Loading...
HomeMy WebLinkAbout2010-10-28 MinutesBoard Members Mayor Jordan Chairman Sondra E. Smith Secretary Marion Doss Position 1/Retired Pete Reagan Position 2/Retired Gene Warford Position 3/Retired Ronnie Wood Position 4/Retired Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes October 28, 2010 Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes October 28, 2010 Page 1 of 6 A meeting of the Fayetteville Firemen's Pension and Relief Fund Board of Trustees was held at 3:00 PM on October 28, 2010 in Room 326 of the City Administration Building. Mayor Jordan called the meeting to order. Present: Marion Doss, Ronnie Wood, Pete Reagan, Sondra Smith, Mayor Jordan, and Kim Cooper, Longer Investments. Gene Warford was absent. Approval of the Minutes: June 24, 2010 Meeting Minutes July meeting was cancelled due to lack of a quorum therefore there are no minutes. August meeting was cancelled due to lack of a quorum therefore there are no minutes. September meeting was cancelled due to lack of a quorum therefore there are no minutes. Pete Reagan moved to approve the June 24, 2010 Firemen's Pension and Relief Fund Board of Trustees meeting minutes. Marion Doss seconded the motion. Upon roll call the motion passed 5-0. Gene Warford was absent. Pension List Changes: Viola Louise Lee deceased October 7, 2010 Sondra Smith: She was a widow of a volunteer. Her pension amount was a little over $100 a month. Pete Reagan: Did she get the October check? Sondra Smith: Yes, because we do not prorate during the month. 113 West Mountain 72701 (479) 575-8323 TDD (Telecommunications Device for the Deaf) (479) 521-1316 Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes October 28, 2010 Page 2 of 6 Paul Becker: Her estate did. Approval of the Pension List: August, September, October and November 2010 pension lists Sondra Smith: The only difference between October and November is Viola Louise Lee deceasing. That reduced the pension amount for the month of November. Everything else is the same. Pete Reagan moved to approve the August, September, October and November, 2010 Pension List. Marion Doss seconded the motion. Upon roll call the motion passed 5-0. Gene Warford was absent. Old Business: None New Business: Viola Louise Lee deceased Sondra Smith: There is a copy of the paperwork I received. Her benefits do not go to anybody else so they stop. NCPERS 2011 membership dues Sondra Smith: I received the invoice for the NCPERS membership dues. We need to decide if we want to approve payment of those membership dues. Pete Reagan: In the amount of? Kit Williams: Looks like $150. Pete Reagan made a motion to approve the NCPERS membership dues. Marion Doss seconded the motion. Upon roll call the motion passed 5-0. Gene Warford was absent. Revenue expense report 08/31/10 Sondra Smith: That's the report that Trish in Accounting does to give you an idea of where you are in your expenses and revenues. We also have a more updated one for September 30th 113 West Mountain 72701 (479) 575-8323 TDD (Telecommunications Device for the Deaf) (479) 521-1316 Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes October 28, 2010 Page 3 of 6 Revenue expense report 09/30/10 A copy of the report was given to the Board 2009 Actuarial Valuation A copy of the report was given to the Board Sondra Smith: That is a copy of your actuarial valuation. I emailed that out so most of you should have it. Kit Williams: That was discussed Monday. 2010 turnback fund information Sondra Smith: I did a spreadsheet so you could see the different years. It shows over the years how your turnback. Kit Williams: Looks like it is going down every year. Pete Reagan: The fire future supplement is $20,664. Sondra Smith: Yes. You're right Kit it has gone down. 2003 was a big year $412,000. Paul Becker: There was a change in legislation back in 2003 and that's when they decided that nobody could get more than 100%. Certain of the premium tax distributions were frozen so that left more premium tax to be distributed over the rest of the one's who had not been getting over 100%. That was a short lived thing for three years and that went out in 2005. Chances are you are going to see a decline because as you have new members come into the LOPFI program that draws away from some of the premium taxes and the total distribution. Kit Williams: When a retiree goes to the regular LOPFI then we have our share cut. Paul Becker: No, they start with premium taxes in total and they make the distributions to all of the pensioners. It's divided up between the old and the new pension fund but any new plans coming into the fund detract from that. You have minimum percentages and all that we have talked about before. The fact of the matter is they probably will continue to decline somewhat. Sondra Smith: I sit on the Public Safety Board at the Arkansas Municipal League and they are looking at changing the way the distribution is calculated at this time. Paul Becker: That would positively affect us if did. It's not going to affect us enough to resolve the problems but it would be a positive impact. 113 West Mountain 72701 (479) 575-8323 TDD (Telecommunications Device for the Deaf) (479) 521-1316 Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes October 28, 2010 Page 4 of 6 Pete Reagan: It would affect the unfunded liability problem. Paul Becker: It would to a degree. Pete Reagan: To a degree yes. I will agree with that. Paul Becker: But not enough to solve the problem. Longer Investments: Monthly Report A copy of the report was given to the Board 2nd Quarter 2010 Report A copy of the report was given to the Board 3rd Quarter 2010 Report A copy of the report was given to the Board Longer View A copy of the report was given to the Board Privacv Notice A copy of the report was given to the Board Kim Cooper: The first report is an appraisal that shows the value and your holdings as of September 30th. At that point your domestic equities were 50.7% and the foreign equities were 4.4%. We were at 55.1 % equities so we need approval to be at that level for September 30th Pete Reagan made a motion to approve the equity overage. Marion Doss seconded the motion. Upon roll call the motion passed 5-0. Gene Warford was absent. The yield is 3.43%. That is 75 basis points higher than the yield that you can currently get in a ten year treasury. Elaine has spoke about this before but all through the year we have been emphasizing dividend income as a defensive measure to get more total return from both your dividend income and to boost your total portfolio return. In the period of declining interest rates this 3.43% yield is higher than we can get in government bonds or in corporate bonds. 113 West Mountain 72701 (479) 575-8323 TDD (Telecommunications Device for the Deaf) (479) 521-1316 Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes October 28, 2010 Page 5 of 6 Page two the mutual fund fixed is an investment grade corporate bond fund. It's currently yielding 5.1% and since you have been holding that you've also had 8% in capital appreciation on it. Your preferred debt securities are yielding 6.4% and corporate bonds 7.05%. We are holding one 4% government bond. You've had 11 % in capital gains on that during the time that we held it as interest rates drop plus you have earned 3.9% income. Your government agencies are yielding 5.48% and you have no significant reinvestment or call risk on those. On page three your alternative investments fund is a gold and silver fund. It's 3.1% of your assets and you've had an 8.6% gain on that while you have been holding it. Your ending value is $5,405,000. Your current annual income on the account is $179,500. Your yield is 3.65% and that's with a 55% growth component. Page four, five, and six is an update, we have included a holdings report portfolio appraisal as of yesterdays close. Your current value is $5.37 million. Since the end of the quarter your stocks are up about 2.8% and your total account is up 1.4%. Page seven is a realized gain and income summary. You're realized gains so far this year are $158,030. Net income and expenses are $106,880, that's your stock dividends and bond interest less expenses on the account. Page eight is a fixed income distribution. Your current yield to maturity is 4.9% and your current maturity is 6.3 years. We have been able to increase that over the yield you had on December 31, 2009 by being opportunistic in purchasing bonds during the year while interest rates have fallen on the 10 year from 3.8% to 2.7%. Your income has still increased on the account. The distribution by maturity shows your bond holdings and when they mature. You've got a stable income stream that's locked in with minimal reinvestment risk and still within a moderate maturity structure. We have ample liquidity to tap higher yields if they appear with the bonds that mature within the three year period. In this environment it's all about balancing between securing income and off setting reinvestment risk while retaining the flexibility to address inflation risk. You're postured to do that. Page nine is a performance summary. Year to date your stocks have performed in line with the S&P 500. Your equity mutual funds which are your foreign performance are well ahead of the foreign index, out performing it by about 4%. Your bond returns are 10.3% that compares to the Lehman Bond index of 4.7%. Year to date your total return on the entire portfolio is 6.4%. As of the October pricing the account has fully recovered from the declines that began in 2008 while the S&P 500 is still down 14%. Page 10 is a summary of your contributions and withdraws since we started managing the account. The total contributions have been $1.12 million. Total distributions have been $8.67 million. In light of the meeting last week Elaine wanted me to point out something she had discussed with you when we first started managing the account. This is something that was from the minutes of the meeting in September 2002. She was discussing actuarial returns with you and said it came down to employer and employer funding and benefits would have to be addressed. 113 West Mountain 72701 (479) 575-8323 TDD (Telecommunications Device for the Deaf) (479) 521-1316 Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes October 28, 2010 Page 6 of 6 She did not believe there was anything on the investment side that will get them back to being fully funded. They would have to get to $16.6 million and earn 6% on that and from $10 million they were talking about a 60% return to get back to earning 6%. The things that were discussed there were being discussed in 2002 also. The final page is an account reconciliation that shows your beginning value in August 2002. Contributions, distributions, income, your ending value, and your net investment return since that time is $3.06 million. Also attached is a copy of investment policy if you want to review that. Pete Reagan: I want like to compliment Longer Investments, Kim and your staff for the good work you do for us and we appreciate it. Kim Cooper: Thank you. We appreciate all of you as well. Informational: 2011 MeetinE Schedule A copy of the meeting schedule was handed out to the board. Sondra Smith: The November meeting has been changed due to the Thanksgiving holiday. I have the months listed that Longer Investments will be here on the new sheet so everyone will know when they are going to be here. Meeting Adjourned at 3:20 PM 113 West Mountain 72701 (479) 575-8323 TDD (Telecommunications Device for the Deaf) (479) 521-1316