HomeMy WebLinkAbout2009-07-16 MinutesBoard Members Policemen's Pension and Relief Fund
Mayor Jordan Chairman Board of Trustees Meeting Minutes
Sondra E. Smith Treasurer TayeVI
July I of 09
12Eldon Roberts Retired Positioed Position 1 Pagc l of 12Jeny Friend Retired Position 2Tim Helder Retired Position 3Melvin Stanley Retired Position 4 K A N S A S
Frank Johnson Retired Position 5
Policemen's Pension and Relief Fund
Board of Trustees Meeting Minutes
July 16, 2009
A meeting of the Fayetteville Policemen's Pension and Relief Fund Board of Trustees was held
at 1:30 PM on July 16, 2009 in Room 326 of the City Administration Building
Mayor Jordan called the meeting to order.
Present: Frank Johnson, Melvin Stanley, Tim Helder, Eldon Roberts, Jerry Friend, Mayor
Jordan, Sondra Smith, City Clerk, Kit Williams, City Attorney, Paul Becker, Finance and
Internal Services Director, Trish Leach, Accounting, Elaine Longer and Kim Cooper,
Longer Investments, Press, and Audience.
Approval of the Minutes:
Approval of the February 11, 2009 Special Firemen's Pension and Policemen's Pension
Joint Meeting Minutes
Tim Helder moved to approve the Special February 11, 2009 meeting minutes. Eldon
Roberts seconded the motion. Upon roll call the motion passed 6-0. Frank Johnson was
absent during the vote.
Approval of April 16, 2009 Meeting Minutes
Eldon Roberts moved to approve the April 16, 2009 meeting minutes. Jerry Friend
seconded the motion. Upon roll call the motion passed unanimously.
Approval of the Pension List:
Revised Pension List's for June and July, 2009 — Donna Lorch deceased
Sondra Smith: We have a revised list because we lost one of the pensioners Donna Larch. You
had already approved those pension lists.
Tim Helder moved to approve the Revised Pension List's for June and July 2009. Melvin
Stanley seconded the motion. Upon roll call the motion passed unanimously.
Policemen's Pension and Relief Fund
Board of Trustees Meeting Minutes
July 16, 2009
Page 2 of 12
August, September, and October, 2009 Pension List's
Sondra Smith: There are changes to these pension lists due to Marie McChristian passing away
on July 1, 2009. She received her full check for the month of July because we don't prorate
benefits. The August, September and October lists have been changed and she has been
removed.
Jerry Friend moved to approve the Pension List's for August, September, and October
2009. Eldon Roberts seconded the motion. Upon roll call the motion passed unanimously.
Old Business: None
Election Results
Sondra Smith: The ones that were serving on the board are still serving. We have no new
board members.
New Business:
Donna Lorch deceased May 27, 2009
Informational
Marie McChristian deceased July 1, 2009
Informational
Revenues/Expenses Report
Sondra Smith: This is a report that Trish is doing for the board which shows your revenues and
expenses from 2004 forward.
A discussion followed regarding the report.
Turnback Funds Information
Sondra Smith: We received the turaback funds earlier this year than what we normally do.
Accounting was nice enough to go ahead and cut a second check which you should have already
received. Your July pension check should have been down by $50 and you should have received
that in August. It will go back up by the $50 because we can't pay that out until we receive the
Policemen's Pension and Relief Fund
Board of Trustees Meeting Minutes
July 16, 2009
Page 3 of 12
funds. Last year and this year they sent an extra $600 but they have requested it back. The
spreadsheet shows where your turn back from 2002 forward. The next two pages are the letters
from PRB explaining the turnback, why you receive it, and how much we have to distribute to
each pensioner. The large sum is always a lump sum separate check, the $50 is added to your
check on a monthly basis.
City Attorney March 5, 2009 memo FOIA Applicability to Police and Fire Pension Board
Meetings
Kit Williams: That's my memo saying that since you all are created by state law that the FOIA
covers all meetings that you have.
Tim Helder: Was there a question?
Kit Williams: There was a question in regards to the Fire Pension Board.
City Attorney May 29, 2009 memo Pension Board Power to reduce Benefits to Avoid
Exhaustion of the Pension Fund.
Kit Williams: The Fire Pension Board asked for an Attorney Generals opinion about whether or
not they could reduce benefits to their pensioners. The Attorney General said that she doubted
that the Fire Pension Board would have that right. As in ever Attorney Generals opinion they
usually don't know all the back ground and all the facts. I don't think the Assistant Attorney
General that wrote this knew that the Fire Pension plan is predicted to run out of funds in 2016.
Senator Madison has already requested another Attorney Generals opinion on the same thing
asking about a particular statute. I did write the Assistant Attorney General and gave her more
facts. I also sited her to a couple statutes that she had not discussed that I thought were relevant
and a case that had to do with a trust and the beneficiary wanting all the income out of it and the
trustee wanted to keep some of the income for the trust to survive. There was nothing in the trust
document that gave the trustee the power to with hold some of the income. The Supreme Court
said that's inherent in the trustee's power to try to preserve the trust even if it is not in the
document the trustee has the power to try to preserve the trust.
My opinion remains that both pension boards have the power to reduce benefits if it's necessary
to keep the pension funds from going broke. The Assistant Attorney General said clearly if you
are going to run out of money in one year then you can prorate the funds but she said she didn't
think you could do it unless you were going to run out of money that year. The statute that she
sited didn't say that you had to wait until that year, that's something that she read into it that I
think was a miss reading of it. The statute talks about if there's not enough money to pay all of
the pensioners all of their benefits then it shall be prorated. She interpreted that to mean all of
your benefits in one year, you keep paying the benefits out and when you get to the last year then
you can finally prorate. My understanding of pensions is that pensions are suppose to be for life,
so if a fund gets to a point to where there's going to be a good prediction that it is going to run
out of money at that point in time the pension board has the power and maybe even the duty to
Policemen's Pension and Relief Fund
Board of Trustees Meeting Minutes
July 16, 2009
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prorate the benefits so that they preserve the fund so that people do not run out of money at one
point especially when it is in a reasonable foreseeable horizon, just a few years out. I think when
you have the kind of report that was given to the Fire Pension Board and their pension fund I
think it is a duty of the Pension Board to take action. An opinion of an Attorney General is an
opinion of a lawyer just like me, most of the time I go right along with the Attorney Generals
opinions. I think that is a great service they give us. They are impartial, well written, and well
researched normally but they are limited because often times they do not have all the facts. They
will be the first ones to say they will not know all the background so sometimes that might
actually make a difference in how the law is interpreted.
Jerry Friend: Is there any legal stuff from looking at it that we might can undo what we have
done but not go below the statutes. We were hired under a 50% amount.
Kit Williams: Absolutely. The Fire Pension Board which their plan is in much worse shape
than yours. They're asking to have some studies done to know exactly what it is but none of
their scenarios would be where is would be less than 50% and it's much more likely that it would
be at the 70% level if not higher. Yours is in better shape than that. At this point as long as we
don't wait too long then I think there would be virtually no chance. I think what the Fire Pension
Board is thinking about is if they can get the right number that will equalize it and that it would
look like it won't cost the City any money to consolidate with LOPFI then that would be the
number they would choose. The City Council at that point in time if they saw that there was no
up front cost they might decide to consolidate with LOPFI'S and that would guarantee the plan
and at that point the City is on the line. It probably in the future would cost the City tax payers
some money but maybe not. Hopefully the actuarial people will be right but the beneficiaries
and the pensioners would no longer have to worry because it would be someone else's problem
and not the pensioners.
Melvin Stanley: In your conclusion you say that the Fire Department Board has the right and
probably fiduciary duty to pensioners to adjust pension. What's your opinion of the limit they
would have to set that would attract the City Council?
Kit Williams: That is what the actuarial study is trying to determine. There were several
scenarios that were presented to the actuary, different ways to reduce it not necessarily reducing
everybody the same, although that might have been one of the scenarios. Whichever one they
choose would have a certain level that that level for this year it would be a cost neutral decision
by the City Council. As long as the stock market or investments performed well enough under
LOPFI as predicted then it wouldn't cost the City any money, if they didn't perform and there
was a problem then the City would have to make up the difference because once it's consolidated
it goes from your reasonability to the City's responsibility. The millage would still come in to
help, that wouldn't end. I don't think it would end all the way through the end of the pension.
That would go into the projections. It's something that you might want to be considering
yourselves in the future. You're not under the gun as much as the Fire Pension Board because
their funds suffered more significant losses. It was already at a lower level and had been reduced
much more dramatically over the years even before the stock market went down.
Policemen's Pension and Relief Fund
Board of Trustees Meeting Minutes
July 16, 2009
Page 5 of 12
Eldon Roberts: I don't have the numbers that came out in the paper shortly after we had the
joint meeting and it was showing the scenarios. It wasn't all that unattractive, it wasn't attractive
either to the City, for the Police Pension to receive no COLA's and to not take a cut in their
current benefits it was not that bad of a number.
Paul Becker: It wasn't nearly as much as the Fire Pension if I remember off the top of my head
it was in the $100,000 range.
Eldon Roberts: That's what I thought and that is per year and that was for us to receive no cut
in current benefits and never get a COLA. That doesn't sound that bad to me but I realize the
City's position on it too. Maybe that will improve in a few years. People are passing away and I
know they are not drawing large money but they weren't figured into this last actuary.
Kit Williams: In actuary studies they estimate the number of deaths.
Eldon Roberts: With the economy and the stock market maybe that number will look more
attractive down the road. I for one, as far as the Police Pension Board of Trustees, if we can
strike some kind of deal with the City where maybe we don't get anymore benefit increases or
COLA but we don't take a cut into what we are getting and we can move to LOPFI. I would be
for it in a heart beat but that all remains to be seen.
Kit Williams: That would be up to the Mayor and the City Council if they would want to try to
come up with $100,000 every year. The danger for the City in the long run and this is why even
if we have a cost neutral.
Eldon Roberts: You can really know what is going to happen.
Kit Williams: And that the State Legislature could decide to give everyone a COLA no matter
what happened and the City is going to pay for it. That might very well happen and that's a risk
the City would be taking. It's not as bad of a risk if it goes in at a zero cost than if it goes in at
any other cost. If it goes to City Council we are going to have to be up front with them.
Frank Johnson: Kit how are you defining risk? I'm a little confused about the liabilities that
the City may face even with the two plans combined.
Kit Williams: Let me talk about the liability. I believe by the way this is set up with the board
primarily controlled by the pensioners, five out of seven members controlled by the pensioners,
and by the way it has been handled through all the years is that you all are in control and
responsible there's no liability at this point for the City to stand behind your fund. However,
there are provisions in the statutes that says when it is consolidated, which is at this point a City
Council decision, when it becomes consolidated with LOPFI the City then assumes
responsibility and assumes the liability at that point in time. You all are no longer responsible
for it you. You lose your over site but you also lose responsibility. Right now I think the City
has no legal liability for what happens to the funds unless they become consolidated with LOPFI.
Policemen's Pension and Relief Fund
Board of Trustees Meeting Minutes
July 16, 2009
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On risk, I just mean there is a risk for what the legislature is going to do and the risk of what the
stock market is going to do. That's the things that I would say are the two risk factors in relation
to keeping it here or having it go down to LOPFI.
Tim Helder: If it goes to LOPFI, the way I understand it, whatever percentage we go in to
LOPFI that is it unless there's a COLA attached to it. If we lose control at some point can the
LOPFI Board or someone else decide to reduce benefits or is it locked in?
Kit Williams I would have to say I am not an expert and we probably need someone from
LOPFI to come up and assure us what would happen but my understanding is exactly that. You
would go down there with whatever percent you were and it will remain that percent. You will
not have any decline but you might have a possible increase if they decide that they are going to
give a COLA. The problem for the City is that if they decide to give a COLA I think they will
turn around and say to the City you're going to pay for this COLA.
Tim Helder: To Franks question the way I was understanding it being asked and my thoughts
that where going on during that time if it going into LOPFI at our current rate and then there was
even a worse financial catastrophe than we have been going through lately and the bottom
dropped out we are no longer in control but the City is ultimately responsible to pay the
beneficiary.
Kit Williams: We have to pay LOPFI.
Paul Becker: What would be happening is you would transfer market risk. The chances are that
the actuarial studies where not accurate or did not keep up the current conditions. You would be
transferring the market risk to the City essentially who would be required to pay LOPFI. The
benefits would stay the same and you would be transferring the risk from here at the fund to
LOPFI and would be a risk of the City and a liability of the City.
Kit Williams: There probably is one potential risk for you to go down there and that is if the
bottom fell out of the State and of the whole LOPFI system and the State Police Pension. Let's
say the Legislature said the tax payers are paying too much we can't afford this we are going to
cut everybody. Right now you all are in control. Your money's not down there, this is your
money, it's not LOPFI money so that can't happen at this point in time. You can run out of
money and then you would be in trouble but you're not going to go down if something happen to
LOPFI. I think it's very unlikely that the State would ever allow that to happen to a state wide
LOPFI plan. There's probably a limit to how much money is going to go out because there are
not very many pension plans out there anymore it's only government. How long the government
can afford to keep the pension plans that they have is a question? That's a risk that something
might happen. It wouldn't happen any time soon but it might ten or twenty years from now if the
cost of the taxpayer got so much that there was enough legislatures that said we are not going to
do this anymore. That would be a lot of litigation because I think you all have some certain legal
rights to a pension that has been promised to you. I think they might have trouble ever trying to
undo it but there is a risk there if it goes down and things got really bad. It is probably way safer
to have it in LOPFI than anywhere else.
Policemen's Pension and Relief Fund
Board of Trustees Meeting Minutes
July 16, 2009
Page 7 of 12
Frank Johnson: The difference in the unfunded liability, the current state, verses the risk that
we were talking about with combining the two plans could you explain that to me, in terms of the
City's inherent or residual obligations to make up any difference.
Paul Becker: If it's transferred?
Frank Johnson Yes.
Paul Becker: If it goes down there first one you are talking about is unfunded liability you
would talk about a different calculation. So it's based on if all income stream stops, which in
this case it wouldn't, because you are going to take your millage down there with you. That
would be if everything stopped at that point in time and you projected it forward there would be
an actuarial liability. It all remains to be seen once it's transferred down there what that liability
is. If it's transferred down there and the actuary projects that it's funded to the proper level at
that point in time there would be no liability. Essentially what you would be done is transferring
market risk. Essentially you're talking about the risks that your asset portfolio is not going to
keep up with what the projections are or that your expenses are going to stay in keeping with
what the actuarial calculated expenses are.
Eldon Roberts: If we merge with LOPFI it would be all of our income we're receiving today
that would go with it.
Paul Becker: It would go with it.
Eldon Roberts: If we merge with LOPFI it would be all of our income that we are receiving
today would go with it. We keep talking about millage but we are talking about the 10% fines
and forfeitures, insurance turn back, and our money is going to be invested and earning
investment monies also. Everything would go with us to Little Rock to LOPFI that we are
receiving today. Then it would only the difference that the City would have to be signing off on.
Paul Becker: That is correct.
Eldon Roberts: Nobody knows what that amount is should the market take a big nose dive after
the City signed on the dotted line to stay in good force in LOPFI. Market risk is what we are
talking about that the City would be assuming and nobody knows what that is.
Paul Becker: Right. That's the actuarial liability that Frank is talking about. That is the
calculation by the actuary over long term what he expects it to be. We don't' know that until it
actually occurred. The revenue streams would go with it.
Melvin Stanley: What benefit would it be to the City to send us to LOPFI? Zero wouldn't it?
Kit Williams: Probably zero from a financial point of view.
Melvin Stanley: Outside of paperwork that these girls do.
Policemen's Pension and Relief Fund
Board of Trustees Meeting Minutes
July 16, 2009
Page 8 of 12
Kit Williams: That's true, that would be some savings but on the other hand we want to see
your funds as secure as possible. We're not as worried about the police fund because you all are
in much better shape. Even though if you look at the actuarial report and it says you are
actuarially unsound and here's what your liability looks like. That's not a totally accurate picture
because as Paul says that does not account for all of the income that will be coming in. You're
probably short because that's why they said $100,000. You're probably some what under funded
now but you are not to far out, which means with no benefit increases, then you shouldn't be in a
steep dive. The Fire Pension plan got into a fairly steep dive and that's why they're projecting
that in 2016 their fund would run to zero. That's why we are concerned about the Fire Pension
plan. That's why they're very concerned about seeing about if they can preserve it. These are all
former city employees so the city has an interest in not seeing city pensioners come up blank and
getting nothing.
Fiduciary responsibility for Pension Board — Frank Johnson
Frank Johnson: This is not necessarily a legal discussion as much as an acknowledgement that
we have to continue with pace While I appreciate what Kit just said in terms of the City's interest
in it's retired police officers, the last thing I want to hear is as the revenue streams began to
tighten up at the city that we are looked at as encumbering any of the programs in the city that
may otherwise be funded if not for us. When it comes down to it for me I just went through that
list of beneficiaries and their widows I began to feel the full weight of the responsibilities of
being on this board. Looking at that list and combing through the minutes over the last few years
it seems like we are showing a pattern of revisiting this, but then we get these single digit returns
and we back off a little bit then things tighten up. I'm just looking for at some point something
actionable so we don't have to continue to come back to this. I think it begins with a broad
discussion of our responsibilities to our beneficiaries. I'm open for any thoughts.
Tim Helder: I agree. We started having these discussions about LOPFI five years ago. We
really tried. There was serious discussion. I don't know that everybody was on board with
doing that. To me it would have been a great thing for the City at that time and for us. There
was a money funding stream coming in that the City was quit ready to give up and go forward
with us going to LOPFL This is something that we have just waited until the last second and
then we are in peril and we are saying please save us. We were trying to do this before there was
a problem.
Kit Williams: There certainly have been discussions and I know that at one point Steve Davis
was talking about some turnback increase.
Eldon Roberts: It did, it got up to $300,000 almost $400,000 for a year and then the maybe the
next year almost $300,000, but it has fallen off now. That was one of the reasons we were asked
to not go to LOPFI to just sit back and take all that increase tumback you're going to get every
year. That didn't last ever year it was just about one or two years in a row and then it has fell
back down to where it is now.
Policemen's Pension and Relief Fund
Board of Trustees Meeting Minutes
July 16, 2009
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Kit Williams: I don't think you all are in terrible shape yet. I'm glad that you are interested in
this. I do think you have a fiduciary duty and ethical responsibility to look at this and be aware
of it and try to stay away from the edge.
Tim Helder: We're not but do we wait until we are?
Kit Williams No, but at this point the Fire Pension board needs to do something much more
quickly. There are some issues out here especially with the Attorney General's opinion that need
to be resolved and they can not wait, if they wait very much longer then they're going to be
looking at not 70% but 50%. No one wants to do cuts and the more you cut the worse it is and
the longer you wait the more you have to cut. It's true a little bit for you all because you have
seen yours go down a little bit but its not going down dramatically like theirs has. There is a
little more time that you all can wait to see what the final results are with the Fire Pension Board.
I am not saying that you are tied to them, you can make your own decisions, but some of the big
decisions are going to need to be made by them this year hopefully. That might give you some
guidance on what you can and can't do.
Tim Helder: Frank I appreciate your thoughts because we do have a responsibility and at some
point we are going to have to make tough decisions. What I'm gathering from everybody is
we're just not in that situation right now. We need to sit back and wait and watch and see what
happens for a while.
Kit Williams: It would probably be too late at this point in the year to try to get the kind of
actuarial study that Fire Pension people have already asked for. It might even be too late for
them this year. I think you can only go down to LOPFI once a year.
Paul Becker: It has to be down there and accepted by them I believe in October. There would
have to be an actuarial study down there and sent back to the City to see if that was acceptable.
The steps you would be taking is have a separate actuarial report
done saying do you have to cut benefits if you do how much to make it zero for the City to send
it down. If the Mayor brought it forward and the City Council did approve it then we would
have to send it down and they would do an actuarial study done by the actuaries of LOPFI. They
would then respond to the City what the situation is and that would all have to be done by
October.
Kit Williams: There is no way you all could do it this year.
Paul Becker: I don't think you all could do it this year. That would be my opinion.
Kit Williams: It would be very tight to do it this year because obviously their plan is losing
considerable funds every year.
Eldon Roberts: We are lucky enough to be in position, that with out the stock market diving
again like it did in 2007 or 2008, that all we really need to do right now is what we are doing.
We are very conscious of this fact and we can watch and see and times may get better for us and
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Board of Trustees Meeting Minutes
July 16, 2009
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for the City to where we can work out a deal where we are willing to go to LOPFI without too
big of a hit on anybody.
Sondra Smith: This is your pension fund and no matter what recommendation you receive from
a staff member at the City it's your fund and you need to do what you think is best for your fund.
If you feel like it's something that you need to do to take it before the City Council then you
need to proceed forward with those steps.
Frank Johnson: Do you think that is something to be considered at another meeting? I see
these meetings as informational to provide us a status at where we are at. Do feel there is a need
to consider a special meeting?
Jerry Friend: I don't. I think we can talk about it at the next regular meeting.
Tim Helder: Based on opinions and what we have heard today I would like to sit back and
watch and see what happens with the Fire Pension.
Jerry Friend: There will be some questions answered with the Attorney General.
Eldon Roberts: When I would vote, as a member of this board, to take it to City Council level
to try to sell it to them, I would like to be at a time when it is the most advantageous for the City,
at the very least cost for them. I think they would come more near accepting us at that time then
if there is a large expense involved in it. We have the luxury of sitting and waiting awhile and
seeing if we arrive at that point where it looks attractive to the City and to us to do that. I'm not
ready to vote to start the merge with LOPFI just yet.
Frank Johnson: I'm not suggesting a meeting to consider a vote as much as to make sure we
have something on the agenda.
Eldon Roberts: We meet quarterly and at every meeting we can have a discussion on where are
we down.
Paul Becker: It's every other year but there have been some discussions with the PRB Board to
do them on a yearly basis. There is a chance that they will do a study this year but traditional
they are done every other year.
Eldon Roberts: That will give us a time frame to work on. We are not behind the eight ball just
yet. We can mention this at our scheduled quarterly meetings and talk about it.
Kit Williams: It should be on the agenda.
Eldon Roberts: If we get an actuarial evaluation this year, if not we will sure get one next year,
and I think we are financially sound enough as long as we are watching out every meeting to
know where we are at. Next year when we get our evaluation we will know where we are at in
all of this.
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Board of Trustees Meeting Minutes
July 16, 2009
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Frank Johnson: The discussion is great and everyone here is very responsible I just think it is
important for us to be fully transparent especially if at some point we feel that we might be
taking this before the City Council.
Parking permits should be used at meter parking only
Sondra Smith: The Parking Division has requested that you park at a metered parking spot and
not around the square.
Longer Investments:
Longer Investments Monthly Report
A copy was given to the board.
The Longer View — July 1, 2009
A copy was given to the board.
Longer Investments 2"d Quarter 2009 Report
A copy was given to the board.
Elaine Longer: The first page is the portfolio appraisal as of June 30a'. We also have an update
for yesterday's close. When I was here in April I talked about the fact that we had gone back
into fully invested on the equity side. The percentage of assets that's invested in equities at the
end of the quarter was 52%.
Page two the percent invested in international equities is 6.2%. We were above the 50% that
requires a motion to approve but within the 10% lead way of the policy.
Jerry Friend moved to approve the equity overage. Eldon Roberts seconded the motion.
Upon roll call the motion passed unanimously.
Elaine Longer: Since the end of the quarter we have had a real good run off that low of March
9, from that point until the high that we hit in June we had a 40% bounce. That's categorized as
the third strongest Bear Market bounce that we have had in the past 100 years. We've taking
some chips off the table and returned to about 46% or 47% equity weighting from the 59% of
where we were at the end of the quarter.
Page three your ending market value was about $7.79 million and the total income yield on the
portfolio is 3.2%. The 3.2% represents what you get in terms of dividends and interest income
on the portfolio. To give you some comparison the 10 year treasury is yielding about 3.4% and
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Board of Trustees Meeting Minutes
July 16, 2009
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the five year is at about 2.4%. Your total portfolio has an income yield that's almost the 10 year
treasury even though you have a 56% growth component.
Page four is an update as of yesterdays close. At one point this month we were down about 5%
from the June 30th close. We had a pretty hard sell off. Now this week we've had a pretty good
increase. The market is still fluctuating within this trading range of a low of about 6,600 in
March and then the high was about 9,300. The equity exposure has been pulled back to about
39% and that combined with the International, which is now at 6.5%, you are at about 46%
equities down from that 58% to 59% at the end of the quarter. The market value as of yesterday
is pretty much where we closed the quarter.
Page seven is a break down of your fixed income portfolio. What's interesting is that the
average yield to maturity on your bond portfolio, we have been able to maintain a 5.1% even
though the average maturity is just 4.1 years. The bonds that mature in three years still make up
52% of your total bond portfolio.
Page eight shows your largest equity holdings Microsoft, Intel, Wal-Mart, Johnson & Johnson,
and AT&T.
Page nine shows the contributions and distributions summary for this year. There have been
$537,000 in cash withdraws.
Page 10 shows the performance. Stocks in your portfolio are up 8.4% year to date. The indices
through that period were up 1.8% on the S&P and the DOW was down 3.8%. The Russell 2000
was about 1.8%. We have had a real strong run this year relative to the market indices. The
International has returned 10.2% and by comparison the EFA index, which is the International
Index, has returned 5.6%. Bonds have been relatively flat this year but the total portfolio is up
5.2% year to date including the fixed income. That brings your annualized numbers back up to a
compound annual of 5.4%.
Meeting Adjourned at 2:45 PM