HomeMy WebLinkAbout2013-10-17 - Agendas - Final Fayetteville Policeman's Pension and Relief Fund
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Melvin Stanley Melvin Stanlev
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Lioneld Jordan Chairman Jerry Friend Retired Position 2
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ARKANSAS
Policemen's Pension and Relief Fund
Board of Trustees Meeting Agenda
October 17, 2013
A meeting of the Fayetteville Policemen's Pension and Relief Fund Board of Trustees will be
held on October 17, 2013 at 3:00 PM in Room 326 of the City Administration Building located at
113 West Mountain Street, Fayetteville, Arkansas.
Roll Call
Approval of the Minutes:
a Approval of the July 18, 2013 meeting minutes
Pension List Changes: None
Approval of the Pension List:
9 Approval of the November and December, 2013 and January, 2014 pension lists
Unfinished Business:
New Business:
Revenue & expense report: 31 Quarter—September 30, 2013 report
2012 Annual Actuarial Valuation
Budget discussion regarding communications, consulting, & NCPERS Conference
Longer Investments:
Longer View
Longer Investments letter dated July 31, 2013
Longer Investments monthly report
Informational:
2014 Meeting schedule
Police]
Lioneld Jordan Chairman Bog Jerry Friend Retired Position 2
Sondra E.Smith Treasurer John Brown Retired Position 3
Eldon Roberts SecretaryAZetired Position I Melvin Stanley Retired Position 4
layeVie Frank Johnson Retired Position 5
ARKANSAS
Policemen's Pension and Relief Fund
Board of Trustees Meeting Minutes
July 18, 2013
A meeting of the Fayetteville Policemen's Pension and Relief Fund Board of Trustees was held
on July 18, 2013 at 3:00 PM in Room 326 of the City Administration Building located at 113
West Mountain Street, Fayetteville, Arkansas.
Mayor Jordan called the meeting to order.
PRESENT: Frank Johnson, Eldon Roberts, Melvin Stanley, Jerry Friend, John Brown
Mayor Jordan, Kit Williams, City Attorney, Sondra Smith, City Clerk Dee McCoy, City
Clerk's office,and Kim Cooper,Longer Investments.
Introduction of Board Members:
Lioneld Jordan, Mayor
Sondra Smith, City Clerk Treasurer
Eldon Roberts, Police Department Retired
Jerry Friend, Police Department Retired
John Brown, Police Department Retired
Melvin Stanley, Police Department Retired
Frank Johnson, Police Department Retired
Approval of the Minutes:
Approval of the April 18, 2013 meeting minutes
Frank Johnson: I think these are some of the most important minutes for a number of reasons.
I think as a new member on the board, and the form that came about as a result of a discussion
we had regarding reductions in benefits and the position you took among with the people that
were here with you is reflected here. Kit, a comment you made relative to our current position,
where you said "We shouldn't take any action right now" making comparison to the Fire
Department. I think these were very significant things that are a matter of record right now. If at
some point we find ourselves in a position where we have to get back on that circular discussion
about a possible reduction of benefits and we have to reflect back on these things, we'll know
that we've exhausted everything we can do. This is not a situation for some reason that
someone just wants to reduce benefits, I don't want to, no one wants to do that. I want the plan
to stay solvent.
Jerry Friend moved to approve the April 18, 2013 meeting minutes. Melvin Stanley
seconded the motion. The minutes were approved in a unanimous vote.
Policemen's Pension and Relief Fund
Bwud of Trustees Meeting Minutes
July 18,2013
Page 2 of 9
Pension List Changes: None
Approval of the Pension List:
Approval of the August, September, October, 2013 pension lists
Sondra Smith: You are paying out $127,863.35 per month. There are no changes.
Eldon Roberts moved to approve the August, September, October, 2013 pension lists.
Frank Johnson seconded the motion. The motion passed with a unanimous vote.
Unfinished Business:
GFOA Best Practices email
Sondra Smith: We went over that in the last meeting and there were some questions as to
what that was. That's more of an informational item. Frank was going to do some checking into
it at some time in the future and see if that's something that we want to do.
Frank Johnson: I went to a website and it was very confusing to me. I think in order to
understand some of what I read it would take maybe someone from the accounting office or
you, Kit. But, just looking at our State Statue, it looks like we are practicing due diligence in
those areas where there are some risk and we are not involved in the distribution of money like
a lot of other pension plans are. We don't provide medical benefits and things like that.
Kit Williams: We are basically complying with what they want us to with best practices. With
the help of the accounting and finance departments, we have been toeing the line as we should.
Frank Johnson: Where did that originate from?
Sondra Smith: It came from the Pension Review Board (PRB), but it also came from the
Government Finance Officers Association. It's an organization that our accounting department is
a member of.
Kit Williams: Paul Becker is a member of that group.
Sondra Smith: I think so.
New Business:
Flower expenses
Sondra Smith: As you are all aware Elaine Longer's son passed away. There's a copy of the
email from Kim Cooper letting us know and there's also a copy of a letter that was sent in the
packet. Frank felt like as a board we should do something. I can not pay for it out of board
expenses or the board pension plan without approval from the board, so therefore it came out of
Policemen's Pension and Relief Fund
Board of Trustees Meeting Minutes
July 18,2013
Page 3 of 9
City Clerk budget, which I do not have a budget for flowers. I offered to pay for it out of my
personal pocket.
Kit Williams: It's quite appropriate since you all have worked with Elaine so long. It is a justified
legalexpense.
John Brown moved to reimburse City Clerk budget for the flower expense. Frank
Johnson seconded the motion. The motion passed on a unanimous vote.
Revenue &expense repo
1st Quarter March 31, 2013 report(Revised
21d Quarter—June 30, 2013 repo
Sondra Smith: At the last meeting we had the first quarter report. I mentioned there was a
number that didn't look correct to me. I checked with accounting and it was not correct, so they
have sent a corrected report. The second report is the June 30 report. At the end of 2012, your
book value was $7,081,000.00 and your market value was $7,689,000.00. At the end of
6/30/2013, your book value is $6,822,000.00 and your market value is $7,387,000.00. The
report gives you a comparison over the years; it goes back to 2005 and shows where you were
in 2005 and where you are at now in your pension plan with market value versus book value.
Jerry Friend: Thank accounting for making this. It's very helpful to see it.
Election Results— Board member listing
Sondra Smith: We have added John Brown to our board of trustees. I've have a list of all the
board members and their contact information. I would like for you to review that, and if there are
any changes that need to be made to that contact information, please let me know. We received
John Brown's email address today. Eldon, you don't have an email address do you?
Eldon Roberts: No.
Sondra Smith: I think you are the only one that doesn't get our minutes and updates.
Melvin Stanley: My mailing address will change in the next month or so.
Sondra Smith: Just call and let us know when you're changing it. We need to change it in
accounting too. We need to do a change of address form. We put this information on our
website. So, if there are any cell numbers or anything you do not want on the website let us
know. This goes out to the public.
Election of Board Secretary
Sondra Smith: Every two years, after our elections, we have to elect a board secretary. Right
now, Eldon Roberts is our board secretary. We need to open the floor for nominations.
Policemen's Pension wd Relief Fund
Board of Trustees Meeting Minutes
July 18,2013
Page 4 of 9
Jerry Friend nominated Eldon Roberts for board secretary. Frank Johnson seconded the
nomination. Eldon Roberts was elected board secretary with a vote of 6-0. Eldon
Roberts abstaining from the vote.
Turn back and Future Supplement funds
Sondra Smith: We normally do not get the turn back money this early. I have a copy of the
check in the packet and I have a copy of the letter we received. This year, each pensioner,
except for those that are drawing because of a qualified domestic relations order (QDRO)
received $1,110.00 additional on their check. This is a one-time lump sum payment, you receive
once a year in either July or August. We can not give it to you until we receive it from the state.
There is an Excel spreadsheet so that you can see how much you've received in the past and
how much you've received this year. There is an additional allocation that we started getting in
2012 because of the way they have changed the laws and how the distribution is made. Last
year, the big lump sum that we received, that goes into your plan, was $103,808.08. This year
we received $117,370.49. Last year, the future supplement was $55,575.000, this year it is
$46,620.00. The $46,620.00 was divided among the pensioners. There's 46 people drawing on
the plan, and four are drawing because of a QDRO therefore there was 42 checks that went out
for $1,110.00. There's an additional police supplement for $25,200.00. We have to give that to
you at $50 per month per pensioner. QDRO's do not get to draw that either. You received an
additional allocation that goes back into your plan. This year, the total amount received was
$213,971.31, last year it was $222,997.77. It changes every year. We do not calculate that, it's
done on a state level. Back in 2002 you only received $178,000.00. There were a few years that
you received over$400,000.00. It just depends on how the state calculates everything.
Frank Johnson: Why is the fluctuation like that?
Eldon Roberts: We are talking about insurance turn back money. It is money the state collects
from car insurance premiums and then it's divided. They wrestle it around and change the
formula every year. At the last meeting I was at for the Pension Review Board in June, the
actuary told the board that more money actually came in this year to the state through the
insurance premium turn back money. But, the state police asked for $700,000.00 more than
they normally ask for which is $6 million. The state had some guidelines that said there would
need to be $4 million left after everybody else got their shares to turn into the general fund. Our
supplement check last year was around $1,300 and this year it was $1,110.00. More money
came into the plan by $2 million but more people are asking for it.
Sondra Smith: They revamped that formula and in 2012 you started receiving that extra
supplement. It's for plans that are not doing as well as other plans. The Fire Pension probably
received more than you received because their plan is in worse shape than the Police Pension
plan. Jody Carreiro tried to explain the calculation to the Arkansas Municipal League Public
Safety Board, and I don't think there were many in the room that understood the calculation.
Frank Johnson: Is it the calculation or the governance around how they make decisions?
Kit Williams: It's the calculations too. I have looked at that before and it's difficult to figure out
exactly what you're supposed to be multiplying and adding. It is very complicated.
Eldon Roberts: State police gets some, the state gets some, volunteer Fire Department plans
all across the state get a certain part, and then Municipal Police and Municipal Fire get part of
Policemen's Pension and Relief Fund
Bound of Trustees Meeting Minutes
July 18,2013
Page 5 of 9
that. LOPFI is counted into that too. They tweak that formula year after year trying to get it more
equitable.
Sondra Smith: It is very complex.
Eldon Roberts: It's done through Little Rock, through the pension review board and maybe
even the legislative process. When they change the formula they may have to get that approved
at the legislative level.
Sondra Smith: There is also a letter that more or less states how your portfolio can be set up. If
you drop below $5 million it changes. Right now, these are the items that you can have in your
portfolio.
Kit Williams: If you look at where it says at a minimum items of review should include, I think
we meet all of those; liquidity is one, performance, the index, allocation, fees, and prohibited
investments. I think our fund is in compliance with all of those.
Sondra Smith: What you need to do is take that letter and match it back to your investment
policy and make sure your investment policy matches what they say you need to be doing.
Eldon Roberts: I first saw this at that June 4th meeting in Little Rock. The letter that we
received told us an actuarial evaluation was coming out and a letter is going to be sent to
approximately 20 plans that's in an at-risk group that they came up with. I don't know what that
letter is going to say. I talked to Jody Carreiro about this and he tells me that we are doing as
good of a job that can be done and that this is not about us. This at-risk group of plans were put
together in order to get the attention of some other people and some other plans that are just
riding down the road in the bus and not looking out the window. They don't know what their
destination is. He said "you all just fell into that risk plan by virtue of your assets".
Sondra Smith: In this letter, it gives us state statues that we need to be following. If anyone
needs a copy of the state statues, I can print them off and give them to you or email them to
you.
Kit Williams: That's not prohibited investments, and we are okay. We are not violating that. If
we drop below $5 million, that really kicks in and limits what we can buy.
Eldon Roberts: What has the Fire Department done? My understanding is from talking to some
of those folks, that they've managed to go out and find someone else.
Kit Williams: It's Garrison Financial. They are doing as well as they can. They can still buy
some mutual funds and things like that. They can't buy individual stocks anymore. They are
more limited than what Elaine has been. Elaine did not feel like she wanted to be that limited.
Eldon Roberts: With some of the methods they use, this company they hired, they still can be
in and out of equities?
Kit Williams: Yes, with mutual funds. In a lot of ways, that's a pretty smart investment anyway.
A discussion followed regarding Garrison Financial and the Fire Department Pension Board.
Policemen's Pension and Relief Fund
Bowd of Trustees Meeting Minutes
July 18,2013
Page 6 of 9
Discussion Items:
LOPFI
Frank Johnson: I'm not sure that needs to be a standing agenda item.
Sondra Smith: I was asked to leave that on there as just a regular agenda item. If you are
ready to remove that, I can remove that from the agenda.
Longer Investments:
Longer View: A copy was given to the Board
Lonner Investments monthly report
Kim Cooper, Longer Investments: The first set of reports in your package is the report for the
end of June. The portfolio appraisal reflects the holdings in your account. As of the end of June,
your stock percentage was 35.2% and the yield on the stocks in your account was 4.5%. That's
just our continuing emphasis on a high dividend yield stocks. That 4.5% compares to the current
yield on the ten year treasury of 2.5%. The next section down is the other income securities.
Those are a couple of funds that hold stocks, but they are high dividend paying stocks. They
have a higher yield on them than what we can get in just a fixed income investment. We are
using that as fixed income although they are stocks, so you do have potential for growth along
with the fixed income. Those are yielding 5.5%.
The next section is your fixed income mutual funds, those hold investment grade bonds and US
Treasuries. That is about 20% of your portfolio and is yielding 3.6%. The last one listed on that
page are your government bonds, those are 15% of your portfolio and are yielding 4.1%. We
still hold a government agency bond in there, that's listed at the top of the second page. Its yield
to maturity is 6.12%. We will just keep holding that for now. You did own a little bit of gold just
under 2% of your portfolio. That's the Central Fund of Canada that's listed there. Your cash was
about 11% of portfolio as of the end of June. The final investment is Energy Limited Partnership.
It's a master limited partnership that holds energy investments. It's just a small percent of your
portfolio, about 2%. The yield on it is 6.1%.
As of the end of the month, your account value was $7,383,000.00 and the yield on the total
portfolio was 3.8%. We went ahead and included an update through July 121 which is the next
set of reports. You'll see that we increased your equity exposure just a little bit from where you
were at the end of the month. We are continuing with our conservative approach, but we had
guidance on earnings. We are kind of in the middle of earning season right now and we have
been able to see some stocks that we wanted to add to and added some additional positions to
the portfolio too. As of July 12th your stocks were at 43.1% and your other income investments
were at 10.5%. That puts us at about 53.6%. As of July 12th we do need approval to be over
50%.
Jerry Friend moved to approve the portfolio being over 60%. Melvin Stanley seconded
the motion. The approval passed with a unanimous vote.
Policemen's Pension and Relief Fund
Bowd of Trustees Meeting Minutes
July 18,2013
Page 7 of 9
Jerry Friend: We are over what our general guidance is. You said you are being real
conservative.
Kim Cooper: Yes and in fact the 10.5% is your other income securities. They do hold stocks in
them. We are really considering them more of a fixed income investment because you've got
that 5.5% yield on it. Just because they are holding stocks, we do need to get that approval.
Just to let you know, and you'll see this when you get to your performance reports, those other
income securities have been a real boost to your portfolio this year because they have returned
9.7% through the end of June compared to the actual bond funds which are down because of
the increase in interest rates. If you'll go to the second page of that July 12ti' report, you'll see
that we've increased your holdings in gold just a little bit. You're still at just about 3% of portfolio
and your cash has now gone down to about 4.4%. Your account value as of July 121 was
$7.491 million and the yield was 4.0%.
Kit Williams, City Attorney: So you're thinking gold might get out of the doldrums? I know it's
had a big crash.
Kim Cooper: We touched on it a little bit in our newsletter. It's the one thing that can be a
hedge for all of the things that are going on with the central banks of the world, monetizing the
debt. We think that at some point that it's going to be the safe haven again.
The next page is a report of your realized gains, and income and expenses year to date.
Realized gains through June 30th were $84,189.00 and your net income was $88,588.00.
The next report is the fixed income distribution. You'll see as of June 3011, your average yield to
maturity on the fixed income holdings was 4.4%. Your average maturity was 4.4 years. You've
got a bond portfolio that has a maturity of less than five years with a yield of 4.4%, which
compares to a 5% treasury that's yielding today 1.39%. You still have those high coupon
treasury bonds in there that are keeping your income yield high. At the lower part of the page is
a table that shows the bonds that you hold. Right now, about 30% of your bond holdings are in
investments that mature in less than three years. Those are very liquid. We need cash to either
go into other bonds or as rates rise if we want to increase your stock holdings, we've got a lot of
flexibility there to do that. It's easy to convert it to cash.
The next report is a performance summary that lists your returns by year through June 30,
2013. Your equities are up 5.7%. Your fixed income, which is the bonds and bond funds, are
down about 3.6%. That's because interest rates have been rising so far this year. Your other
,income assets are still up 9.7%. Your total return with all of those figured into it is 1% year to
date. Your cumulative return annualized is still at 6%, which is the target objective in your
investment policy and the original actuary assumption that was needed.
We also provided, in the box at the lower part of the page, an update through July 12th. As of
July 12th your stocks were up 9.4%, bonds were still down about 4%, your other income was up
11.9% and your total account was up 2.5% year to date. Your annualized return was bumped up
to about 6.1%.
Your contributions and distributions year to date are on the next page. Those are through June
30th and total $393,000. The following page is a reconciliation of your returns since the
inception of your account in 1990, the contributions, distributions and then the income in
realized and unrealized gains that make up the return investment portion of it. The investment
Policemen's Pension and Relief Fund
Board of Trustees Meeting Minutes
July 18,2013
Page 8 of 9
return, which is listed at the bottom of the page, is $8,108,000.00 since inception. That
compares to the distributions that have come out of the account, which were $9.933 million.
Eldon Roberts: On the withdrawals, the February, March, April and May, is that the money we
are drawing out to pay the retired people?
Sondra Smith: To pay your pension plan, yes.
Eldon Roberts: Why are the last two months so much less than the first two months?
Sondra Smith: It depends on what money they have in the account and how much money they
have coming in. There are different factors because they get different funds that come in during
different times of the year. They see what they have in the account and what they need to
cover. The Mayor or I one have to sign every one of those withdrawals. I look at them every
month.
Eldon Roberts: I knew we were paying out at around $121,000.00 to $125,000.00 a month, I
just couldn't see a difference. I understand what you are saying.
Sondra Smith: If you'll notice in January they didn't take anything out. Some months they might
not have to take anything out.
Kit Williams: Is that because we get insurance turn back money?
Sondra Smith: We receive different funds, millage and your turn back money. It just depends
on what comes in and how much.
Frank Johnson: I have a question on the reconciliation page. What are our contributions since
1990?
Kim Cooper: That's any funds that came into the account. Transfer of securities was actual
securities that we transferred into the account from other managers, but the contributions were
actual cash contributions that went into the account.
Kit Williams: You had $4.3 million when Longer took over.
Kim Cooper: We actually started with $1.3 million then another $3.5 million was added in
contributions, and then a transfer of securities of$4.3 million from other managers was added.
Kit Williams: Was that when you took over?That's when the transfer of securities came?
Kim Cooper: When we took over the management of the entire portfolio brought in that
additional $4.3 million.
Sondra Smith: If you have a class action lawsuit you get a little bit of money from that?
Kim Cooper: Yes, that's very small though in relation to the total.
I also have just a few comments from Elaine that she asked me to share with you. All of you
should have received a copy of the newsletter. I brought an extra copy if you'd like to have that.
Policemen's Pension and Relief Fund
Board of Trustees Meeting Minutes
July 18,2013
Page 9 of 9
Sondra Smith: It's in the packet.
Kim Cooper: Elaine wanted me to point out a few things that were in the newsletter. The
Federal Reserve right now is what is in control and that's kind of what's triggering the changes
that we are seeing in the stock market. One week the Fed Chairman Bernanke speaks about
tapering or letting off some of the bond purchases that they are buying, the quantitative easing
that they are doing, then chaos erupts, the stock market and bonds go down, the currency and
gold markets go down. Then the following week, after market hours, he spoke in an interview
that the Fed would continue to be in an easing mode and then the next day, all the markets
jumped. The stock market was up 180 points. We are seeing a lot of volatility in all of the
markets right now. Bonds fell when he spoke about reducing the quantitative easing and they've
actually delivered their worst performance since 1994. What we've seen even yesterday, he
spoke about the fact that the tapering of the quantitative easing is not going to be something
that time dependant where they had originally said it would be based on unemployment and
inflation. Then they came back and said they may start it at the end of 2013 and stop it
completely by the end of 2014, which is when the markets all reacted negatively. Yesterday he
talked about the fact that they would be not time dependent but more data dependent so back to
the original premise. That has kind of helped the market some.
The earning season began last week and they've kind of been going in earnest. We've seen a
lot of downward revisions in several companies outlook and the revisions have mostly been
negative. We are waiting to see how all the earnings sort out. We are listening to conference
calls, hearing what they chairman of the various companies have to say about what they are
seeing in the global economy. China is slowing, the companies in the Eurozone are still in
recession, and central banks continue to monetize debt trying to jumpstart their economies the
same way the Federal Reserve is doing in the United States. The jury is still out as to whether
this fix will cure the patient and we still see lack luster domestic growth.
The second quarter GDP growth rate was reduced to less than 1%, that's coming off the heels
of the first quarter which was reduced to 1.8% from a previous 2.4%. That's why we have
doubts that the Fed will be able to taper off on quantitative easing and if it will even continue to
talk about doing so.
We continue to be structured as we have been coming into this across multiple asset classes
with good income producing stocks and those other assets that provide the growth and income
in excess of what we can get in bonds. We continue to hold the bond funds, the master limited
partnership that yields 6%, and the small holding in gold. Across all the asset classes, our
underlying requirement is that we are maintaining a very high quality portfolio.
We have a copy of your current investment policy, but I brought new investment policies and
contracts that have Mr. Brown's name included so we can get that signed.
Informational:
2013 Meeting schedule: A copy was given to the Board
POLICE PENSION FUND 11 11 11 11 11
November 2013 6BOO-9800 6800.9800
Month 11 Regular Me 5335-00 5225-05
11
EMP# NAME Benefit YTD Reg Benefit Suppl. YTD Suppl.
154 ALLEN,CHARLES $ 2,584.64 $ 28.431.04 $ 50.00 $ 550.00
206 BAYLES,BOBBI J $ 1,5B7.41 $ 17,461.51 $ 50.00 $ 550.00
216 BLACK,MILDRED $ 1,125.64 $ 12,382.04 $ 50.0) $ 55U.00
147 BRADUEY,GERALD $ 4,820.09 $ 53,020.99 $ 50.00 $ 550.00
139 BRADLEY,RANDALL $ 2,860.17 $ 31,461.87 $ 50.00 $ 550.00
167 BROWN,JOHN $ 4,3SZ01 $ 47,982.11 $ 50.00 $ 550.00
157 CARROLL,RONALD L $ 2,106.04 $ 23,166.44 $ 50.00 $ 550.00
151 COLE,RUSTON $ 3,065.74 $ 33,723.14 $ 50.00 $ 550.00
160 DUGGER,GARY $ 3,163.74 $ 34,801.14 $ 50.00 $ 550.00
140 FOSTER,BILLY D. $ 3,207.35 $ 35,280.85 $ 50.00 $ 550.00
148 FRIEND,JERRY $ 1,970.42 $ 21,674.62 $ 50.00 550.00
161 HANNA,JANICE $ 1,36B.59 $ 15,054.49 $ -
145 HANNA,MARK $ 1,368.59 $ 15,054.49 $ 50.00 $ 55D.00
169 HELDER,TIM $ 5,838.12 $ 64,219.32 $ 50.00 $ 550.00
180 HOYT,RICK $ 7,460.01 $ 82,060.11 $ 50.00 $ 550.00
146 HUTCHENS,BERNICE $ 1.825.54 $ 20,080.94 $ 50.00 $ 550.00
194 JOHNSON,FRANK $ 7,974.81 $ 87,722.91 $ 50.00 $ 550.00
215 JOHNSON,JOYCE $ 2,455.50 $ 27,010.50 $ 50�00 $ 550.00
103 JOHNSON,WENDELL $ 783.15 $ 8,614.65 $ 50.00 $ 550.00
118 JONES,BOB $ 3,300.45 $ 36,304.95 $ 50.00 $ 550.00
211 JONES,MICHELE $ 1,182.26 $ 13.004.86
144 KILGORE,DONALD $ 2,046.48 $ 22,51118 $ 50.00 $ 550.00
218 MARTIN,CONNIE $ 3,692.85 $ 40,621.35 $ 50.00 $ 50.00
128 MCCAViLEY,LARRY $ 1,694.79 $ 18,642.69 $ 50.00 $ 550.00
126 MCWHORTER,KAREN deceased 111012013 $ 1,012.10 $ - $ 50.00
136 MITCHELL,MICHAEL $ 2,305.29 $ 25,358.19 $ 50.00 $ 550.00
141 MUELLER,ROSEMARY $ 2,063.93 $ 22.703.23 $ 50.00 $ 550.00
158 MUNSON,ANGELA $ 4,198.15 $ 46,179�65 $ 50.00 $ 550.00
112 MURPHY,JAKE $ 405.75 $ 4,463.25 $ 50.00 $ 550.00
137 PERDUE.LARRY $ 2,322.67 $ 25,549.37 $ 50.00 $ 550.00
164 PERSHALL,ROBIN $ 1.525.07 $ 16,775.77 $ - $ -
132 PHILLIPS,HOMER GENE $ 1,754.44 $ 19,298S4 $ 50.00 $ 550.00
199 PRESTON,NORMA J $ 1.601.37 $ 17,615.07 $ 50.00 $ 550.00
135 RICKMAN,LOREN $ 2,231.07 $ 24,541.77 $ 50.00 $ 550.00
214 RIGGINS,BONNIE $ 1,669.37 $ 18,363.07 $ 50.00 $ 550.00
183 ROBERTS,ELDON $ 4,263.24 $ 46,895.64 $ 50.00 $ 550.00
183 ROBERTS,ELDON Plus 25 add pay $ 587.09 $ 6,457.99 $ $
212 ROBERTS,CAROLYN K $ 3,216.13 $ 35,377.43 $
212 ROBERTS,CAROLYN K Plus 25 add pay $ 442.89 $ 4,871.79 $
159 SCHUSTER,JOHN H. $ 3.117.36 $ 34,290.96 $ 50.00 $ 550.00
168 STANLEY,MELVIN $ 4,880.07 $ 53,680.77 $ 50.00 $ 550.00
155 STOUT,BETTY $ 866.51 $ 9,531.61 $ 50.00 $ 550.00
133 SURLES,JERRY $ 2.721.40 $ 29,935.40 $ 50.00 $ 550.00
142 TAYLOR,DENNIS $ 2,063.93 $ 22,703.23 $ 50.00 $ 550.00
163 WATSON,RICHARD $ 6.947.05 $ 76,417.55 $ 50.00 $ 550.00
163 Watson,Richard Plus 25 Add'l Pay $ 948.76 $ 10,436.36 $ - $
149 WILLIAMS.JOYCE $ 2,539.66 $ 27,936.26 $ 50.00 $ 550.00
195 WITT.BETTY J $ 1,766.83 $ 19,435.13 $ 50.00 $ 550.00
213 WOOD,RUTHIE -$ 1,560.93 $ 17,390.23 $ 50.00 $ 550.00
$ 127,863.35 $ 1,407,508.95 $2,05G.00 $ 22,100.00
POLICE PENSION FUND 12 12 12 12 12
December 2013 6800-980 (1
Month 12 Regular Mo 5335-00 5335.0
12
EMP# NAME Benefit YTD Reg Benefit Suppl. YTD Suppl.
154 ALLEN,CHARLES $ 2,584.64 $ 31.015.68 $ 50.00 $ 600.00
206 BAYLES,BOBBiJ $ 1,587.41 $ 19,048.92 $ 50.00 $ 600.00
216 BLACK.MILDRED $ 1.125.64 $ 13,507.68 $ 50.00 $ 600.00
147 BRADLEY,GERALD $ 4.820.09 $ 57,841.08 $ 50.00 $ 600.00
139 BRADLEY,RANDALL $ 2,860.17 $ 34,32104 $ 50.00 $ 600.00
167 BROWN,JOHN $ 4,362.01 $ 52,344A2 $ 50.00 $ 6DD.00
157 CARROLLJRONALD L $ 2T'06.04 $ 25.272.48 $ 50.00 $ 600.00
151 COLE,RUSTON $ 3,065.74 $ 36,788.88 $ 60.00 $ 600.00
160 DUGGER,GARY $ 3,163.74 $ 37,964.88 $ 50.00 $ 600.00
140 FOSTER,BILLY D. $ 3,207.35 $ 38,488.20 $ 50.00 $ 800.00
148 FRIEND,JERRY $ 1,970.42 $ 23,645.G4 $ 5D.00 $ 600.00
161 HANNA,JANICE $ 1.368.59 $ 16,423.08 $ $
145 HANNA,MARK $ 1,368.59 $ 16,423.08 $ 50.00 $ 600.00
169 HELDER,TIM $ 5,838.12 $ 70,05T44 $ 50.00 $ 600.00
180 HOYT,RICK $ 7,460.01 $ 89,520A2 $ 50.00 $ 600.00
146 HUTCHENS,BERNICE $ 1,825.54 $ 21,906.48 $ 50.00 $ 600.00
194 JOHNSON,FRANK $ 7.974.61 $ 95.697.72 $ 50.00 $ 600.00
215 JOHNSON,JOYCE $ 2,455.50 $ 29,466.00 $ 50.00 $ 600.00
103 JOHNSON,WENDELL $ 783.15 $ 9,397.80 $ 50.00 $ 600.00
118 JONES,BOB $ 3,300.45 $ 39,605.40 $ %00 $ 600.00
211 JONES,MICHELE $ 1,182.26 $ 14,187.12
144 KILGORE,DONALD $ 2,046.48 $ 24,557.76 $ 50.OD $ 600.00
218 MARTIN,CONNIE $ 3,692.85 $ 44,314.20 $ 50.00 $ 50.00
128 MCCAWLEY,LARRY $ 1,694.79 $ 20,337.48 $ 50.00 $ 600.00
126 MCWHORTER,KAREN deceased 1/1012013 $ 1,012.10 $ - $ 50.00
136 MITCHELL,MICHAEL $ 2,305.29 $ 27,663.48 $ 50.00 $ 600�00
141 MUELLER,ROSEMARY $ 2,063.93 $ 24.767.16 $ 50.00 $ 600.00
168 MUNSON,ANGELA $ 4,198.15 $ 50,377.80 $ 50.00 $ 600.00
112 MURPHY,JAKE $ 405.75 $ 4,869.00 $ 50.00 $ 6DO.00
137 PERDUE,LARRY $ 2.322.67 $ 27,1172.04 $ 50.00 $ 600.00
164 PERSHALL,ROBIN $ 1,525.07 $ 18,300.84 $ - $ -
132 PHILLIPS.HOMER GENE $ 1,754.44 $ 21,053.28 $ 50.00 $ 600.00
199 PRESTON,NORMA J $ 1,601.37 $ 19,216.44 $ 50.00 $ 600.00
135 RICKMAN.LOREN $ 2,231.07 $ 26,772.84 $ 50.00 $ 600.00
214 RIGGINS,DONNIE $ 1.669.37 $ 20D32.44 $ 50.00 $ 600.00
183 ROBERTS,ELDON $ 4.263.24 $ 51.158.88 $ 50.00 $ 600.00
183 ROBERTS,ELDON Plus 25 add pay $ 587.09 $ 7,045.08 $ $ -
212 ROBERTS,CAROLYN K $ 3,216A3 $ 38,593.56 $
212 ROBERTS,CAROLYN K Plus 25 add pay $ 442.89 $ 5,314.68 $ -
159 SCHUSTER,JOHN H. $ 3,117.36 $ 37,408.32 $ 50.00 $ 600.00
168 STANLEY.MELVIN $ 4,880.07 $ 58,560.84 $ 50.00 $ 600.00
155 STOUT,BETTY $ 666.51 $ 10,398.12 $ 50�00 $ 600.00
133 SURLES,JERRY $ 2,721.40 $ 32,656.80 $ 50.OD $ 600.00
142 TAYLOR,DENNIS $ 2,063.93 $ 24.767.16 $ 50.00 $ 600.00
163 WATSON,RICHARD $ 6,947.05 $ 83,364.60 $ 50.00 $ 600.00
163 Watson,Richard Plus 25 Add'I Pay $ 948.76 $ 11.385.12 $ - $ -
149 WILLIAMS,JOYCE $ 2,539.66 $ 30,475.92 $ 50.00 $ 600.00
195 WITT,BETTY J $ 1,766.83 $ 21,201.96 $ 50.00 $ 600.GD
213 WOOD.RLITHE $ 1.580.93 $ 18.971.16 $ 50.00 $ 600.00
$ 127,863.35 $ 1,535,372.30 $2,050.00 $ 24,100.00
POLICE PENSION FUND 1 1 1 1
January 2014 68DD-9800 3000-9800
Month I Regular Me 533�00 533�05
1
EMP# NAME Benefit YTD Reg Benefit Suppi. YTD Suppi.
154 ALLEN,CHARLES $ 2,584.64 $ 2,584.64 $ 50�00 $ 50.00
206 BAYLES,BOBBIJ $ 1,587.41 $ 1,587.41 $ 50.00 $ 50.00
216 BLACK,MILDRED $ 1,125.64 $ 1,125.64 $ 50.DD $ 50.00
147 BRADLEY,GERALD $ 4,820.09 $ 4,820.09 $ 50.00 $ 50.00
139 BRADLEY,RANDALL $ 2,860.17 $ 2,860.17 $ 50.00 $ WAD
167 BROWN,JOHN $ 4.362.01 $ 4,362.01 $ 50.00 $ 50.00
157 CARROLL,RONALD L $ 2,106.04 $ 2,106.04 $ 50.00 $ 50.00
151 COLE,RUSTON $ 3,065.74 $ 3,065.74 $ 50.00 $ 50.00
160 DUGGER,GARY $ 3.163.74 $ 3.163.74 $ 50.00 $ 50.00
140 FOSTER,BILLY 0. $ 3,207.35 $ 3,207.35 $ 50.00 $ 50.00
148 FRIEND,JERRY $ 1,970.42 $ 1.970.42 $ 50.00 $ 50.00
161 HANNA,JANICE $ 1,368S9 $ 1,368S9 $ - $ -
145 HANNA,MARK $ 1,368.59 $ 1,368.59 $ 50.00 $ 50.00
169 HELDER,TIM $ 5,838.12 $ 5,838.12 $ 50.00 $ 50.00
180 HOYT,RICK $ 7,460.01 $ 7.460.01 $ 50.00 $ 50.00
146 HUTCHENS,BERNICE $ 1,825.54 $ 1,825.54 $ 50.00 $ 50.00
194 JOHNSON,FRANK $ 7,974.81 $ 7,974.81 $ 50.00 $ 50.00
215 JOHNSON,JOYCE $ 2,45S50 $ 2,45&50 $ 50.00 $ 5D.00
103 JOHNSON,WENDELL $ 783.15 $ 783.15 $ 50.00 $ 50.00
118 JONES,BOB $ 3,300.45 $ 3,300.45 $ 50.00 $ 50.00
211 JONES,MICHELE $ IJ82.26 $ 1,182.26
144 KILGORE.DONALD $ 2.046.48 $ 2,U46.48 $ 50.00 $ 50.00
218 MARTIN,CONNIE $ 3,692.85 $ 3,692.85 $ 50�00 $ 50.00
128 MCCAVLEY,LARRY $ 1,694.79 $ 1,694.79 $ 50�00 $ 50.00
136 MITCHELL,MICHAEL $ 2,305.29 $ 2,305.29 $ 50.00 $ 50.00
141 MUELLER,ROSEMARY $ 2,063.93 $ 2,063.93 $ 50.00 $ 50.00
158 MUNSON,ANGELA $ 4,198.15 $ 4,198.15 $ 50.00 $ 50.00
112 MURPHY,JAKE $ 405.75 $ 405.75 $ 50.00 $ 50.00
137 PERDUE,LARRY $ 2,322.67 $ 2,322.67 $ 50.00 $ 50.00
164 PERSHALL,ROBIN $ 1,525.07 $ 1,525.07 $ - $ -
132 PHILLIPS,HOMER GENE $ 1,754.44 $ 1,754.44 $ 50.00 $ 50.00
199 PRESTON,NORMA J $ 1,601.37 $ 1,601.37 $ 50.00 $ 50.00
135 RICKMAN,LOREN $ 2,231.07 $ 2.231.07 $ 50.00 $ 50.00
214 RIGGINS,BONNIE $ 1,669.37 $ 1,669.37 $ 50.00 111 50.00
163 ROBERTS,ELDON $ 4,263.24 $ 4,263.24 $ 50.00 $ 50.00
183 ROBERTS,ELDON Plus 25 add pay $ 587.09 $ 587.09 $ $ -
212 ROBERTS,CAROLYN K $ 3,216.13 $ 3,216.13 $
212 ROBERTS,CAROLYN K Plus 25 add pay $ 442.89 $ 442.89 $
159 SCHUSTER,JOHN H. $ 3,117.36 $ 3,117.36 $ 50.00 $ 60.00
168 STANLEY,MELVIN $ 4,880.07 $ 4,880.07 $ 50.00 $ 50.00
155 STOUT,BETTY $ 866.51 $ 866.51 $ 50.00 $ 50.00
133 SURUES,JERRY $ 2,721.40 $ 2,721.40 $ 50.00 $ 50.00
142 TAYLOR,DENNIS $ 2,063.93 $ 2,063.93 $ 50.00 $ 50.00
163 WATSON,RICHARD $ 6,947.05 $ 6,947.05 $ 50.00 111 50.00
163 Watson,Richard Plus 25 Add'i Pay $ 948.76 $ 948.76 $ - $ -
149 WILLIAMS,JOYCE $ 2,539.66 $ 2,539.66 $ 50DD $ 50.00
195 WITT,BETTY J $ 1.766.83 $ 1,766.83 $ 50.00 $ 50.00
213 WOOD,RUTHIE $ 1,580.93 $ 1,580.93 $ 50.00 $ 50.00
$ 127,863.35 $ 127,863.35 $2,050.00 $ 2,050.00
Police Pension Fund Revenue Expense Summary
913012013 2012 2011 2010 2009 2008 2007 2006
Revenues:
Employee Contributions $ $ $ - $ $ $ 4,139.00
Employer Contributions $ $ - $ $ $ $ 8,278.00
State Insurance Tax $ 142,151.31 $ 138,410.77 $ 205,694.53 $ 213,357.83 $ 214,429.30 $ 188,429.42 $ 19D,192.00 $ 226,826.00
Local Millage(A mills) $ 268,192.22 $ 511,961.22 $ 498,380.67 $ 508,192.07 $ 485,345.06 $ 441,696.50 $ 388,877.00 $ 370,849.00
10%City Fines and Forfeitures $ 90,D21.86 $ 125.274.87 $ 126,045.40 $ 130,723.07 $ 123,653.64 $ 131,583.83 $ 106,385.00 $ 119,147.00
Sale of Confiscated Goods $ 577.67 $ 3,491.81 $ 5,026.40 $ 5,487.59 $ 9,732.16 $ 7,715.61 $ 10,806.00 $ 6,343.00
Interest and Dividends $ igS,834.89 $ 285,514.18 $ 263,520.02 $ 267,714.80 $ 266,907.42 $ 359,998.26 $ 356,699.00 $ 373,776.00
Gain(Lose)on Sales $ 144,749.92 $ 168,288.38 $ 209,001.15 $ 362,316.64 $ 153,193.23 $ (885,460.7e) $ 395,378.00 $ 420,298.00
Police Supplement $ 37,800.00 $ 39,900.00 $ 40,500.00 $ 42,000.00 $ 41,200.00 $ 30,000.00 $ 30,000.00 $ 30,300,00
Future Supplement $ 46,620.00 $ 65,576.00 $ 36,450.00 $ 26,061.50 $ 38,350.00 $ 41,370.00 $ 86,040.00 $ 60,060.00
Misc Revenue $ 186.83 $ 53.39 $ 104.60 $ 1,561.27 $ 5,757.99 $ 161.46 $ 907.00 $ 1,126.00
Total Revenue $ 926,934.70 $ 1,328,469.62 $ 1,384,722.67 $ 1,557,416.77 $ 1,318,668.80 $ 313,494.32 $ 1,565,284.00 $ 1,620,942.00
Expenditures
Regular Monthly Benefits $ 1.151,782.25 $ 1,551,087.50 $ 1,564,986.62 $ 1,582,900.00 $ 1,628,521.36 $ 1,638,067.76 $ 1,581,319.00 $ 1,456,466.00
Police Supplement $ 18,500.00 111 25,500.00 $ 26,400.00 $ 27,250.00 $ 29.300.00 $ 30,000.00 $ 30,000.00 $ 29,600.00
Future Supplement $ 46,510.00 $ 51,870.00 $ 35,640.00 $ 24,962.60 $ 36.816.00 $ 41,370.00 $ 86,040.00 $ 60,060.00
Investment Manager Fees $ 49,988.57 $ 69,500.53 $ 71,060.23 $ 70,369.02 $ 68,150.57 $ 82,754.75 $ 87.712.00 $ 86,243.00
Other Expenses:
Office Supplies/printing $ 56.81 $ 46.20 $ - $ 84.00
Audit Fees $ 3,400.00 $ 3,600.00 $ 3,500.00 $ 3,500.00 $ 3.500.00 $ 3,500.00 $ 3,500.00 $ 3,300.00
Professional Services $ -
LegalFees $ - $ 1,025.00
Bank Fees $ 61.52 $ 89.83 $ 164.48 $ 119.34 $ 181.69 $ 203.21 $ 195.00 $ 156.00
Total Expenses $ 1,269,299.15 $ 1,701,694.06 $ 1,701,741.33 $ 1,709,090.86 $ 1,766,563.62 $ 1,795,895.72 $ 1,788,766.00 $ 1,636,850.00
Net Income(Loss)Before Market AdJ $ (342,364.45) $ (373p224.44) $ (317,018.66) $ (161,674.09) $ (447,984.82) $ (1,482,401.40) $ (223,482.00) $ (15,908.00)
Market Adjustment $ 766,670.42 $ 770,169.29 $ 770,856.91 $ 410,382.51 $ (1,291,031.77) $ 151,740.00 $ 344,973.00
Net Income(Loss) $ (342,364.45) $ 383p445.98 $ 453,150.63 $ 619,182.82 $ (37,602.31) $ (2.773,433.17) $ (71,742,00) $ 329,065.00
Book Value Total Reserve Assets $ 6,755,469.30 $ 7.081,891.04 $ 7,46k021.86 $ 7,785,041.00 $ 7,950,215.00 $ 8,398,1911.00 $ 9,880,601.00 $ 10,104,083.00
Market Value Total Reserve Assaft 7,358,863.46 $ 7,689,491.43 $ 8,158,105.82 $ 8,565,897.00 $ 8,360,804.00 $ 8,046,386.00 $ 10,819,789.00 $ 110,8911,630.00
*Assets less any liabilities
Market Value calculated at year and
10/16/2013 K\Polloe Pension\Revenue&Expense SummarA2013 PP Revenue Expense Summary\Pollce Pension Summary 093013
2005
$ 5,193.00
$ 10,385.00
$ 353,271.00
$ 339,416.00
$ 126,833.00
$ 120.00
$ 347,752.00
$ 231,691.00
$ 31,275.00
$ 51,199.00
$ 2,401.00
1.499,536.00
1,362,008.00
29,800.00
48,245.00
86,672.00
3,210.00
2,000.00
156.00
1,532,151.00
(32,615.00)
(361,860.00)
(394,475,00)
$ 10M9,990.00
$ 10,562,465.00
10/16f2013 KAPoljoe PensioMilevenue&Expense SummaryX2013 PP Revenue Expense SummarykPolice Pension Summary 093013
PRB
ARKANSAS FIRE & POLICE PENSION REVIEW BOARD 620 W.3rd, Suite 200
Little Rock,Arkansas 72201-2223
Telephone:501.682.1745
Toll-Free:866.859.1745
Fax:501.682.1751
email:info@lopfi-prb.com
website:www.lopfi-prb,com
To: Board of Trustees
FAYETTEVILLE Police Pension Fund
From: PRB Staff
Re: 2012 Annual Actuarial Valuation
Date: August 6, 2013
Under state law the actuary for the PRB tests each local fire and police pension fund for actuarial
soundness. The PRB uses an annual valuation cycle to assist each Local Plan in monitoring the funding
progress of their plan. The enclosed valuation for December 31, 2012, answers the following questions
about your plan:
YES NO
I. Does income meet or exceed the Necessary XX
Employer Contribution (see page 4)?
2. Is the funded percentage at least 97% (see page 10),
OR are there enough assets to cover: all active
member contributions; all payments to current
beneficiaries; and 100%of all future payments
earned by active members(see page 11)? XX
3. Is the Local Plan actuarially sound?
(YES response to items I and 2) XX
FAYETTEVILLE POLICE PENSION FUND
ACTUARIAL VALUATION
AS OF DECEMBER 31, 2012
Osborn, Carreiro & Associates, Inc.
Actuaries Consultants Analysts
Little Rock, Arkansas
Osborn, Carreiro & Associates, Inc. 124 West Capitol Avenue,SLtite 1690
ACTUARIES CONSULTANTS ANALYSTS Uttle Rock,Arkansas 72201
(501)376-3043
August 6,2013
Board of Trustees
Fayetteville Police Pension Fund
Gentlemen:
This report presents the results of our actuarial valuation of the assets and liabilities of the Fayetteville
Police Pension Fund as of December 31,2012.
This valuation is required by Arkansas Code Annotated 24-11-205. The purpose of this report is to(1)
evaluate the actuarial status of the Fund, (2)determine the level contribution requirement needed, (3)
review the development of the Fund over the past several years,and(4)present certain actuarial items
on page 9 for disclosure under Governmental Accounting Standards. This report is not intended for any
other purpose.
The member and financial information used in this report was supplied by the Arkansas Fire&Police
Pension Review Board. We did not audit this information,although we did review it for reasonableness
and consistency.
I certify that this report has been prepared in accordance with generally accepted actuarial principles
and practices. In my opinion,the actuarial methods used are appropriate and the actuarial assumptions
produce results which,in the aggregate,are reasonable.
Sincerely,
'A .1
joo"'� (244�
0 a
Jody Carreiro,A.S.A.,M.A.A.A.
Actuary
2
TABLE OF CONTENTS
EXHIBIT I CONTRIBUTIONS
EXHIBIT 2 COST AND LIABILITIES
EXHIBIT 3 SUMMARY OF FINANCIAL INFORMATION
EXHIBIT 4 COMPARISON WITH PRIOR YEARS
EXHIBIT 5 SHORT CONDITION TEST
EXHIBIT 6 EMPLOYEE AND RETIREE PROFILES
EXHIBIT 7 PRINCIPLE PROVISIONS OF THE PLAN
EXHIBIT 8 ACTUARIAL METHODS AND ASSUMPTIONS
3
EXHIBIT I
CONTRIBUTIONS
The following contribution level reflects the payment of the current year Normal Cost for benefits
attributable to said year(see Exhibit 2)plus an amount sufficient to pay off the Unfunded Actuarial
Liability over a 5-year period. These costs DO NOT include the contributions due to the Local Police
and Firefighters Retirement System("LOPFI")for persons hired after 1982.
2013 Necessary Annual Contribution to pay:
I Normal Cost,plus $ 0
2 Pay off the Unfunded Actuarial
Accrued Liability 3,085,572
3 Total necessary $ 3,085,572
Less
4 Expected Employee Contribution 0
(6.00%of salary)
Necessary Employer Contribution __$�3085 572
(This is the amount needed in
addition to investment income)
Covered Payroll $ 0
Necessary Employer Rate 0.00%
The contributions are assumed to be made continuously throughout the year.
The actual 2012 contribution was$779,139 from the employer.
4
EXHIBIT 2
COSTS AND LIABILITIES
December 31,2012
A Normal Cost Dollar Percent
(Cost to fund current active members) Amount d�a
I Regular Retirement Benefits $ 0 0.00%
2 Voluntary Termination Benefits 0 0.00%
3 Survivors'Benefits 0 0.00%
4 Disability Benefits 0 0.00%
TOTAL $ 0 0.00%
B Actuarial Accrued Liabilit
I Active Lives
Regular Retirement Benefits $ 0
Voluntary Termination Benefits 0
Survivors'Benefits 0
Disability Benefits 0
TOTAL ACTIVE LIVES $ 0
2 Inactive Lives
Retirees $ 14,953,858
Disability Retirees 2,980,008
Widows&Children 2,839,699
TOTAL INACTIVE LIVES $ 20,773,565
3 Total Liabilit $ 20,773,565
C Assets $ 7,088,826
D Unfunded Actuarial Accrued Liabilit $ 13,684,739
5
EXHIBIT 3
SUMMARY OF FINANCIAL INFORMATION
(Items D-E,and G deternfined by Osborn,Carreiro and Associates,Inc.)
Year Ended Year Ended Year Ended
A. INCOME 12/31/2010 12/31/2011 12/31/2012
1 Employee Contributions $ 0 $ 0 $ 0
2 E=loyer Contributions
Employer/Court Fines/Other 136,210 131,071 128,767
Local Millage 508,192 498,381 511,961
3 State Insurance Premium Tax
Premium Tax Allocation 213,358 205,695 103,808
Additional Allocation 0 0 34,603
Guarantee Fund 0 0 0
4 Other Income
LOPFI Subsidy 0 0 0
Police Supplement(Act 1452 of 1999) 28,500 27,600 27,300
Future Supplement(Act 1373 of 2003) 26,062 36,450 55,575
Other Income/Donations 1,561 0 53
Adjustment to prior year 0 0 0
asset value
5 Net Investment Income 559,665 401,576 384,301
TOTAL INCOME $ 1,473,548 $ 1,300,773 $ 1,246,368
B. EXPENSES
I Administrative $ 3,619 $ 3,671 $ 3,736
2 Benefits Paid
Monthly Benefits 1,582,900 1,564,987 1,551,087
Police Supplements 27,250 26,400 25,500
Future Supplements 24,953 35,640 51,870
DROP Payouts 0 0 0
Paid Current Year for Previous Year 0 0 0
3 Refunds 0 0 0
4 Other Expenses 0 0
TOTAL EXPENSES $ 1,638,722 $ 1,630,698 $ 1,632,193
6
EXHIBIT 3(Continued)
C. ASSETS (at book value) 12/31/2010 12/31/2011 ----12/31/20-12-
1 Cash&Checking Accounts $ 3,018 $ 19,643 $ 10,906
2 Bank Deposits 0 0 0
3 Savings and Loan Deposits 0 0 0
4 Other Cash Equivalents 212,637 109,154 116,827
5 US Govt.Securities 1,586,099 1,279,004 1,352,185
6 Non-US Govt Securities 0 0 0
7 Mortgages 0 0 0
8 Corporate Bonds 922,200 1,324,587 1,443,125
9 Common Stocks 5,044,965 4,711,054 4,135,803
10 Other 29,622 24,574 23,044
I I Payables (13,500) (12,900) (12,600)
TOTAL ASSETS $ 7,785,041 7,455,116 $ 7,069,291
D. RATIO OF ASSETS TO
ANNUAL EXPENSES: 4.8 4.6 4.3
E. NET INVESTMENT RETURN: 7.4% 5.4% 5.4%
(Book Value Basis)
7
EXHIBIT 3 (Continued)
12/31/2008 12/3112009 12/31/2010 12/31/2011 12/31/2012
F. TOTAL MARKET VALUE
I Mai*ket Value,end of year 8,046,356 8,360,804 8,555,897 8,225,285 7,825,962
(Used for GAS13 calculations,page 9)
2. Market Value,beginning of year 10,819,789 8,046,356 8,360,804 8,555,897 8,225,285
G. DEVELOPMENT OF ACTUARIAL VALUE OF ASSETS
I Actuarial Value of Assets,beginning of year 10,153,823 9,465,599 8,923,776 8,429,143 7,815,210
2. Non Investment Net Cash Flow (874,185) (789,851) (724,839) (731,501) (770,126)
3. Development of Investment Income
(a) Total Market Investment Income(F1-F2-G2) (1,899,248) 1,104,299 919,912 400,889 370,803
(b) Assumed Rate for Immediate Recognition 7% 7% 5% 5% 5%
(c) Amount for Immediate Recognition(GI x b) 710,768 662,592 446,189 421,457 390,761
(d) Amount for Phased In Recognition(a-c) (2,610,016) 441,707 473,743 (20,568) (19,958)
(e) Phased In Recognition
Current yew:20%of 3(d) (522,003) 88,341 94,749 (4,114) (3,992)
First Prior Year 39,138 (522,003) 88,341 94,749 (4,114)
Second Prior Year 83,792 39,138 (522,003) 88,341 94,749
Third Prior Year (103,832) 83,792 39,138 (522,003) 88,341
Fourth Prior Year (21,902) (103,832) 83,792 39,138 (522,003)
Total Phased In Recognition (524,807) (414,564) (215,983) (303,889) (347,018)
(f) Actuarial Value Investment Income 185,960 248,028 230,205 117,568 43,742
(3(c)+3(e))
4. Actuarial Value of Assets,End of year
( 1+2+3(f)) 9,465,599 8,923,776 8,429,143 7,815,210 7,088,826
5. Net Investment Return on the 1.9% 2.7% 2.7% 1.5% 0.6%
Actuarial Value of Assets
Note: The Pension Review Board's Board Rule#11 first applies this methodology to determine the Actuarial Value
of Assets for the 12/31/99 actuarial valuation report. Different methods were used to determine the Actuarial
Value of Assets for the 12/31/98 and earlier reports.
EXHIBIT 3(Continued)
ACCOUNTING INFORMATION
This page is included to provide the information required by the Governmental Accounting Standards Board Statement
No.25 and 27. The values below are based on the assumptions contained in Exhibit 8.
The Annual Pension Cost disclosed in this exhibit will almost always differ from the actual cash contribution to the fund.
We must emphasize that these disclosures are shown in the city's financial statements; Sound actuarial projections
should be used to determine the actual cash contribution requirements.
RECONCILIATION OF NET PENSION OBLIGATION(NPO)
2011 2012 2013
1. Actuarially Required Contribution ---i—,986,576 —2�� 2,919,366
2. Interest on NPO 308,085 361,595 406,393
1 Adjustment to(1) 1,389,310 1,630,615 1,832,634
4. Annual Pension Cost(1)+(2)-(3) 1,905,350 1,675,110 1,493,125
5. Actual Contribution Made 835,147 779,139
6. Increase in NPO(4)-(5) 1,070,203 895,971
7. NPO Beginning of Year 6,161,694 7,231,898 8,127,868
8. NPO End of Year 7,231,898 8,127,868
REQUIRED SUPPLEMENTARY INFORMATION
(a) (b) (c) (d) (c) (f) (g)
Unfunded
Entry Age Accrued UAL as a%
Actuarial Market Actuarial Liability Funded Annual of Covered
Valuation Value of Accrued (UAL) Ratio Covered Payroll
Date Plan Assets Liability (c)-(b) (b)/(c) Payroll (d)/(f)
12/31/2003 10,937,721 18,596,975 7,659,254 58.8% 219,008 3497.2%
12/31/2005 10,562,465 20,132,980 9,570,515 52.5% 70,279 13617.9%
12/31/2007 a 10,819,789 18,707,210 7,887,421 57.8% 0 N/A
12/31/2008 8,046,356 19,015,138 10,968,782 42.3% 0 N/A
12/31/2009 b 8,360,804 22,485,442 14,124,638 37.2% 0 N/A
12/31/2010 8,555,897 21,801,583 13,245,686 39.2% 0 N/A
12/31/2011 8,225,285 21,282,718 13,057,433 38.6% 0 NIA
12/31/2012 7,825,962 20,773,565 12,947,603 37.7% 0 NIA
a Includes change in assumptions to 7%discount rate and 83GAM mortality.
b Includes change in assumptions to 5%discount rate and 83GAM mortality.
9
EXHIBIT 4
COMPARISON WITH PRIOR YEARS
Full Paid Actuarial Computed
Active Members Employer Contribution Total Plan
Unfunded Normal
Valuation Annual Percent Dollar Actuarial Cost Funded
Date No. Payroll of Pay Amount Assets Liability Percent Percent
12/31/1994 38 691,245 32.9% 227,671 2,637,566 1,685,881 23.7% 61.0%
12/31/1986 29 604,566 35.5% 214,342 3,251,235 1,712,937 23.9% 65.5%
12131/1987 * 28 666,941 37.8% 252,114 3,374,250 2,065,775 24.6% 62.0%
12/31/1989 25 634,711 38.8% 246,132 4,009,866 2,175,493 27.2% 64.8%
12/31/1991 24 675,900 35.9% 242,541 5,144,950 1,632,194 28.2% 75.9%
12/31/1993 17 536,070 37.2% 199,314 6,293,999 1,232,923 27.8% 83.6%
12/31/1995 * 15 518,643 37.5% 194,517 7,187,710 989,655 27.7% 87.9%
12/31/1997 12 491,422 15.1% 74,142 9,126,449 (255,946) 26.9% 102.9%
12/31/1999 * 11 482,457 175.7% 847,558 10,572,573 4,788,608 45.2% 68.8%
12/31/2001 7 384,312 252.4% 969,851 11,353,564 4,549,239 41.6% 71.4%
12/31/2003 * 3 219,008 0.0% 1,678,182 11,125,006 7,471,969 36.4% 59.8%
12/31/2005 * 1 70,279 0.0% 2,071,290 10,564,072 9,568,908 40.6% 52.5%
12/31/2007 * 0 0 0.0% 1,872,657 10,153,822 8,553,388 0.0% 54.3%
12/31/2008 0 0 0.0% 2,108,536 9,384,367 9,630,771 0.0% 49.4%
12/31/2009 0 0 0.0% 3,057,822 8,923,775 13,561,667 0.0% 39.7%
12/31/2010 * 0 0 0.0% 3,015,156 8,429,143 13,372,440 0.0% 38.7%
12/31/2011 0 0 0.0% 3,036,591 7,815,210 13,467,508 0.0% 36.7%
12/31/2012 0 0 0.0% 3,085,572 7,088,826 13,684,739 0.0% 34.1%
Benefits or assumptions changed
10
EXHIBIT 5
SHORT CONDITION TEST
The Arkansas General Assembly has stated that the funding objective for these plans is to pay for
benefits with contributions that remain level as a percentage of employee payroll. Thus,the long-term
condition test is met when the actual contributions are fairly level and are paid when due.
A short condition test can be used to measure a plan's progress. Under the short condition test,the
fund's assets are compared with:
1) Active member contributions;
2) The liabilities for future benefits to the present retirees and inactive members;
3) The liabilities for service already rendered by active members.
If the plan has been following level cost funding,liability(1)and liability(2)above will almost
always be fully covered by the rest of the present assets. In addition,liability(3) above will at least
partially funded. The larger the funded portion of liability(3),the stronger the condition of the fund.
For a closed fund i.e.,one like yours,where no new members are admitted),the funded portion of
liability(3)should be steadily increasing.
The following table illustrates the history of the short condition test for this plan:
Computed Actuarial Liabilities Portion of Liabilities
(1) (2) (3) covered by Assets
Active Retirees Actives-
Valuation Members and Employer Valuation
Date Contributions Inactives Financed Assets (1) (2) (3)
12/31/1984 186,492 2,220,660 1,916,295 2,637,566 100% 100% 12%
12/31/1986 200,487 2,982,120 1,781,565 3,251,235 100% 100% 4%
12/31/1987 229,457 3,095,232 2,115,336 3,374,250 100% 100% 2%
12/31/1989 266,726 3,719,388 2,199,245 4,009,866 100% 100% 1%
12/31/1991 336,940 3,674,180 2,766,024 5,144,950 100% 100% 41%
12/31/1993 299,612 4,834,716 2,392,594 6,293,999 100% 100% 48%
12/31/1995 319,728 5,358,162 2,499,475 7,187,710 100% 100% 60%
12/31/1997 317,594 5,944,842 2,608,067 9,126,449 100% 100% 110%
12/31/1999 347,267 10,047,770 4,966,144 10,572,573 100% 100% 4%
12/31/2001 291,291 11,488,981 4,122,531 11,353,564 100% 96% 0%
12/31/2003 155,251 16,072,819 2,368,905 11,125,006 100% 68% 0%
12/31/2005 50,523 19,314,460 767,997 10,564,072 100% 54% 0%
12/31/2007 0 18,707,210 0 10,153,822 100% 54% 0%
12/31/2008 0 19,015,138 0 9,384,367 100% 49% 0%
12/31/2009 0 22,485,442 0 8,923,775 100% 40% 0%
12/31/2010 0 21,801,583 0 8,429,143 100% 39% 0%
12/31/2011 0 21,282,718 0 7,815,210 100% 37% 0%
12/31/2012 0 20,773,565 0 7,088,826 100% 34% 0%
I I
EXHIBIT 6
Employee Profile
Employee data needed for the valuation was obtained from the records furnished by
the Arkansas Fire and Police Pension Review Board. The following table shows a
detailed breakdown of the present participants by the number of participants and total
salary.
Actives
Years of Seri,ice
30 and
Age 0-5 5-10 10-15 15-20 20-25 25-30 Over Total
Under Count 0 0 0 0 0 0 0
25 Salary 0 0 0 0 0 0 0
01
25-29 Count 0 0 0 0 0 0 0
Salary 0 0 0 0 0 0 0
30-34 Count 0 0 0 0 0 0
alary 0 0 0 0 0 0
35-39 Count 0 0 0 0 0 0 0 �0
11 Salary 0 0 0 0 0 0 0 '0
40-44 1 Count 0 0 0 0 0 0 0 0
0
I; Salary 0 0 0 0 0 0 0
45-49 Count 0 0 0 0 0 0 0 0
Salary 0 0 0 0 0 0 0 0
50-54 Count 0 0 0 0 0 0 0 0
Salary 0 0 0 0 0 0 0 0.
55-59 Count 0 0 0 0 0 0 0 01
Salary 0 0 0 0 0 0 0 0
60-64 Count 0 0 0 0 0 0 0 0
Salary 0 0 0 0 0 0 0 0
65& Count 0 0 0 0 0 0 0 0
Over Salary 0 0 0 0 0 0 0 0,
0 o 0 0
Unknown Count 0 0,
ge Salary 0 0 0 0 0 0 0 01
Total Count 0 0 0 0 0 0 0 0
Salary 0 0 0 0 A 0 0 03
-------------
12
EXHIBIT 6
Inactive Profile
Employee data needed for the valuation was obtained from the records furnished by the Arkansas
Fire and Police Pension Review Board. The following table shows a detailed breakdown of the
present payees by the number of payees and total annual benefit.
Retirees and Survivors
Years Since Retirement
10 and
Age 0-1 1-2 2-3 3-4 4-5 5-10 0 Over 0- Total 01
Under Count 0 0 0 0 0
40 Benefit 0 0 0 0 0 0 0 0
40-44 Count 0 0 0 0 0 0 0 01
Benefit 0 0 0 0 0 0 0 0
45-49 Count 0 0 0 0 0 0 1 1
Benefit 0 0 0 0 0 0 18,301 18,3011
50-54 Count 0 0 0 0 0 3 1 41
Benerit 0 0 0 0 0 218,099 14,187 232,28611
55-59 Count 0 0 0 0 0 1 7 8
Benefit 0 0 0 0 0 92,784 176,089 268,873
60-64 Count 0 0 0 0 0 3 6 9:
Benefit 0 0 0 0 102,470 244,731 347,201
0-69 Count 0 0 0 6--0 --- —1 6 7'
Benefit 0 0 0 0 0 58,204 19u,5V5
W
70-74 Count 0 0 0
Benefit 0 0 0 0 0 0 263,221 263,221 ,
75-79 0 0 0 0 4 4
Count 0
Benefit 0 0 0 0 0 0 194,749 194,749.
80-84 Count 0 0 2 2
Benefit 0 0 0 0 0 0 23,840 23,840
85 & Count 0 0 0 0 0 0 1 1
Over Benefit 0 0 0 0 0 0 10,398 10,398
Unknownj Count 0 0 o o 0 0 0
Age :! Benefit 0 0 0 0 0 0 0 0'
Tota—l� Count 0 0 0 ---—39 47
Benefit 0 0 0 0 0 471,557 1,078,210 1,549,767
This includes 25 retirees with annual benefit of $1,029,935
This includes 10 disableds with annual benefit of $259,149
This includes 12 survivors with annual benefit of $260,683
13