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HomeMy WebLinkAbout2005-05-26 MinutesFiremen's Pension & Relief Fund Board of Trustees Meeting Minutes May 26, 2005 Page l of 8 Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes May 26, 2005 A meeting of the Fayetteville Firemen's Pension and Relief Fund was held at 11:00 a.m. on May 26, 2005 in Room 326 of the City Administration Building. Mayor Coody called the meeting to order. Present: Mayor Coody, Robert Johnson, Pete Reagan, Marion Doss, Sondra Smith City Clerk, Amy Bozarth, City Clerk's Office, Trish Leach, Accounting Department, Kit Williams City Attorney, and Carl Springston, Pensioner. Absent: Danny Farrar and Ronnie Wood. Approval of the Minutes: Pete Reagan made a motion to approve the April 28, 2005 minutes. Marion Doss seconded the motion. Upon roll call the motion passed 5-0. Approval of the Pension List: Sondra Smith: There haven't been any changes. There hasn't been anyone that has gone from drop to retirement, the next person scheduled for retirement will be in July, and there has not been anyone that has deceased. Pete Reagan made a motion to approve the June 2005 Pension List. Robert Johnson seconded the motion. Upon roll call the motion passed 5-0. Old Business: Travel Reconciliation Pete Reagan Sondra Smith: This is just to let Pete know we need to get his Travel Reconciliation Report on the trip he went on. Pete Reagan: The NCPERS Conference. I submitted a report, an overview of the conference. I have all the material here if anyone would like to see it. I had the receipts lying on my desk, but I failed to get them. I will bring them in. Mayor Coody: When was the conference? Firemen's Pension & Relief Fund Board of Trustees Meeting Minutes May 26, 2005 Page 2 of 8 Sondra Smith: The first of May. Pete Reagan: May 5th through the 13th Sondra Smith: Could you get the information to me so we can do the Reconciliation Report. 2005 Elections Sondra Smith: We had five people that were nominated: Robert Johnson, Dennis Ledbetter, Charles McWhorter, Larry Poage, and Ronnie Woods. Ronnie Woods and Dennis Ledbetter were elected to the board. Marion Doss made a motion to accept the election results. Pete Reagan seconded. Upon roll call the motion passed 5-0. Kit Williams: You shall notify them, Sondra? Sondra Smith: Yes. Kit Williams: Will they need to actually be sworn in? Sondra Smith: Not that I know of, we have not sworn them in in the past. Pete Reagan: No, it's just a simple election. Sondra Smith: We just need to notify them that they've been elected. Kit Williams: And they'll be at the next meeting. Sondra Smith: Yes. Nichols & Campbell, P.A. — Income Tax refund for Retirees Sondra Smith: I enclosed a copy of the letter, and each one of you should have received a copy of it my mail stating that we're going to submit the information directly to the Department of Finance and the Administration. We are currently working on that, and it will probably be sometime in July before we get all of the data compiled. Then, we will submit all of the information directly. After we compile all of the information, we are going to send a copy to each pensioner for them to verify that the information we compiled is correct. There will be a little box down in the bottom for them to check to say, yes this is correct. Some of them have said that they do not want to participate, and if they do not want to participate, they will check a little box that says I do not wish to participate. Then they will have to send it back to us. Kit Williams: Will it have a signature block on it too? Firemen's Pension & Relief Fund Board of Trustees Meeting Minutes May 26, 2005 Page 3 of 8 Sondra Smith: Yes. Marion Doss: Now this is just concerning an income tax refund, it has nothing to do with the pension plan, right? Sondra Smith: No, it has nothing to do with the pension plan. A lot of people are confused about this. This refund has to do with their tax return and how the Department of Finance and Administration calculated their tax. Is that right? Kit Williams: Yes. Sondra Smith: The State evidently did not calculate their taxes correctly. Some of them think they did not pay any tax but if they paid State Income Tax they may be due a refund on some of that state tax they paid. So, they could be eligible for a refund. Kit Williams: I think the State gave a $6,000 exemption to the military but not to other ones. That was found to be improper. They should have given the $6,000 exemption everybody or nobody. Sondra Smith: There are also some people that are confused because their spouse is now deceased, but they also could be eligible for this refund. Kit Williams: But it's not going to be much. Sondra Smith: No. Robert Johnson: One letter said it averaged around $1,000, didn't it? Sondra Smith: That's from the attorney, so we have no idea how much it's actually going to average. Kit Williams: It's over a number of years, so if you receive $6,000 for a number of years and were paying at the highest 7% rate, then it could add up. But, most people are not going to be at that level. Pete Reagan: For the purposes of the DROP pensioners, this is just for retirees of the fund from 1999 to 2002? Kit Williams: I think that's correct. Sondra Smith: I think that's correct. I sent a letter to the DROP participants, so they will know what's going on. Not everybody is going to be eligible. Pete Reagan: Right. But the DROP members should be, because they're actually considered retired. Firemen's Pension & Relief Fund Board of Trustees Meeting Minutes May 26, 2005 Page 4 of 8 Kit Williams: I don't think you have paid any State Income Tax on that, have you? You had to have paid State Income Tax on pension funds and didn't get that $6,000 deduction from the amount you would be paying taxes on that the military received. Pete Reagan: So it's only for those that are actually drawing their retirement check then? Kit Williams: I think that's probably correct because in the future, the State is not making that mistake. When you get your pension it will be under the new and improved rules that no longer discriminate. Robert Reagan: It will totally depend on yourself and how you filed to begin with. Kit Williams: Yes. Sondra Smith: You have to have been hired before 1984 to be eligible. There are a lot of variables on whether or not you'll get a refund. Carl Springston: I'm a retired firefighter since 1976. It says from the tax years of 1999 through 2002. That leaves me a little confused. I've paid tax on that ever since 1976. Kit Williams: That's due to the statute of limitation and when the suit was filed. They can only go back so far after the suit was filed and it would be during the period of time they were collecting it improperly. You can only look under 1999 through 2002, because of the statute of limitations. Sondra Smith: It could be possible that the State law changed sometime during that time too. Kit Williams: Yeah, I think State law changed in 2002, and that's why there is the cut off. They went back three years, because the statute of limitations. They could make claims back three years because of the statute of limitations. This originally came from another state, and when that state's pension's revisions were declared unconstitutional, a lawyer filed the suit here. He immediately won because the precedence had already been set in another state. Carl Springston: Do I have to go through my CPA or do I have to go through this attorney to receive this potential refund? Kit Williams: The attorney I think has been already awarded a fee by the Supreme Court. He received a lot of money back on this I think. Your CPA certainly can help you with this. At this point, the attorney I don't think is charging any more. He's already received his funds or will at the end of the suit. I don't think it will affect your refund. If you pay your CPA, then of course, you will be out that money. But your CPA can certainly help you. Sondra Smith: Right now, the State is saying the only way they're going to accept the information is if we submit it to them electronically. So, it's possible they might not accept the information if we don't submit it for you. Firemen's Pension & Relief Fund Board of Trustees Meeting Minutes May 26, 2005 Page 5 of 8 Trish Leach: We were also told, in an email from David Foster, with the State, that if we submit it, the pensioners should not have to do anything. Sondra Smith: If we submit the information the State has told Accounting that the pensioner will not have to file a claim form. Kit said there's information on the claim form that he feels the pensioners are going to have to fill out themselves. Trish Leach: I wondered about that, but David Foster with the State and told us that if we submit it, then you shouldn't have to do anything. So we're gathering the information to send to the State. Sondra Smith: But that's up to you. If you want to submit it, you can. Carl Springston: Is the attorney going to get part of the $1,000? Sondra Smith: No. Kit Williams: He's probably already been awarded his fee, and now they're trying to get the money to the people that lost it in the first place. The attorney's fee is supposedly based on the amount of money that is out there that should not have been taken by the State. He's gotten a percentage fee of that I think, so your amount might have already been reduced. Carl Springston: Overall, I've paid quite a bit of state tax, but the state tax I've paid on my pension has not been that great. Kit Williams: The most it could be is $6,000 times 7%, because that's the most you could have lost if you received $6,000 from the Fayetteville Pension Fund per year and you paid taxes on it when you shouldn't have. So it would be whatever your rate was, about 7% is the maximum, so that's about $420 a year. That's the maximum you could recover a year and that's with no attorney's fees taken out. Whether the court has reduced that already by attorney's fees, I don't know. Carl Springston: So we don't need to do anything else with it until we hear something from the City? Kit Williams: That's what we've been told. Sondra Smith: Right. Accounting is doing the calculations. When we get everything completed we will send you a letter with your personal information in your letter. Then you'll have to verify whether your information is correct. If it is, you'll let us know by sending the letter back to us, and we will submit it directly to the State. Carl Springston: Thank you. Kit Williams: I hope it all works out. We're getting advice from different sources and it's not always consistent. Firemen's Pension & Relief Fund Board of Trustees Meeting Minutes May 26, 2005 Page 6 of 8 Mayor Coody: Thanks for coming today. New Business: Longer Investment Authorization on Equity Variance of 5% Sondra Smith: We changed the equity potion so that Longer could have a variance of 5%, but if they go over or under that variance then we have to vote on it. They have gone over by 2.4%. This is just for us to approve that variance. Pete Reagan motioned to approve the 2.4% variance. Marion Doss seconded the motion. Upon roll call the motion passed 5-0. Other: Kit Williams: There's one more item that it would be best to update. On the TIF lawsuit, Jim Rose was in fact hired. Everybody on both the police and fire pensions agreed on Mr. Rose, so he has begun representing you and has filed an answer on your behalf. Right now, the only thing we are waiting for is for the State Department of Finance and Administration to file an answer. I have talked to their attorney and their attorney said that they probably will wait. Normally when you sue the state, you have to go to Pulaski County. Well, that would cost everybody more money to send their attorney down to Pulaski County when all the attorneys are here. So I beseeched the Department of Finance and Administration to please leave the case up here and wave venue, which they can do. Their attorney told me that they probably would do that. I'm still waiting to get their answer. Hopefully they will specifically wave venue. Then it will go through up here and you all would stand in a very good position with the new law saying that you are exempt from the TIF District. I expect that I will lose the argument that you are supposed to be in it, and then it will actually go down to the Supreme Court. So far, everything is doing well, and we're just waiting for the Department of Finance and Administration's attorney to file their response. Pete Reagan: Do you have a copy of the response by Jim Rose yet? Kit Williams: Yes I do. Basically he quoted the new law saying that you're exempt and you should be dismissed and you shouldn't pay anything. Pete Reagan: Can we get a copy of that for the minutes? How thick is it? Kit Williams: It's a number of pages, because obviously when I filed this complaint, I had to do a lot. But, I could give a copy to Sondra if she wants it. Sondra Smith: We probably need to keep a copy of it in our records too. Kit Williams: And of course, your attorney has a copy. have it for both of the pension boards. Sondra Smith: That would be great. Thank you. Firemen's Pension & Relief Fund Board of Trustees Meeting Minutes May 26, 2005 Page 7 of 8 But I will supply a copy so you can Longer Investments Report Sondra Smith: This is for everyone to look at and review. Robert Johnson: What's the bottom line on this? Pete Reagan: The bottom line is that oil stocks are doing rather well. Kit Williams: But the rest of the market is pretty shaky. A brief discussion of the Longer Investments Report ensued. Marion Doss motioned to approve the report. Pete Reagan seconded the motion. Upon roll call the motion passed 5-0. Pete Reagan: I have a question to Kit on this Pulaski County case, McFadden vs. Weiss. I guess Weiss is the Director of the Department on Finance and Administration? Kit Williams: Yes he is. Mr. McFadden, I don't know. Pete Reagan: This is the one on our Income Tax Refund. Have you reviewed that case? Kit Williams: I really haven't. It was done totally by an independent lawyer who got a class action to represent all pensioners, people in the teachers retirement program, and all of the pensioners like that that did not get the benefit of that $6,000 deduction. That's my understanding of it. This case has been going on, as you can tell, for a long time, at least since 2002. I've read about it in the newspaper, and that's basically what I know about it. Pete Reagan: When I got this, it was all news to me. I thought I'd wait until I got here to ask you, as our attorney, what the bottom line was on it, why it was done, and if it was because of a new law. Kit Williams: It was done because another case in Michigan found that it was unconstitutional to treat military retirement pay differently than firemen pension retirement fund. So they said that you can exempt some, but if you exempt some, you have to exempt it for all the pensions and not just military. That's my understanding of the case. Since 2002, the state changed it around and now exempts it. When you do your State Income Tax, I think you have about a $6,000 exemption now that used to be military only. Pete Reagan: We have some disability retirees on LOPFI. How are they handling that? Firemen's Pension & Relief Fund Board of Trustees Meeting Minutes May 26, 2005 Page 8 of 8 Kit Williams: I think any kind of pension, whether it is for disability or regular, probably was handled in the same case. They have probably gotten the same notifications. Marion Doss: It probably would have been sent to LOPFI, wouldn't it? Pete Reagan: Yeah, it probably would have been sent to LOPFI. Meeting Adjourned at 11:27 a.m.