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HomeMy WebLinkAbout2005-01-20 - Agendas - Final Police Pension and Relief Fund Board of Trustees Agenda January 20, 2005 A meeting of the Fayetteville Policemen's Pension and Relief Fund Board will be held on January 20, 2005 at 1 :30 p.m. in Room 326 of the City Administration Building located at 113 West Mountain Street, Fayetteville, Arkansas. 1 . Roll 2. Approval of the October 21 , 2004 Meeting Minutes 3. Approval of November 2004, December, 2004 and January, 2005 Pension List 4. Approval of Eldon Roberts Retirement 5. Investment Report 6. Widow's Benefits 7. 2005 Meeting Schedule 8. Parking Permits V 1 J d 0 4 c aNi E c R m E y N p p C ` LL = N N p p C ` LL = fA U) R 0 p O a C 7 O O y m R m p 7 O O d N R d E �; ` to 0 20 N zoK - FO � m to 2 a rn 2R' 7PO � tq 't O I _ d a C 7 LL w Q a c to 0 1 cc c W IL }to 0 a .Y✓ •i.. d dL mg 9adC OOF mT O 9 r u m (n dLL a OA 1'dCyL OOC p 2R O O O A E d 9=E R LL LAP 10) F O fA Police Pension Meeting Minutes October 21, 2004 Page I of 11 • Police Pension and Relief Fund Board of Trustees Meeting Minutes October 21 , 2004 A meeting of the Fayetteville Policemen's Pension and Relief Fund Board was held on October 21 , 2004 at 1 :30 p.m. in Room 326 of the City Administration Building located at 113 West Mountain Street, Fayetteville, Arkansas. PRESENT: Randy Bradley, Tim Helder, Jerry Surles City Clerk Sondra Smith, Assistant City Attorney David Whitaker, Marsha Farthing and Eldon Roberts. ABSENT: Mayor Coody, Jerry Friend and Dr. Mashburn. Randy Bradley called the meeting to order. Approval of the July 15, 2004 Meeting Minutes: Randy Bradley moved to approve the Minutes. Sondra Smith seconded the motion. The motion passed 4-0. • Approval of Pension List for August, September and October 2004: Randy Bradley: J.R. Bowen died; his last check was in August. That is the difference between the September and October retirement list. Tim Helder moved to approve the Pension List. Jerry Surles seconded the motion. The motion passed 4-0. Investment Report, Longer Investments: Elaine Longer: We will start on the first page of the report. This is your overall portfolio as of September 3&. At September 3& you where about 44.5 % equities and then we have about a 1 % interest in the Japanese market so that brings it up to about 45 %. As of yesterday you are about 50% which is your maximum. Page 5 shows your current market value which is about $10.67 million. The income yield, which is the income that comes in from dividends and interest, is about a 3.7% yield or $373,000 per year. The first tab breaks out the stock portion of the portfolio. • We wanted to ask your approval to combine this accounting that we do because we started out years ago with this segmented on our computer. . The custodian which is Northern Police Pension Meeting Minutes October 21, 2004 Page 2 of I I • Trust holds it all as one account and the City does all of their accounting as one account. We had it segmented because at the time it came in,, a certain amount was suppose to be in stocks and a certain amount was suppose to be in bonds, as the relative performance of the different asset classes has changed that mix we always have to transfer cash from one to the other. At this point it is much easier to mange it as one whole portfolio. It is just an accounting change on our computers where we consolidate it and all of your reporting would be like what you see on the first report where it is all accounted for as one portfolio. If that is alright with you we will discontinue doing the separate bond account and stock account going forward. Tim Helder moved to approve the combination of the bond and stock accounts. Jerry Surles seconded the motion. The motion passed 4-0. Elaine Longer: I think it will make it easier for the City too because then we will all be on the same page. Page 9 lists your largest holdings, Johnson and Johnson, Union Pacific, MeadWestvaco, Kerr McGee and Citigroup. You can see that among the five largest holdings, still at the percent of equity, your largest holding is 2.2 %. Asa percent of total portfolio just 1 .4 % so you still have,a very diversified portfolio without a lot of single issue stock risk. On page 10 is our industry report. Basically to summarize it we are over weigh, as we have • been all year, in the capital goods area the cyclical industries and the energy industries. We are under weight in consumer, financial stocks and health care, unparticular the pharmaceutical stocks. We are about equal weight in technology. The over weigh in the energy has really helped this year. We have trimmed the sails a little bet, we got as high as 18 % in energy stocks relative to about 7 % on the S&P 500 and we have pulled back to about a 13 % weigh in relative to the 7%. So we are still double weighted in energy but we have used those funds to apply to the technology and other companies that should do better as the economy continues to improve. So we have taken a little bit off the table in the energy, it has been a great place to be this year it has -been a stabilizer in the portfolio when something goes boom overseas the energy stocks go up. But at this point I think that we have harvested the low hanging fruit and it is time to extend out the risk profile a little bit to get to some of these companies that are little bit more tied to the economy. Still at 13 % that is a very good weighting in oils. We are very under weigh in the pharmaceuticals, in fact at this point you own Johnson and Johnson and Abbott Labs, both of those companies have other areas in healthcare besides strictly pharmaceuticals. Ms. Longer stated that they sold some pharmaceuticals due to some of the drugs that they produced. She also spoke of what could happen to the drug companies due to who is elected President. Page 18 summarizes the bond holdings. The weighted average yield to maturity is still 5.3 % within a weighted average maturity of 7 years. We have extended maturities when interest rates popped up in the summer. We bought some of the long treasury bonds, the • 5.25 % that is due 2029, we bought it at 98 cents on the dollar which was about a 5.50% yield. Now that bond is trading at 1 .05 and three quarters so we have made about 8 % _ Police Pension Meeting Minutes October 21, 2004 Page 3 of I I • capital appreciation while you are also making 5.50% income yield. This is what we call a total return trade. Those of you that have served on this Board for a number of years you have seen that there maybe one sometimes two opportunities in a year where you can go in and extend maturities. We use both the long bond and then also what is called the I-Shares which is a closed end mutual fund that trades on the New York Stock Exchange that is a portfolio of 20 year plus maturity treasury bonds. By using those two tools we extend the maturities. We are going for that total return trade where we have the higher income yield but also the capital appreciation that we can experience as interest rates have backed off those highs. For instance at the peak the 10 year was trading about 4.9%, yesterday it is at 3.99%, so down almost a full percent in the 10 year yield since July. When you have a situation like that happen, anything that you have bought at those peak yields you get price appreciation because that bond is now worth more money in the market than it was back in July. Page 19 is the summary of your realized gains year to date which are about $ 179,000. That's just the gains that we have taken on securities as we have sold and harvested the gains on for instance, some of our energy stocks. Then your income which is just dividends and interest has been about $220,000. Page 20 shows your. contributions and distributions. Contributions this year have been about $ 189,000. The withdraws have been about $578,000. • Page 21 shows the performance history. Your average annualized return from inception to date is 7. 1 %. You can see the bottom line is the performance through September 30th. The equities are only up 0.6%, most of the market averages through September 30th where either flat in the S&P 500 up .2 % or down 2% on the DOW, down 4.5% on the NASDAQ so it has been kind of a go nowhere year with a lot of volatility within the market. The overall price appreciation hasn't been much. However the bonds are up 2.3 % so your total return year to date through September 30th is 1 .9%. This is a summary of cash flows from inception to date. It shows what the beginning value, all future deposits and withdraws have been versus your net investment return. Your investment return has been about $4.762 million and your withdraws have been $2.435 million. Elaine Longer gave a presentation on the economic outlook and the market outlook. She stated that the soft patch that was hit during the June and July period seems to be ending. Some of the earnings reports they are seeing especially among the manufacturing companies are very encouraging. Despite the rise in energy prices inflation and inflation expectations have remained moderate. Third quarter GDP growth is expected to come in around 4% - 4.5 %!that is a pick up from 3% in the second quarter. Employment is strengthening but it is still at a very sluggish pace. Bond yields have declined, consumer spending and construction spending continue to show gains and inflation is tame. The dollar has been stable for nine months through October I ". The positives going into the year include low bond yields, short term interest rates have been raised three times this year, the long term interest rates are at the same level that we • entered the year. When an incumbent wins reelection the stock market performs better Police Pension Meeting Minutes October 21, 2004 Page 4 of 11 • than when an incumbent loses the election. That is just a matter of historical accuracy because the stock market doesn't like the uncertainty. We have continued earnings growth so far. It looks good to me out there. The biggest risk is oil price rises, how high will we go and how quickly will we get there, Iraq, a terrorist attack and political turmoil. The S&P is trading around_111_4_and-ten_y-ear-treasur-y-is-at-4%o.T-hestock-mar-ket-has-not gone up since 1997. A lot has changed since the first time that we were at 1100 in 1998 for the better, especially the relative evaluation between stocks and bonds. The S&P volatility has been very low this year on the, historical bases, that's on the market overall. It hasn't . been low within the market. However it breaks out of the trading range is going to be very traumatic because of the fact you have stops placed above and you have stops placed below. We feel the break will be to the upside. Stocks look like the asset of choice relative to a 4% ten-year. This is a look at the long term price earnings multiple. In 1999 we reached about 30 times earnings and the market has corrected to where we are really trading at about 15 times expected earnings for next year which is fairly close to the long term average of 14.4 times. We also have a 40 year low interest rate. We are emphasizing the large cap stocks in our portfolio posture because of the fact that the small caps and mid caps have out performed the large cap stocks for about the last five • years. Typically that cycle runs about five years. So the relative valuation on the large stocks versus the small stocks is at the best level that it has been in five years. The S&P 500 has a higher dividend yield relative to the small cap stocks. We expect that the dividends will increase in the next couple of years. Cash flow is very strong among these large companies. The dividend payout ratio is only 33 % and that is the percentage of earnings that are paid out in dividends to share holders. It is the lowest it has been going back to the 30's. We have a situation where corporations are sitting on rising cash flows, they are reluctant to hire, they haven't really opened up the coffers to engage in capital spending and they aren't paying it out in dividends. They can't go on like this for very long when cash yields 0.7%. We think if the president is elected for a second term that would almost ensure that the 15 % tax treatment on dividends would remain in place, as it is it has to be voted on by Congress again in 2008. It comes at the end of the next president's term. The equity risk premium which is the measure of the relative valuation between stocks and bonds it measures the PE ratio versus the 10 year treasury yield is at the most attractive level that it has been at since 1980. At this point in time we are really positioned to participate if the stock market enters into a year end rally. I don't expect that we would see much more than a 10% rally going forward from here to where we hit the next level of resistance. A lot of people are waiting for the election to be over so there is more certainty. The market never gives you that luxury of planning when you are going to make a decision. I think it will happen before the election takes place. Police Pension Meeting Minutes October 21, 2004 Page 5 of 11 • We think it looks good out there at this point in time. Randy Bradley: We have been through some pretty rocky times and the bottom line has stayed pretty constant. 2003 Actuarial Valuation Report: . Randy Bradley: I think as you can see we have made no, on every category as far as being actuarially sound. Sondra Smith: I have that in electronic format if any of you would like it that way. Randy Bradley: Am I interpreting this correctly that we need $ 1 ,678,000 more dollars to be actuarially sound? Marsha Farthing: Yes, that is what they are saying, Eldon Roberts: I was always taught that on page 11 the very last column on the right, the more near 100% that column is the better off we are financially. In December of 1997 we . were 110% and then we granted our benefit increase to 90% of salary and some of the investments took a turn to the south at that point in time. Since that time we have really • been going down. Bear in mind that actuarial soundness is not what we used to grant our benefit increase. There is another method that the State allows that is called a cash flow evaluation. They say there is plenty coming in and going to continue to be plenty coming in to meet the needs of what is going out. The actuarial soundness test I have always been taught is a lot tougher to meet and to pass than the cash flow evaluation. Randy Bradley: They have strict procedures that they go by. Eldon Roberts: State law that they have adopted it is hard to meet actuarial soundness standards by the State: Tim Helder. What is the valuation of our current assets? Eldon Roberts: We just received a balance sheet, and it is about $ 10.9 million. We are staying right in that range. The most that we have ever had in that plan was $11 .8 million or $ 11 .9 million. I thought we were going to break $ 12 million but we didn't quite get to $ 12 million and then everything went south on investments. We got down in to the $9 million range, but we have worked our way back up. Policemen's Pension Board Term End Date Change: . Randy Bradley: We had mentioned changing this to May 31" from April 30th. There is no conflict with that the way it is set up under State Statue right now is there. Police Pension Meeting Minutes October 21, 2004 Page 6 of 11 Sondra Smith: No, that is the reason that we probably need to change it because it says in the Statue that the election is to be held in May of each year. Right now your term end dates are April but you do not have elections until May. Jerry Surles moved to change the term end dates to May 31". Tim Helder seconded the motion. The motion passed 4-0. Procedure for Notification of Deaths: Sondra Smith: Accounting has requested in the past that we secure a death certificate for pensioners that have deceased and sometimes that is a problem if they do not have a widow that is still living and sometimes even if they do have a widow it is kind of hard to get the death certificate. Currently we rely on Eldon to call and tell us when someone has deceased. We need to set up a procedure of how the Board wants us to handle that because when Eldon retires we need some way of notification. What we set up for the Fire pension is that we would watch the obituary and get a copy of the obituary. The Board needs to vote whether or not an obituary will be sufficient as notification of death or if we will need to pursue getting a death certificate. • Randy Bradley: I guess we can get them through Little Rock if we have to. Sondra Smith: Yes, we can get them through Little Rock. The problem with that is there is a fee and also the time frame. They stated it takes usually 30 to 60 days to get one through Little Rock. We need to give Accounting notification as soon as possible so they can stop the benefit. Randy Bradley: Usually we find out by word of mouth. Someone will hear it and pass the word along. Eldon Roberts: Absolutely. Randy Bradley: We need to get the word to you. Sondra Smith: Right, if someone knows they need to get the word to us. We need direction from the Board, do you want us to pursue a death certificate or will the obituary be sufficient. Jerry Surles: You are saying it would be easier to obtain the obituary. Sondra Smith: Yes. I don't mind getting a death certificate. I can get those if there is a widow usually because they want the benefits, but if there is no surviving spouse it is hard to get a death certificate from the family. • Jerry Surles: Maybe we should make that part of it, if there is a widow they furnish a death certificate. Police Pension Meeting Minutes October 21, 2004 Page 7 of 11 • Sondra Smith: That has not been a problem if there is a widow. They have to come in and sign an affidavit and change everything over into their name. But if there is no surviving spouse will an obituary suffice? Jerry Surles: I don't see where it would be a problem to use an obituary. Randy Bradley: Maybe we should get a death certificate if there is a surviving spouse and if there is not a surviving spouse we use the obituary. Sondra Smith: It takes the widow a little -bit of time to bring that in, can Accounting go ahead and stop the benefit check and issue the $200 death benefit check with just a copy of the obituary and then we will try to get a death certificate. Accounting wants some kind of process in place so they will know how to handle a death. Jerry Surles: What did the Fire Pension do? Sondra Smith: They went ahead and voted to accept obituaries and not worry about the death certificate. If we can get them, and I will make every effort to get a death certificate, but if we can't get one, they said the obituary will be fine. Eldon Roberts: I really don't see a problem with an obituary. This is kind of a family of • people and there are only so many people in it and everyone knows everyone. Once someone passes away within this family it is pretty much common knowledge, most everyone lives in this area. It looks like an obituary should suffice. Jerry Surles: I think an obituary should be sufficient. Sondra Smith: It takes 10 days or so for a funeral home to get a certificate, I can not call and request one from the funeral home. They are not allowed to tell me if someone deceased or the names of their family members. Jerry Surles moved to accept an obituary as notification of death. Tim Helder seconded the motion. The motion passed 4-0. Fire & Police Academy Conference: Notification of the Police and Fire Academy Conference was given to the Board. Widow's Benefits: Randy Bradley: Do we want to talk about increasing the widow's benefit? Police Pension Meeting Minutes October 21, 2004 Page 8 of 11 • Jerry Surles: I think it should be done with the entire Board here. I really thought that we had talked about this before. I am like Jerry Friend, I think I went home and told my wife that she would have 90% . Randy Bradley : I don't recall ever approving that. Sondra Smith: You haven't done it since I have been here. Tim Helder: I don't remember it. Randy Bradley: I know we addressed it several times but we have never really taken any action that I can recall. We talked about it at the last meeting that when we submitted our request for our last benefit increase, correct me if I am wrong Eldon, did we not exclude the widows in our request? What my point is do you think they are covered now under that request that we had prior or will be have to resubmit? Eldon Roberts: This is all cloudy and it has been clouded up even more so with the last legislative session in Little Rock. I think the means are there for this Board to increase the widow's benefits to 90% of salary of what their spouse is drawing. It takes Board action possibly to do that. One of our cash flow evaluations that we had done, in an effort to raise benefits, we where wondering if they had counted widows in that at the 90% level because obviously it makes a difference. We wrote a letter to them asking them and they said yes, . we took into consideration your widows being moved to 90% of salary. I also understood that it has to do with the widows whose husbands were drawing 90% of salary and whenever they died they continued drawing that 90% of 'salary. I don't know if it addressed going back to the widows whose husbands never drew the 90% because they deceased before the 90% benefit was implemented. I don't know, I am really at a loss for this. Kit mentioned that he doesn't think we can do this. It is something we do need to address and find out what we can do. I am not sure what we can do. Randy Bradley: How about having Kit check into that. Eldon Roberts: I think we are going to need someone to walk us through this alright. . Sondra Smith: What was the Attorney General's opinion that Kit got, I thought that was why he got an Attorney's General opinion. Eldon Roberts: I remember that. I think that was prior to the change in the legislation two years ago. That had to do with whether we should pay the widows 50% of salary or 90% and we pretty much were doing it right according to that Attorney General's ruling. Since that time I think there has been some legislation passed at the last session that changed all of that. I want to think that this Board has the right to raise those widows to 90% of salary. I don't know if you have the right to go back and raise the ones whose husbands were deceased and never even drew 90% or not but the ones that are currently • living and their husbands are living and drawing 90% of salary when they pass away their spouses could remain at that 90%. Police Pension Meeting Minutes October 21, 2004 Page 9 of 1 I • Tim Helder: That is kind of odd that they would prohibit them because if their husband was still alive they would be getting 90 %. Randy Bradley: Couldn't we, if we choose to do it, from this day forward and not be retroactive to the day we went to 90 %, would that be up to the Board? Sondra Smith: Wouldn't you have to have another study completed to see if you could qualify for raising those benefits? Eldon Roberts: Possibly. . Sondra Smith: I would think that you would have to have another study done. I don't know that we would pass the test to have a benefit increase if they did another study, from the looks of this report. Eldon Roberts: We probably couldn't actuarially but if we went with cash flow evaluation, which is an easier test to pass. I think the Board does need to take some sort of action to get this started. Let's try to work our way through this to see .what we have to do, what we can do and what we want to do. I don't know how to go about it other than the Pension Review Board in Little Rock can possibly give us some guidance On that and explain the current law to us so that we can maybe understand it, what our options are out there. I do know for sure at one time that we were concerned if the actuarial evaluation figures that • were turned in that they used to compute our benefit increases, if they were done counting widows to continue to receive what their husbands drew. We wrote a separate letter to them and it came back yes, they were counted in there to continue to receive the level of benefit that their spouse was when they passed away. Obviously we have never done that because we are still at 50% of salary for all widows that are drawing benefits. Randy Bradley: Are you looking at giving them the benefits retroactive to the point that we went to 90% or from this day forward. Eldon Roberts: I would say from this day forward. If the deal was that the widows were allowed to continue drawing 90% of salary if their husband was in fact alive and drew that, maybe retroactive back to that point. That wouldn't be that many people back. I think we have had 3 or 4 die since we were doing 90% of benefits. Randy Bradley: You are still talking about quite a bit of money. Eldon Roberts: I didn't mean go back and pay them. Just go back and have them start drawing from this day forward. Not go back and pay them a big lump sum of money. Randy Bradley: Retroactive would be a large sum of money. Eldon Roberts: I don't know if the Board is out on a limb here or not, if we should be doing this and we are not paying those people what they have coming. I am kind of loss on • this too, I try to keep up with this about as well as anybody does, but this has me confused. Police Pension Meeting Minutes October 21,2004 Page 10 of 11 • I do think the Board does need to take some kind of action to get something started that will tell the Board where we are at in this and where our options are and if there are any mandates. Randy Bradley: I suggest we start the procedure by going through the Pension Relief Board and see what we have to do down there and if we have done everything we need to do. Eldon Roberts: That . might be good to draft a letter to them and tell them we are. concerned about what options are available to us or what mandates regarding the payment of benefits to widows. Randy Bradley: Maybe Kit could explore the new statue and stuff that you are talking about that has been passed recently and bring us up to date on that at the next meeting. Eldon Roberts: I don't think that new statue gives this Board the authority to vote to increase the. widow's benefits to 90% of salary. David Whitaker: Was that the 2003 session? Tim Helder: . I wonder if we could vote it in as a Board whenever the study indicates we are able to provide that benefit. That it is our intent to provide that benefit if the fund will support it. I think it is important that they get it but you also don't want to do it if it is a • detriment of the entire fund. Eldon Roberts: That's right. You might point out in the letter do we need to have this costed again, do we need to do another actuarial evaluation or is the one that we have already had done suffice because I know that we were told that they computed all of their numbers on widows staying at the same level that the husbands were drawing. Tim Helder: Where are we at now compared to when they did that study as far as dollar wise . Eldon Roberts: I don't remember that would have been back in 1997 or 1998. Sondra Smith: I don't see how you can increase the benefit when you have a necessary employer contribution of $ 1 ,678,000. Eldon Roberts: Well on the actuarial evaluation, but there are other methods that are acceptable through State law to determine benefit levels. Sondra Smith: But if you increase the benefits this number is going to go up. Eldon Roberts: Absolutely. Except for the fact that maybe widow' s are already figured in that number. Because the actuaries told us in a letter that they had computed that widows would remain at the same level that their husbands were at. So they could already be figured in that number right there. • Police Pension Meeting Minutes Octoba 21, 2004 Page I I of I 1 • Randy Bradley: Would you be willing to have someone draft a letter and request information from them. Sondra Smith: I think David made some notes and I will get with Kit on the law. Eldon Roberts: Ask if we are mandated to do anything and do we have an option as a Board to do anything. Other: Jerry Surles: I get my check sometimes before the 15th but the check is dated the 15'h. Is there any reason we put the 15d' on the check when we get it before that date? Marsha Farthing: That is the date that we have chosen as the date of the checks. We mail them early so they will be there in time. David Whitaker: The check is on an operative legal. The date line is not an operative legal requirement. A check is known as a demand instrument. So if you have a signed check it is cashable. Sondra Smith: The money is there, there is no transferring that -has to be completed on a • certain day? Marsha Farthing: We always make sure the money is there before we write the checks. Meeting Adjourned at 2:35 pm • J POLICE PENSION FUND November 2004 61300-8000 6800-9agg 5335-00 533505 Fultrre EMP# NAME GROSS YTD Wages Suppl. YTD Suppl. Suppl. Fed Tax ST. TAX NET �154 ALLEN, CHARLES 2.296.42 22,964.20 50.00 500.00 649.80 220.00 66.89 2,059.53 52 ARNOLD, WILLADEAN 863.14 8,631 .40 50.00 500.00 649.80 913.14 130 BAYLES, DON 1 ,410.39 14.103.90 50.00 500.00 849.80 1,460.39 107 BLACK, JOE P 1 ,000.12 10,001.20 50.00 500.00 649.80 100.00 20.00. 930.12 120 BOWEN, J R (DECEASED)" 4,929.12 400.00 649.80 0.00 147 BRADLEY, GERALD 4,282.59 42,825.90 50.00 500.00 649.80 940.53 217.32 3,174.74 139 BRADLEY, RANDALL 2,541.22 25,412.20 50.00 500.00 649.80 382.00 100.00 2,109.22 167 BROWN, JOHN 3,875.58 38,755.80 50.00 500.00 649.80 600.00 200.00 3,125.58 157 CARROLL,RONALD L 1 ,871 .19 18,711 .90 50.00 500.00 - 649.80 250.00 105.00 1 ,566.19 151 COLE, RUSTON 2,723.87 27,238.70 50.00 500.00 649.80 600.00 200.00 1 ,973.87 109 COOPER, ADRIAN 567.23 5,672.30 50.00 500.00 649.80 617.23 108 DENNIS, WARREN 1,223.34 12,233.40 50.00 500.00 649.80 0.00 1 ,273.34 160 DUGGER,GARY 2.810.94 28,109.40 50.00 500.00 649.80 300.00 120.00 2.440.94 125 FLOWERS, HAROLD 766.42 7,664.20 50.00 500.00 649.80 816.42 140 FOSTER, BILLIE D. 2,849.68 28,496.80 . 50.00 500.00 649.80 300.00 120.00 2,479.68 148 FRIEND, JERRY 2,801.12 28,011 .20 50.00 500.00 649.80 725.00 150.00 1 ,976.12 161 HANNA, JANICE 1 ,739.21 17,392.10 175.00 50.00 1,514.21 145 HANNA, MARK 692.74 ' 6,927.40 50.00 500.00. 649.80 742.74 162 HASKINS, IRENE 386.10 3,861 .00 50.00 500.00 649.80 436.10 169 HELDER, TIM 5,187.10 51,871 .00 50.00 500.00 649.80 750.00 250.00 4,237.10 180 HOYT, RICK 6,628.13 19,884.39 50.00 100.00 1 ,100.00 410.00 5,168.13 146 HUTCHENS, BERNICE 901 .10 9,011 .00 50.00 500.00 649.80 130.00 821 .10 143 JOHNSON, CHARLES 2,181 .68 21,816.80 50.00 500.00 649.80 42.67 2,189.01 103 JOHNSON, WENDELL - 695.82 6,958.20 50.00 500.00 649.80 745.82 118 JONES, BOB 2,932.41 29,324.10 50.00 500.00 649.80 0.00 2,982.41 144 KILGORE. DONALD 1,818.27 18,182.70 50.00 500.00 649.80 19.72 1 ,848.55 129 LAWSON, FORREST 1 ,393.05 13,930.50 50.00 500.00 649.80 350.00 1 ,093.05 150 LITTLE, PATSY R 360.50 3,605.00 50.00 500.00 649.80 410.60 *53 LORCH, DONNA G 360.50 3,605.00 50.00 500.00 649.80 410.50 156 MARTIN, KENNETH 3,281 .05 32,810.50 50.00 500.00 649.80 500.00 140.00 2,691 .05 128 MCCAWLEY, LARRY 1 ,505.80 15,058.00 50.00 500.00 649.80 180.00 40.00 1 ,335.80 116 MCCHRISTIAN. MARIE 360.50 3,605.00 50.00 500.00 649.80 410.50 126 MCWHORTER, KAREN 499.57 4,995.70 50.00 500.00 649.80 549.57 136 MITCHELL, MICHAEL 2.048.22 20,482.20 50.00 500.00 649.80 150.00 1 ,948.22 141 MUELLER, ROSEMARY 1,833.79 18,337.90 50.00 500.00 649.80 1 ,883.79 158 MUNSONANGELA 3,730.DD 37,300.00 50.00 . 500.00 649.80 500.00 183.00 3.097.00 112 MURPHY, JAKE 360.50 3,605.00 50.00 500.00 649.60 0.00 410.50 137 PERDUE, LARRY 2,063.66 20,636.60 50.00 500.00 649.80 200.00 25.00 1 ,888.66 164 PERSHALL, ROBIN 1,355.00 13,550.00 190.00 67.00 1,098.00 132 PHILLIPS, HOMER GENE 1,558.80 15,588.00 50.00 500.00 649.80 300.00 1 ,308.80 105 PRESTON, GEORGE DAVID 1 ,422.81 14,228.10 50.00 500.00 - 649.80 100.00 100.00 1,272.81 135 RICKMAN, LOREN 1 ,982.28 19,822.80 50.00 500.00 649.80 230.00 65.00 1,737.28 104 RIGGINS. RAYMOND C 1 ,483.21 14,832.10 50.00 500.00 649.80 125.00 25.00 1 ,38321 159 SCHUSTER,JOHN H. 2,769.74 27,697.40 50.00 500.00 649.80 340.00 110.00 2,369.74 122 SKELTON, FRANK (DECEASED)' 2,940.32 200.00 0.00 178 SKELTON, FRIEDA T. 367.54 2.205.24 50.00 300.00 649.80 417.54 168 STANLEY, MELVIN 4,335.87 43,358.70 50.00 500.00 649.80 1,100.00 300.00 2,985.87 155 STOUT, BETTY 427.71 4,277.10 50.00 500.00 649.80 0.00 477.71 133 SURLES, JERRY 2.417.93 24,179.30 50.00 500.00 649.80 450.00 150.00 1 ,867.93 142 TAYLOR, DENNIS 1 ,833.79 18.337.90 50.00 500.00 649.80 105.00 40.00 1 ,738.79 106 UPTON, FRANKLIN 93920 9,392.00 50.00 500.00 649.80 10.00 - 979.20 163 WATSON, RICHARD 7,015.33 70,153.30 50.00 500.00 649.80 1,950.00 400.00 4,715.33 149 WILLIAMS, JOYCE 1 ,253.58 12,535.80 50.00 500.00 649.80 217.07 1 ,086.51 134 WITT, DON 1 ,569.81 15,698.10 50.00 500.00 649.80 115.00 64.00 1 ,440.81 127 WOOD, PAUL J 1 ,404.63 14,046.30 50.00 500.00 649.80 0.00 1 1,454.63 0 104,980.18 1,009,804.17 2,550.00 25,500.00 33,139.80 13,684.60 3,780.00 90,064.98 61300-9801) 6800-9800 6800-9800 533500 53350.5 5335-06 Total '5200 seam EerrefiM paw in May Year to Date 1 ,010,204.17 25,500.00 33,139.80 1 ,008,843.97 ^ 4200 death benefits paid in August POLICE PENSION FUND December 2004 6BW9900 6800-9600 5375-00 5335-05 Future EMP# NAME GROSS YTD Wages Suppl. YTD Suppl. Suppl. Fed Tax ST. TAX NET 1* 154 ALLEN, CHARLES 2,296.42 27,557.04 50.00 550.00 649.80 220.00 66.89 2,059.53 152 ARNOLD, WILLADEAN 863.14 10,357.68 50.00 550.00 649.80 913.14 130 BAYLES, DON 1 ,410.39 16,924.68 50.00 550.00 649.80 1 ,460.39 107 BLACK, JOE P 1 ,000.12 12,001 .44 50.00 550.00 649.80 100.00 20.00 930.12 120 BOWEN, J R (DECEASED)" 4,929.12 350.00 649.80 0.00 147 BRADLEY, GERALD 4,282.59 51,391 .08 50.00 550.00 649.80 940.53 217.32 3,174.74 139 BRADLEY, RANDALL 2,541 .22 30,494.64 50.00 550.00 649.80 382.00 100.00 2,109.22 167 BROWN, JOHN 3,875.58 46,506.96 50.00 550.00 649.80 600.00 200.00 3,125.58 157 CARROLL,RONALD L 1,871 .19 22,454.28 50.00 550.00 649.80 250.00 105.00 1 ,566.19 151 COLE, RUSTON 2,723.87 32,686.44 50.00 550.00 649.80 600.00 200.00 1 ,973.87 109 COOPER, ADRIAN 567.23 6,806.76 50.00 550.00 649.80 617.23 108 DENNIS, WARREN 1 ,223.34 14,680.08 50.00 550.00 649.80 0.00 1 ,273.34 160 DUGGER.GARY 2,810.94 33,731 .28 50.00 550.00 649.80 300.00 120.00 2,440.94 125 FLOWERS, HAROLD 766.42 9,197.04 50.00 550.00 649.80 816.42 140 FOSTER, BILLIE D. 2,849.68 34,196.16 . 50.00 550.00 649.80 300.00 120.00 2,479.68 148 FRIEND, JERRY 2,801 .12 33,613.44 50.00 550.00 649.80 725.00 150.00 1 ,976.12 161 HANNA, JANICE - 1,739.21 20,870.52 r 175.00 50.00 1,514.21 145 HANNA, MARK 692.74 8,312.88 50.00 - 550.00 649.80 742.74 162 HASKINS, IRENE 386.10 4,633.20 50.00 550.00 649.80 436.10 169 HELDER, TIM 5,187.10 62,245.20 50.00 550.00 649.80 750.00 250.00 4,237.10 180 HOYT, RICK 6,628.13 33,090.65 50.00 200.00 1 ,100.00 410.00 5,168.13 146 HUTCHENS, BERNICE 901 .10 10,813.20 50.00 550.00 649.80 130.00 821 .10 143 JOHNSON, CHARLES 2,181.68 26,180.16 50.00 550.00 649.80 42.67 2,189.01 103 JOHNSON, WENDELL 695.82 8,349.84 50.00 550.00 649.80 745.82 118 JONES, BOB 2,932.41 35,188.92 50.00 550.00 649.80 0.00 2,982.41 144 KILGORE, DONALD 1,818.27 21,819.24 50.00 550.00 649.80 1932 1,848.55 129 LAWSON, FORREST 1 ,393.05 16,716.60 50.00 550.00 649.80 350.00 1 ,093.05 150 LITTLE, PATSY R 360.50 4,326.00 50.00 550.00 649.80 410.50 •153 LORCH, DONNA G - 360.50 4,326.00 50.00 550.00 649.80 410.50 156 MARTIN, KENNETH 3,281 .05 39,372.60 50.00 550.00 649.80 500.00 140.00 2,691 .05 128 MCCAWLEY, LARRY 1 ,505.80 18,069.60 50.00 550.00 649.80 180.00 40.00 1 ,335.80 116 MCCHRISTIAN, MARIE 360.50 4,326.00 50.00 550.00 649.80 410.50 126 MCWHORTER, KAREN 499.57 5,994.84 50.00 550.00 649.80 549.57 136 MITCHELL, MICHAEL 2,048.22 24,578.64 50.00 550.00 649.80 . 150.00 1,948.22 141 MUELLER, ROSEMARY 1 ,833.79 22,005.48 50.00 550.00 649.80 1 ,883.79 158 MUNSONANGELA 3,730.00 44,760.00 50.00 550.00 649.80 500.00 183.00 3,097.00 112 MURPHY, JAKE 360.50 4,326.00 50.00 550.00 649.80 0.00 - 410.50 137 PERDUE, LARRY 2,063.66 24,763.92 50.00 550.00 649.80 200.00 25.00 1 ,888.66 164 PERSHALL, ROBIN 1 ,355.00 16,260.00 190.00 67.00 1 ,098.00 132 PHILLIPS, HOMER GENE 1 ,558.80 18,705.60 50.00 550.00 649.80 300.00 1 ,308.80 105 PRESTON, GEORGE DAVID 1 ,422.81 17,073.72 50.00 550.00 649.80 100.00 100.00 1,272.81 135 RICKMAN, LOREN 1,982.28 23,787.36 50.00 550.00 649.80 230.00 65.00 1 ,737.28 . 104 RIGGINS, RAYMOND C 1 ,483.21 17,798.52 50.00 550.00 649.80 125.00 25.00 1,383.21 ©183 ROBERTS, ELDON 6,645.32 6,117.34 6,645.32 159 SCHUSTER,JOHN H. 2,769.74 33,236.88 50.00 550.00 649.60 340.00 110.00 2,369.74 122 SKELTON, FRANK (DECEASED)' 2,940.32 200.00 0.00 178 SKELTON, FRIEDA T. 367.54 2,940.32 50.00 350.00 649.80 417.54 168 STANLEY, MELVIN _ 4,335.87 52,030.44 50.00 550.00 649.80 1 ,100.00 300.00 2,985.87 155 STOUT, BETTY 427.71 5,132.52 50.00 550.00 649.80 0.00 477.71 133 SURLES, JERRY 2,417.93 29,015.16 50.00 550.00 649.80 450.00 150.00 1,867.93 142 TAYLOR, DENNIS 1,833.79 22,005.48 50.00 550.00 649.80 105.00 40.00 1,738.79 106 UPTON, FRANKLIN 93920 11 ,270.40 50.00 550.00 649.80 10.00 979.20 163 WATSON, RICHARD 7,015.33 84,183.96 50.00 550.00 649.80 1,950.00 400.00 4,715.33 149 WILLIAMS, JOYCE 1 ,253.58 15.042.96 50.00 550.00 649.80 217.07 1 ,086.51 134 WITT, DON 1 ,569.81 18,837.72 50.00 550.00 649.80 115.00 64.00 1,440.81 127 WOOD, PAUL J 1 ,404.63 16,855.56 50.00 550.00 649.80 0.00 1,454.63 • //��y� /� y 111625.50 1,225831 .87 2,550.00 28,050.00 33,139.80 13,684.60 3,780.60 96,710.30 R w4iiW 6800-9900 6e00-98M 6wo-9900 . 533590 533505 533506 Total '5200 death Ettrefils paid in May Year to Date 1 ,226,281 .87 30,600.00 33,139.80 1,290,021 .67 - tt00 deem eere0ts paid in August POLICE PENSION FUND January 2005 6800.9800 68009800 5335-00 5395-05 EMP# NAME GROSS YTD Wages Suppl. YTD Suppl. Fed Tax ST. TAX NET •154 ALLEN, CHARLES 2,365.31 2,365.31 50.00 50.00 220.00 66.89 2,128.42 152 ARNOLD, WILLADEAN 889.03 889.03 50.00 SOHO 939.03 130 BAYLES, DON 1 ,452.70 1,452.70 50.00 50.00 1 ,502.70 107 BLACK, JOE P 1 ,030.12 1,030.12 50.00 50.00 100.00 20.00 960.12 147 BRADLEY, GERALD 4,411.07 4,411.07 50.00 50.00 940.53 217.32 3,303.22 139 BRADLEY, RANDALL 2,617.46 2,617.46 50.00 50.00 382.00 100.00 2,185.46 167 BROWN, JOHN 3,991 .85 3,991 .85 50.00 50.00 600.00 200.00 3,241 .85 157 CARROLL,RONALD L 1 ,927.33 1 ,927.33 50.00 50.00 250.00 105.00 1 ,622.33 151 COLE, RUSTON 2,805.59 2,805.59 50.00 50.00 600.00 200.00 2,055.59 109 COOPER, ADRIAN 58425 584.25 50.00 50.00 634.25 108 DENNIS, WARREN 1 ,260.04 1 ,260.04 . 50.00 50.00 0.00 1 ,310.04 160 DUGGER,GARY 2,895.27 2,895.27 50.00 50.00 300.00 120.00 2,525.27 A25 FLOWERS, HAROLD 789.41 . 789.41 50.00 50.00 839.41 ._ 140 FOSTER, BILLIE D. 2,935.17 2,935.17 50.00 50.00 300.00 120.00 2,565.17 148 FRIEND, JERRY 2,885.15 2,885.15 50.00 50.00 725.00 150.00 2,060.15 161 HANNA, JANICE 1,791.39 1 ,791.39 0.00 175.00 50.00 1 ,566.39 145 HANNA, MARK 713.52 713.52 50.00 50.00 763.52 162 HASKINS, IRENE 397.68 397.68 50.00 50.00 447.68 169 HELDER, TIM 5,342.71 5,342.71 50.00 50.00 750.00 250.00 4,392.71 180 HOYT, RICK 6,826.97 6,826.97 50.00 50.00 1 ,100.00 410.00 5,366.97 . 146 HUTCHENS, BERNICE 928.13 928.13 50.00 50.00 130.00 848.13 143 JOHNSON; CHARLES 2,247.13 2,247.13 50.00 50.00 - 42.67 2,254.46 103 JOHNSON, WENDELL 716.69 716.69 50.00 50.00 766.69 118 JONES, BOB 3,020.38 3,020.38 50.00 50.00 0.00 3,070.38 144 KILGORE, DONALD 1,872.82 1,872.82 50.00 50.00 19.72 1 ,903.10 129 LAWSON. FORREST 1,434.84 1,434.84 50.00 50.00 350.00 1 ,134.84 150 LITTLE, PATSY R 371.32 371 .32 50.00 50.00 421 .32 •153 LORCH, DONNA G 371.32 371 .32 50.00 - 50.00 421 .32 156 MARTIN, KENNETH 3,379.48 3,379.48 50.00 50.00 500.00 140.00 2,789.48 128 MCCAWLEY, LARRY 1 ,550.97 1,550.97 50.00 50.00 180.00 40.00 1 ,380.97. 116 MCCHRISTIAN, MARIE 371.32 371 .32 50.00 50.00 421 .32 126 MCWHORTER, KAREN 514.56 514.56 50.00 50.00 564.56 136 MITCHELL, MICHAEL 2,109.67 2,109.67 50.00 50.00 150.00 2,009.67 141 MUELLER, ROSEMARY 1 ,888.80 1 ,888.80 50.00 50.50 1.938.80 158 MUNSON,ANGELA 3,841 .90 3,841 .90 50.00 50.00 500.00 183.00 3,208.90 112 MURPHY, JAKE 371 .32 371 .32 50.00 50.00 0.00 421 .32 137 PERDUE, LARRY 2,125.57 2,125.57 50.00 , 50.00 200.00 25.00 1,950.57 164 PERSHALL, ROBIN 1 ,395.65 1,395.65 - 0.00 190.00 67.00 1 ,138.65 132 PHILLIPS, HOMER GENE 1 ,605.56 1 ,605.56 50.00 50.00 - 300.00 1 ,355.56 105 PRESTON, GEORGE DAVID 1,465.49 1 ,465.49 50.00 50.00 100.00 100.00 1 ,315.49 135 RICKMAN, LOREN 2,041.75 2,041 .75 50.00 50.00 230.00 65.00 1 ,796.75 104 RIGGINS, RAYMOND C 1 ,527.71 1 ,527.71 50.00 50.00 125.00 25.00 1,427.71 183 ROBERTS, ELDON 6,844.68 6,844.68 . 0.00 1 ,244.00 400.00 5,200.68 159 SCHUSTER,JOHN H. 2,852.83 2,852.83 50.00 50.00 340.00 110.00 2,452.83 178 SKELTON, FRIEDA T. 378.57 378.57 50.00 50.00 428.57 168 STANLEY, MELVIN 4,465.95 4,465.95 50.00 50.00 1 ,100.00 300.00 3,115.95 155 STOUT, BETTY 440.54 440.54 50.00 50.00 0.00 490.54 133 SURLES, JERRY 2,490.47 2,490.47 50.00 50.00 450.00 150.00 1 ,940.47 142 TAYLOR, DENNIS 1,888.80 1,888.80 50.00 50.00 105.00 40.00 1 ,793.80 106 UPTON, FRANKLIN 967.38 967.38 50.00 50.00 10.00 1,007.38 163 WATSON, RICHARD 7,225.79 7,225.79 50.00 50.00 1 ,950.00 400.00 4,925.79 149 WILLIAMS, JOYCE 1 .291.19 1,291 .19 50.00 50.00 217.07 1 ,124.12 134 WITT, DON 1 ,616.90 1,616.90 50.00 50.00 115.00 64.00 1,487.90 127 WOOD, PAUL 1 ,446.77 1,446.77 50.00 50.00 0.00 1 ,496.77 114 974.27 114,974.27 2,550.00 2,550.00 14,928.60 4,180.60 98,415.07 6800-9800 68005800 5335-00 5335-05 Tote Year to Date 114,974.27 2,600.00 117,574.27 .APPLICATION FOR PENSION PURPOSES • DATE November 22 2004 Board of Trustees Police Pension and Relief Fund Fayetteville, Arkansas 72701 Gentlemen: 1, Eldon R . Roberts have been employed by the Police Department of the City of Fayetteville, Arkansas, from 11-25-68 to 12-03 -04 I hereby request all benefits due me from the Police Pension and Relief Fund as of My beneficiary is Carolyn K. Roberts My reasons for retirement are voluntary ,' f l✓ Signature zi;g76? S td ahij s4vom to before me this aamf�day of � ng'y+ATaA� 200+} . - M U L 1 Notary Public 0&*- t • y'c mmissiagexpiies: Ok. & I- aQDS City Treasurer's Office The annual salary of the above applicant for pension purposes is: $ 87 , 270 . 98 Computation of Retirement Benefits Ninety per cent (90%) of applicant's annual salary =----------------------- $ 78 , 543 . 88 Additional annual benefits per AR Code Anno, 24- 11 -422 ----------------, $ 1 , 200 . 00 *Additional annual benefits per AR Code Anno, 24- 11 -432 -------------- $ 00 . 00 *(Payable only at age 60 with 26 or more years of service) Total annual retirement benefits ---------------------------------------------- $ 79 , 743 . 88 Total monthly benefits ( 1/12 of total annual retirement benefits) ---------- $ 6 , 645 . 32 City Treasurer, wu, ``%A.j N � ed and sworn to before me this day of ce Lr►t 200 . ZOOMJ a• • .es Q:o'�. No7AFJ .1,vo p Notary Public =m : ALY corrin j�ion expires: p (0 So * PUBL+G ; _� �D GENERAL POLICE PENSION • Prepared : 11 /24/2004 Name: Eldon Roberts Date of Retirement: 12/03/04 Emp # 20 SS# 430-92-8240 DOH : 11 /25/1968 Yrs Srv: 36 Hourly Rate: 41 . 9572 Hours Base : 21080. 00 Annual Salary 87 ,270 .98 Annual Benefit (at 90% of salary) 789543 .88 1 .25% for each year over 25 (payable at age 60) 0 .00 Total Annual Benefit 78 , 543.88 1112 of Annual Benefit 61545.32 Additional yrs beyond 20 :(max. 5 yrs) 5 $20.00 100.00 Monthly benefit 61645. 32 Daily benefit 218.48 Last day on payroll 12/03/04 . ' *1st retirement check to be issued 12/15/2004 Dec 4-31 , 2004 28.00 days daily benefit 218 .48 Total Check 61117 . 34 11 /24/2004 gen police pension calc sheet tl r • 2005 Meeting Schedule Policemen's Pension and Relief Fund Board of Trustees Third Thursday of the First Month of each Quarter 1 :30 p.m . City Administration Room 326 January 20 April 21 July 21 October 20 • KIT WILLIAMS M S FAYETTEVILLE CITY ATTORNEY AVID J. WHITAKER ssistant City Attorney Judy Housley Office Manager THE CITY OF FAYETTEVILLE, ARKANSAS Phone (479) 575-8313 113 W. Mountain, Suite 302 FAX (479) 575-8315 Fayetteville, AR 72701-6083 October 20, 2003 Fire Pension and Relief Board of Trustees Police Pension and Relief Board of Trustees RE: Attorney General Opinion concerning Act 674 of 2003 concerning surviving spouse's benefits Dear Board of Trustee Members: As requested, I sought and have now obtained an Attorney General ' s Opinion on Act 674. The Attorney General interpreted it as we thought it • should be interpreted, that granting surviving spouses more than 50% of a member' s benefits must specifically be approved through the processes identified in A.C.A. §24- 11 - 102. Thus, despite the title of the act to "clarify the authority", the act did not clarify existing authority but granted new and additional authority. The Attorney General opined that surviving spouses are not entitled to a retroactive increase to the benefits equal to what the member would have been entitled to receive. Therefore; we do not need to change our current procedure and payment list. Attached is the Attorney General's Opinion (No. 2003-276). With kindest regards, Kit Williams Fayetteville City Attorney KW/jh • Attachment Opinion No. 2003-276 October 17, 2003 The Honorable Jan A. Judy State Representative 202 West Maple Street Fayetteville, AR 72701 -4132 Dear Representative Judy: • You have presented the following questions for my opinion: ( 1) Does Act 674 of 2003 change the existing law to give new authority to police and. fire pension boards to raise surviving spouses ' benefits in the future to exceed fifty percent of the ending salary of the pensioners? (2) If the current pensioners are receiving more than fifty percent of the ending salary, are the current surviving spouses limited to what they had been receiving prior to Act 674 until the pension board acts under A.C .A. § 24- 11 - 102 to specifically raise the surviving spouses' benefits? RESPONSE Question: I — Does Act 674 of 2003 change the existing law to give new authority to police and fire pension boards to raise surviving spouses ' benefits in the future to exceed fifty percent of the ending salary of the pensioners? It is my opinion that Act 674 of 2003 changes the existing law to give new authority to police and fire pension boards to raise surviving spouses' benefits in the future to exceed fifty percent of the salary attached to the rank of the pensioner at the time of death. • The Honorable Jan A. Judy State Representative . Opinion No. 2003-276 Page 2 Before discussing the basis for this conclusion, I will set forth the language of Act 674. It states in full : SECTION 1 . Arkansas Code § 24- 11 -425(f), concerning pension benefits in the event of the death of an active or retired member of a police pension and relief fund, is amended to read as follows: (f)( 1 ) The sum total of the pension to be paid the surviving spouse or the qualifying child of the deceased police officer shall not exceed one-half ( 1 /2) of the salary attached to the rank the police officer held at the time of his or her death. (2) However, the limit on the sum total amount under subdivision (/)(I) of this section may be exceeded through benefit increases authorized under § 24-11-102. SECTION 2 . Arkansas Code § 24- 11 -820(b)(3), concerning pension • benefits in the event of the death of an active or retired member of a firemen' s pension and relief fund, is amended to read as follows: (3)(A) The sum total of the pension to be paid the spouse or the qualifying children of volunteer or part-paid fire fighters shall not exceed one-half (1 /2) of the salary attached to the rank the member held at the time of his or her death as an active member of a volunteer or part-paid fire department, nor shall it be less than thirty dollars ($30.00) per month. (B) However, the limit on the sum total amount under subdivision (b)(3)(A) of this section may be exceeded through benefit increases authorized under § 24-11-102. Acts 2003 , No. 674 (emphasis added). The amending language of Act 674 refers to A.C.A. § 24- 11 - 102, which states in pertinent part: (a) The board of trustees of a municipal firemen's relief and pension fund and the board of trustees of a policemen's pension and relief . fund are authorized to increase benefits for future or current retired The Honorable Jan A. Judy State Representative • Opinion No. 2003-276 Page 3 members and beneficiaries of the firemen' s relief and pension fund or policemen's pension and relief fund. A.C.A. § 24- 11 - 102(a) . The statute goes on to set forth the conditions that any increase must meet. Your question apparently arises out of a concern as to whether Act 674 should be applied retroactively so as to require back payments to surviving spouses. It is my opinion that Act 674 should not be applied retroactively. A well-established principle of statutory interpretation that has been consistently applied by the Arkansas Supreme Court is the principle that all legislation is presumed to apply prospectively unless the legislature expressly declares, or necessarily implies by the language used, an intent to give the legislation retroactive effect. Any doubt on the matter will be resolved against retroactive application. See, e.g., City of Cave Springs v. City of Rogers, 343 Ark. 652, 37 • S.W3d 607 (2001 ); City of Dover v. Barton, 337 Ark. 186, 987 S.W.2d 705 ( 1999). In the context of legislation affecting pension benefits, the court has explicitly stated that "legislation affecting pension rights should contain an express provision if it is to be construed as having retroactive operation." Arkansas Fire & Police Pension Rev. Bd. v. Stephens, 309 Ark. 537, 541 , 832 S.W.2d 239 ( 1992), citing Cross v. Graham, 224 Ark. 277, 272 S.W.2d 682 (1954). Act 674 of 2003 contains no indication whatsoever that it was intended to be applied retroactively. It is my understanding that there is some concern that an argument could be made that the title of Act 674 may indicate an intent that the act apply retroactively. The title of the Act is: "An Act to Clarify the Authority of Police and Fire Pension and Relief Funds to Increase the Benefits for Surviving Spouses and Beneficiaries After the Death of an Active or Retired Member; and For Other Purposes." Acts 2003 ) No. 674, Title. The concern apparently arises out of the title's use of the word "clarify." The argument would be that this term indicates that the purpose of the act was not to grant new authority, but rather to make clear authority that already existed. If the authority already existed, the argument goes, surviving spouses would be entitled to increases that had already been enacted by the board. It is my opinion that this argument must fail for two reasons. First, it is appropriate to look to the title of an act only for the purpose of resolving ambiguities in the text. But if the text of the act is unambiguous, resort to the act' s The Honorable Jan A. Judy State Representative • Opinion No. 2003-276 Page 4 title is inappropriate. Quinney' v. Pittman, 320 Ark. 177, 895 S.W.2d 538 ( 1995). In my opinion, the text of Act 674 is unambiguous. Indeed, any ambiguity that might be raised concerning the retroactive application of the act arises out of the title itself. It is therefore particularly inappropriate to look to the title of Act 674 in interpreting the act. Second, even if the title is consulted in interpreting Act 674, it need not be interpreted to indicate retroactivity. Indeed, the title could easily be read to indicate simply that the act is intended to make clear that whereas there may have been some question in the past as to whether police and fire pension fund boards could increase surviving spouses' benefits, those boards will, as of the effective date of the act, unquestionably have the authority to increase such benefits. Nothing about the word "clarify" necessitates a retroactive interpretation. For these reasons, any argument for retroactivity that relies upon the use of the word "clarify" in the title of Act 674 must fail . I acknowledge that the court has made an exception to the presumption against retroactivity in some limited circumstances in which the legislation in question has been deemed to be procedural or remedial, rather than substantive. The exception applies only to legislation that does not disturb vested rights or create new obligations, but that instead only supplies a new or more appropriate remedy to enforce an existing right or obligation. AKA v. Jefferson Hospital Assoc., 344 Ark. 627, 42 S.W.3d 508 (2001 ). In my opinion, this exception cannot apply to Act 674 of 2003 . Act 674 is substantive, rather than procedural, because by permitting an increase in benefits, the Act clearly creates new payment obligations for the pension fund. The exception to the presumption against retroactive application is therefore inappropriate with regard to Act 674. Act 674 must be interpreted to operate prospectively only. Question 2 — If the current pensioners are receiving more than fifty percent of the ending salary, are the current surviving spouses limited to what they had been receiving prior to Act 674 until the pension board acts under A. C.A. § 24- 11-102 to specifically raise the surviving spouses ' benefits? It is my opinion that regardless of the amount current surviving spouses of police and fire pension fund members are receiving at present, the amount they receive can only be increased by specific action of the board pursuant to A.C.A. § 24- 11 - 102. The provisions of A.C.A. § 24- I1 - 102 appear to be the only source of . authority upon which an increase in benefits paid to beneficiaries can be based. The Honorable Jan A . Judy State Representative Opinion No. 2003-276 Page 5 It is my understanding that this question is based upon what appears at first blush to be a conflict between A.C.A. § 24- 11 -425(a)( 1 ) and A.C.A. § 24- 11 -425(f). Section (a)( 1 ) provides that the surviving spouse is to receive "an amount equal to the pension attached to the rank of the deceased police officer at the time of his or her death," whereas Section (f), provides that the surviving spouse is to receive an amount not to exceed "one-half ('/2 ) of the salary attached to the rank the police officer held at the time of his or her death:" Apparently the question is based upon the idea that the board has authority under Section (a)( ] ) to pay surviving spouses more than is currently permitted under Section (f) and could therefore give surviving spouses an increase pursuant to Section (a)( 1 ), without having to comply with A .C.A. § 24- 11 - 102 . It should be noted that my predecessor opined that there is no conflict between Section (a)( 1 ) and Section (f), and that Section (f) should be interpreted to operate as a limitation on the amount permitted under Section (a)( 1 ). See Op. Att'y Gen. No.- 2002-236. Under that interpretation, the board does not have the authority to pay surviving spouses more than the amount permitted under Section (f). I agree with my predecessor' s interpretation and conclude that it • would be improper for a board to grant a surviving spouse an increase from the Section (f) amount to the Section (a)( 1 ) amount without complying with the requirements of A.C.A. § 24- 11 - 102. I note that if a particular pension board had previously (i. e. , prior to the effective date of Act 674 of 2003) opted to pay surviving spouses in accordance with Section (a)( 1 ), rather than under the limitation language of Section (f), that amount can now only be increased under the authority of A.C.A. § 24- 11 - 102 and in accordance with that statute 's required mechanisms and conditions. I believe that Act 674 makes clear that increases must be accomplished through A.C.A. § 24- 11 - 102 . Assistant Attorney General Suzanne Antley prepared the foregoing opinion, which I hereby approve. Sincerely, MIKE BEEBE • Attorney General okuee KIT WILLIAMS FAYE7TEVILLE CITY ATTORNEY *AVID J. WHITAKER Assistant City Attorney - - Judy Housley Office Manager THE CITY OF FAYETTEVILLE. ARKANSAS Phone (979) 575-8313 - 113 W. Mountain, Suite 302 FAX (979) 575-8315 Fayetteville, AR 72701-6083 September 2, 2003 Honorable Jan Judy 202 W. Maple Street Fayetteville, AR 72701 Dear Representative Judy: Act 674 of 2003 now allows a surviving spouse to receive more than 50 % of a police or fire pensioner's benefits "through benefit increases authorized under X24-11-102." The only question that might .be raised is retroactivity since this act was entitled "An Act to clarify the authority . . . ." rather than "An Act to add the authority or "change" the authority. Thus, to ensure our pension boards are properly complying with thi 's new law, I request you forward the following questions as well as my memo of August 291hto the Attorney General for his opinion. (1) Does Act 674 of 2003 change the existing law to give new authority to police and fire pension boards to raise surviving spouses' benefits in the future to exceed 50 % of the ending salary of the pensioners? (2) If current pensioners are receiving more than 50 % of ending • salary, are the current surviving spouses limited to what they had i� been receiving prior to Act 674 until the pension board acts pursuant to A .C.A. 24-11 -102 to specifically raise the surviving spouses' benefits? Thank you for your assistance. With kindest regards, Kit Williams Fayetteville City Attorney KW/jh cc: Police Pension Board Members li FAYETTEN71 LLE KL s� f CITY OF FAYETTEVILLE, ARKANSAS IH KIT WILLIAMS, CITY ATTORNEY r DAVID WHITAKER, ASST. CITY ATTORNEY _ LEGAL DEPARTMENT DEPARTMENTAL CORRESPONDENCE TO: Police Pension Board Members FROM: Kit Williams, City Attorne DATE: August 29, 2003 RE: Widow's benefits I believe the new law {Act 674 of 2003 codified as A.C.A. §24- 1 .1 -425 (f) (2)} is NOT CLEAR. It states: "However, the limit on the sum total amount under subdivision (f) (1 ) of this section may be exceeded through benefit increases authorized under §24711 - 102:" Of course, every benefit increase you have granted was "authorized under §24-11 -102 so does that mean widows are now immediately entitled to the benefit of all those previously authorized increases? The title of the act .seems to imply that interpretation is correct. It states : "AN ACT TO. CLARIFY THE AUTHORITY OF POLICE AND FIRE PENSION AND RELIEF FUNDS TO INCREASE THE BENEFITS FOR SURVIVING SPOUSES AND BENEFICIARIES AFTER THE DEATH OF AN ACTIVE OR RETIRED MEMBER; AND FOR OTHER PURPOSES." (emphasis added) The title says "clarify", not change. So was there .always the authority to pay widows more than 50% and the legislature simply needed to clarify the law for us RECEIVED AUG 2 9 2003 CITY OF FAYETTEVILLE r;!TY CLERK:S OFF,M dummies? If they were changing the law (instead of merely clarifying it), why did they state it was "to clarify the authority?" I cannot answer that question. If an Act is not clear, the Arkansas Supreme Court will look to the Act' s title to interpret the meaning of statutory language. . However, despite its title, I believe Act 674 was not clarifying the authority to increase benefits to widows over 50%, but was changing the law to allow such authority for future increases. I believe this is true because I believe the law was absolutely clear (before this new Act) that surviving spouses ' benefits "shall not exceed one-half of the salary" of the retiree. This Act clearly states that surviving spouses ' benefits may now exceed this one-half limitation (which is a change, not a clarification). The importance whether the new Act was a "change" rather than a "clarification" is tied to your past increases authorized under §24- 11 - 102. If the law was actually a clarification that surviving spouses ' benefits could always have been raised, then every widow is immediately eligible for all past increases (and may be entitled to back payments for the whole period we believed widows were not eligible for these increases). If the law was a change (as I believe), widows certainly would not be eligible for back payments and probably would not be entitled to receive the increased benefits granted to retired members until the Board passes a Resolution to increase surviving spouses" benefits and the effect of this proposed benefit increase is analyzed by the state accountants and accepted by the Arkansas Fire and Police Pension Review Board:' However, I am not completely confident that surviving spouses may not now be entitled to the pension benefits "in an amount equal to the pension amount attached to rank of the deceased police officer at the time of his or her death." A.C.A. §24- 11 -425 (a) ( 1 ). So if Officer John Doe was receiving 90% of his salary at the time of his death (Because of increases authorized pursuant to A.C.A. §24- 11 - 102), would his widow not now be entitled to "an amount equal to the pension amount" (90%) rather than the previous 50% limit? The answer to that question could be "yes." Therefore, I propose we pose a question to the Attorney General to interpret these statutes and inform us what the proper pension'benefits would be. JUL-23-2003 WED 10 : 17 AM AR LOCAL POLICE & FIRE FAX N0, 5016821751 P, 01 Po t %C4 Tex4L PRARKANSAS FIRE & POLICE PENSION REVIEW BOARD P.O. DRAWER 34164 l.i1TLEROCK, ARKANsAS 72203 TELEPHONE: (501 ) 682 . 1745 July 21 , 2003 FAx: (501 ) 682 - 1751 email: infoMopfi-prb.com website: www.lopfi-prb.com Deputy Chief Eldon Roberts City of Fayetteville Police Department PO Box 1988 Fayetteville, AR 72702 VIA FAX: 1-479-587-3522 & US MAIL Dear Deputy Chief Roberts: I am writing to confirm the points of our telephone conversation this morning. Your question to me was whether, given the results of your February 4, 1999 benefit increase request, the actuarial results via cash flow.of that request, and the enactment of Act 674 of 2003, which became effective law July 16, you could now increase the benefits to surviving spouses to 90%. The answer is yes. As we discussed this morning, it has been common practice during the history of this agency to accept, Wcess, and approve benefit increases to surviving spouses of police pension fund members. It was not until the Arkansas Attorney General ruled last year that the law did not authorize this, that benefit increases to surviving spouses were called into question. Act 674 clarifies that what has been common practice is now clearly lawful. The actuaries issued a clarifying letter October 19, 2001 that their valuation for the Fayetteville Police Pension bund had included an increase to future and current retirees, and surviving spouses (copy enclosed). ✓Hence, I hereby certify that the Fayetteville Police Pension Fund Board of Trustees is authorized to increase the benefits to qualified surviving spouses of deceased pension fund members to 90%, as of the next payments to be issued by the pension fund. As discussed, this will not apply to those widows whose benefits currently exceed 90%, i.e. for whom the mandated increases in law throughout time.have now carried their benefits above 90%. I trust you will call with questions. On a different note, I am gratified to hear that you have made the decision to convert administration of the Fayetteville Police Pension Fund to LOPFI administration. We look forward to being of service in this regard. Will I still need to come to the City Council meeting, do you know? Sincerely; *1 A=& A 4YAA 04 4�ZL a I Cathym E. Hinshaw Executive Director gel: actuarys letter of October 19, 2001 2001 Acts of the Arkansas Legislature