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HomeMy WebLinkAbout2003-08-28 MinutesFireman's Pension and Relief Fund Board Meeting August 28, 2003 Page 1 of 4 MINUTES OF A MEETING OF THE FIREMAN'S PENSION AND RELIEF FUND BOARD August 28, 2003 A meeting of the Fayetteville Firemen's Pension and Relief Fund was held at 11:00 a.m. on August 28, 2003 in Room 326 of the City Administration Building. Present Danny Farrar, Pete Reagan, Robert Johnson, Marion Doss, Ronnie Wood, Mayor Dan Coody, Chairman, Sondra Smith, Secretary, City Attorney Kit Williams, Steve Davis, Marsha Farthing, Attorney Kent Kieklak, and guest. The meeting was called to order by Mayor Coody. Approval of the Minutes July 31, 2003: Pete Reagan moved to approve the minutes. Danny Farrar seconded. The motion passed unanimously. Approval of the Pension List for September, 2003. Sondra Smith: There will be one change to the Pension List. Marion Doss: Edward Osburn passed away; he was one of the retirees. Pete Reagan: He did not leave a surviving spouse? Sondra Smith: I do not show on the last affidavit that he completed that he has anyone listed except his children and they are all above the age of 23. Pete Reagan moved to approve the Pension List. Robert Johnson seconded. The motion passed unanimously. Investment Report: Mayor Coody: Elaine Longer is not going to be here she has sent a copy of the report for your perusal, you can look at that at your leisure, I can't image that there would be any changes on that. Fireman's Pension and Relief Fund Board Meeting August 28, 2003 Page 2 of 4 Old Business: LOPFI Plan: Mayor Coody: I know that we were looking to send the old pension plan down to the State, but according to the actuarial report, we would be leaving a bunch of money on the table, Steve do you want to bring everyone up to speed on the details on that? Steve Davis: We presented the information to the City Council and the City Council had some questions at the agenda session, but at the City Council meeting all the new business was tabled because of the smoking debate. I then asked for this agenda item to be tabled until October 7, 2003 City Council meeting. We received a fax from Osborn and Carreiro that indicated that if the City moved the old plan to the LOPFI plan in their opinion this pension fund would lose a significant amount of the State tum back over the next five years. It also indicated that there was a possibility of a 3% temporary COLA under the circumstances that Carreiro sets forth. That's where we are right now. There are a couple of questions that Pete has asked about, going to a ten year drop and working after the drop period is over. City Council would have to go along with both of those options. Pete Reagan: It would also have to go through the PRB process, Arkansas Pension Review Board. Just so we understand and it gets in the minutes Steve, Osborne and Carreiro who is the actuarial for the Arkansas Pension Review Board and LOPFI is saying that we keep this Board in tact in Fayetteville, so that we can receive a higher amount of insurance turn back funds because the fund is not actuarially sound, we will be receiving an increased amount over and above what we would normally receive and I think that amount is close to one half a million dollars this year. Have we received that check yet? Steve Davis: I don't know what the amount is, what they recommended was that because of the State Legislature change to the formulas this legislature session that we wait at least two years because the next legislature session could change the turn back formula again and would change their recommendation, because the turn back formula is based on needs basis now where it was based on some other basis. The legislature may change their distribution policy at the next session in 2005. Pete Reagan: Just for the record we will be intensely fighting that, the reason we requested this change this year and part of it was a resolution out of the Arkansas Professional Firefighters Convention is we bad small cities in the State of Arkansas that were receiving monies over and above what it cost for their entire Police and Fire LOPFI cost and they were having to put that in the bank. We received less, the big cities are the ones that got hurt, Little Rock was a million and a half and I think it was 80 something thousand that we lost on the new calculation in 2001. Fireman's Pension and Relief Fund Board Meeting August 28, 2003 Page 3 of 4 Kit Williams: That was probably done by the small cities. Pete Reagan: It was actually done by ULAR, they changed the formula and used 60% land area and 40% population, and we flip flopped those numbers. It is also now based on need, those cities that have monies in the bank will not receive any money and we, because we are not actuarially sound, we are receiving their portion. Steve Davis: The net benefit to the Pension Board Fund following the Osborn and Carreiro analysis is $1.6 million. Kit Williams: Over the next two years or five? Steve Davis: 5 years. Kit Williams: Assuming the formula doesn't change. Hopefully also within two years we will have this case settled too with Merrill Lynch and there won't be a problem as to what to do with that. Steve Davis: They estimate you could only do a 1% COLA at this time. If you stay independent for another three years with that additional State turn back you could do the 3% COLA. Kit Williams: Not only that but we might have some sort of settlement by then from Merrill Lynch. Pete Reagan: This will greatly enhance the bottom line. I would like to thank Steve Davis, I know he has put a lot of time in on this and I would like to thank him for his expertise and Marsha. New Business: Kent Kieklak on line log in with Northern Trust: Kent Kieklak: As you know we are going to monitor the fund beginning as soon as possible. What we need from the Board is authority so that we can go to Northern Bank again establish a direct log -in, so that we can begin monitoring daily your account. We've already into some road blocks with Northern, these days you have to be so careful with providing information. What we would like is a resolution authorizing us to establish a log in so that we can begin monitoring the fund. Pete Reagan moved to approve the drafting of a resolution to give authority to the attorneys to waive any privacy concerns the Northern Trust Bank might have and allow them as our attorneys to have complete access to our financial records. Marion Doss seconded. The motion passed unanimously. Fireman's Pension and Relief Fund Board Meeting August 28, 2003 Page 4 of 4 Other: Budget Report from Accounting was handed out for review. Copy of the Monitor was given to the Board. Pete Reagan: The Joint Retirement Committee with the Arkansas Legislature is meeting today and tomorrow at the Springdale Holiday Inn. Today the meeting is at 4:00 and tomorrow morning it begins at 9:00. Tomorrow morning is the public sector retirement system and there is going to be a legislative update and I plan on being in attendance. Kit Williams: Are they taking public comment tomorrow morning? Pete Reagan: Yes Meeting Adjourned at 11:20 AM.