers and the - surviving Sion and relief fund of the cityandbe administered by
4937,cthe queatk �4 usesiand minor children of deceased- retired police the . board : of trustees- of the_ .policemen's.;pension and
general or .,spmi �'.' ' tern{;�t -t, - , , :, a+� : relief fund for the.same class of beneficiaries and in the
I-mithis:sections . 12) The,•lev shall be'made by-)the'. cit �.council,� or same_ manner, as prescribed by law..„. .
? C-. . y' y (f) in those cities which do not have a policemen's
all. bens follows 31 ergoverning body of the city, on or before the time pension., and relief fund but which cover their police
+' ed by,. law. for levying county taxes, and the city officers under .,the ,Arkansas - Local. Police, and Fire
1, > •_ ,! 'li uncil;e-or !other governing -body, shall make ' out and ..
Retirement System, the funds a all,be,applied .to each
J- ri + rtlAy�t, the county clerk the rate`of taxation levied by city's account - in -'that system insuchmanner and
rg .'¢ 9877, ASA llifd, a m"iiincipaVcorporatfon" on the ' real - and personal
•ny . ;. party within% the city. ' - ' amounts as determined by the board of trustees of that
.�q� system ,it4d .
passagc�and app'"a"'ll¢ IWAThe am bunt so certified shall be •placed'upon the1.
;ned by the Govern '2 xlbook-by.the county clerk of the,county and collected History. Acts 1941; No 16, 44 1. 2,
4 1985; No. 900, ¢¢ 1, 3; A.S.A.
ie,lo;11,937. Emerged ith'6196ne•manner that state and county� taies are 1947;¢¢ 19-1707; 1911708, 19.1710; Acts 19891No +341':4 1.
, 4q liectediand: shall be turned over to the board of Publisher's Notes. in reference to the term, -"passage of this
section, 1.
Acts 141, No 16 was signed by the Governor and took effect
Mr#q, iruste'es of the policemen's pension and relief fund of January 30. 19.4
lx levy. lu(hr` the citya ." - ,, " :' 0 ' ". ' ' ' Acts 1941 No. 16, 45 zlv grand 4; were also codifiedas'
one"(1)'viill oti111 +(bH3r)jIn those cities which do not have a policemen's Irepealedl -
+ , r - ponsioneand :relief fund but which xoveritheir police .. - -
cities' br towns lis; CASENOTES
isioned and sup9i4', ,a dl cerstunder the,.Arkansas Local Police and Fire
partment, for �dli. } RCtiiement System, the tax shall also be allowedwhenCites Board'of, Trustees e. City of Little Rock, 295 Ark. 585, 750
ren I i id enAarn " �� ipproved.bya majority of qualified electors of the cities S w.2d 95011988):
or., participating in: any'.election on the question and held " - •
oohce'Aepartmeill, it the time of any election in the city, whether state, (24=11-405. Board of trustees. I) ,
ase of temporo"}` dty special, or federal, or at a special election for the -- „ ;.•, -
r•n a purpose of voting on the question. . . :(a) The board ,of trustees of the :policemen's pension
s the ,pohcemell: L The election:ma be held -in ,connection with the and relief:fund shall consist.�bf,seven (7) members, as
. (2)io y,
collected as othfil--. Ilrst�general city election following March 6, 1989, but
follows: '
j over)to the boot” the,fai16ure to submit at a city or other election shall not' . . (1) The chiefexecutive officer of the city, who shall be
and relietfund, 00 defei1Gthe.right of submission at any, subsequent elec- chairmaixof the board; o.
,, (2) • The citytreasurer, :who shall be the treasurer of
hon ` L .
:
ave a ,policemonai - P (3) `yUpon the filing with the county board of election the fund
cover •their., polio,:. Wmmissioners, not later,than sixty.(60) days before the (3)(A)(i). Four. (4). active or rretired ;members of the
Police_.,and Fire ) date`-of,the election.of a petition signed by.twenty (20) :pension fund;- z, I -
ve ..
irovedbylamajotr prlmore„qualified electors of the. city., affected and (ii)(a) The.active pension fund.members�shall elect
shall,be collecto& praying that the. question of a policemen's pension be the active members by secret.written ballot,in May of
led and -shall 11a �: submitted, it shallbethe duty of the, county board of . each.year,:with the. member or membersito;bechosen
iecit,to each .cityk , election commissioners to place the question upon the in alternating years.: . I. .
mer,and :amounts ballot: ,; ,, (b) The retired member or members. shallibe•cho-
e's :ofthatsystem) ' ;(9),In the event that, for any reason, the que$tion.of sen, .in May;.of each.. year,Iby.,a•. method -to, be deter-
- i :r ' , r,,., 7., thepoiicemen's pension is not voted upon. in the. next mined by the board, withthe .member ormembers to
- 8 , ° i •: , general-city.. election •after March 6, -1989, the question be chosen in alternating years. - . :
¢ 9856;Acts 1939, No. -
4, AS=Aft947.71i ` rmayf<be ,submitted at any..other. general . ,or -special (c) AlLnmember: ..trustees - :shalLaerve •,two-year
election, held in the city as provided in this subsection. terms; - • . . o-: 'rr� • - �+
W a
a
c
r fF
r +2441-406 " %' • - :e"! R)✓TIREMSNTAND 'PENSIONS '* ' r1191
t
- t(ui) :ilfthere are no, activeinemberso6thepension History. Acts 1937, No. 250 -§§ ' 34(PopesDig §§ 985V. :(4)(A) No' 'benefit .
fund, all, four (4) employee members' shallhe'elected 1985, No. 390, § 1; A.S.A.: 1947 §§ 19-1803, 119-1804; AcUtil" :benefits 'payable' f
from and by the retired membRershtp of therpension lers,os § 2 is91, No 365.,§ , t. t .a H IT61 d�� I!`Administration of I
Amendments. The 1991. amendment rewrote (al(3NA) .end
fund as n , ax51 a : (13)' Shbuld the'l
(B) The• board"shall select one ( 1) l6f the police fits;.to retired me;
vR•
members as secretary of the bolirI. Ofd to I .seine fora CASE NOT EB 9Y (n Cincreases shall^.,be
perP'tiod of two(2) years or until his 'successor'is elected o (» rdarH serve of the mactit
"'and quehfied v ANALI Ai,zd g1 £ (C)"No proratin;
(C) However, if no r'etirant is available to serve on Action against pana,on boa d tAp"fh Inactive funds olid
'.the board, .all foie ))4) em to ee. ' , ' :- -' <.1 : i. raT . .A(1 them... . , .
� .l �� l P�, y ,,. , l>OSIt10Ila.shall ,be Hearms on"pehs,on claim:"' (D) I( the'iretire
' field by active members of the pension fund and shall - ,ffrdiz �+?lfjIt
all be elected b secret ballot:b y the active, I .members Action Against Perieion soars. `shall become made
Y Y , If the <invit court's : Y �' amUl,4
5 unappealed dismissal of mandamus"lY frble reclplentS, the
,,: of the pension fund for two,yea;;terms asprovided based on subsection,(al precludinglaAi<ialreviawiof boeidad' ployer, and the
,, . above ,tip e., .. the dismissal Il .would not be res lud¢ata as to the police`olll(dk 2 - n-
' 'ix1 - ' " - lights amt in the federal courts H,mll v: Memweat]iarr629 ft._ actuarially COmPuf
(D) The boardahall have.�the power:to, make.-all :iaN.CiL'r.Pi i� �• ' � +' - • enu ;). . pay full .benefits to
,i rules and regulationsi needful:, for its;.guidance to sa4 °d;3 Iehts. +r,,-+o,
,�implement •theiprovisions regarding. board- compost- Heanngon,PensionClaim , ' ; � i tiR -f (6)(A)' Once a fiini
, t . .s,�i Pahce officer was entitled to have his pension claim mnaiao m. , . .
" 'hody of reasonable and fairmnded and. -meet, reserve Is Cr(
(4)- The ixi (6) membersi rovided' for tin subdivisions pe sons who vete Able end.
P to give'the claim fair consideration and to grantitifminii i(a�,' „ tZ. employerl.tr
(IR3)'of•this !subseeti6n{shall'elecvonii ('1) more. mem- v. •Me^iweathegi629,F:2d490 (8th Cirri980) ..ca�j lines, fees, 'state in
ber whbttshao
ll' ber"ariteptitablii 'physician'and 'who Ishall •> , : r- r i*'n'.Ir}kn'
;`1 '_ _ i� - • _ revenues as allowe
m1 ..
represent the-•board of trusteesmtheexaminaGon�of 2441-406. Administrationofsmall'funds•b�' _ .. 'retirementprogran
any member of the department upon a claim'of disabil- kansas Local Police andiFire lltetrrein-"ek ` `(B) The revenue,
ity; ` nl r, r, - ' � + - ' > tem ' + ,i i , a : - , I ii III ,( ., i 4,djllk4 A n account .designated
(5) The number of active meinbeis 'or retired mem- _ ^ , v of vra1: Y pa t ,
rs to serveron the 6oai•d shall blile'deterIIImined b the (a) , In those local :police pension and 7elio ng payments_to th+
y 4 a t - other purpose
opor`tionate number of active members to; retired which cover fewer:thaI' ll Ip four (I.4) I .active member[% tf (6)lA) ,All employe
memberslk `" iboard of trustees,mayj no longer exist and the fuq�- shall be made inisu
"" (A)' When the number of 'active members equals be designated as inactive by &,einployer�i ;for m;tand:frequenc.
seventy-five percent (75%) of the total of retired (b) Admimstratiye4' . . 1. IIresponsibility rl r -I e; fund' -Arkansas Local• Pol
members and active members, ,the , board shall be he assigned to -the Arkansas ,Locah-Policelerid'` k allirequire. I, ;r••
comprised,iof,three (8). activer members 11
n11 d one .(•1 ) Retirement, System,,.as, allowed by §§,r244 130 1 ;(B)tThe 1 pensiorr
retired+meinber. e'I! ., + T.-u� ! ^✓ -" �� >%•l'� 24-10-302�and as provided-.imthe follow hglp ' ether materials am
(B)iWhEh the mintier of active members equals ' (1HA)iThe actuary,;under-contractI,,i fthei the.board,to=admin
fifty„percent (505o).�of,,thentotal .of,retu•ed (members shall computer•the retirement reserveefor,ve9t - providedutoethe�L'o
and active members, the board shall be comprisedrof active members and ,foreligible beneficiariobrRystem in suchmai
two (2) active members and two (2) retired' members. inactive fundriAfterieceivingrtHe [Np,6 t;of,the. -@li . ,r vx;i..:
a the em to '•� ' `p
(C) When the namlier oY retired members equals rY p yer:ishall transfer.. the ocnm u(" iilatory:•Aeta 1x37- No!x
„ seventy, five percent . (75%) of.t)ie total ;of retired serve to tine systeiiifto berheldhn -an acreoun4.� .. f� §}i PSA
members and active .members, the boardf shall-cbe i natecl asahe' retirement reserve'for the inedtl
comprised ' of one (1) active -member and three (3) ' � and from.which the system shall pey4eligible, 1.407 List ofire
retired members ,,y , 1,; i;�,::,<, t +a i P`_ ciaries " a� , ' 71`' t'frri `s �s ( T�}I% IliIIshall `be;il,
(b) The police officer members and the physician (B) IThe retirement reserve'" anki any Add( I{fAtee's by the"secreI
representative of,the*b'osrd"shall',serve 'for 'a'pertod of employer contributions shall, mcludeisuchhp f �q , :,i.l
two (Uyears or until%their successors are elected and as are necessary to provideladmiAlf§ lv�eI"I
#§llr&d p'ohce officers.
qualified. for the-system but'such'ezpenses shall not'b Ch1mTbs Wok shall,]
trld record of action of
id(2)'+Ther'board shall 'have' •ttiefabsolute Controh and - total 'of' one half of one perceiiL r05 )`�bfl lied all ersoris •iii
management of the funds provided ;for in this's ibehap- member payioll,- ifany; plbis 6fi6 &pI ero1111
. Tne tal:
ter and of all:moneysd'onated, paid or a ssessed'for'the annual reserve assets. rr , r ugvi
IMIA fill Jr depaitment date �
relief or, pension of disabled, superannuated;- and re- (2)' Any excess assets of the fund remaining a r, y''
tired members of the:policedepartmenC their surviving retirement reservedscreated 'shall be^tran'sfe Abe `date land ;fii
spouses and minor . children, or dependenf" agents accounbdesi (I�Aminatl0n made of +
p gnate8-tiy the employer°to'`be upn - M4flI retired `under th
solelydependent upon members! for their-support'. for the' p(irpose •of making payments thdteyri( .
(d)(1) The board shall make All necessary rules 'and employee coverage 'admmistered under thfelayp( [ltrtory Acts1937, NI.
o. 2!
re lationsffor its overnment aiidr'the'dischar a of its for no other' u ose:_ I ="' 15Gds d( -
gu g g` purpose.' - ii 1P12.
uties and shall hear and decide al] applicatioiis' for iM - 1f-a ' former member of' the local�iial
ief or. petision tinder hissubchapter returns to service in which the employee watt( �1i11 08 Treasurer
- (2y A'll' decisions:upon;applications shall be final and again -become' a member"of the'local 'fund!Iu i
conclusive and not
ject'to reviI w •or reversal except service'creditmay be purchased•By the empl(iy@j ISAThe treasurer SI
by the board. - + ' "'i�+ -< ' employee 'under'the system,' and the�'ptirclia ;d1{ii'fdndand-`shall'-ki
. ..a(3)+The board shall•cause'to be keotla)record of all its shall The amortized-in the same niar rtes afhed d�fNitiq the. funds in s1
meetings and proceedings. credit purchas'es'are 'amortized under}theleyri(. . lhe.board.
sfy Y1P�. i