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Home My WebLink About2006-03-30 - Agendas - Final Firemen's Pension and Relief Fund Meeting Agenda March 30, 2006 A meeting of the Fayetteville Firemen's Pension and Relief Fund will be held at 11:00 AM on March 30, 2006 in Room 326 of the City Administration Building 1. Approval of the Minutes: • February 23, 2006 Meeting Minutes 2. Approval of the Pension List: • April, 2006 Pension List 3. Old Business: • Elections: Copy of Nomination Letter • Non-Return of Affidavits: Dwayne McChristian 4. New Business: • NCPERS — Support for Shareholders Proposals on Political Disclosure & Board Oversight • Act 2094 of 2005 • Kimberly Skelton — Letter to her Bank • Arkansas Fire and Police Pension Review Board — Board Rules 5. Longer Investments: • Report Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes February 23,2006 Pagel of 3 Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes February 23, 2006 A meeting of the Fayetteville Firemen's Pension and Relief Fund Board of Trustees was held at 11 :00 AM on February 23, 2006 in Room 326 of the City Administration Building. Marion Doss called the meeting to order. Present: Marion Doss, Danny Farrar, Dennis Ledbetter, Pete Reagan, Ronnie Wood, Sondra Smith, Trish Leach and Fire Chief Johnson. Absent: Mayor Coody. Approval of the January 26, 2006 Meeting Minutes Danny Farrar moved to approve the January 26, 2006 meeting minutes. Ronnie Wood seconded the motion. Upon roll call the motion passed 6-0. Mayor Coody was absent. Approval of the March, 2006 Pension List Sondra Smith there has been no changes to the March Pension list. Pete Reagan moved to approve the March 2006 pension list. Danny Farrar seconded the motion. Upon roll call the motion passed 6-0. Mayor Coody was absent. Old Business: NCPERS Conference Travel Initialization Form for Pete Realm. A copy of the travel request form for Pete Reagan to attend the NCPRES conference was given to the Board. The expenses are estimated to be around $3,700. Kim Skelton Proof of Enrollment. A copy of the Proof of Enrollment for Kim Skelton was given to the Board. Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes February 23, 2006 Page 2 of 3 New Business: Longer Investment - Approval of the January 31, 2006 Equity Overage of 541% Pete Reagan moved to approve the Longer Investment Equity Overage. Ronnie Wood seconded the motion. Upon roll call the motion passed 6-0. Mayor Coody was absent. Elections: Board Members Elected by Positions. Pete Reagan suggested that each Board position be assigned a number so that when the elections take place the pensioners would nominate one person to each position. When we receive the nominations the pensioners would then vote for one person to fill each open position. Sondra Smith stated that the Mayor and City Clerk do not need to be assigned positions because they serve on the Board due to State law requirements. The State law states the Mayor must serve as the Chairman of the Board and the City Clerk must serve as the Secretary of the Board therefore it is not necessary to assign them positions. Pete Reagan moved to assign position numbers to five positions, the highest ranking member of the Fire Department and the four retired positions. Danny Farrar seconded the motion. Upon roll call the motion passed 6-0. Mayor Coody was absent. Sondra Smith asked how the positions will be assigned, which number to the current members of the Board. Pete Reagan suggested the two members of the Board that have terms ending this year be assigned Position 1 and 2 and the two members that have terms ending next year be assigned Position 3 and 4. The highest Ranking member of the Fire Department would then be assigned Position 5. Pete Reagan moved to assign the following position numbers: Position 1 Marion Doss, Position 2 Pete Reagan, Position 3 Dennis Ledbetter, Position 4 Ronnie Wood and Position 5 Danny Farrar. Danny Farrar seconded the motion. Upon roll call the motion passed 6-0. Mayor Coody was absent. Sondra Smith stated she will get the nomination letters out in March. Non-Return of Affidavits Sondra Smith said the following have not returned their affidavits, Dwayne McChristian and Jennie H. Lane. She stated they have been sent three notices and will be called to remind them to turn in their affidavits. If they do not get their affidavit to the City Clerk's office by March 1, 2006 they will not receive a check for the month of March. Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes February 23,2006 Page 3 of 3 A discussion followed on whether to print the checks for the non-return of affidavit pensioners and hold them or not print the checks at all. Trish Leach from Accounting stated she would rather the checks not be printed at all until the affidavit is received. Meeting was adjourned at 11:35 AM. FIREMEN'S RELIEF AND PENSION April 2006 THE FOLLOWING ARE THE OBLIGATIONS OF THE FIREMEN'S RELIEF FUND FOR THE MONTH OF AUGUST. YOU ARE HEREBY INSTRUCTED TO ISSUE CHECKS TO THE PAYEES, IN THE AMOUNTS SHOWN, AND FOR THE PURPOSE SO STATED. Act 1373 DATE OF Regular Mo Year To Date Future EMP#RETIREMENT NAME Benefit Reg Benefit Supplement Fed Tax St Tax Net Q 79 11/99 ARMSTRONG (DILL), PAMELA 1,812.74 7,250.96 300.00 100.00 1,412.74 R 177 4/04 BACHMAN, EDDIE 2,618.55 10,474.20 479.27 119.82 2,019.46 S 74 3/86 BAIRD, JULIA 1,802.08 7,208.32 350.00 145.00 1,307.08 V 2 3/75 BLACKARD, PAUL 109.27 437.08 109.27 V 63 5/72 BOLAIN, ANN 109.27 437.08 109.27 R 68 7/99 BONADUCE, MICHAEL 2,988.76 11,955.04 475.38 2,513.38 S 44 9/86 BOUDREY, BETTY MRS. 2,477.42 9,909.68 300.00 50.00 2,127.42 R 45 9/86 BOUDREY, HOWARD 2,089.28 8,357.12 2,089,28 R 49 7/88 BOUDREY, JACK 1,647.63 6,590.52 287.68 50.00 1,309.95 V 5 5/72 CASELMAN, ARTHUR 131.13 524.52 131.13 R 57 5/90 CATE, ROY 1,788.90 7,155.60 1,788.90 V 6 4/68 CHRISTIE, ARNOLD 109.27 437.08 109.27 V 8 10/76 COUNTS, WAYNE 109.27 437.08 109,27 R 77 11/99 DILL,GARY JOHN 1,812.75 7,251.00 100.00 1,712.75 188 12/05 DOSS, MARION H 5,376.91 21,507.64 800.00 320.00 4,256.91 R 11 2/76 FARRAR,ALONZO 998.86 3,995.44 998.86 R 38 5/84 FRALEY, JOSEPH G. 1,768.12 7,072.48 200.00 15.00 1,553.12 R 170 5/03 FREEDLE, LARRY 3,816.75 15,267.00 500.00 100.00 3,216.75 R 92 03/02 GAGE,TOMMY 2,596.69 10,386.76 226.00 50.00 2,320.69 V 34 6/79 HARRIS, JAMES E. 109.27 437.08 109.27 V 70 11/99 HARRIS, MARY RUTH 109.27 437.08 109,27 Q 182 10/04 JENKINS, EILEEN 1,788.75 7,155.00 350.00 100.00 1,338.75 R 93 06/02 JENKINS, JOHN 1,788.76 7,155.04 350.00 100.00 1,338.76 R 86 07/01 JOHNSON,ROBERT 3,073.47 12,293.88 500.00 100.00 2,473.47 R 64 4/95 JORDAN, CHARLIE 2,274.95 9,099.80 150.00 50.00 2,074.95 S 76 5/88 JUDY, JAN 1,647.63 6,590.52 200.00 50.00 1,397.63 R 37 3/84 KING, ARNOLD D. 1,522.37 6,089.48 300.00 47.00 1,175.37 R 54 5/89 KING, ARVIL 1,711.21 6,844.84 130.00 50.00 1,531.21 V 12 3/60 LANE, HOPE MRS 109.27 437.08 109.27 R 13 10/67 LAYER, MERLIN 456.22 1,824.88 456.22 R 173 12/03 LEDBETTER, DENNIS 3,775.80 15,103.20 650.00 200.00 2,925.80 V 181 10/04 LEE, VIOLA LOUISE 109.27 437.08 109.27 R 51 10/88 LEWIS, CHARLES 1,647.63 6,590.52 75.00 25.00 1,547.63 R 40 9/85 LOGUE, PAUL D. 2,868.28 11,473.12 325.00 75.00 2,468.28 R 50 9/88 MASON, LARRY 1,631.25 6,525.00 137.61 25.00 1,468.64 R 39 4/85 MC ARTHUR, RONALD A. 1,753.74 7,014.96 150.00 50.00 1,553.74 V 35 2/82 MC CHRISTIAN, DWAYNE,No 2006 Affidavit on file 0.00 218.54 218.54 R 15 4/77 MC WHORTER, CHARLES 1,334.51 5,338.04 150.00 1,184.51 R 29 8/81 MILLER, DONALD 1,304.07 5,216.28 125.00 25.00 1,154.07 R 73 2/00 MILLER,KENNETH 3,180.02 12,720.08 325.00 75.00 2,780.02 V 42 2/86 MOORE, JAMES H. 109.27 437.08 109.27 V 176 4/04 MORRIS, DIXIE E. 125.66 502.64 125.66 V 62 10/68 MORRISON, ELIENE 136.59 546.36 136.59 R 48 7/88 MULLENS, DENNIS W. 2,191.30 8,765.20 2,191.30 R 184 3/05 NAPIER, LONNIE 3,518.28 14,073.12 110.00 88.00 3,320.28 R 46 5/88 OSBURN, TROY 1,899.66 7,598.64 200.00 38.00 1,661.66 R 81 02/01 PHILLIPS,LARRY 2,765.09 11,060.36 2,765.09 R 53 2/89 POAGE, LARRY 2,346.70 9,386.80 300.00 100.00 1,946.70 R 186 06/05 REAGAN, PETE 3,535.71 14,142.84 3,535.71 V 22 4/73 REED, JOE 109.27 437.08 109.27 S 172 12/03 SCHADER, MADGE 1,386.01 5,544.04 1,386.01 R 41 9/85 SCHADER, TROY 1,524.99 6,099.96 57.00 25.00 1,442.99 S 83 03/01 SKELTON, KIMBERLY 2,434.98 9,739.92 250.00 50.00 2,134.98 S 66 8/98 SKELTON, PAULINE, Deceased 12/30/05 0.00 0.00 0.00 R 36 5/76 SPRINGSTON, CARL 806.19 3,224.76 70.00 17.00 719.19 S 90 03/02 STOUT, IMOGENE W. 767.80 3,071.20 767.80 R 165 12/02 TATE, RALPH 3,668.10 14,672.40 300.00 100.00 3,268.10 V 65 3/66 TUNE, BILLIE SUE 136.59 546.36 136.59 V 27 3/71 TUNE, MILDRED MRS. 136.59 546.36 136.59 R 71 1/00 WARFORD,THOMAS 2,502.72 10,010.88 300.00 2,202.72 R 28 7/68 WATTS, DONALD 437.09 1,748.36 437.09 R 88 01/02 WOOD,RONNIE D 3,077.15 12,308.60 800.00 200.00 2,077.15 R 52 9/88 WRIGHT, RANDALL 1,691.34 6,765.36 200.00 25.00 1,466.34 101,666.47 406,884.42 0.00 10,522.94 2,564.82 88,578.71 DATE OF Regular Mo Year To Date Future EMP#RETIREMENT NAME Benefit Reg Benefit Supplement Fed Tax St Tax Net DROP DATE DROP EMPLOYEES NEW BENEFITS 03/01/03 MAHAN, MARSHALL 4,077.28 03/01/03 PIERCE, JOEY 3,647.18 03/01/03 SHACKLEFORD, GLEN 3,647.18 04/01/03 O'NEAL, TEDDY 4,120.99 05/01/04 FARRAR, DANNY 4,155.36 WE, THE UNDERSIGNED, DO SOLEMNLY SWEAR THAT THE ABOVE OBLIGATIONS ARE JUST AND CORRECT; THAT NO PART THEREOF HAS BEEN PREVIOUSLY PAID; THAT THE PENSION PAYMENTS SO CHARGED ARE IN ACCORDANCE WITH THE ACTIONS OF THE BOARD OF TRUSTEES OF THE FIREMEN'S RELIEF AND PENSION FUND; THAT THE SERVICES OR SUPPLIES FURNISHED, AS THE CASE MAY BE, WERE ACTUALLY RENDERED OR FURNISHED; AND THAT THE CHARGES MADE THEREFORE DO NOT EXCEED THE AMOUNT ALLOWED BY LAW OR THE CUSTOMARY CHARGE FOR SIMILAR SERVICES OR SUPPLIES SECRETARY CHAIRMAN AND PRESIDENT ACKNOWLEDGEMENT STATE OF ARKANSAS ) COUNTY OF WASHINGTON) SWORN TO AND SUBSCRIBED BEFORE ME THIS DAY OF 2005. NOTARY PUBLIC MY COMMISSION EXPIRES : YTD 6810-98105335-00 305,327.22 406884.42 -101557.20 6810-9810-5335-06 0.00 0.00 0.00 Drop Payoutllntrest Checks to Drop Retirees 355,912.59 YTD Column 661,239.81 Difference 0.00 "(should be off Supplemental amount for DROP part) ** Benefits stopped for Dwayne McChristian on 3/1/06 for No 2006 Affidavit s March 22, 2006 RE: Election of Board of Trustees The Firemen's Pension and Relief Fund Board of Trustees is now accepting nominations for two retired member positions. The term end date for these positions will be May 31, 2008; Marion Doss and Pete Reagan are currently serving in the two retired trustee positions, both are willing to serve another term. The Board of Trustees voted to add position numbers to each Board position. Marion Doss is serving in Position 1 and Pete Reagan is serving in Position 2. You will need to nominate one person to each position. I have attached a copy of the current Board of Trustees and the Pension List. All Board of Trustees nominations must be submitted in writing and remitted to: Sondra Smith City Clerk/Treasurer 113 W. Mountain Street Fayetteville, AR 72701 All nominations must be received by 5:00 PM on April 15, 2006. Please return the attached page with your nomination by 5:00 PM on April 15, 2006. If you have any questions, please call the City Clerk's office at 575-8323. Sincerely, Sondra Smith Secretary.Firemen's Pension & Relief Fund Board of Trustees City Clerk/Treasurer March 22, 2006 Firemen's Pension and Relief Fund Board of Trustees nominations for Board members with terms beginning June 1, 2006 and ending May 31, 2008. I nominate the following for Position 1. I nominate the following for Position 2. Return to: Sondra Smith City Clerk 113 W. Mountain Street Fayetteville, AR 72701 All nominations must be received by 5:00 p.m. on April 15, 2006. Please return this page with your nominations by 5:00 p.m. on April 15, 2006. Sincerely, Sondra Smith Secretary Firemen's Pension & Relief Fund Board of Trustees City Clerk/Treasurer National Conference on Public Employee Retirement Systems The Voice for Public Pensions URGENT ACTION NEEDED OFFICERS LETTER TO NCPERS MEMBERSHIP Robertident ny President URGING SUPPORT FOR SHAREHOLDER PROPOSALS Pat McElligott ON POLITICAL DISCLOSURE AND BOARD OVERSIGHT First Vice President Mel Aaronson Second Vice President Dear NCPERS Member: Tina Fazendine Secretary The controversial referenda in California promoted last year by Gov. Arnold Richard Wachsman Schwarzenegger all received the fate they deserved — failure. These referenda Treasurer included: abolishing defined benefit pension plans for public employees (withdrawn from the ballot), weakening teacher tenure, capping state spending, EXECUTIVE BOARD replacing legislators with judges to reapportion legislative districts, and limiting Larry Curran political contributions by public employee unions Boston, MA Lawrence Deck This was accomplished despite corporations donating $2.2 million in support of Columbus, OH the referenda. Our pension funds are substantial shareholders in many of these Daniel Fortuna corporations. As fiduciaries, our duty is to question these contributions, not to Chicago, a ignore them. What was the process that resulted in corporate assets being spent Kelly L. Fox on such controversial issues, unrelated to corporate business? Was any Olympia. WA consideration given to the reputational risks associated with these issues? How Stephan G. Fugate do shareholders uncover such political contributions? Baltimore, MD Rick Gale Responsible institutional investors—including two NCPERS members, West Allis, WI Firefighters' Pension System of the City of Kansas City, Missouri, and Miami Dan Givens Miami, FL Firefighters Relief and Pension Fund—have filed shareholder proposals seeking Ronald Gracia greater disclosure and board of director oversight of political contributions at Detroit, MI four of the largest corporate contributors to the California referenda: Kenneth Hauser Chicago, IL • ChevronTexaco ($300,000), Bill Lundy • Citigroup ($100,000), Little Rock, AR • Target ($100,000), and Donald L. Phillips • Wal-Mart ($100,000). Swartz Creek, MI Will Pryor This is a new type of shareholder proposal. It was first developed in 2004 by Los Angeles CA the Center for Political Accountability, a non-partisan advocacy group that John Reilly works with a group of reform-minded institutional investors. Support is Philadelphia, PA growing as we approach the 2006 proxy season: Mona Romain New York, NY • Six companies have already agreed to review political contributions at Philadelphia, PA Carol stakes the board level on an annuals anpost a complete basis to list of their Elmer J.'Khal contributions and rationales online. The six companies are household Past President names: Coca-Cola, Eli Lily, Johnson & Johnson, Morgan Stanley, Frederick H.Nesbitt Pepsico and Schering-Plough. RECEIVED Executive Director Legislative Counsel 8 i®R 2 O 2005 NCPERS • 444 North Capitol Street NW, Suite 221,Washington, DC 20001 • 202-624-1456 • Fax 202-624-1439 • info@NCPEER$Qr • www.NCPERS.org {;I7YOf- /�YLr i '. CITY CLERK'S OFRUE 0IMa21 • Institutional Shareholder Services, an influential proxy advisor which had previously always recommended a vote against the proposal, is now going to review it on a company-by-company basis because 65% of its clients said full, public disclosure of political contributions is a priority. We urge you to support these proposals. Begin by having your board vote to support them. If you vote your own proxies, then make sure the person responsible for voting is advised of the board's position. If you do not vote your own proxies, contact your investment manager or proxy voting agent and tell them of your concern on this vital issue. A sample letter to the investment manager/proxy voting agent is attached. NCPERS members can play a crucial role in helping build momentum for this needed reform to help protect our pension and health benefits. As an owner, you have a fiduciary responsibility to be involved and ask questions — not just rubber stamp the recommendations of the board of directors. If you have any questions on how you can help, contact NCPERS at 877-202- 5706 or info@NCPERS.org for more information. Sincerely yours, 164u,f D . Ak Robert Podgorny President SAMPLE LETTER TO INVESTMENT MANAGERS/PROXY VOTING AGENTS Dear We are writing to urge you to vote our plan's shares and other shares for which you have discretionary proxy voting authority in support of shareholder proposals filed by responsible institutional investors to require greater disclosure and board of director oversight of political contributions at these four corporations' stockholder meetings: ChevronTexaco – April 26 Citigroup – April 18 Target – May 17 Wal-Mart – June 2 These companies came to our attention because of their excessive support last year for the controversial California referenda to abolish defined benefit plans for public employees, weaken teacher tenure, and cap state spending. All of the referenda failed—even though corporations donated $2.2 million in support of them. ChevronTexaco contributed $300,000 while Citigroup, Target and Wal-Mart each contributed $100,000. As fiduciaries we have a duty to question the prudence of such contributions, not to ignore them: • What was the process that resulted in corporate assets being spent on such controversial issues, unrelated to corporate business? • Was any consideration given to the reputational risks associated with theseissues? • How do shareholders uncover such political contributions? As fiduciaries, we support these proposals requiring greater disclosure of corporate political contributions and board of director oversight. This is a new type of shareholder proposal. It was first developed in 2004 by the Center for Political Accountability, a non-partisan advocacy group that works with a group of reform-minded institutional investors. Support is growing as we approach the 2006 proxy season: • Six companies have already agreed to review political contributions at the board level on an annual basis and to post a complete list of their contributions and rationales online. The six companies are household names: Coca-Cola, Eli Lily, Johnson & Johnson, Morgan Stanley, Pepsico and Schering-Plough. • Institutional Shareholder Services, an influential proxy advisor which had previously always recommended a vote against the proposal, is now going to review it on a company-by-company basis because 65% of its clients said full, public disclosure of political contributions is a priority. We view this as an increasingly important issue in corporate governance reform. We hope that we can count on your support. Please advise us of what actions you take. Sincerely yours, Attention! i New Requirement for 2006 Act 2094 of 2005 Act 2094 of 2005 established new responsibilities for local plan boards pertaining to plan investments and ethics disclosures for local board members. The first sections of the law give the ability to hire an investment advisor to all plans with more than $100,000 of plan assets. It also limits the total amount of fees paid for all investment and custodial services that may be paid to 3% of the first $500,000 of assets, plus 2% of the next $500,000 of assets, plus 1% of assets above $1,000,000. The fees are to be clearly stated on statements provided to the local board by the investment advisors to the board. The next sections of Act 2094 deal with the disclosure of gifts or compensation that may be received by a local board member from current or potential investment advisors or managers. These gifts include, but are not limited to, trips and meals. Each board member receiving such gifts or compensation must provide a written statement disclosing them and their value. These statements are to be collected by the local board or the municipal treasurer and retained on file. One copy of the statements is also required to be filed with the Secretary of State. Finally, the chair of the local board must certify as part of this annual filing that all of the disclosures have been collected and filed as required. Certification Statement As chairman of the local board of trustees, I certify that the financial gift or compensation statements fdt all board members who received such gifts or compensation have been collected by the board. I further certify that these statements have been kept on file by the local board for public inspection and that a copy has been filed with the Secretary of State. Chair, Pension Board of Trustees Date j Page 6 Stricken language would be deleted from and underlined language would be added to the law as it existed prior to this session of the General Assembly. Act 2094 of the Regular Session 1 State of Arkansas As Engrossed: 5219105 52117105 53122105 2 85th General Assembly A Bill 3 Regular Session, 2005 SENATE BILL 154 4 5 By: Senator Faris 6 7 8 For An Act To Be Entitled 9 AN ACT TO ENSURE PARITY BETWEEN THE LOCAL POLICE 10 AND FIRE PENSION AND RELIEF FUNDS ; TO ESTABLISH 11 RULES FOR LOCAL POLICE AND FIRE PENSION AND 12 RELIEF FUNDS ; AND TO ESTABLISH ETHICS AND FISCAL 13 ACCOUNTABILITY OF LOCAL BOARD PLAN MEMBERS ; AND 14 FOR OTHER PURPOSES . 15 16 Subtitle 17 AN ACT TO ENSURE PARITY AND ESTABLISH 18 RULES FOR THE LOCAL POLICE AND FIRE 19 PENSION AND RELIEF FUNDS ; AND TO 20 ESTABLISH ETHICS AND FISCAL 21 ACCOUNTABILITY OF LOCAL BOARD PLAN 22 MEMBERS . 23 24 25 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS : 26 27 SECTION 1 . Arkansas Code § 24-11-410(c) , pertaining to investments, is 28 amended as follows: 29 (c) (1 ) In those pension and relief funds in which assets exceed five 30 hundred th a a lls ($500 f /000) one hundred thousand dollars ($100, 000) , \ Y-�vv 31 the board of trustees may employ an investment advisor as defined in § 24-10- 32 402(a) (2) (A) (ii) to invest the assets, subject to the terms, conditions, 33 limitations, and restrictions imposed by law upon the Arkansas Local Police 34 and Fire Retirement System, as provided by §§ 24-10-401 - 24-10-411 . 35 (2) Investments shall not be limited to interest-bearing bonds. IIIIIIIIIIIII IIIIII IIIIIIIIIII IIII 03-22-2005 08:54 MMC068 r As Engrossed: S2/9/05 S2/17/05 S3/22/05 SB154 1 (3) The total amount of fees paid for investment advisors, 2 investment advisory services, investment educational services , trustee 3 services, custodial and administrative services , and investment management 4 services where the managers are required to perform security trades on a best 5 execution basis shall be: 6 (A) Limited to no more than three percent (3%) annually of 7 the first five hundred thousand dollars ($500, 000) of plan assets, plus no 8 more than two percent (2%) annually of the next five hundred thousand dollars 9 ($500, 000) of plan assets, plus no more than one percent (1%) annually of 10 plan assets over one million dollars ($1 , 000, 000) ; and 11 (B) Clearly stated, in total, on all monthly, quarterly, 12 and annual statements prepared for the board of trustees of the pension and 13 relief funds. 14 15 SECTION 2. Arkansas Code § 24-I1 -805(d) , pertaining to investments, is 16 amended as follows: 17 (d) (1) However, in those pension and relief funds in which assets 18 exceed one hundred thousand dollars ($100, 000) , the board of trustees may 19 employ an investment advisor as defined in § 24-10-402(a) to invest the 20 assets, subject to the terms, conditions, limitations, and restrictions 21 imposed by law upon the system, as provided by § 24-10-401 et seq. 22 (2) Investments shall not be limited to interest-bearing bonds, 23 certificates of deposit, and time deposits . 24 (3) The total amount of fees paid for investment advisors, 25 investment advisory services, investment educational services , trustee 26 services, custodial and administrative services , and investment management 27 services where the managers are required to perform security trades on a best 28 execution basis shall be: 29 (A) Limited to no more than three percent (3%) annually of 30 the first five hundred thousand dollars ($500, 000) of plan assets, plus no 31 more than two percent (2%) annually of the next five hundred thousand dollars 32 ($500, 000) of plan assets, plus no more than one percent (1%) annually of 33 plan assets over one million dollars ($1 , 000, 000) ; and 34 (B) Clearly stated, in total , on all monthly, quarterly, 35 and annual statements prepared for the board of trustees of the pension and 36 relief funds. 2 03-22-2005 08 : 54 MMC068 As Engrossed: S2/9/05 S2/17/05 S3/22/05 SB154 1 2 SECTION 3. Arkansas Code § 24-11-405, pertaining to the board of 3 trustees, is amended to add a new subsection as follows: 4 (e) (1 ) Each board member who receives gifts or other compensation, 5 including, but not limited to, trips and meals, from current or potential 6 investment advisors or managers of the policemen 's pension and relief fund 7 shall prepare an annual statement listing each item received, the estimated 8 value of each item, and from whom each item was received. 9 (2) (A) Each board member shall attest by written affidavit that 10 the member's annual statement is true and current to the best of his or her 11 knowledge. 12 (B) (i) Annual statements and affidavits from each board 13 member shall be collected by the board or municipal treasurer. 14 (ii) One (1 ) copy of the statement and affidavit 15 shall be filed with the Secretary of State. 16 (iii) A second copy of each statement and affidavit 17 shall be retained on file by the board or municipal treasurer and shall be 18 available for review by any plan participant. 19 (C) (i) As part of the annual report to the Arkansas Fire 20 and Police Pension Review Board, the chair of each board of trustees for each 21 plan shall certify that the statements and affidavits as described in 22 subsection (e) of this section have been completed and appropriately filed. 23 (ii) Each plan 's annual report shall not be 24 considered complete without this certification. 25 26 SECTION 4. Arkansas Code § 24-11-801 , pertaining to the board of 27 trustees and members, is amended to add a new subsection as follows : 28 ( j) (1) Each board member who receives gifts or other compensation, 29 including, but not limited to, trips and meals, from current or potential 30 investment advisors or managers of the firemen 's pension and relief fund 31 shall prepare an annual statement listing each item received, the estimated 32 value of each item, and from whom each item was received. 33 (2) (A) Each board member shall attest by written affidavit that 34 the member's annual statement is true and current to the best of his or her 35 knowledge. 36 (B) (i) Annual statements and affidavits from each board 3 03-22-2005 08 :54 MMC068 As Engrossed: S2/9/05 S2/17/05 S3/22/05 SB154 1 member shall be collected by the board or municipal treasurer. 2 (ii) One (1) copy of the statement and affidavit 3 shall be filed with the Secretary of State. 4 (iii) A second copy of each statement and affidavit 5 shall be retained on file by the board or municipal treasurer and shall be 6 available for review by any plan participant. 7 (C) (i) As part of the annual report to the Arkansas Fire 8 and Police Pension Review Board, the chair of the board of trustees for each 9 plan shall certify that the statements and affidavits as described in 10 subsection ( j) of this section have been completed and appropriately filed. 11 (ii) Each plan 's annual report shall not be 12 considered complete without this certification. 13 14 /s/ Faris 15 16 17 APPROVED: 4/13/2005 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 4 03-22-2005 08 :54 MMC068 fttr 7 aye ARKANSAS THE CITY OF FAYETTEVILLE, ARKANSAS Kimberly Skelton Chelsea Shaffer Bank of Fayetteville March 9, 2006 Dear Ms. Shaffer, This letter is in response to the request of monthly pension amount and benefit stop date for Kimberly Skelton. The monthly Pension amount is $2434.98. This monthly benefit will continue through her 23d birthday and will cease on 7/31/2008. If you have any questions, please feel free to contact me at 575-8275. Thank You, Wendy Moore Accounting Division City of Fayetteville S ARKANSAS FIRE AND POLICE PENSION REVIEW BOARD BOARD RULES Rule #1 Description of the Board and Method of Operation Rule 42 Procedure for Increasing Benefits from Local Pension Funds Rule #3 Procedure for Making Annual Disclosure of the Financial Activities and Condition of the Fund Rule #4 Definition of"Actuarial Soundness" Rule #5 Penalties for Non-Compliance With Laws Governing Benefit Levels and Annual Financial Disclosure Rule #6 Enforcement of Funding Standards Rule #7 Police Pension Funds: Definition of"Salary" and "Compensation" Rule #8 Expenses for Board Members Rule #9 Administrative Services Committee Rule #10 Administration of DROP Accounts Rule #11 Asset Valuation Method Rule #12 Premium Tax Turnback Allocation ARKANSAS FIRE & POLICE PENSION REVIEW BOARD PRB 620 W. 3rd, Suite 200 LITTLE ROCK, AR 72201 RULES AND REGULATIONS Agency # 137.00 ARKANSAS FIRE AND POLICE PENSION REVIEW BOARD PRB BOARD RULE #1 Adopted: April 17, 1985 Amended: May 30, 1985 Amended: September 4, 1986 Amended: May 21, 1987 Amended: December 14, 1990 Amended: June 29, 1999 Description of the Board; Method of Operation; Methods for Public Access to the Information; Election of Chair. The Arkansas Fire and Police Pension Review Board was established by Act 381 of 1983. Its legal charge is to enforce Arkansas laws which govern funding of local police and fire pension funds, which were established by Act 250 of 1937 and Act 491 of 1921, respectively, and to enforce the proper legal level of benefit payments from these funds. The law also charges the Board with approving the decisions of staff, who certify the proper action to be taken on benefit increase requests for local police and fire pension funds. The Board has nine voting members. In or after July of each odd-numbered year the voting members of the Board shall elect from among their number a Chair of the Board. If a Chair leaves the Board before expiration of the term as Chair, another member shall be elected to fill the unexpired term of Chair. Employers have three (3) representatives; each employee group has two (2) representatives; the public has one (1) representative, and the Director of the Department of Finance and Administration sits ex officio. The Board Members are appointed by the Governor and hold terms which are set by law. The Board must meet once a year, and may call other regular and special meetings at its discretion. The law designates the Executive Director and staff of the Arkansas Local Police and Fire Retirement System to serve as director and staff for the Review Board. The Board is authorized to make rules and regulations necessary to enforce the laws governing funding and benefit levels, and to withhold State Tumback from the local pension funds when non-compliance with such laws is determined. The press is notified of each meeting of the Board and such meetings are open to the public. The public may review the records of the Board at its offices located at 620 W. 3rd, Suite 200, Little Rock, Arkansas. Office hours are Monday through Friday from 8:30 a.m. — 5:00 p.m. Public records may be copied in the office, but charges not to exceed 50 cents per page may be charged to defray the cost of copying large volumes of pages. Any interested party will be afforded access to the public files, but such persons are asked to contact the Board's director first at (501) 682-1745 so that a mutually convenient time may be arranged and office operations will not be disrupted. ARKANSAS FIRE AND POLICE PENSION REVIEW BOARD PRB Board Rule #1 (continued) Actuarial Cost Studies for Legislative Proposals The Executive Director will not pay for actuarial costing of proposed legislation without prior approval of the Board. Actuarial Cost Studies for Depository Insurance Recoveries Local pension plans will be responsible for charges incurred for actuarial services required to recover pension fund assets from depository insurance corporations. Certified By: Cathyrn E. Hinshaw, Executive Director Agency # 137.00 ARKANSAS FIRE AND POLICE PENSION REVIEW BOARD PRB BOARD RULE #2 Adopted: April 17, 1985 Amended: May 21, 1987 Amended: December 9, 1994 Amended: December 3, 1997 Amended: September 10, 2004 PROCEDURE FOR INCREASING BENEFITS FROM LOCAL PENSION FUNDS There are two methods by which a local pension fund may increase benefits to its members. The first is by legislation which mandates an increase. The second is by securing an actuarial valuation which demonstrates that a pension fund can support the cost of the increased benefit over a defined period of years. Police and fire pension funds are required by law to process all benefit increase requests through the Pension Review Board. If a local Board of Trustees wishes to process a benefit increase through the Pension Review Board, the following procedure must be used: 1. The local Board of Trustees must adopt a resolution to raise benefits to the new amount. The resolution must be signed by 3/'s of the membership of the Board (at least 6 of 7 members must sign.) A certified copy of the minutes of the Board meeting at which the resolution was adopted must accompany the resolution. The minutes must reflect who voted for the benefit increase resolution and who voted against it. The certification shall be by the Board's director. 2. The resolution must state how much the increase would be and to whom it would apply, current retirants only; future retirants only; current and future retirants; current surviving spouses and/or children; future surviving spouses and/or children; current and future surviving spouses (Police pension funds may include dependent parents.) 3. The completed resolution should be mailed to: Arkansas Fire and Police Pension Review Board 620 W. 3`d, Suite 200 Little Rock, AR 72201-2212 4. A determination will be made by the Review Board staff that, based on all available financial information on the fund, the benefit increase request should be processed. The pension fund will be sent a bill for the actuarial valuation and the pension fund should return a check promptly for that amount to the above address. No actuarial work will be processed until payment is received. 5. Once the check and any additional information on the fund has been received, it will be submitted to the actuary. 6. When the valuation results are received, the Executive Director shall certify to the ARKANSAS FIRE AND POLICE PENSION REVIEW BOARD PRB Board Rule #2 (continued) local Board whether or not the increased benefit can be given. If denied, the local Board may appeal the findings of the staff to the Pension Review Board, upon a written request to do so. Benefit increases, which are approved, must also be accepted by the Review Board. The Executive Director may make benefit increases retroactive to the date of the local Board resolution requesting the increase, or to a later date, depending on the circumstances of the increase. 7. When an increase in granted, a copy of the resolution, the actuarial valuation, and the Executive Director's certification must be filed by the local Board of Trustees with the circuit and city clerks of the county and city in which the pension fund is located. Certified By: David B. Clark, Interim Executive Director Agency # 137.00 ARKANSAS FIRE AND POLICE PENSION REVIEW BOARD PRB BOARD RULE #3 Adopted: April 17, 1985 Amended: September 28, 1999 Amended: December 12, 2000 PROCEDURE FOR MAKING ANNUAL DISCLOSURES OF THE FINANCIAL ACTIVITIES AND CONDITION OF THE FUND Pursuant to Act 700 of 1979, as amended, each local fire and police pension fund is required annually to compile a financial statement of the pension fund. These annual financial statements must be filed with the Pension Review Board. 1. Financial reports, including the required personnel data, shall be filed with the Review Board no later than March 31 of each year for the previous calendar year. The Executive Director may extend this date in writing, but in no case, will this date be extended beyond May 15. The failure of a plan to submit this information by this date may result in the Joss of premium tax allocations to the plan as described in Rule #12. 2. The reports will be made on reporting forms supplied by the Review Board. If the local fund chooses to submit financial information in an alternate form, it must include all information required on the Review Board reporting form. 3. Each financial statement shall include at least the following: 1) The plan's revenues and expenditures during the year. The revenues exhibit shall allow at least the annual total for each of the following items: (a) Employee contributions (b) Employer contributions, from State (c) Employer contributions, other (d) Investment Income 1. Interest and dividends 2. Gain or (loss) on sales 3. Other (specify) 4. Total of 1+2+3 (e) Other (specify) (f) Total (a) through (e) The expenditures exhibit shall show at least the annual total for each of the following items: (a) Refunds of employee contributions (b) Benefits paid (c) Administrative expenses (d) Other (specify) (e) Total (a) through (d) ARKANSAS FIRE AND POLICE PENSION REVIEW BOARD PRB Board Rule #3 (continued) The difference between revenues and expenditures is the change in plan reserve assets for the year. 2) The plan reserve assets exhibit at year-end shall show at least the total for each of the following items: (a) Cash and bank checking account (non-interest bearing) (b) Bank deposits, interest earning (c) Savings and loan deposits, interest earning (d) Other cash equivalents, maturing one [1] year or less (e) USA Government securities (f) Mortgages (g) Corporate bonds (h) Corporate common stock (i) Other (specify) 0) Total (a) through (i) The asset values shall be cost values or amortized cost values. If corporate common stock is held, there shall also be shown separately the year-end market value of such stock. 3) The accumulated employee contributions at year-end of all non-retired covered employees. 4) The compiler shall certify that in his opinion the information contained in his report is accurate statements of these activities. 5) The staff of the Review Board may refuse to accept financial reports in which the reported balances do not reconcile or which are incomplete, and the staff may require the local pension funds to submit corrected or new reports. Local funds will not be shown as having reported for the year until an adequate report has been accepted by the Review Board staff. Staff refusal to accept inadequate or incorrect reports will be subject to review by the Board if requested by a local fund. Certified By: Cathyrn E. Hinshaw, Executive Director Agency # 137.00 ARKANSAS FIRE AND POLICE PENSION REVIEW BOARD PRB BOARD RULE #4 Adopted: May 30, 1985 Amended: July 18, 1995 Amended: September 10,1997 Amended: September 10, 2004 DEFINITION OF "ACTUARIAL SOUNDNESS" Under law, the financial objectives of the local pension plans shall be to establish and receive contributions which will remain approximately level from year to year and will not have to be increased for future generations of citizens. The law specifies that this objective is achieved when contributions received each year by a pension fund are sufficient both, (1) to fully cover the costs of benefit commitments being made to employees for their service being rendered in such year and, (2) to make a level payment which, if paid annually over a reasonable period of future years, will fully cover the unfunded costs of benefit commitments for service previously rendered. 1. The financial objectives discussed above must be met in order for a fund to be considered "actuarially sound." 2. All computations of actuarial condition shall be based upon assumptions of future financial experiences and funding methods which are either established by or approved by the Pension Review Board. 3. From the date of the adoption of this Board rule, the tests described below shall be used to evaluate benefit increase requests from the local funds and to determine if pension recipients are eligible for benefits mandated by law for pension funds which are "actuarially sound." A fire or police pension fund that is designated as "actuarially sound" must meet one of the following conditions: 1. The Contribution Test and the Short Condition Test; or 2. The Contribution Test and the Funded Percentage Test; or 3. Cash Flow Projection Valuation 4. Alternate Cash Flow Projection Valuation Contribution Test The contributions made to the Fund must be equal to or more than the actuarially computed contributions to pay for the Fund's proposed total benefits. Such computed contributions shall consist of the following items: 1. Normal Cost; and 2. An amortization of unfunded accrued liabilities over a period of future years, which period is defined in the table below. ARKANSAS FIRE AND POLICE PENSION REVIEW BOARD PRB Board Rule #4 (continued) Short Condition Test The Pension Fund's current assets (cash and investments) must be sufficient to cover: 1. Active member contributions on deposit; and 2. The proposed total liabilities for future benefits to present retired lives and inactive members; and 3. A portion of the proposed total liabilities for service already rendered by active members. The portion is defined in the table below. Funded Percentage Test The Pension Fund's current assets (cash and investments) must be sufficient to cover a portion of the proposed total liabilities of all participants of the Pension Fund. The portion is defined in the table below. Testing Amortization of Amortization of Active Funded Dates as of Unfunded Active Unfunded Retiree Liability-Short Percentage December 31 Liabilities Liabilities Condition Test Test 1994 18 9 55% 82% 1995 16 8 60% 84% 1996 14 7 65% 86% 1997 12 6 70% 88% 1998 10 5 75% 90% 1999 9 5 80% 92% 2000 8 5 85% 94% 2001 7 5 90% 95% 2002 6 5 95% 96% 2003 & after 5 5 100% 97% Cash Flow Projection Valuation If the pension fund has 50 or more participants, the Fund may show "actuarial soundness" using a Cash Flow Projection Valuation. This valuation will project the assets, future income, and future benefit obligations of the pension fund. The assumptions used in this valuation shall be based upon the same assumptions used by the Pension Review Board for regularly scheduled valuations. The Cash Flow Valuation must show that the current assets projected with future income will always be sufficient to cover all benefit obligations. A Cash Flow Valuation is not required to be done on a regular basis, but will only by completed when requested by the Fund and at the expense of the pension fund If, however, a pension plan has received money from the Arkansas Fire and Police Guarantee Fund, that pension fund may not have a cash flow study performed for the purpose of granting a benefit increase for a two-year period following receipt of the Guarantee Fund money. ARKANSAS FIRE AND POLICE PENSION REVIEW BOARD PRB Board Rule #4 (continued) Alternate Cash Flow Projection Valuation If a pension fund has less than 50 participants, the Fund may show "Actuarial Soundness" using an Alternate Cash Flow Projection Valuation as defined in this paragraph. This valuation will project the assets, future income and future benefit obligations of the pension fund. The assumptions used for an Alternate Cash Flow Projection Valuation will not necessarily be the same assumptions used by the Pension Review Board for regularly scheduled valuations, because of the small number of fund participants. The Alternate Cash Flow Projection Valuation must show that the current assets projected with future income will always be sufficient to cover all benefit obligations. An Alternate Cash Flow Projection Valuation is not required to be done on a regular basis, but will be completed when requested by the Fund and at the expense of the pension fund. For a pension fund to be able to use the Alternate Cash Flow Projection Valuation, it must also meet the following conditions: 1. The fund uses a PRB Recognized Investment Management and Trust Arrangement. 2. The local pension board, as well as the local city council, must certify to the PRB that they understand the risks involved in using a cash flow model for a small group, and that they assume responsibility for any future funding shortfall risk that might occur as a result of the utilization of the Alternate Cash Flow Projection Valuation. An investment management and trust arrangement will be a Recognized Investment Management and Trust Arrangement by the PRB if it contains the following independent and separately accountable components: 1. Investment Advisory and Reporting, including, but not limited to a. Pension plan prudent asset allocation advice b. Choosing independent investment managers or funds c. Reporting the results of the investment managers versus their benchmark at least quarterly. 2. Investment Management, including, but not limited to a. Investing plan assets on a plan-specific basis which pertains to the stated asset allocation designated by the local pension board with the assistance of the investment advisor b. Regular reporting of results through the recognized investment management and trust arrangement. 3. Trust, Custodial and Administrative Services, including, but not limited to a. Trust and/or custodian agreement with an independent trustee and/or custodian b. Year-end plan financial reporting to the PRB. Certified By: David B. Clark, Interim Executive Director Agency # 137.00 ARKANSAS FIRE AND POLICE PENSION REVIEW BOARD PRB BOARD RULE #5 Adopted: April 17, 1985 PENALTIES FOR NON-COMPLIANCE WITH LAWS GOVERNING BENEFIT LEVELS AND ANNUAL FINANCIAL DISCLOSURE Pursuant to law, the Review Board is required to withhold State turnback to pension funds found to be in non-compliance with laws governing benefit levels and annual financial disclosures. Benefit Levels For Benefit Payments Which Are Too Low 1. The staff shall notify the local fund in writing of its non-compliance and shall inform the local board of the proper benefit levels to be paid. The staff will ask the local board to increase payments to underpaid recipients or to file a notice of pro-rating with the Review Board. 2. The local board shall be required to submit a copy of the minutes of the board meeting at which the increase was made or at which pro-rating of benefits was adopted. The local board shall take action within six (6) weeks of notification of non- compliance, unless the local board wishes for a review of staff findings. 3. Back payments for underpaid benefits shall be left to the discretion of the local board and its legal counsel. 4. Any local board, which disagrees with the findings of staff regarding the correct level of benefit payments, may request a hearing before the Review Board. The Review Board shall schedule the hearing during its next regular meeting, but may delay the hearing to a later meeting if requested by the local board. 5. State turnback to the local fund shall be withheld until either staff findings are overturned, or until compliance is achieved through an increase in benefit payments or by filing a notice of pro-rating. 6. A notice of pro-rating shall include a statement describing the method and amount of pro-ration which must comply with the pro-rating methods set by Act 338 of 1985. For Benefit Payments Which Are Too High I. The staff shall notify the local fund in writing of its non-compliance and shall inform the local board of the proper benefit levels to be paid. The staff will ask the local board to decrease payments to overpaid recipients to the correct levels or to file a statement from an actuary with the Review Board stating that the pension fund can pay the higher benefit. 2. The local board shall be required to submit a copy of the minutes of the board meeting at which the rollback was made or at which the letter of the actuary was accepted. The local board shall take action within six (6) weeks of notification of non-compliance, unless the local board wishes for a review of staff findings.