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HomeMy WebLinkAbout2012-10-18 - Agendas - Final Fayefteville Policeman's Pension and Relief Fund Meeting Date 11,hifx 11' ' i-sow, Adjourn Time Az Attendees: \,flelvivi S-6nIfxi .I7&4I+Idr r� d,ve"I Ar,If tOV4-, MCA 126bIA, t A114V JCM611 QA-I� �N ;PL ',-TO 14 Dep'-L 3 d OLL Subject: Subject: Motion To: Motion To: Motion By: Motion By: I Seconded: Seconded: Mayor Jordan Mayor Jordan Jerry Friend Vol Jerry Friend Tim Helder Tim Helder Frank Johnson Frank Johnson Eldon Roberts Eldon Roberts Melvin Stanley Melvin Stanley I ISondra Smith 1 6/ ISondra Smith Subject: Subject: Motion To: Motion To: Motion By: Motion By: Seconded: Seconded: Mayor Jordan Mayor Jordan Jerry Friend V� Jerry Friend Tim Helder Tim Helder Frank Johnson Frank Johnson Eldon Roberts Eldon Robe s Melvin Stanley Melvin Stanley Sondra Smith Sondra Smith Lioneld Jordan Chairman Jerry Friend Retired Position 2 Melvin Stanley Retired Position 4 Frank Johnson Retired Position 5 Sondra E.Smith Treasurer Tim Heider Retired Position 3 Eldon Roberts Secretary/Retired Position I Fayve e i le ARKANSAS Policemen's Pension and Relief Fund Board of Trustees Meeting Agenda October 18, 2012 A meeting of the Fayetteville Policemen's Pension and Relief Fund Board of Trustees will be held on October 18, 2012 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: 9 Approval of the July 19, 2012 meeting minutes Approval of the Pension List: * Approval of the November and December 2012 and January 2013 pension lists New Business: • Revenue & expense report • Actuarial Valuation Report for December 31, 2011 • Northern Trust Letter from Michael McGee, Accounting Manager dated July 18, 2012 Discussion Items: 0 LOPFI Longer Investments: Longer View Longer Investments Tdquarter 2012 report Longer Investments monthly report Longer Investments— Investment Advisor Agreement Informational: a 2013 Meeting schedule Policemen's Pension and Relief Fund Board of Trustees Meeting Minutes July 19,2012 Page I of 13 meld Jordan Chairman Jerry Friend Retired Position 2 Sondra E.Smith Treasurer Tim Helder Retired Position 3 Eldon Roberts Secretary/Retired Position I Melvin Stanley Retired Position 4 Taye I Frank Johnson Retired Position 5 ARKANSA Policemen's Pension and Relief Fund Board of Trustees Meeting Agenda July 19,2012 A meeting of the Fayetteville Policemen's Pension and Relief Fund Board of Trustees was held on July 19, 2012 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, Tim Helder, Jerry Friend, Mayor Jordan, Kit Williams, City Attorney, Paul Becker, Finance and Internal Services Director, Sondra Smith, City Clerk, Lisa Branson, Deputy City Clerk, Trish Leach, Accounting,Kim Cooper, Longer Investments. ABSENT: None Approval of the Minutes: Approval of the April 19,2012 meeting minutes Jerry Friend moved to approve the April 19, 2012 meeting minutes. Tim Helder seconded the motion. Upon roll call the motion passed 7-0. Pension List Changes: Patsy Ruth Little deceased June 18,2012 Approval of the Pension List: Re-approval of the July pension list(Patsy Ruth Little deceased) Sondra Smith: Ms. Little deceased in June and we had already approved the July pension list so we need to re-approve the July pension list with her removed. Jerry Friend moved to approve the revised July pension list. Eldon Roberts seconded the motion. Upon roll call the motion passed 7-0. Policemen's Pension and Relief Fund Boud of Trustees Meeting Minutes July 19,2012 Page 2 of 13 Approval of the August, September, October 2012 pension lists Sondra Smith: At this time there are no changes to those lists. Eldon Roberts moved to approve the August, September and October pension lists. Tim Helder seconded the motion. Upon roll call the motion passed 7-0. New Business: Revenue & expense report Sondra Smith: That's the report that Accounting does for the Board to give them a review of their expenses and revenue. Eldon Roberts: On 2010 and 2011 the very last numbers on those columns, because they are not in parenthesis am I lead to believe we finished okay? How could that have possibly happened? Tim Helder: It says in parentheses loss,those two columns don't show in parenthesis. Trish Leach: The market adjustment. The market came back the next few years and in those two years the market came back enough that it offset. Eldon Roberts: I thought we had been in red all along there ever since 2008 or even before. Paul Becker: That's when they mark to market and they adjust to what the value of the market is. That's going to change over time and fluctuate but it was positive last year. Obviously if you look back in 2008 there was a two million dollar loss. That's going to go up and down, it all depends, you can't trade that all at once but it was positive last year. Eldon Roberts: For this year up to this point in time we're $360,000 behind. Paul Becker: $360,000 behind but that's not marking to market. That's not the exact value of what the portfolio would at this point in time. This year you're up about 2.6% so you might be somewhere close. If you remember Eldon the last time we attended the PRB meeting and we just got recent figures. Premium taxes are going to be less this year than they were last year. That's going to put a strain on the system too. They readjusted how it is distributed. Jerry Friend: Which bothers us. Paul Becker: I can certainly understand. Melvin Stanley: Who made that decision? Paul Becker: That was legislation; it was approved and went forward. It came from the PRB Board. The net result of it is those funds that are in worse positions are getting a little more Policemen's Pension and Relief Fund Boud of Truslea Meeting Minutes July 19,2012 Page 3 of 13 because they are in a worse position. You are correct, they are in worse position probably because some decisions were made that you made a little more improvement than some others. Sondra Smith: The main person that pushed that forward, if I remember correctly, was Mayor Moles from Harrison, who is no longer the mayor. Paul Becker: There were a couple of things that were done. One 'of the things it did was to change the premium tax distribution to try to equalize what the cities got with the percentage they pay, which it did successfully. One of the other issues was the ability to have two rounds of distribution. The first round of distribution they make and then the second one is based on what the actual position of your fund is. They do a third distribution from a guaranteed fund and there was a little more money this year. However, as things went around the biggest distribution by the time they played it all out went to those funds that were under stress. That did not help you positively. Eldon Roberts: How much did Little Rock increase? They went to a million dollars or more. I don't remember what they were drawing prior to that but they really got a boost. Jerry Friend: I thought they passed a tax. Eldon Roberts: They did on top of that and marked an amount of that to go to the pension but they also got a big boost from this insurance turn back. They went to a million dollars. Paul Becker: That's where the largest amount of the money went. The City of Fayetteville gained a little but when we combine all of the money we got from premium taxes. Jerry Friend: Would it help if we all went to the next meeting? Paul Becker: They are open meetings. Jerry Friend: I have a problem with that thinking because you said what little it is, is not going to save the fund anyway. Why take away from some and give to others. Kit Williams: Don't they concentrate on the funds that are in the wor st shape and that's who gets the most money? Paul Becker: The way they did the distribution before didn't really address that. The distribution before said everybody gets a minimum percentage of what they use to get back in 1999. By the time all of those distributions were gone it was suppose to be distributed by your actuarial evaluation where you stood but there was no money by the time you got to that. When they changed and took what was called minimum percentage out of the legislation that changed the whole mix of the way they did it. Now it comes down to those in worse shape end up getting more. Unfortunately it didn't help your fund. Trish is it about $80,000 less they will get this year? Trish Leach: That sound about right. Policemen's Pension and Relief Fund Bond of Trustees Meeting Minutes July 19,2012 Page 4 of 13 Paul Becker: We just saw these numbers yesterday. Over the year you're going to be about $80,000 less. That certainly helps out but that is not going to make or break a plan one way or another. Melvin Stanley: It will not make or break the fire plan either. Paul Becker: That's correct. Sondra Smith: A copy of,everything that we received is in your packet. So you can see the difference. Paul Becker: Eldon and Pete go religiously. I'm normally at all of the meetings and I'm not usually bashfully about making a few comments. It is an open meeting if you want to go down and make a few comments. Frank Johnson: What was the original legislative intent? How did it gain so much favor that it passed? Paul Becker: It was an unfair distribution. What was looked at was how the distributions were to cities as a whole. Fayetteville might get 37% of our costs. There were small cities that would get 100% of their costs at one time so, between the LOPFI and the old pension plans, it didn't cost those cities anything where the other cities it did. Those referenced were cities like Fort Smith, Fayetteville and Little Rock. So as city of the whole we were getting our fair share on that method of the distribution. That was changed to address that and we're hearing cities come forward now and saying wait a minute we use to not pay anything and now we have to pay. I was trying to remember which city that was. Eldon Roberts: Russellville. Paul Becker: That was meant to equalize that. That was the primary intent and that was changed and that will change but the time it is all done. The problem is the method that they are redistributing it under is going to favor the unfunded plans. This is an off shoot to what the original intent was. Eldon Roberts: That might change again too because I've been familiar with insurance turn back ever since it was conceived and about every legislative session the formula gets moved around and changed. How they distribute is highly political. Frank Johnson: What was the Municipal League's position on it? Paul Becker: Municipal League supported the legislation. I'm going to repeat third hand from what I'm hearing other Mayor's say down there is they didn't realize what the impact was going to be, because the numbers of winners and losers across the city are dis proportioned. Most of the cities are getting less than they got before. A few are getting more, we're getting a little more but Little Rock is the one that got the most. Melvin Stanley: How does the division come down? You're saying it goes to cities and ends up being different because of the percentages that they paid before. How does it end up with us in the same city? Policemen's Pension and Relief Fund Boud of Trustees Meeting Minutes July 19,2012 Page 5 of 13 Paul Becker: Because one plan is in worse shape than the other. Melvin Stanley: That had to be completely different than the original intent where you said cities like Fayetteville paid 37%. That would have nothing to do with the plans themselves that had to come in some place. Paul Becker: It does have to do with the plans. The first part of it falls out with how the premium tax is distributed for each, when it comes to the premium tax distribution the fire is one pool and police is another pool. To say the fire department took it directly from the police is not really true, it is the entire condition of the police funds and the entire condition of the fire flinds. The fire is coming from the property tax. 'Me police are basically coming from automobiles. Eldon Roberts: What we lost, gave up, or was taken from us went to help another police department somewhere. Paul Becker: It went to another plan that was funded less than you were. Eldon Roberts: But a police plan. Jerry Friend: When is the next meeting? Eldon Roberts: September 6 lh. Guys you're welcome to come down there and talk all you want to. We see a lot of people come down and talk but it doesn't change the law. Wewould all be better off talking to our local politician's that go down there and vote on it because that is where the rubber meets the road. You can talk and voice your concerns down there for the way things are being done, and they let you talk because it's a public meeting, but then that's it. Frank Johnson: It all comes down to the influencing. The power of how you influence is based on political capital. If there's anything that happens down there it has to be a collective efforL Eldon Roberts: I've been going for the last couple years and Paul is always there, we're not all that big on how everything happens but it's out of your control. Paul Becker: What you are saying is correct. Probably the best move would be to contact your legislature's before they go down there. I'm certainly getting a sense that you're going to see some proposals to change the method of distribution. Eldon Roberts: There will be some proposals put out there. Then we will need to find out what they are and then we need to contact our people and say push this. Paul Becker: Mayors on the PRB are saying that they didn't realize. Eldon Roberts: That's what I was going to say when you said Mayors are finding out now what the impact is. A couple of them are on the Pension Review Board that voted for this. Policemen's Pension and Relief Fund Board of Trustees Meeting Minutes July 19,2012 Page 6 of 13 Paul Becker: The legislature before they go they listen and they did input. We will certainly give input and I would be happy to put forward anything that you might want. I know Lioneld certainly will. Sondra Smith: You also have Don Mart., He was serving on the Municipal League Public Safety Board. I don't know if he still is but all those bills come before that board. If there is something that you are opposed to you need to talk to him and tell him. There are several boards like the large first class cities and pubic safety board that vote whether or not they want Municipal League to support proposed bills. Paul Becker: One thing I should make clear is when I said the money that the cities are paying that is the cities of the plan. There was an unfair distribution to your plan too. Melvin Stanley: You said it was an $80,000 a year difference? Paul Becker: Roughly, you're not going to see that on the financials yet because we haven't collected anything yet. Melvin Stanley- Looking at the last pension boards notes you said "you will be a little bit better but we are not talking much, we are talking$20,000 to $25,000. Paul Becker: Correct, I just saw the final numbers. Sondra Smith: Last year you received counting the future supplement and everything $271,155.53. This year you received $222,997.77. That is the main amount that you usually get that doesn't go out to the pensioners but that goes into your plan. Last year was $205,694.53 and this year was $103,808.08. We received an additional check too that is probably because of this redistribution for$34,602.69. Paul Becker: We hadn't seen the final distribution when we were down there, we saw the preliminary. Frank Johnson: As a matter of what this board does, I'm wondering how we get in front of all of this just thinking about the speed of the legislative process and how things pop and be considered and then boom. Eldon Roberts: When we were at the police department there was always legislation proposed and we tried to keep abreast of that and different police organizations would call us or send it to us. I guess Don probably gets the same things that have to do with pension systems. What we would be better off to do is once all the proposals are out there for this new legislation, when we choose the one we think will best benefit us then we need to send a letter from this board, not just one person, to our local senators and representatives saying we strongly support whatever they call them and that you vote for that when it comes up. Frank Johnson: I think that's a good idea. Eldon Roberts: We have to wait and see what proposals are made. There will be some about this insurance turn back. Policemen's Pension and Relief Fund Bowd of Tnastees Meeting Minutes July 19,2012 Page 7 of 13 Frank Johnson: Is there a calendar that maps out the dates when these things are coming up to be considered and reviewed? Paul Decker: Arkansas LOPFI will take you to their website and there will be a list for PRB and LOPFI meetings and you can look at their agenda. About two weeks before the meetings they post their agenda. When they get in there they will start talking about legislative changes. Quick calculation$67,280.40 you will be getting less into the plan. Eldon Roberts: When is the next legislative session? Paul Becker: Next year. Elson Roberts: This coming year 2013. Paul Becker: Probably at the next meeting they will start talking about it or by the 4 th quarter. Lioneld Jordan: Municipal League votes on all those proposals. There is a big stack of those. Jerry Friend: They have already had the meeting? Kit Williams: A few years ago they changed one that was going to be very disadvantages to the City. They had to rely upon Uvalde Lindsley and other representatives to stop it because they didn't realize what they were doing and how bad it was going to be for the City of Fayetteville. What the original proposal was didn't include it, they changed it. Lioneld Jordan: There are a lot of things that we do that you all don't even know that we are doing. All of those bills come to me and I look at those every week. Lindsley is the liaison to us and the legislators. I take positions and send letters but keep in mind that is just one mayor from one city. Sondra Smith: The people that are on the Public Safety Board at Arkansas Municipal League most of the guys that are setting on there are fire and police pensioners. They are going to try to wangle things the way they think they need to be done. There was a lot of argument and discussion about changing that allocation. I was in one of those meetings and there was a lot of discussion about it. One of the statements I made was you can change the distribution and the allocation but you don't know what it is going to do to each individual fund by doing that. Lioneld Jordan: When this came up I said if the City of Fayetteville is going to get less than I'm not going to be supportive of it. Jerry Friend: You're saying the first distribution they changed it based more on if Fayetteville collected this much they get back a percentage of that. Paul Becker: In the old days they had what they called a fixed percentage. They went back to. whatever the percentage was in 1999. Some of these very small towns and I think it's easier to see on the fire side, they were geographically large, when they were back in that plan they getting 130% of what their pension cost was. They were getting more money than the pension costs. They moved legislation and said we are going to change that so people aren't getting more than they need so were going to distribute that to people who do need it. Policemen's Pension and Relief Fund Board of Trustees Meeting Minutes July 19,2012 Page 8 of 13 My guess is there was a compromise and the way they got that through was to say you can't get more than 100% but we are going guarantee you whatever you get in a percent at this point in time is this percent and that's what you will get first. On the second pass the neediest ones will get more, well you never got the second pass, that's the problem. Funds were getting over 100%. Now they are coming in saying we have to pay and we didn't. That's what it was correct. It did that but there were some other methods on there that now went and changed up more to distribute to those pension plans under funded. What it essentially did was correct one problem and not the other. If we overall look at the LOPFI side the City of Fayetteville benefited a little bit. They will hash this out again. If you go out to their website you can see what's going on and when the legislative session comes on if anyone is interested in following these bills through we will show the websites and how to get.there. Pension Review Board (PRB) letter dated June 5,2012 -Evaluating Local Plan Inv estments Kit Williams: I wrote to you about that, if the fund, which is currently at $7.8 million dips below $5 million then you all have some extreme restrictions on what you can purchase, not what you can hold. We went through this with the fire. There was some confusion and I had some confusion about whether or not they could even hold stocks that they already owned because it says you can only have money, cash, federal and state bonds an no load mutual funds. The Attorney General and the PRB Board said no, you can't buy anymore but you can hold what you have. Longer Investments felt like they could not manage the fund anymore at that point because they wanted to more than hold and wanted to be able to trade but you can't trade. Eventually you are probably going to a place where you are going to be getting close to $5 million. At that point you probably should look very closely about what you have because you are about to your final purchases on things that can generate more money than T Bills and other stuff. When you go below $5 million I think Longer will probably resign again and you will have to hire someone else. You will probably want to stand pat there for awhile because you will probably be in the best shape from a money making point of view that you can be. As you have to sell stocks you can never buy stocks again. As you have to sell some of these other investments that Longer has gotten you into that have been paying very well you can't ever get those again. When you hit that point you probably should not do much more trading because the only thing you can buy back are investments,that are very safe but do not pay very much but you're not there yet. Hopefully it will be a long time until you get there. Eldon Roberts: It only takes one more year like 2008. Kit Williams: Who knows what is going to happen. I've gone through a lot of cash myself Eldon Roberts: Elaine wasn't here today but far from truthful to say she is not aware of what has happened with the fire department and that we might be going there. We are far enough away from the $5 million that I think it is business as usual and we need to be that way because that is how we are making the most money. Kit Williams: The only thing that you might want to look at that would be done differently then than it would now is that you might go for some long term corporate bonds. She likes to keep Policemen's Pension and Relief Fund Board of Trustees Meeting Minutes July 19,2012 Page 9 of 13 them fairly short so she has more maneuvers but there at the end if corporate bonds are paying a much better percentage than T Bills then she might want to go for some longer term corporate bonds so you can enjoy that interest longer before it's over. City Attorney letter dated June 12, 2012 — Response to the Pension Review Board (PRB) letter dated June 5,2012 MayorJordan: Is that what you just covered? Kit Williams: Yes sir. City Clerk letter dated July 9, 2012 -2012 supplemental benefits Sondra Smith: Diat's the letter I sent out to everyone letting them know that their July check was going be short. I sent everyone an email yesterday letting you know we received the turn back funds. Accounting is going to go ahead and cut special checks. Trish Leach: We did and they went out today. Sondra Smith: The $50 you were short in July was added to this special check. Your August check should be normal. Eldon Roberts: So you're sending an extra check. Trish Leach: Yes, the $50 and the future supplement. If you're on direct deposit we direct deposited it. Eldon Roberts: We appreciate that. Sondra Smith: Eldon the total amount of the check you should receive is $1,285 and it includes the $50 for July. Eldon Roberts: And the $1,235. Sondra Smith: Yes. Trish Leach: Sondra and I had talked about it because we were concerned. Some of the pensioners are older and we want them to watch for it so if you talk to someone share with them to watch their mailbox and take it to the bank. Sondra Smith: If it is a live check because if you have direct deposit it will be direct deposited. If you get a live check it will be a live check. City Clerk memo dated July 18, 2012 - 2012 turn back funds from the State of Arkansas Poliemen's Pension and Relief Fund Boud of Trustees Meeting Minutes July 19,2012 Page 10 of 13 State of Arkansas Department of Finance and Administration—turn back letter and copies of the turn back checks June 2012 Sondra Smith: That's a copy of everything that we received from the State. There is a copy of the checks and the distribution amount. Board election results—Frank Johnson and Jerry Friend elected New Pension board list Sondra Smith: This is the new list showing your term end dates. If you have any changes that need to be made please let us know. Lisa has that on our website so if you have any address changes or phone number changes let us know. Discussion Items: LOPF1 Sondra Smith: I have been asked to leave that on the agenda each quarter. Pension Board communication with the City Council Sondra Smith: That was brought up at one of our meetings about maybe talking to the City Council about LOPFI and the plan. You all doit't have to do it. I was just asked to put that on the agenda. Frank Johnson: It generates this awkward thing as a reminder that at some point that might have to be an avenue we have to take. It seems like it's the communication that needs to be had at some level if even incrementally but at some point instead of just coming in and saying we need to know where you stand on it. Eldon Roberts: There are too many funds out there that are so much worse off than we are that that's all going to be ironed out. I'm glad we can just sit back and wait and see. We will know where we stand and what we can and can't do and what to expect and what not to except when we get to that point where we can no longer pay our pensioners. That's going to be settled some other way. Longer Investments: Northern Trust letter dated June 11, 2012 A copy was given to the Board Policemen's Pension and Relief Fund Board of Trustees Meeting Minutes July 19,2012 Page I I of 13 Longer Investments 2nd quarter 2012 repo A copy was given to the Board Lon2er Vi A copy was given to the Board Lon2er Investments monthly report Kim Cooper: Elaine is at an investment conference. She and I went through the package so I have her comments to deliverto you along with the information on the reports. I included in the package a copy of our newsletter that was sent out in June and the update we sent in early July. Page one of the report is a portfolio appraisal that shows what you currently hold. You have 44% common stocks that are currently yielding 4.02%. That is more than twice the yield on the ten year treasury. Your other income securities we use those to supplement your income on the account. They are high income stocks and funds like utility stocks that allow us to get a little bit higher yield for you. Those are yielding 5.27%. When you add that into your equities you are above the 50% level so we need an approval to be at that level. Eldon Roberts moved to approve the equity overage. Jerry Friend seconded the motion. Upon roll call the motion passed 7-0. Continuing on page one and then the second page is the fixed income mutual funds. Those are yielding 3.67%. We hold the seven to ten year Treasury bond fund and view that as a cash equivalent to us. It's currently yielding about 2.2% compared to zero in your money market fund. If we want to use cash in the portfolio over and above what we have we can use that as cash'equivalent. Page two your preferred debt is the two GE preferred debt securities, those are yielding 6.27%. The government bonds are yielding 4.05%, that's based on your cost. Over the time that we've held them, the bonds have appreciated 16% but if at some point interest rates do start going up again then we will have to give up some of that gain on it. The government agency, the Federal Farm Credit that is a 6 1/8 coupon we have three more years before that matures. It's yielding 6.13% and there is not any call risk in that. You current cash level is 4.2% of portfolio. With that bond fund in there it is closer to 9%. The final item listed is Limited Partnerships. The Kinder Morgan Limited Partnership is something that we are also using for income on the account. Your total portfolio value is $7,876,000 and the yield is 4.05%. That's even with more than 50% of it invested in growth. Policemen's Pension and Relief Fund Bowd of Trustees Meeting Minutes July 19,2012 Page 12 of 13 Page three is your income and realized gains. The realized gains through June 3 01h Were about' $80,000, and income, which is the interest and dividends that you've earned less expenses, is $103,000. Page four is a summary of your fixed income holdings. Your average yield to maturity is currently at 4.4% which is the same level that it was at year end. Even though yields have declined significantly this year, your yield has stayed at that same level. That is because we have had a few short maturity bonds that have rolled off but you have below average reinvestment risk. Page five is summary of your performance since inception. The stocks that had performed so well last year, the defensive high dividend stocks that we had focused on have under performed the broad market for the first half of the year. We discussed that in the newsletter that you have but we still believe it's important to adhere to the conservative stance that we've had throughout last year and this year. We've got a lot to overcome between now and year end; a slowing economy that could further increase unemployment but also add earnings risk into the equation. The eurozone headline risk will continue, the fiscal cliff that Elaine addressed in the newsletter, that's still news and we see no serious attempts to address it at this point. We are going into a very volatile election season. International tensions related to Syria and Iran and it doesn't feel prudent right now to extend your risk out further until we get more clarification on some of these variables that we are watching. Your fixed income performance has out performed stocks this year. It's at 3.4% and that compares to last year which was at 9.4%. The compounded annual return on the entire portfolio is 6.2%. That is above the 6% actuary assumption that was in place at the time we started managing the account. Right now the actuarial assumption has been reduced to 5% but we are still exceeding the 6%. Your compound annualized return is 6.2%. Page six is the contribution and withdrawals. We've had a deposit to money market for a class action lawsuit for $7.00. The withdrawals through the first half of the year have been $496,000. If you look at that at an annual rate based on your beginning value, that's going to come to 15% per year even though your portfolio is not in the shape as the Fire Pension was in when we were managing it,the distribution rate is still not sustainable at this level. Page seven is an asset reconciliation. Distributions since inception have been$9.2 million. Your investment return has been $7.87 million. The bottom line is that it's important to know that even though we have met those actuarial assumptions it's just the weight of the distributions that are making the portfolio not be in line with your actuarial assumption. Mayor Jordan: So you have 15% going out and 6% coming in. Kim Cooper: No, not 6% coming in. That 6% is your annual compounded rate of return for the last 22 years that we have been managing the account. Mayor Jordan: So right now it is sitting at what? Kim Cooper: Your year to date return has been 2.6%. That's the total return on page five. Jerry Friend: The 15% we're losing each time includes what is coming in. Policemen's Pension and Relief Fund Board of Trustees Meeting Minutes July 19,2012 Page 13 of 13 Kim Cooper: If there are additional funds that are coming in. There haven't been any contributions since the first of the year other than the small class action suit. The distribution rate based on what went out in the first half of the year; if we annualized that it would be at 15%. We also have a copy for you of your investment policy. Jerry Friend: Nothing has changed? Kim Cooper: Nothing has changed. It's just a copy that you all signed back in October. Does anyone have any questions? Informational: 2012 Meeting schedule Eldon Roberts: The next meeting is October 18't'. Kit Williams: I think I might be out of town then. Meeting Adjourned at 3:55 PM POLICE PENSION FUND I I I I I 1 11 11 November2012 sS0s.9800 6800.9800 Month 11 Regular Mo M&M 5335-05 Check 11 EMP# NAME Benefit YTD Reg Benefit Suppl. YTD Suppl. Future Supple Fed Tax St Tax Net '54 ALLEN,CHARLES $ 2,584.64 $ 28,431.04 $ 50.00 $ 550.00 $ 220.00 $ 66.89 $ 2,347.75 6 BAYLES,BOBBI J $ 1,587.41 $ 17,461.51 $ 50.00 $ 550.00 $ 1,637.41 �16 BLACK.MILDRED $ 1,125.64 111 12,382.04 $ 50.00 $ 550.00 $ 150.00 $ 20.00 $ 1,005.64 147 BRADLEY,GERALD $ 4,820.09 $ 53,020.99 $ 50.00 $ 550.00 $ 975.00 $ 300.00 $ 3,595.09 139 BRADLEY,RANDALL $ 2,860.17 $ 31,461.87 $ 50.00 $ 550.00 $ 382.00 $ 100.00 $ 2,428.17 167 BROWN,JOHN $ 4.362.01 $ 47,982.11 $ 50.W $ 550.00 $ 600.00 111 200.00 $ 3,612.01 157 CARROLL.RONALD L S 2.106.04 $ 23,166.44 $ 50.00 $ 550.00 $ 260.00 $ 105.00 $ 1,801.04 1151 COLE,RUSTON $ 3,065.74 $ 33,723.14 $ 50.00 $ 550.00 $ 6W.00 $ 200.00 $ 2.315.74 160 DUGGERGARY $ 3,163.74 $ 34,801.14 $ 50.00 $ 550.DO $ 300.00 $ 120-00 $ 2,793.74 M FOSTER,BILLY D. $ 3,207.35 $ 35,280.85 $ 50.00 $ 550.00 $ 3130.00 $ 120.00 $ 2,837.35 148 FRIEND,JERRY $ 1,970.42 $ 21,674.62 $ 50.00 $ 550.00 $ 3W.00 111 260.00 $ 1,46OA2 211 JONES(Friend).MICHELE $ 1,182.26 $ 13,GD4.86 $ 300.00 $ 100.00 $ 782.26 161 HANNA,JANICE $ 1,36&59 $ 15,054.49 $ - $ - $ 10D.00 $ 25.00 $ 1.243.59 145 HANNA,MARK $ 1,368.69 111 15,054.49 $ 50.00 $ 550.00 $ 100.00 $ 50.00 $ 1,268.59 169 HELDER,TIM $ 5,838.12 $ 64,219.32 $ 50.00 $ 550.00 $ 750.W $ 250.00 $ 4.888,12 180 HOYT,RICK $ 7,460.01 $ 82,060.11 $ 50.00 $ 550.00 $ 1,600.00 $ 426.00 $ 5,495.01 146 HUTCHENS,BERNICE $ 1.825.54 $ 20,080.94 $ 50.00 $ 550.00 $ 130.00 $ 1.745.54 194 JOHNSON,FRANK $ 7.974.81 $ 87,722.91 $ 50.00 $ 550.00 $ 1,600.00 $ 500.00 $ 5,924.81 215 JOHNSON,JOYCE $ 2,455.50 $ 27,010.60 $ 50.00 $ 550.00 $ - $ 42.67 $ 2,462.83 103 JOHNSON,WENDELL $ 783.15 $ 8,6114.65 $ 50.00 $ 550.00 $ 833.15 1 IS JONES,BOB $ 3,30OA5 $ 36,304.95 $ 50.00 $ 550.00 $ - $ 3,350.45 144 KILGORE,DONALD $ 2.046.48 $ 22,511.28 $ 50.00 $ 550.00 $ 19.72 $ 2,076.76 i5o LITTLE,PATSY R dec 6-18-2012 $ - $ 4,382-10 $ - $ 300.00 $ - 156 MARTIN,KENNETH $ 3,692.85 $ 40,621.35 $ 50.00 $ 550.00 $ 500.00 $ 140.00 $ 3,102S5 128 MCCAWLEY.LARRY $ 1,694.79 $ 18,642.69 $ 50.00 $ 550.00 $ 195.00 $ 50.OD $ 1,499.79 126 MCWHORTER,KAREN $ 1,012.10 $ 11,133.10 $ 50.00 $ 550.00 $ 1,062.10 136 MITCHELL,MICHAEL $ 2.305.29 $ 25,358.19 $ 50.00 $ 5%00 $ 250.00 $ 10.00 $ 2,095.29 141 MUELLER,ROSEMARY $ 2.063.93 $ 22,703.23 $ 50�00 $ 550.00 $ 2,113.93 158 MUNSONLANGELA $ 4,198.15 $ 46,179.65 $ 50.00 $ -1,50.00 $ 6DO.00 $ - $ 3,648.15 112 MURPHY,JAKE $ 4135.75 $ 4,463.25 $ 50.00 $ 550.DD $ - $ 455.75 137 PERDUE,LARRY $ 2.322.67 $ 26,649.37 $ 50.00 $ 550.00 $ 3DO.00 $ 50.00 S 2,022.67 164 PERSHALL,ROBIN $ 1,525.07 $ 16,775.77 $ - $ - $ 190.00 $ 67.00 $ 1,260.07 132 PHILLIPS,HOMER GENE $ 1,754." $ 19,298.84 $ 50.00 $ 550.00 111 3DO.00 $ 1.504.44 199 PRESTON,NORMA J $ 1.601.37 $ 17,615.07 $ 50.00 $ 550.00 $ 200.00 $ 100.00 $ 1,351.37 15 RICKMAN,LOREN $ 2.231.07 $ 24,541.77 $ 50.00 $ 550.00 $ 230.00 $ 65.00 $ 1.986.07 4 RIGGINS,BONNIE $ 1,669.37 $ 18,363.07 $ 50.00 $ 550.00 $ 125.00 $ 2&00 111 1,569.37 183 ROBERTS,ELDON $ 4,263.24 $ 46,895.64 $ 50.00 $ 550.GO $ WO.00 $ 20033 $ 3,512.91 183 ROBERTS,ELDON Plus 25 add pay $ 587.09 $ 6,45T99 $ - $ - $ 587.09 212 ROBERTS,CAROLYN K $ 3.216.13 $ 35,377.43 $ - $ 365.90 $ 1%00 $ 2,700.23 212 ROBERTS,CAROLYN K Plus 25 add pay $ 442.89 $ 4,871.79 $ - $ 442.89 159 SCHUSTER,JOHN H. $ 3,117.36 $ 34.290.96 $ 50.00 $ 550.00 $ 340.00 $ 160.00 $ 2,667.36 168 STANLEY.MELVIN $ 4.880.07 $ 53,680.77 $ 50.00 $ 550.00 $ 1,100.00 $ 300.00 $ 3,530.07 155 STOUT,BETTY $ 866.51 $ 9,531.61 $ 50.00 $ 550.00 $ - $ 916.51 133 SURUES,JERRY $ 2,721.40 $ 29,935.40 $ 50.00 $ 550.00 $ 60D.00 $ 200.00 $ 1,971.40 142 TAYLOR,DENNIS $ 2.063.93 $ 22.703.23 $ 50Z0 $ 550.00 $ 110.DO $ - $ 2;00193 163 WATSON,RICHARD $ 6,94T05 $ 76,417.55 $ 50.00 $ 550.00 $ 1.950.00 $ 425.00 $ 4,622.05 163 Watson,Richard Plus 25 Add'I Pay $ 948.76 $ 10,436.36 $ - $ - $ W.76 149 WILLIAMS,JOYCE $ 2,639.68 $ 27,936.26 $ 50.00 $ 550.00 $ 217.07 $ 2,372.59 195 WITT,BETTY J $ 1.766.83 $ 19,435.13 $ 50.00 $ 5%00 $ 115.00 $ 64.00 $ 1.637.83 213 WOOD,RUTHIE $ 1.580.93 $ 17,390.23 $ 50.00 $ 550.00 $ 1.630.93 $ 128,875.45 $ 1,422,012.05 $2,100.00 $ 23,400.00 $ $16,9".97 $ 109,119.87 POLICE PENSION FUND 12 12 12 12 12 December 2012 6800,9800 Month 12 Regular Mo 533�00 Check 12 Suppl. YTD Suppl. Future Supple Fed Tax St Tax Net EMP# NAME Benelit YTD Reg Benefit 154 ALLEN,CHARLES $ 2,584.64 It 31,015.68 $ 50.00 $ 600.00 $ 220.00 $ 66.89 $ 2.347.75 206 BAYLES,BOBBI J $ 1,587.41 $ 19.048.92 $ 50.00 It 600.00 $ 1,637-41 216 BLACK,MILDRED $ 1,125.64 $ 13,507.68 $ 50-00 $ OW.00 $ 150.00 $ 20.00 $ 1,005.64 147 BRADLEY,GERALD It 4,820.09 $ 57,841.08 $ 50-00 $ 600�00 $ 975.01) $ 300.00 $ 3,1595.09 139 BRADLEY,RANDALL $ 2,860.17 $ 34,322.04 $ 50.00 $ 6DO.00 $ 382.00 $ 1DO.00 It 2,428.17 167 BROWN,JOHN $ 4,362.01 $ 52,344.12 $ 50.00 $ 600-00 $ 600.00 $ 2W,00 $ 3,612.01 157 CARROLLAONALD L $ 2,105.04 $ 25,272.48 It 50-00 It 600.00 $ 250.00 $ 105-00 $ 1,801�04 151 COLE,RUSTON $ 3,065.74 $ 36.7BB.88 $ 50.00 $ 6M.00 $ smoll $ 200.00 $ 2,315.74 160 DUGGER.GARY It 3,163.74 It 37,964.88 It 50-00 $ 600.00 $ 3Do.00 $ 120.00 $ 2,793.74 140 FOSTER,BILLY D. $ 3,207.35 $ 38,488.20 $ 50.00 $ 6w.00 $ 300.00 $ 120.00 $ 2,837.35 143 FRIEND,JERRY It 1,970.42 $ 23,645.04 $ 5000 $ 600.00 $ 3oom $ 260.00 $ 1,460-42 211 JONES(Friend),MICHELE It 1,182.26 $ 14,187.12 $ 300.00 It 100-00 $ 782.26 161 HANNA.JANICE $ 1,368.59 It '16,423.08 $ - $ - $ 100.00 It 25.00 $ 1,243-59 W HANNA,MARK $ 1,368.59 $ 16.423.08 $ 50-00 $ 600.00 $ loo.00 $ 50.00 It 1.268.59 169 HELDER,TIM $ 5,838.12, $ 70,057.44 $ %00 $ 600.00 It 750.00 $ 250.00 $ 4,888.12 180 HOYT,RICK $ 7,460.01 $ 89,520.12 It 50-00 $ 600.00 $ lsoo.00 $ 425.00 $ 5,485.01 146 HUTCHENS,BERNICE $ 1,825.64 $ 21,906.48 $ 50.00 It 600-00 $ 130.00 $ 1.746.54 194 JOHNSON,FRANK It 7,974.81 $ 95,697.72 $ 50.00 $ 600.00 $ 1,600.00 $ 600.00 $ 5.92481 29,466.00 $ 50.00 $ 600.03 $ - It 42.67 $ 2,462.83 215 JOHNSON,JOYCE $ 2.466.50 $ $ 833.15 103 JOHNSON,WENDELL $ 783.15 $ 9,397.80 $ 50-00 $ 6W.00 $ 3,350.45 118 JONES,BOB $ 3,300.45 It 39,605.40 It 50.00 $ 600.00 $ $ 19.72 $ 2,076.76 144 KILGORE.DONALD $ 2,046.48 $ 24,557.76 It 50-00 $ 600.00 $ - iSD LITTLE,PATSY R dec 6-18-2012 $ - $ 4,3B2.10 $ - $ 3W.00 156 MARTIN,KENNETH $ 3,692.85 $ 44,314.20 It 50-00 $ 600.00 $ 500.00 $ 140.00 $ 3.102.85 7.48 $ 50.00 $ 600.00 $ 195.00 $ 60.00 $ 1,499.79 128 MCCAWLEY.LARRY $ 1,694.79 $ 20.33 $ 1,062.10 126 MCWHORTER,KAREN $ 1,012.10 $ 12,145.20 $ 50.00 $ 600.OD $ 10.00 $ 2,095.29 136 MITCHELL,MICHAEL $ 2,305.29 It 27,663.48 $ 50-00 $ 600.00 $ 250.00 $ 2,113.93 141 MUELLER,ROSEMARY $ 2,063.93 $ 24,767A6 $ 50-00 $ 600.00 158 MLINSONANGELA $ 4,198.15 $ 50,377.80 It 50-00 $ 600.00 It 6W.00 $ - $ 3,648.15 112 MURPHY,JAKE $ 405.76 $ 4.869.00 $ 50-00 It 600.00 $ - $ 455.75 137 PERDUE,LARRY $ 2,322.67 $ 27,872.04 $ 50.00 $ 6DO.00 $ 300.00 $ 50.00 $ 2.022.67 164 PERSHALL,ROBIN $ 1,525.07 $ 18,300.84 It - $ - $ 190.00 $ 67.DO $ 1,268-07 132 PHILLIPS,HOMER GENE $ 1.754.44 $ 21,053.28 $ 5000 It 600.00 $ 300.00 $ 1,504.44 199 PRESTON,NORMA J $ 1,601.37 $ 19,216.44 $ 50-00 $ 600.00 $ 200.DO $ 100-00 It 1,351.37 135 RICKMAN,LOREN It 2,231.07 $ 26.772.84 $ 50.00 $ 60D.00 $ 230.00 $ 65.00 $ 1,986 07 214 RIGGINS,BONNIE $ 1,669.37 $ 20,032.44 It 50-00 $ 600.00 $ 125.00 $ 25.00 $ 1.569-37 183 ROBERTS,ELDON $ 4,263.24 $ 51.158.88 $ 50.00 $ 6w.00 $ 6DO.00 $ 200.33 $ 3.512.91 183 ROBERTS,ELDON Plus 25 add pay $ 587.09 $ 7.045.08 $ - It - $ 587.09 212 ROBERTS.CAROLYN K $ 3,216.13 $ 38,593.56 $ - $ 365.90 $ 150.00 $ 2.7DO.23 212 ROBERTS,CAROLYN K Plus 25 add Pay It 442.89 $ 5,314.68 It - $ 442.89 159 SCHUSTER,JOHN H. $ 3,117.36 $ 37,40&32 $ 50-00 $ 60"D $ s40.00 $ 160.00 $ 2,66T36 168 STANLEY,MELVIN $ 4,880.07 $ 58,560.84 $ 50-00 $ 600.DD $ jy)o.00 $ 300.00 $ 3,530.07 155 STOUT.BETTY It 866.51 $ 10,398.12 $ 50IGO $ 600.00 $ - $ 916.51 It 2,721.40 $ 32,656.80 $ 5000 $ 600.00 $ 600.00 $ 200.00 $ 1.97140 133 SURLES,JERRY $ 110.00 $ - $ 2,003.93 142 TAYLOR,DENNIS $ 2,063.93 It 24,767.16 $ 50.00 It 600.00 $ 1,950.00 It 425.00 $ 4.622.05 163 WATSON,RICHARD $ 6,947.05 $ 83,364.60 $ 5000 $ 600.00 $ 948.76 163 Watson,Richard Plus 25 Add'l Pay $ 940.76 $ 11,385.12 $ - $ -DD $ 217.07 It 2,372.59 149 WILLIAMS,JOYCE It 2,539.66 $ 30,475.92 $ 50-00 $ 600 195 WITT,BETTY J $ 1.766.83 $ 21,201.96 $ 50-00 $ 6DD.00 $ lis.all $ 64.00 $ 1.637.83 213 WOOD.RUTHIE $ 1,580.93 It 18971.16 $ 50-00 $ 600.00 - $ 1,630.93 $ 128,875.45 $ 1,550�887.50 $2,100.00 $ 26�50D 00 $�- $16 944,97 $4,91U.51 4� 1 uu,119 8L $ 109,119.87 POLICE PENSION FUND I I I I January 2013 MM98M 68� Month I Regular Mo f5ss5.00 533� Check 1 EMPX NAME Benerit YTD Reg Bertelit Suppl. YTD Suppl. Future Supple Fed Tax St Tax Net 154 ALLEN,CHARLES $ 2,584.64 It 2,584.64 $ 50.00 $ SD.D0 $ 220.00 $ 66.89 $ 2,347.75 )6 BAYLES,BOBBI J It 1,5117.41 $ 1,587AI $ 50.00 $ 50.00 $ 1,637.41 -16 BLACK MILDRED $ 1,126.64 $ 1,125.64 $ 50.00 $ 50.w $ 150.00 $ 20.00 $ 1.005.64 147 BRADLEY,GERALD $ 4.820.09 $ 4,820.09 $ 50.00 $ 50.00 $ 975.00 $ 300.00 $ 3,595.09 139 BRADLEY,RANDALL $ 2,8613.17 $ 2,860.17 It 50.00 $ 50.00 $ 38ZOD It 100.00 $ 2,428.17 167 BROWN.JOHN $ 4,362.01 $ 4,362.01 $ 50.00 $ 50.00 $ 600.00 $ 200.00 $ 3,612.01 157 CARROLL,RONALD L $ 2,108.04 $ 2,106.04 $ 50.00 $ 50.00 $ 250.00 $ 105.00 $ 1,801.04 151 COLE,RUSTON $ 3,065.74 $ 3,065.74 $ 50.00 $ 60.00 $ 600.00 $ 200.00 $ 2,315.74 160 DUGGER,GARY $ 3,163.74 $ 3,163.74 $ 60.00 $ 50.00 $ 300.00 $ 120.00 $ 2,793.74 140 FOSTER.BILLY D. $ 3,207.35 $ 3.207.35 $ 60.00 $ 50.00 $ 300.00 $ 120.00 $ 2,837.35 148 FRIEND,JERRY $ 1,970.42 It 1,970.42 $ 50.00 $ 50.00 $ 300.00 $ 260.00 $ 1.460.42 211 JONES(Friend),MICHELE $ 1,182.26 It 1,182.26 $ 300.OD $ 100.00 $ 782.26 161 HANNA,JANICE $ 1,368.59 $ 1,368.59 It - $ - $ 100.00 It 25.00 It 1,24&59 145 FIANNA,MARK $ 1.368.59 $ 1,368.59 $ 60.00 $ 50.00 $ 100.00 $ 50.00 $ 1,268.59 169 HELDER,TIM $ 5,8W.12 $ 5,838.12 $ SD.00 $ 50.00 $ 750.00 $ 250.00 $ 4,888.12 180 HOYT,RICK $ 7,460.01 $ 7,460.01 $ 50.00 It 50.00 $ 1.600.00 $ 425DO $ 5,485DI 146 HUTCHENS,BERNICE $ 1,826.64 $ 1.82&S4 $ 50.00 $ 50.00 $ 130.00 $ 1.745.54 194 JOHNSON,FRANK It 7,974.81 $ 7.974.81 111 50.00 $ 50.00 $ 1,600.00 $ 500.00 $ 5,924.81 215 JOHNSON,JOYCE It 2.455.60 $ 2.455.50 $ 60.00 It %00 $ - $ 42.67 $ 2,462.83 103 JOHNSON,WENDELL $ 783.15 $ 783A5 It 50.OD $ 50.00 $ 833.15 118 JONES,BOB $ 3,3DO.45 $ 3,300.45 $ 50.0D $ 50.00 $ - $ 3,350.45 144 KILGORE,DONALD $ 2,046.48 $ 2,046.48 $ 50.00 $ 50.00 $ 19.72 $ 2.076.76 156 MARTIN,KENNETH $ 3,692.85 $ 3,692.85 $ 50.00 $ 60.00 $ 5DO.00 $ 140.00 $ 3,102.85 128 MCCAWLEY,LARRY $ 1,69479 $ 1,69C79 $ 50.00 $ 60.00 $ 195.00 $ 50.00 It 1,499.79 126 MCWHORTER,KAREN $ 1.012.10 $ 1,012.10 $ 50.00 $ 50.00 $ 1,052.10 136 MITCHELL,MICHAEL $ 2,305.29 $ 2,305.29 $ 50.00 $ 50.00 $ 250.00 $ 10.00 $ 2.095.29 141 MUELLER,ROSEMARY It 2,063.93 $ 2.063.93 $ 50.00 $ 50.00 $ 2,113.93 156 MUNSON1,ANGELA $ 4,198.15 $ 4,198.15 $ 50.DO $ 50.00 $ 600.00 $ - $ 3,648.15 112 MURPHY,JAKE $ 405.75 It 405.75 $ 50.00 $ 50.00 $ - $ 455.75 137 PERDUE,LARRY $ 2,322.67 $ 2,322.67 $ 50.00 $ 50.00 $ 300.00 $ 50.00 $ 2,022.67 164 PERSHALL,ROBIN $ 1,525.07 $ 1,525.07 $ - $ - It 190.00 $ 67.00 $ 1.268.07 132 PHILLIPS,HOMER GENE $ 1,754.44 $ 1,754.44 It 50.00 $ 50.00 $ 300.00 $ 1.504.44 199 PRESTON,NORMA 3 $ 1,601.37 $ 1,601.37 $ 50.00 $ 50.00 $ 200.00 $ 100.00 $ 1,351.37 135 RICKMAN,LOREN $ 2,231.07 $ 2,231.07 $ 50.00 $ 50.00 $ 230.00 $ 65.00 $ 1,9116.07 -14 RIGGINS.BONNIE $ 1,669.37 $ 1,669.37 $ 50.00 $ 50.00 $ 125.00 $ 25.00 $ 1,569.37 3 ROBERTS,ELDON $ 4,263.24 $ 4,263.24 $ 50.00 $ 50.00 $ 600.00 $ 200.33 $ 3,512.91 =ROBERTS,ELDON Plus25add pay $ 587.09 $ 587.09 $ - $ - $ 587.09 212 ROBERTS,CAROLYN K It 3.216.13 $ 3,216.13 $ - $ 365.90 $ 150.00 $ 2,700.23 212 ROBERTS,CAROLYN K Plus 25 add pay $ 442.89 $ 442.89 $ - $ 442.89 159 SCHUSTER,JOHN H. It 3.117.36 $ 3,117.36 $ 50.00 $ 50.00 $ 340.W $ 160.00 $ 2,667.36 168 STANLEY,MELVIN $ 4.880�07 $ 4.880.07 $ 50.00 $ 50.00 $ 1,100.00 $ 300.00 $ 3,530.07 155 STOUT.BETTY $ 86&51 $ 866.51 $ 50.00 $ 50.00 $ - $ 916.51 133 SURLES,JERRY $ 2,721.40 $ 2,721.40 $ 50.00 $ 50.00 $ 600.00 $ 200.00 $ 1,971.40 142 TAYLOR,DENNIS $ 2,063.93 $ 2,063.93 $ 50.00 $ 50.00 $ 110.00 $ - $ 2,003.93 163 WATSON,RICHARD $ 6.947.05 $ 6.947.05 $ 50.00 $ 50.00 $ 1,950.00 $ 425.00 $ 4,622.05 163 Wilson,Richard Plus 25 Add'l Pay $ 948.76 $ 948.76 $ - $ - $ 948.76 149 WILLIAMS,JOYCE $ 2,539.66 $ 2,539.66 $ 50.00 $ 50.00 $ 217.07 $ 2,37Z59 195 WITT,BETTY J $ 1,766.83 $ 1,766.83 It 50.00 $ 60.00 $ 115.00 $ r4.00 $ 1,637.83 213 WOOD,RUTHIE $ 1.5BO.93 $ 1,580.93 $ 50.00 $ 50.00 $ 1�630.93 $ 128,875A5 $ 128,875.45 $2,100.00 $ 2,100.00 $ $16,944.97 $4910.61�$ 109,119.87 $ 109,119.87 Police Pension Fund Revenue Expense Summary Revenues: 9/30/2012 2011 2010 2009 2008 2007 2006 2005 Employee Contributions $ $ - $ $ - $ $ $ 4,139.00 $ 5,193.00 Employer Contributions $ $ - $ $ $ - $ 8.278.00 $ 10,385.00 State Insurance Tax $ 138,410.77 $ 205,694,53 $ 213,357.83 $ 214,429.30 $ 186,429.42 $ 190,192.00 $ 226,826.00 $ 353,271.00 Local Millage(A mills) $ 258,477.72 $ 498,380.57 $ 508,192.07 $ 485,345.06 $ 441,696.50 $ 388,877.00 $ 370,649.00 $ 339,416.00 10%City Fines and Forfeitures $ 96,163.15 $ 126,D45.40 $ 130,723.07 $ 123,653.64 $ 131,583.83 $ 106,385.00 $ 119,147.00 $ 126,833.00 Sale of Confiscated Goods $ 2,454.24 $ 5,026.40 $ 5,487.59 $ 9,732.16 $ 7,715.61 $ 10,806.00 $ 6,343,00 $ 120.00 Interest and Dividends $ 210,795.01 $ 263,520.02 $ 267,714.80 $ 266,907.42 $ 359.998.26 $ 356,699.00 $ 373,776.00 $ 347,752,00 Gain(Loss)on Sales $ 85,367.48 $ 209,001.15 $ 362,318.64 $ 153,193.23 $ (885,460.76) $ 395,378.00 $ 420,298.00 $ 231,691:00 Police Supplement $ 39,900.00 $ 40,500.00 $ 42,000.00 $ 31,200.00 $ 30,000.00 $ 30,000.00 $ 30.300.00 $ 31.275.00 Future Supplement $ 55,675.00 $ 36,450.00 $ 26,061.50 $ 38,350.00 $ 41,370.00 $ 86,040.00 $ 60,060.00 $ 51.199.00 Misc,Revenue $ 53.39 $ 104.60 $ 1,561.27 $ 5,757.99 $ 161.46 $ 907.00 $ 1,126.00 $ 2,401.00 Total Revenue $ 887,196.76 $ 1,384,722.67 $ 1,557,416.77 $ 1,318,568.80 $ 313.494.32 $ 1,565,284.00 $ 1,620,942.00 $ 1,499,536.00 Expenditures Regular Monthly Benefits $ 1.164,261.15 $ 1,564,986.62 $ 1,582,900.00 $ 1,628,521.36 $ 1,638,067.76 $ 1,581,319.00 $ 1,456,466.00 $ 1,362,068.00 Police Supplement $ 19P200.00 $ 26,400.00 $ 27,250.00 $ 29,300.00 $ 30,000.00 $ 30P000.00 $ 29,600.00 $ 29P800.00 Future Supplement $ 51,870.00 $ 35,640.00 $ 24,952.50 $ 36,816.00 $ 41,370.00 $ 86,040.00 $ 60,060.00 $ 48,245.00 Investment Manager Fees $ 52,226.14 $ 71,050.23 $ 70,369.02 $ 68,150.57 $ 82,754.75 $ 87,712.00 $ 86,243.00 $ 86,672.00 Other Expenses: Office Supplies/printing $ 46.20 $ - $ 84.00 Audit Fees $ 3,600.00 $ 3,500.00 $ 3,500.00 $ 3,500.00 $ 3,500.00 $ 3,sao.00 s 3,300.00 $ 3,210.00 Professional Services $ LegalFees $ $ 1,025.00 $ 2,000.00 Bank Fees $ 58.36 $ 164.48 $ 119.34 $ 181.69 $ 203.21 $ 195.00 $ 156.00 $ 156.00 Total Expenses $ 1,291,261.85 $ 1,701,741.33 $ 1,709,090.86 $ 1,766,553.62 $ 1,795,895.72 $ 1,788,766,00 $ 1,636,850.00 $ 1,532,151.00 Net Income(Loss)Before Market Adj $ (404,065.09) $ (317,018.66) $ (151,674.09) $ (447.984.82) $ (1,482,401.40) $ (223,482.00) $ (15,908.00) $ (32,615.00) Market Adjustment $ 770,169.29 $ 770,856.91 $ 410,382.51 $ (1,291,031.77) $ 151,740.00 $ 344,973.00 $ (361,860.00) Net Income(Loss) $ (404,065.09) $ 453,150.63 $ 619,182.82 $ (37,602.31) $ (2,773,433.17) $ (71,742.00) $ 329,065.00 $ (394,475.00) Book Value Total Reserve Assets $ 7,051,060.39 $ 7,468,021.86 $ 7,785,041.00 $ 7,960,215.00 $ 8,398,199.00 $ 9,880,601.00 $ 10,1D4,083.00 $ 10,119,990.00 Market Value Total Reserve Assets $ 8,002,170.86 $ 8,158,105.82 $ 8,555,897.00 $ 8,360,804.00 $ 8,046,356.00 $ 10,819,789.OD $ 10,891,530.00 $ 10,662,465.00 *Assets less any liabilities Market Value calculated at year end 10/18/2012 C:\DOCUME—I\Ibranson%LOCALS—I\Temp\XPgrpwise\Police Pension Summary 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 and Relief Fund From: PRB Staff Re: 2011 Actuarial Valuation Date: August 1,2012 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 fund in monitoring the funding progress of their pension fund. The enclosed valuation for December 31,2011, answers the following questions about your fund: 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 pension fund actuarially sound? (YES response to items I and 2) XX FAYETTEVILLE POLICE PENSION FUND ACTUARIAL VALUATION AS OF DECEMBER 31, 2011 Osborn, Carreiro & Associates, Inc. Actuaries Consultants Analysts Little Rock, Arkansas One Union National Plaza,Suite 1690 Osborn, Caffelro & Assodates, Inc. 124 West Capitol Avenue Little Rocit,Arkansas 72201 ACTUARIES - CONSULTANTS ANALYSTS (501)376-8043 FAX(50 1)376-7847 August 1,2012 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 31,2011. 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, lJ Jo 2arreir:A�S-A.,M.A.A.A. o Aary 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 EXHD31T 8 ACTUARIAL METHODS AND ASSUMPTIONS EXHIBIT 1 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. 2012 Necessary Annual Contribution to pay: I Normal Cost,plus $ 0 2 Pay off the Unfunded Actuarial Accrued Liability 3,036,591 3 Total necessary 3,036,591 Less 4 Expected Employee Contribution 0 (6.00%of salary) Necessary Employer Contribution 3,036,591 (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 2011 contribution was W5,147 from the employer. 4 EXH1131T 2 COSTS AND LIABILITIES December 31.2011 A Normal Cos Dollar Percent (Cost to fund current active members) Amount af-p-day 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 Liabilfty 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 $ 15,886,347 Disability Retirees 3,022,993 Widows&Children 2,373,378 $ 21,282,718 TOTAL INACTIVE LIVES 3 Total Liabilijy $ 21,282,718 C Assets $ 7,815,210 D Unfunded Actuarial Accrued Liabilfty $ 13,467,508 5 EXHIBIT 3 SUMMARY OF FINANCIAL INFORMATION (items D-E,and G determined by Osborn,Carreiro and Associates,Inc.) Year Ended Year Ended Year Ended A. INCOME 12/31/2009 12/31/2010 12/31/2011 1 Employee Contribud= $ 0 0 $ 0 2 Emplaer Contributions Employer/Court Fines/Other 133,386 136,210 131,071 Insurance Tax 214,429 213,358 205,695 Local Millage 485,345 508,192 498,391, 3 Other Income Guarantee Fund 0 0 0 LOPFI Subsidy 0 0 0 Police Supplement(Act 1452 of 1999) 31,200 28,500 27,600 Future Supplement(Act 1373 of 2003) 38,350 26,062 36,450 Other Income/Donations 5,758 1,561 0 Adjustment to prior year 0 0 0 asset value 4 Net Investment Income 341,867 559,665 401,576 TOTAL INCOME $ 1,250,335 S 1,473,548 $ 1,300,773 B. EXPENSES I Administrative $ 3,682 $ 3,619 $ 3,671 2 Benefits Paid Monthly Benefits 1,628,521 1,582,900 1,564,987 Police Supplements 29,300 27,250 26,400 Future Supplements 36,816 24,953 35,640 DROP Payouts 0 0 0 Paid Current Year for Previous Year 0 0 0 3 Refunds 0 0 0 4 Other EUenses 0 0 0 TOTAL EXPENSES $ 1,698,319 $ 1,638,722 $ 1,630,698 6 EXHIBIT 3 (Continued) C ASSETS(at book value) 12/31/2009 12/31/2010 12/31/2011 I Cash&Checking Accounts 0 3,018 19,643 2 Bank Deposits 2,932 0 0 3 Savings and Loan Deposits 0 0 0 4 Other Cash Equivalents 91,470 212,637 109,154 5 US Govt.Securities 1,963,872 1,586,099 1,279,004 6 Non-US Govt Securities 0 0 0 7 Mortgages 0 0 0 8 Corporate Bonds 1,024,106 922,200 1,324,587 9 Common Stocks 4,842,939 5,044,965 4,711,054 10 Other 38,696 29,622 24,574 11 Payables (13,800) (13,500) (12,900) TOTAL ASSETS S 7,950,215 7,785,041 7,455,116 D. RATIO OF ASSETS TO ANNUAL EXPENSES: 4.7 4.8 4.6 E. NET fNVESTMEN—T RETURN: 4.3% 7.4% 5.4% (Book Value Basis) 7 Exhibit 3(Continued) 121,3WO07 12131/2008 12/31/2009 12/31/2010 12/31/2011 F. TOTAL MARKET VALUE I Market Value,end of year 10,819,789 8,046,356 8,360,804 8,555,897 8,225,285 (Used for GASB calculations,page 9) 2. market Value,beginning of year 10,891,530 10,819,789 8,046,356 8,360,804 8,555,897 G. DEVELOPMENT OF ACTUARIAL VALUE OF ASSETS 1. Actuarial Value of Assets,beginning of year. 10,340,257 10,153,923 9,465,599 8,923,776 8,429,143 2. Non Investment Net Cash Flow (887,847) (874,185) (789,851) (724,839) (731,501) 3. Development of Investment Income (a) Total Market Investment Income(FI-F2-G2) 816,106 (1,899,248) 1,104a99 919,932 400,889 (b) Assumed Rate for Immediate Recognition 6% 7% 7% 5% 5% (c) Amount for Immediate Recognition(Gl x b) 620,415 710,768 662,592 446,189 421,457 (d) Amount for Phased In Recognition(a-c) 195,691 (2,610,016) 441,707 473,743 (20,568) (e) Phased In Recognition Current year:20%of 3(d) 39,138 (522,003) 88,341 94,749 (4,114) First Prior Year 83,792 39,138 (522,003) 88,341 94,749 Second Prior Year (103,832) 83,792 39,138 (522,003) 88,341 Third Prior Year (21,902) (103,832) 83,792 39,138 (522,003) Fourth Prior Year 83,802 (21,902) (103,832) 83,792 39,138 Total Phased In Recognition 80,998 (524,807) (414,564) (215,983) (303,889) (f) Actuarial Value Investment Income 701,413 185,960 248,028 230,205 117,568 3(c)+3(e)) 4. Actuarial Value of Assets,End of year ( I +2+3(f)) 10,153,823 9,465,599 8,923,776 8,429,143 7,815,210 5. Net Investment Return on the 7.1% 1.9% 2.7% 2.7% 1.5% Actuarial Value of Assets Note: The Pension Review Board's Board Rule,#1 I 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) 2010 2011 2012 I. Actuarially Required Contribution 3,184,758 86,576 2,944,00 2. Interest on NPO 232,540 308,085 361,595 3. Adjustment to(1) 1,048,640 1,389,310 1,630,615 4. Annual Pension Cost(])+(2)-(3) 2,368,658 1,905,350 1,675,110 5. Actual Contribution Made 857,760 835,147 6. Increase in NPO(4)-(5) 1,510,898 1,070,203 7. NPO Beginning of Year 4,650,796 6,161,694 7,231,898 8. NPO End of Year 6,161,694 7,231,898 REQUIRED SUPPLEMENTARY INFORMATION (a) (b) (c) (d) (e) (9) 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% 12/3112005 10,562,465 20,132,980 9,570,515 52.5% 70,279 13617.9% 12/3112007 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 N/A 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 EXMIT 4 COMPARISON WITH PRIOR YEARS 'Mis exhibit compares current valuation results with those of 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 12/31/1984 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% 12/31/1987 * 28 6661941 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 35.90/6 242,541 5,144,950 1,632,194 28.2% 75.9% 12131/1993 17 536,070 37.2% 199,314 6,293,999 1,232,923 27.8% 93.6% 12/31/1995 * 15 518,643 37.5% 194,517 7,197,710 989,655 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 4,788,609 45.2% 68.8% 12/31/2001 7 384,312 252.40/. 969,851 11,353,564 4,549,239 41.6% 71A% 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 0.00/0 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 0.00/0 49.4% 12/31/2009 0 0 0.0% 3,057,822 8,923,775 13,561,667 0.00/0 39.7% 12/31/2010 * 0 0 0.0% 3,015,156 8,429,143 13,372,440 0.0% 38.7% 12/3MOl] 0 0 0.0% 3,036,591 7,815,210 13,467,508 0.00/0 36.7% Benefits or assumptions changed Note:Normal cost before 1989 is net of 6%employee contributions. 10