HomeMy WebLinkAbout1986-08-04 MinutesMINUTES OF A MEETING OF THE FIRE PENSION BOARD
A meeting of the Firemen's Pension and Relief Fund Board was held on
Monday, August 4, 1986 at 4:00 p.m. in Room 313 of City Hall, 113 W.
Mountain Street, Fayetteville, Arkansas
PRESENT: Chairman Don Grimes, Secretary Suzanne Kennedy, Fire
Chief Mickey Jackson, Firemen John Dill, Darrell Judy,
and Pete Reagan, Retiree Carl Springston, and Bill
Conrad of A. G. Edwards and Sons.
ABSENT: Treasurer Scott Linebaugh
Call To Order
The meeting was called to order by the Chairman at 4:00 p.m.
Minutes
The minutes of the July 7 meeting were approved as submitted.
Pension List
It was moved by Dill, seconded by Reagan, and passed, 7-0, to approve
the Pension List for August.
Old Business
Grimes noted that the Board had discussed working with the pension list
to determine whether the proposed $50 benefit increase would be applied
equitably. Fire Chief Jackson reported he made calculations for
current people to determine what their pensions would be, based on a
current retirement at the top salary in each pay grade. Jackson said
he did not know how this compared with the payout list. Jackson said
those figures are available if they are needed. Grimes said the staff
would do some work but that Linebaugh was absent at this time.
Jackson said he understood the calculations were supposed to be done on
the question of whether a $50 increase applied to everyone would put
anybody above what a retiree could receive who retired today. Jackson
reported that a Grade 10, Step G Firefighter retiring today would
receive a monthly pension of $769.82, not counting any extra years
above 20. Jackson said there would be one exception in the case of
someone whose salary is above the top -out amount in the pay plan, and
whose pension would be $781.19.
Fire Pension Board
August 4, 1986
Page 2
It was noted that Arnold King had received the benefit of a pension
increase immediately after having retired, making his pension $828.42.
Jackson said what was said at the last meeting was that, if the benefit
increase is approved, we would not want to include people such as King.
Jackson asked if anyone else, with a $50 increase, would be above
$769.82. Jackson noted that a Captain would receive $1031.67 and a
Lieutenant would receive $891.22. Jackson noted that Baird had retired
at $916.20, being above the top -out amount. Dill said he did not think
Baird had been above the top -out amount. Reagan said he thought Baird
had left with longevity pay being considered in his salary. There was
some question as to whether the longevity pay had been figured in his
salary when he retired. Dill said he did not think Baird had been
earning as much as McArthur, and that McArthur's pension was lower.
Grimes said he did not disagree with the philosophy but did not want to
treat some retirees differently than others. Grimes suggested between
now and the next meeting the Board work together and with Linebaugh to
come up with a good formula.
Turnback Honey
Reagan asked if the Fund had received its turnback check. Grimes,
after checking with the Accounting staff, reported the check had been
received, in the amount of $149,064.79.
A. G. Edwards Presentation
Bill Conrad, representing A. G. Edwards and Sons, presented a proposal
to the Board. Conrad noted the Board presently has funds invested in
a "Managed Account" and that A. G. Edwards placed $1,250,000 in a zero
coupon last November at a 9.56% yield maturity. Conrad noted that bond
would mature in 1991. He said the Board originally paid $766,762 for
the bond which is worth about $878,000 today. Conrad distributed a
brochure to the Board members on A. G. Edwards' "Managed Account".
Conrad said the firm's three goals in investing funds in a managed
account are to protect capital, preserve purchasing power, and provide
a superior long-term rate of return. Conrad said that during periods
of market decline or economic uncertainty, cash equivalents, such as
money market funds, may represent a major portion of total portfolio
assets. Conrad said the account would be managed individually; in that
the Board would choose its own approach, whether that be "income" or
"equities". Conrad said there would be an individual portfolio manager
assigned to the account.
Conrad said the firm does its billing in one of two ways - (1) the
Board pays a fee and pays the commissions. Conrad said this fee would
amount to 1.25% annualized and would be billed quarterly; or (2) the
firm charges a "unified fee" and the Board receives a confirmation
Fire Pension Board
August 4, 1986
Page 3
showing the trade. Conrad said, for a $500,000 investment in an equity
account, the fee would be $3300 per quarter, including all fees and
commissions. On a 60/40 split, Conrad said the fee would be $2293 per
quarter. Conrad recommended the unified schedule. Conrad reported a
20.38% rate of growth for the firm over a six-month period on equity
accounts. Conrad asked the Board to consider investing some money in
an A. G. Edwards managed account.
In answer to a question from Reagan, Conrad said audits are conducted
by A. G. Edwards. Conrad said the Board would receive copies of
confirmations on all trades, monthly statements, and quarterly
statements with an economic forecast.
Adjournment
It was moved by Springston, seconded by Judy, and unanimously approved,
to adjourn the meeting.
IRNAN