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HomeMy WebLinkAbout2003-10-16 MinutesPolice Pension and Relief Fund Meeting Minutes October 16, 2003 Page 1 of 3 Police Pension and Relief Fund Board of Trustees Meeting Minutes October 16, 2003 A meeting of the Fayetteville Police Pension and Relief Fund Board of Trustees was held on October 16, 2003 at 1:30 p.m. in Room 326 of the City Administration Building located at 113 West Mountain Street, Fayetteville, Arkansas. PRESENT: Jerry Friend, Tim Helder, Dr. James Mashburn, Jerry Surles, Randy Bradley; City Attorney Kit Williams, City Clerk Sondra Smith, Eldon Roberts and audience. The meeting was called to order by Randy Bradley. Approval of the minutes of a special meeting on September 10, 2003: Jerry Friend moved to approve the minutes. Jerry Surles seconded the motion. Upon roll call the motion passed unanimously. Approval of Pension List: Jerry Surles moved to approve the Pension List. Tim Helder seconded. Upon roll call the motion passed unanimously. Kit Williams: You all were going to have Craig Westbrook look at GUST. I did not do anything in relation to that has anyone else done anything on that? Sondra Smith: He did look at GUST and he charged the board I think $75.00 for his opinion. Kit Williams: Did we get a written report? Sondra Smith: No. Kit Williams: Did he give you an oral report? Sondra Smith: I am not the one that took care of that, because he deals with our Human Resources on a regular basis, Steve Davis asked Michele in HR to speak with him. Kit Williams: Did he say we are okay? Sondra Smith: Yes. Police Pension and Relief Fund Meeting Minutes October 16, 2003 Page 2 of 3 Randy Brady: We need to try to get something in writing. Sondra Smith: I will check with Michele and see if she can get something in writing. Jerry Friend: When we get the resolution back from the Police Pension Board do we have to vote on it again? Kit Williams: No. I will look at the statues again when we get the resolution back and we will follow step by step exactly how it is suppose to be done I think you all can do that without the City Council though, but again I will look at the statues and make sure. Eldon Roberts: I think you are correct that it can be done without the City Council approval. We have done two or three benefit increases in the past and as long as we follow the law, go through the actuary, then through the Pension Review Board, and everything is okay according to them and the law, then this board can do it. Sondra Smith: Do you think for safety sake we should have this board sign the resolution? We can go ahead and do a signature page while they are here and then if we don't need it we don't have to use it. Kit Williams: I don't think so, the statues state it must pass by 75% or three fourths of the membership of the Board of Trustees. Investment Report: Elaine Longer, Longer Investments: The equity exposure is about 33% plus the mutual funds that you have in the foreign market which are 2.4% so you are about 35% to 36%, this is as of September 30, 2003. The real estate investment trust is about 2.5%; the rest is a combination of corporate bonds, government agency bonds and US Treasury Bonds. The value of the portfolio as of September 30, 2003 was about $10.3 million. The income on the portfolio is still holding at 4.2%. Your total market value as of October 10, 2003 was about $10.4 million. The stock accounts and the bond accounts are on page 13, right now you are probably going to show an over draft in the bond account relative to the stock account, it is only a statement on our computer, so when you see the bonds are a minus $200,000 and stocks are at $200,000 it is really balanced. The largest stock holdings you have are Pfizer, General Electric, Citigroup, Minnesota Mining & Mfg. and Microsoft, the largest position being 2.6% of equity portfolio and 1.4% of total portfolio. Realized gains year to date are $278.96. We have been over weighted in technology. The income yield on the book value of your fixed income security is still at 6%. This has held fairly constant for the past few years even though we have had a dramatic decline in interest rates. The balance in the bond account is within the next three years you have about 13% of the portfolio maturing, within a five year maturity we have almost 30% maturing. This is a good position to be in. Your performance history inception to date, as of June of this year you have fully recovered from where you started the bear market in 1999, that is because of the fact that you only went down about 5%. Your total return Police Pension and Relief Fund Meeting Minutes October 16, 2003 Page 3 of 3 is close to 7%. The weighted average on the stock that you own is 3.4% which puts the portfolio at about an A-. I brought along the Carreiro report. According to their report the assumed rate of return on the asset value that they are using needs to be 6% return on current market value of the portfolio, not on the actuarially accrued liability, to get back to actuarial soundness. Kit Williams: Do you think that is reasonable that the overall portfolio can gain the 6% as assumed by Carreiro? Elaine Longer: I think it is very reasonable, it is an assumption that is very close to what we are using in our retirement plans for private clients. I think their assumptions are good. Eldon Roberts: The insurance turn back check, has it come in yet and do you know how much it is? Sondra Smith: The last time I checked with accounting they had not received it, I will check with them and see if it has come in and the amount. Meeting Adjourned at 2:15 PM.