HomeMy WebLinkAbout2006-10-19 - Agendas - Final Police Pension and Relief Fund Board of Trustees
Agenda
October 19, 2006
A meeting of the Fayetteville Policemen's Pension and Relief Fund Board will be held on
October 19, 2006 at 1 :30 p.m. in Room 326 of the City Administration Building located at 113
West Mountain Street, Fayetteville, Arkansas.
1. Roll Call
2. Approval of the Minutes
• Approval of the July 20, 2006 Meeting Minutes
3. Approval of the Pension List
• Approval of the Revised May, 2006 Pension List
• Approval of August, September and October, 2006 Pension Lists
4. Old Business
• 3% COLA Discussion
• Letter to Merrill Lynch
5. New Business
• Frank Johnson Retirement — Approval
• Additional Benefits for Certain Officers
• Actuarial Valuation 12/31/05
• Elections — Replace Doctor Mashburn and Frank Johnson
6. Longer Investments
• Monthly Investment Report
• Investment Policy Review
0 Quarterly Report
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Policemen's Pension & Relief Fund
Board of Trustees Meeting Minutes
July 20,2006
Page 1 of 14
Policemen's Pension and Relief Fund Board of Trustees
Meeting Minutes
July 20, 2006
A meeting of the Fayetteville Policemen's Pension and Relief Fund Board was held on July 20,
2006 at 1 :30 p.m. in Room 326 of the City Administration Building located at 113 West
Mountain Street, Fayetteville, Arkansas.
Mayor Coody called the meeting to order.
Present: Mayor Coody, Eldon Roberts, Dr Mashburn, Frank Johnson, Jerry Friend,
Sondra Smith, David Whitaker, Marsha Farthing, Accounting.
Absent: Tim Helder
Approval of the May 16, 2006 Meeting Minutes
Dr Mashburn moved to approve the minutes. Eldon Roberts seconded the motion. Upon
roll call the motion carried 5-0. Jerry Friend was absent during the vote. Tim Helder was
absent.
Approval of May, June and July, 2006 Pension List
Mayor Coody: Are there any changes to the May, June, or July Pension Lists?
Eldon Roberts: The change in the widow's benefits. I see it's listed here on the old amount
verses the new amount and it started in May.
Sondra Smith: That total amount of the change for the widow's was $3861.33 per month, that
was the increase on the May, June, and July Pension List.
Mayor Coody: Any other questions on that.
Sondra Smith: There is also one pensioner that didn't receive his check because he didn't turn
in his affidavit. I believe that was Warren Dennis and he is now receiving his check again
because we received his affidavit. On the May list there is no amount for him but he-is back on
the list in June after we received his affidavit.
Mayor Coody: Did he get caught up on that? He didn't miss a check did he?
Policemen's Pension &Relief Fund
Board of Trustees Meeting Minutes
July 20, 2006
Page 2 of 14
Sondra Smith: Yes. The month to date total doesn't reflect that but the year to date totals
reflect it.
Dr. Mashburn moved to approve the Pension List. Eldon Roberts seconded the motion.
Upon roll call the motion carried 5-0. Jerry Friend was absent during the vote. Tim
Helder was absent.
Old Business:
Election Results
Mayor Coody: Jerry Friend was re-elected to the Board does that take any action?
Sondra Smith: I don't think so.
Letter to David Clark and Jody Carreiro Re2ardin2 Benefit Increase
Sondra Smith: I sent a letter to David Clark showing that we did implement a benefit increase.
I also sent the same letter to Osborne and Carreiro so that when they do our next study they will
know that benefit increase was implemented.
Mayor Coody: Does this take any kind of action or is this just informational.
Sondra Smith: It's just informational letting you know that has been taken care of.
Letter to Survivor's regardin y the Benefit Increase for Survivor's
Sondra Smith: This is the letter we sent out to the survivor's letting them know they did get a
benefit increase.
Survivor's Benefit Increase Calculation
Sondra Smith: The additional benefit due to the increase for widows is $3861.33 per month.
Letter to Jody Carreiro regarding the 3% COLA
Sondra Smith: This is the letter that Eldon asked me to send to Jody Carreiro about whether or
not the COLA was included in our study or whether or not they could do a study and include the
COLA. I sent the letter as Eldon asked. I asked in the letter if there would be any additional cost
to redo the study and include that 3% COLA and if so to let me know and what the time is for
Policemen's Pension & Relief Fund
Board of Trustees Meeting Minutes
July 20,2006
Page 3 of 14
completing that study with the 3% COLA calculated in and I haven't heard a reply. I don't know
what else to do. I know that they are extremely busy. We haven't even received the Police
Pension Actuarial reports. We received the Fire Pension reports in July. I called about the Police
Pension reports and they said they haven'tsent them out yet, if there is one fund they are still
working on they don't send any of them out.
Mayor Coody: Okay. Any questions?
New Business:
Memo from Sondra to Kit Williams re ardin2 Spouse Benefits
Sondra Smith: You asked me to check with Kit regarding if a new wife qualifies for benefits
upon the death of a pensioner and this is his reply to my memo. He states that if a police officer
marries after retirement the surviving spouse maybe entitled to a pension if he or she has been
married for at least 5 years but he says the Board has to decide to extend that benefit beyond the
pensioner's death to the surviving spouse.
Eldon Roberts: The way I read it is if the fund is actuarially sound so that will take care of that.
Mayor Coody: Any other questions on that? The memo from Kit regarding spouse benefits
more the same?
Sondra Smith: My questions to Kit are on one page and his answers are on the next page, if
you have questions please let us know.
Chief Frank Johnson: Let me make sure I understand this right. Let me put it in personal terms
"you and I" get married after I retire. You are eligible for this benefit?
Sondra Smith: If we are married for five years and if the Board approves it.
Eldon Roberts: You mean if you get married now before you retire. `
Chief Frank Johnson: No I mean after I retire.
Eldon Roberts: Okay then what she says is the way it works. If you get married before you
retire your spouse is automatically entitled to your pension.
David Whitaker, Assistant City Attorney: For the spouse at the time of retirement there's no
question about them.
Eldon Roberts: Right.
Sondra Smith: But it's the time after retirement.
Policemen's Pension &Relief Fund
Board of Trustees Meeting Minutes
July 20, 2006
Page 4 of 14
David Whitaker: Exactly.
Sondra Smith: Then you have to be married for a minimum of five years then we have to
approve that payment to your spouse but we are not actuarially sound so we wouldn't be able to
extend a benefit increase.
Eldon Roberts: We wouldn't be able to extend the benefit increase even if we wanted to.
Sondra Smith: He also said if a former spouse that is divorced is receiving benefits because of
a qualified domestic relations order those benefits cease upon the death of the beneficiary, if his
ex.wife is drawing benefits and the retiree passes away then her benefits stop.
Eldon Roberts: Plus if she remarries the benefits stop? Is that the way you see it to?
Sondra Smith: He says the benefits end with remarriage.
Eldon Roberts: Even if they're divorced and she is drawing part of his monthly benefit and if
she remarries it stops.
Sondra Smith: That is what Kit is saying because in my letter I ask does a beneficiary of a
pensioner continue to draw benefits if they remarry and for how long after remarrying. Now on
the former spouse I think it depends on the qualified domestic relations order.
David Whitaker: That's correct it would be bound by the actual language of the quarto.
Eldon Roberts: So she could remarry and continue drawing.
David Whitaker: If the order said that.
Eldon Roberts: If the order said that.
David Whitaker: That would be unusual in my experience.
Sondra Smith: On the next pension list you will see a change; there is one pensioner that we
had to pay $508 of his check to his former spouse for child support that was Mark Hanna. That
is the reason Mark Hanna's check is less that Janice Hanna's. That child became of age in July of
this year so his amount will go up by the $508 and her amount will be less.
Merrill Lynch wants to come and visit us at one of our pension meetings to give you information
about their company if you would like. They sent information that I can give you a copy of if you
would like.
Policemen's Pension &Relief Fund
Board of Trustees Meeting Minutes
July 20,2006
Page 5 of 14
Eldon Roberts: We had a run with them back when we first started doing investments and it
was ugly. I would just as soon not have them come. You can have a Board vote or however you
want to do. That's just my take on it.
Dr Mashburn: I would just as soon see us leave things the way they are. We run pretty smooth.
Sondra Smith: They wanted to be here today and I told them they could not come until the
Board gave me an okay.
Eldon Roberts: They can come and sit out there but as far as addressing us, no.
Sondra Smith: They are going to want to address you.
Eldon Roberts: Sure they are.
Sondra Smith: Do you want me to tell them the Board said no?
Eldon Roberts: Should we take a vote or however you want to do it. I don't know. There are
still four of us here.
Sondra Smith: It would be better to take a vote that way it is in the minutes that we chose not to
have them come.
Eldon Roberts moved to not let Merrill Lynch to come to the meeting and give a
presentation. Dr Mashburn seconded the motion. Upon roll call the motion carried 4-0.
Jerry Friend and Mayor Coody were absent during the vote. Tim Helder was absent.
Sondra Smith: I will send Merrill Lynch a letter.
Eldon Roberts: Just tell them we are happy with the way things are at this time.
Lonzer Investments:
Elaine Longer: You received the news letter in the mail and it's really tough in a rapidly
changing environment in investments to write a news letter and I hope to get it out before it is
outdated. This one was particularly difficult because you have so much going on in the
geopolitical scene plus the interest rates and the energy prices so by the time we got the news
letter back from the editor and printer it was in fact outdated. One of the things we said at the end
was these are the factors that could affect our cautiously optimistic outlook, an increase in the
geopolitical tensions and increase in energy prices through the upper limits of the range that
we've seenthis year. By the time it came back from the printer that is exactly what you had
when Lebanon and Israel started shooting off missiles and crude oil prices responded and went
through the recent highs. So we've pulled back into a cautious position again, some of our stocks
that we place under what we consider to be non corporate holdings, we usually control the down
Policemen's Pension &Relief Fund
Board of Trustees Meeting Minutes
July 20,2006
Page 6 of 14
side risk in a market like this by placing them close stop and we've had some of those go off so
we've had higher cash reserves than what we had as recently as two weeks ago. There is a lot.
going on out there and there is a lot of volatility because of it. It's not just the geopolitical
situation but the markets are still trying to get used to the new Federal Reserve Chairman
Bernanke and he can't find his sea legs, every time he gets in front of a microphone he is
wearing a different hat and so that upsets the markets. Yesterday was volatility to the upside
because he spoke before the Senate Finance Committee in his Humphrey Hoskins testimony and
he sounded pretty dovish or as if he wasn't going to raise the interest rates in August and then
that's the reason market was up 200 points. Nothing changed between Tuesday and Wednesday
except that Bernanke spoke again and so everybody has a case of the nerves with him, we all
what the old professor back, Greenspan, where he didn't roll the markets he chose his words
carefully and he chose his venue to say something very carefully. Since Bernanke took the helm
in the first part of the year he's actually made statements at cocktail parties to a CNBC reporter
that ended up moving the markets by Monday when it was reported. He is acting very
sophomoric in his position as being the primary spokes person and policy setter for the US
economy, so he needs to get his sea legs quickly. Yesterday was just another example of the
Bernanke volatility because the market responds in internet time to the changes in these factors
and everything is very volatile right now. That is why you are seeing so much of these swings,
100, 200 point day swings. I think the volatility is going to be here with us until we get
clarification on some of these things that are bothering everybody, the geopolitical, the energy
prices, the interest rates those are the three big ones.
The good news is that earnings are coming through relatively good and the first quarter GDP
growth rate was 5.6%. We probably slowed to about 3% to 3.5% in the second quarter we don't
have those numbers yet but given the factors that we are seeing the reports being put out by the
retailers in particular Wal-Mart, Target, Best Buy, and Bed Bath and Beyond, the places where
America shops those numbers are really weakening a lot in June. Then we have had news from
General Motors and Ford that June sales basically fell off a cliff. We are seeing weakness
elsewhere in housing stocks and companies like Home Depot so the consumer is really being
affected. Today it was a pizza company, that had bad numbers and it's affecting all the restaurant
stocks like Appleby's and Panera Bread.
We've been wondering how long this tapped out consumer will be able to continue their
spending patterns that have really been such a strong support to the economy. A consumer
makes up 70% of the GDP so it's very important and we are seeing cracks in the foundation it is
starting, the energy prices, the higher interest rates are starting to affect consumer spending
patterns and it really kicked in in June. That means the second half of the year is probably going
to be a 2% to 2.5% growth rate. I don't think the Fed will raise again in August if they do we
want to own bonds even more than if they don't because they are going to kill the economy. We
wrote this in the news letter that the market is juggling this 5.75 or will it be 5.50 it doesn't really
matter we are in the ninth ending we just don't know if it's the top of the ninth or the bottom of
the ninth and from a market stand point that's all that matters. In 1994 which was the last time
that we had a interest rate cycle like this the Fed raised rates six times we came into 1995 they
raised again in January and then by July they were cutting interest rates because they had gone
Policemen's Pension & Relief Fund
Board of Trustees Meeting Minutes
July 20,2006
Page 7 of 14
too far. I think that could be very possibly what we will see where the Fed by the fourth quarter
has to actually start cutting rates.
Dr Mashburn: That's the only way they can tell whether it's high enough is when they have
already gone too far.
Elaine Longer: Exactly and the inflation numbers are trailing indicator because you get the
inflation number today, that is for last month, what we are looking at is what will the inflation
numbers will be out there in November and December where the economy is slowing to a 2%
growth rate, that's a whole different picture. We've been very comfortable about extending our
maturities in the bond market, locking in some of these higher interest rates. This week we
bought some of the ten year treasury the 5.125 at par and by yesterday it was one half point
above what we paid for it. The yield curve is inverting even more, even though you have 5.75 in
the Fed funds or the short term interest rates. The five year yield is 5% the 10 year yield is
almost down to 5% and so what that inversion tells you is the market is saying these interest rates
won't last. I'm willing to go out here to the 10 year and take a 5.125 even though I can get 5.75
in the money market because I want to lock that 5.125 in for ten years. When you see this
inversion in the yield curve that's what the market is saying is.that these rates won't last. So that
is a good sign, we have to get to that point before the Fed stops. In 1995 even though the
economy slowed the stock market preformed real well because you had that pressure released on
the interest rate side and I think that's what you will see as we move through this end of the cycle
and it becomes real apparent to participants that the Fed is done. Then they will look back over
here at stocks and say "oh by the way" earnings were up 22% last year and the stock market
didn't do anything and now this year to date they are up 14.6% and the stock market is up 1.8%;
the valuation has really improved over here on the stock side. Right now everybody is focused
on bonds and so stocks have had a rising valuation. The valuation floor of the market keeps
improving but we don't see that in price at this point, it will come though it's just going to be
delayed until we get some resolution on the interest rate out look. So that's the newsletter if you
haven't read it.
On page 1 you will see the summary of your portfolio holdings as of June 30th and at that time
we were 45% invested in domestic stocks and then you have approximately 61/o in foreign stocks
so were just over that 50% level so we need approval to be over the 50%. The ranges are up to
50% plus or minus 5. It requires approval if were over the 50%.
Sondra Smith: Does someone want to move to approve the equity overage?
Eldon Roberts moved to approve the equity overage. Dr Mashburn seconded the motion.
Upon roll call the motion carried 5-0. Mayor Coody was. absent during the vote. Tim
Helder was absent.
Elaine Longer: Page 4 you will see that the market value on June 30th was $10.35 million and
the end income yield is still 3.5% so even though we have a higher equity allocation we've been
able to keep the income yield up because of the rising interest rates in the bond market. Page 5
your realized gains year to date are about $203,000 and net income has been $127,000 so that is
Policemen's Pension &Relief Fund
Board of Trustees Meeting Minutes
July 20, 2006
Page 8 of 14
just the gains that we've realized on stock positions it does not include the unrealized
appreciation. Page 6 is a summary of the bond portfolio, your weighted average yield to maturity
is 5.2% and the average maturity is 3.8 years. So you have a good high income yield even though
the maturity risk is not very high in your portfolio and we still have a lot of flexibility to extend ,
maturities although we have already done a lot of purchasing in the 5 year maturity and recently
the 10 year. Page 7 just shows your largest stock holdings as a percent of your equity portfolio
and that's well within your policy guide lines which states that no equity should exceed 5% of
total equity. Page 8 shows the contributions and distributions year to date. We did receive some
litigations settlements I'm sure it's not as much as the attorneys who did the litigations received.
The withdrawals have been about $460,000. The next page is your performance report and we
are having a good year if you look at 2006 year to date through June 30th the stocks are up 5.8%
the S&P 500 is up about 1.8% with the Dow up about 5%. The Treasury bond index is down
1.3% but your bonds are up 0.2% and that's because we have had a shorter average maturity then
the bond index. That's where a lot of the realized gains came from because we sold the long
bonds and the long bond mutual funds back in February and that has helped hold the bond
portfolio so total return year to date has been 3.2% with bonds included.
Your annualized return stocks are at 6.4%, bonds at 5.8% and total compound annual return has
been 6.8% compared to the actuary of 6%. Inception to date this just summarizes the beginning
value and additions to the portfolio, the distributions that have taken place of $3.85 million
verses the net investment return of $5.58 million so the investment return has run ahead of the
distributions.
The investment policy, there isn't anything that we would recommend that you change at this
time and although we have been authorized to increase the foreign exposure in the portfolio, we
haven't acted on that yet because last year foreign out performed domestic markets by a wide
margin and then year to date through June 30th the foreign markets have out performed the US so
at this point in time US stocks and particularly the large cap US stocks the "big uglies" we call
them are very cheap on a relative value to some of the other markets in the world. In times of
trouble the US is the safe harbor and so at this point buying Taiwan or buying Singapore as
opposed to staying in US stocks especially the large caps is not a good trade. So at.this point we
still have that authorization in the portfolio policy and we appreciate the change but we are not
going in that direction right at this time. We are keeping the international that we currently hold
but I think on a relative performance basis the US market as we clear some of these hurtles can
play catch up to what some of the foreign markets have done in the past 18 months.
It's never dull out there and it's been particularly exciting this year. Does anyone have
questions?
Eldon Roberts: Have you been managing our money since 1990? Has it been that long?
Elaine Longer: Yes.
Eldon Roberts: You all took over sixteen years ago?
Policemen's Pension &Relief Fund
Board of Trustees Meeting Minutes
July 20,2006
Page 9 of 14
Elaine Longer: Sixteen Years.
Eldon Roberts: Wow. Where did it go? I don't have any further questions.
Elaine Longer: It was right before the first Persian Gulf War invasion. You had just came in
when IRAQ crossed the Kuwait border and then from that point which was mid 1990 the market
fell off by about 19% going into the invasion which was January 15, 1991. So it was a tough start
but once that uncertainty cleared the market had a big year. The stock market is an emotional
market, there is nothing that it hates more than uncertainty and right now there's a lot of it. In
fact when I was putting together the news letter one of the measures is what's called an 80%.day
where 80% of total volume is either up or 80% is down and those are extreme days it usually
indicates a lot of sentiment in one direction or the other. Yesterday was a 90% day to the upside
but last week we had two 90% days to the down side and so the string of 80% days in the past 5
weeks ending July 3 there were 14 of them and that was the highest volatility in 55 years by that
measure. So what you are seeing on the news is being reflected in the stock market and that is
why you have all these gyrations, but the fundamentals underline all of that and are still very
favorable.
Dr Mashburn: That means you are hitting more nervous people out there.
Elaine Longer: Well you've got a case of the nerves and not only that but the composition of
trading has changed in the past several years because now hedge funds which typically use
leverage, they make up over 50% of the trading volume on the New York exchanges each day.
So you have volatility and you have uncertainty and then you overlay that with leverage players,
that is why you see the movements happening so rapidly. The time period it used to take to
respond to a Federal Chairman saying something was much longer now it is instantaneous. He
had not even gotten to the microphone before the market was up 150 points because he released
the text of his prepared statement to the press about 15 minutes before he actually started talking
and they read it on CNBC and I'm sitting there watching the market just go through the roof. It's
just fascinating because it does happen so quickly it's probably the same price difference that
you would have in response to a given set of variables being released but it didn't use to take 15
minutes.
Eldon Roberts: When does the Federal Reserve Board meet again, it is August sometime?
Elaine Longer: It's August.
Eldon Roberts: The way you feel right now they won't raise rates. The high energy cost is one
thing and the high interest rates by them raising it every so often but the energy is something
everybody that everybody has to have and it has really taken a toll I think. I don't think it's
going to come back down very much and give any relief.
Elaine Longer: I don't see it in this geopolitical environment but the thing that the Fed is
balancing is that you have raising inflation numbers because of the energy input and the produce
of price index number that came out last week, that .5% was higher than expected. The
4
Policemen's Pension &Relief Fund
Board of Trustees Meeting Minutes
July 20,2006
Page 10 of 14
consumer price index number that is the core number came out at .3%, the market was expecting
.2% so they are concerned about these energy prices filtering into the basic inflation rate. They
have to act to quell inflation fears because you don't want them to get embedded and get into the
way trade and all of that stuff because then you have a multi year problem trying to knock it out
so that's one thing that they are fighting. Then on the other hand though they see the weakening
economy and Bernanke tried to address both sides of it and today he had to go before the .house
and they nailed him on that, they want clarification. He really is juggling the two, the rising
inflation pressures but also he sees they are worsening. He knows the economy is weakening. So
he has to maintain his creditability especially with being the new guy on the block and still
appear to be a very staunch inflation fighter otherwise the dollar comes under pressure which
would raise inflation pressures. So he is walking a tight rope. I just wish that he would pick his
opportunities to speak much more carefully and maybe have somebody review the text before he
gets before the microphone. I think he will get there he is very professorial looking and acting
and so I don't think he is someone that is going to shoot from the hip. It is a tight rope they are
walking because he does have to maintain creditability on the inflation fighting front and at the
same time. not throw the economy into a recession. I won't want his job on a good day. Are
there any other questions? Thank you.
Eldon Roberts: I just want to see what the Board thinks. Jerry before you got here we discussed
the actuary report is not in and neither is the letter that we asked Jody Carreiro to tell us about
making the COLA permanent, none of that has come back yet. Should we just let that go, the
letter anyway, until the next meeting in October in hopes that all of that will be in by then? We
are going to be so far down the road from that last benefit proposal that he did I don't know how
well he is going to want to do this 3% permanent COLA.
Sondra Smith: I don't know why he's not responding is he normally like that?
Eldon Roberts: No, I've heard that some group has them working really hard on a new way of
dividing up the insurance turn back money on the old funds and joining LOPFI, there is a whole
lot that some interim committee is having them do. They are just so far behind trying to get the
answers for those people and the session is just around the corner that's what I'm hearing. The
actuary report we know they are going to send it's just when they get it done. The letter that we
asked for, he promised me 3 or 4 months ago. We have a little time on the COLA it's still good
for two more years if I understand everything right, it was a five year tempory COLA and we,
have had 3 years of it so we still have 2007 and 2008. I guess I would be in favor of just waiting
until October and hope that surely by then we have a response from _him on both of these the
actuary report and the making of the COLA permanent.
Sondra Smith: It doesn't matter to me I will do what ever you all want me to do.
Eldon Roberts: What do the rest of you all think? I don't know what else we can do to hurry
them up anyway you've already written them a letter and he knows surely what we are waiting
on. The actuarial report is something that they do anyway that is not something that we
requested. That is something they do every 2 years, isn't that right?
Policemen's Pension &Relief Fund
Board of Trustees Meeting Minutes
July 20,2006
Page 1 I of 14
Sondra Smith: Yes.
Eldon Roberts: It's not pertinent that we the information -to make the COLA permanent right
now.
Dr. Mashburn: Sometimes a second letter letting them know that you are showing an interest.
Eldon Roberts: Sondra sent a letter.
Dr. Mashburn: You sent one already?
Sondra Smith: Yes and Eldon called him a couple times.
Eldon Roberts: I talked to him on the phone and he promised me to do this at no extra cost
because we are just coming off him doing a benefit proposal study anyway and he said all the
numbers was right handy for him.
Sondra Smith: I don't think they're going to do anything right now until they get all those
actuarial reports done.
Eldon Roberts: You're probably right. So I for one can wait until October to see if we have
heard back from him on these two things. Surely they will have the actuary report out by then.
Maybe he will respond in writing whatever he decides about the COLA being made permanent.
Jerry Friend: Remind me is he involved in the actuary?
Eldon Roberts: Yes sir, they do the actuary.
Jerry Friend:. I was thinking so.
Eldon Roberts: They are under contract through the State, I think they do a lot of LOPFI work
and they do ours. They do the actuaries for the Police and Fire old plans for sure. He is also the
one we've asked to give us information on if we can make the COLA permanent or not.
Jerry Friend: Same thing that's holding up the actuaries is probably holding up that letter.
Eldon Roberts: I know they are looking at new way of dividing up the insurance turn back
money every year, something that's more equitable. I don't know what they are going to come
up with. I don't guess we have received our insurance turn back check yet either but surely
August. When do those usually come in August or September?
Sondra Smith: No I think it's usually about this time.
Eldon Roberts: It .won't affect this years -because it will have to go before the legislative
process, whatever this group comes up with in proposals.
Policemen's Pension&Relief Fund
Board of Trustees Meeting Minutes
July 20,2006
Page 12 of 14
Jerry Friend: We probably need to look at what they come up with something because there
was some talk that the funds that needed it worse might get more.
Eldon Roberts: Wonder if they will send us a proposal on what's going to go before the
legislative body? I guess they will meet in. January. I wonder if we will get some kind of
proposal that's going to be given to them so we can voice our opinion.
Jerry Friend: What committee will summit that?
Eldon Roberts: Joint Retirement Committee probably, I think is what all pension stuff comes
under down there. It's a group of people that is made up of Senators and Representatives both.
Jerry Friend: I think we ought to look at that.
Dr. Mashburn: Do you have a list.
Eldon Roberts: I don't have a list of who's on that committee. It can be obtained but I'm like
Jerry it would be nice if we could look at it and see because they might decide we don't need as
much of that money as we've been getting.
Jerry Friend: Yeah.
Eldon Roberts: We might want to contact our representatives.
Jerry Friend: We might want to go push for it or . . ...
Eldon Roberts: Or push against it. Well let's just try to figure on in October if we haven't heard
anything on what that group of people has come up with in a way of proposals to go before the
legislative session, let's see if we can get a copy of it and review it and see if we are for it or
again it.
Jerry Friend: _There is some publication that has all the Bills in it or something isn't there?
Eldon Roberts: Yeah.
Jerry Friend: Maybe I will try to get a hold of one of them and read through it and find it.
Chief Frank Johnson: You can look at the State web site.
Jerry Friend: Right. I think it is on there.
Eldon Roberts: I don't know when they will have the report finalized that they are taking to the
legislative session, but that is when we would want to get it and look at it after they come up
with what there going to recommend.
Policemen's Pension &Relief Fund
Board of Trustees Meeting Minutes
July 20,2006
Page 13 of 14
Jerry Friend: Right.'
Eldon Roberts: I can wait till October and see if we have heard anything back from him on the
letter:
Sondra Smith: I don't know what else we can do.
Eldon Roberts: I don't either. Write him another letter, but I don't know if that would make a
lot of difference because they are under the gun down there.
Dr. Mashburn: That's probably the only letter he gets from all of us.
Sondra Smith: I know they have to be behind because we always get the Police Pension report
at the same time as the Fire Pension report. I couldn't believe we received one without the other.
I thought it was lost and tried to find it.
Eldon Roberts: I've not received anything.
Sondra Smith: I called PRB and they said they had not sent the Police Pension report out.
Accounting couldn't believe it either they always send them out at the same time. I asked when
we can expect it and they didn't know.
Jerry Friend: Do we need to.vote today or just wait?
Eldon Roberts: I don't know.
Sondra Smith: There is no vote that we can take.
Eldon Roberts: It wouldn't make any difference would it? We can see where we are at in
October we should be further down the road by then and maybe have answers to both of these
questions. Frank you have an opportunity to look on line every once in a while can you kind of
keep track of pension legislation that is going to be coming up that they will take to the next
session. The next session is in January of next year isn't it?
Chief Frank Johnson: Yes.
Eldon Roberts: Starting in the next few months you might be able to find some information on
that web site that pertains to pensions. Anything you can get just pull it up and print it. Give it to
Sondra and she can incorporate it into the minutes of the meeting or into the package she hands
out next time. There is a lot of things we miss, we missed that Frank was suppose to be a
member of this Board for 6 months and it is just hard to keep track of all of it. We need
somebody that that's all they are doing.
. ............
Policemen's Pension &Relief Fund
Board of Trustees Meeting Minutes
July 20,2006
Page 14 of 14
Sondra Smith: We should not have missed that and the only reason we missed that we did was
because that little section was on the next page. That's the only reason we missed it. Kit and I
both read those new acts before they went into affect.
Eldon Roberts: I'm not pointing fingers at anybody I'm just saying it's hard to keep up with it
all of this. F
Jerry Friend: It is.
Eldon Roberts: It is just hard you have so many different people that have input into that. It is
hard to monitor and get everything and stay abreast of it because it is constantly changing or
being added to.
Sondra Smith: That's the reason I go to Municipal League because we find out a lot of changes
or proposed changes when we go to Municipal League.
Chief Frank Johnson: I'll put this on my favorites file.
Eldon Roberts: That's a good deal then we can watch it from here on out for the rest of the year
because there will be proposals coming up all the time from here on out that pertains to pensions.
A lot of those things we might be for and a lot of those things we might be against. Then once
the legislative body finally meets and acts on them we sure need to know them because it
becomes law.
Chief Frank Johnson: What's the committee again?
Eldon Roberts: I think it's the Joint Retirement Committee.
Dr Mashburn: Do any of you go down to those meetings?
Eldon Roberts: I used to a long time ago.
Dr Mashburn: I use to go down there and keep up with some of those things.
Eldon Roberts: Okay so we will just wait until October and see is if we have heard anything
back from Carreiro. They are not going to ask us for our input on coming up with a new way of
dividing this insurance turn back money. They are going to come up with their own ideas. I
don't know if it's going to be good or bad for us.
Meeting Adjourned at 2:15 PM
POLICE PENSION FUND ReviseriL' SurvivomBeneff 1twmme: i€33 Yf rren Dennis back:pay:$?297 84�
May 2006
Month 5 �� M
5335-00 Back pay 5335-05 Future
EMP# NAME GROSS YTD Wages Suppl. Supplement YTD Suppl. Supplement Fed Tax ST. TAX NET
154 ALLEN, CHARLES 2,436.27 12,181.35 50.00 250.00 220.00 66.89 2,199.38
130 BAYLES, DON 1,496.28 7,481.40 50.00 250.00 1,546.28
107 BLACK, JOE P 1,061.02 5,305.10 50.00 250.00 900.00 20.00 991.02
147 BRADLEY, GERALD 4,543.40 22,717.00 50.00 250.00 940.53 217.32 3,435.55
139 BRADLEY, RANDALL 2,695.98 13,479.90 50.00 250.00 382.00 100.00 2,263.98
167 BROWN; JOHN 4,111.61 20,558.05 50.00 250.00 600.00 200.00 3,361.61
157 CARROLL,RONALD L 1,985.15 9,925.75 50.00 250.00 250.00 105.00 1,680.15
151 COLE, RUSTON 2,889.76 14,448.80 50.00 250.00 600.00 200.00 2,139.76
109 COOPER,ADRIAN 601.78 3,008.90 50.00 250.00 651.78
108 DENNIS, WARREN 2,595.68 6,489.20 100.00 250.00 0.00 2,695.68
160 DUGGER,GARY 2,982.13 14,910.65 50.00 250.00 300.00 120.00 2,612.13
140 FOSTER, BILLIE D. 3,023.23 15,116.15 50.00 250.00 300.00 120.00 2,653.23
148 FRIEND, JERRY 2,971.70 14,858.50 50.00 250.00 725.00 150.00 2,146.70
161 HANNA, JANICE 1,845.13 9,225.65 0.00 175.00 50.00 1,620.13
145 HANNA, MARK 734.93 3,674.65 . 50.00 250.00 784.93
162 HASKINS, IRENE 737.30 2,375.74 50.00 250.00 787.30
169 HELDER, TIM 5,502.99 27,514.95 50.00 250.00 750.00 250.00 4,552.99
180 HOYT, RICK 7,031.78 35,158.90 50.00 250.00 1,600.00 425.00 5,056.78
146 HUTCHENS, BERNICE 1,720.75 5,544.63 50.00 250.00 130.00 1,640.75
143 JOHNSON, CHARLES 2,314.54 11,572.70 50.00 250.00 42.67 2,321.87
103 JOHNSON, WENDELL 738.19 3,690.95 50.00 250.00 788 19
118 JONES, BOB 3,110.99 15,554.95 50.00 250.00 0.00 3,160.99
144 KILGORE, DONALD 1,929.00 9,645.00 50.00 250.00 19.72 1,959.28
129 LAWSON, FORREST 1,477.89 7,389.45 50.00 250.00 350.00 1,177.89
150 LITTLE, PATSY R 688.43 2,218.27 50.00 250.00 73843
153 LORCH, DONNA G 688.43 2,218.27 50.00 250.00 73843
156 MARTIN, KENNETH 3,480.86 17,404.30 50.00 250.00 500.00 140.00 2,890.86
128 MCCAWLEY, LARRY 1,597.50 7,987.50 50.00 250.00 195.00 50.00 1,402.50
116 MCCHRISTIAN, MARIE 688.43 2,218.27 50.00 250.00 738.43
126 MCWHORTER, KAREN 954.00 3,074.00 50.00 250.00 1,004 00
136 MITCHELL, MICHAEL 2,172.96 10,864.80 50.00 250.00 150.00 2,072.96
141 MUELLER, ROSEMARY 1,945.46 9,727.30 50.00 250.00 1,995.46
158 MUNSON,ANGELA 3,957.16 19,785.80 50.00 250.00 500.00 183.00 3,324.16
112 MURPHY, JAKE 382.46 1,912.30 50.00 250.00 0.00 432.46
137 PERDUE, LARRY 2,189.34 10,946.70 50.00 250.00 200.00 25.00 2,014.34
164 PERSHALL, ROBIN 1,437.52 7,187.60 0.00 190.00 67.00 1,180.52
132 PHILLIPS, HOMER GENE 1,653.73 8,268.65 50.00 250.00 300.00 1,403.73
105 PRESTON, GEORGE DAVID 1,509.45 7,547.25 50.00 250.00 100.00 100.00 1,359.45
135 RICKMAN, LOREN 2,103.00 10,515.00 50.00 250.00 230.00 65.00 1,858.00
104 RIGGINS, RAYMOND C 1,573.54 7,867.70 50.00 250.00 125.00 25.00 1,473.54
183 ROBERTS, ELDON 7,050.02 35,250.10 50.00 250.00 1,244.00 400.00 5,456.02
159 SCHUSTER,JOHN H. 2,938.41 14,692.05 50.00 250.00 340.00 110.00 2,538.41
168 STANLEY, MELVIN 4,599.93 22,999.65 50.00 250.00 1,100.00 300.00 3,249.93
155 STOUT, BETTY - 816.77 2,631.81 50.00 250.00 0.00 866.77
133 SURLES, JERRY 2,565.18 12,825.90 50.00 250.00 600.00 200.00 1,815.18
142 TAYLOR, DENNIS 1,945.46 9,727.30 50.00 250.00 110.00 0.00 1,885.46
106 UPTON, FRANKLIN 996.40 4,982.00 50.00 250.00 10.00 1,036.40
163 WATSON, RICHARD 7,442.56 37,212.80 50.00 250.00 1,950.00 400.00 5,142.56
149 WILLIAMS, JOYCE 2,393.87 7,713.59 50.00 250,00 217.07 2,226.80
134 WITT, DON 1,665.41 8,327.05 50.00 250.00 115.00 64.00 1,536.41
127 WOOD, PAUL J 1,490.17 7,450.85 50.00 250.00 0.00 1,540.17
121,463.93 585,385.13 2,500.00 0.00 12,250.00 0.00 15,598.60 4,215.60 104,149.73
6800-9800 6600.9800 6800.9800 .
5335-00 533.5-05 5335-06 Total
Year to Date 585,385.13 12,250.00 0.00 597,635.13
POLICE PENSION FUND
August 2006 6800-9800 68M9800
Month 8 5335-00 Backpay 5335-05 Future
EMP# NAME GROSS YTD Wages Suppl. Supplement YTD Suppl. Supplement Fed Tax ST. TAX NET
154 ALLEN, CHARLES 2,436.27 19,490.16 300.00 220.00 66.89 2,149.38
130 BAYLES, DON 1,496.28 11,970.24 300.00 1,496.28
107 BLACK, JOE P 1,061.02 8,488.16 300.00 100.00 20.00 941.02
147 BRADLEY, GERALD 4,543.40 36,347.20 300.00 940.53 217.32 3,385.55
139 BRADLEY, RANDALL 2,695.98 . 21,567.84 300.00 382.00 100.00 2,213.98-
167 BROWN,JOHN 4,111.61 32,892.88 300.00 600.00 200.00 3,311.61
157 CARROLL,RONALD L 1,985.15 15,881.20 300.00 250.00 105.00 1,630.15
151 COLE, RUSTON 2,889.76 23,118.08 300.00 600.00 200.00 2,089.76
109 COOPER,ADRIAN 601.78 4,814.24 300.00 601.78 r
108 DENNIS,WARREN 1,297.84 10,382.72 300.00 0.00 1,297.84
160 DUGGER;GARY 2,982.13 23,857.04 300.00 300.00 120.00 2,562.13
140 FOSTER, BILLIE D. 3,023.23 24,185.84 300.00 300.00 120.00 2,603.23
148 FRIEND, JERRY 2,971.70 23,773.60 300.00 725.00 150.00 2,096.70
161 HANNA, JANICE 1.290.03 14,205.94 0.00 175.00 50.00 1,065.03
145 HANNA, MARK " 1,290.03 6,434.54 300.00 1,290.03
162 HASKINS, IRENE 737.30 4,587.64 300.00 737.30,
169 HELDER, TIM 5,502.99 44,023.92 300.00 750.00 250.00 4,502.99
180 HOYT, RICK 7,031.78 56,254.24 300.00 1,600.00 425.00 5,006.78
146 HUTCHENS, BERNICE 1,720.75 10,706.88 300.00 130.00 1,590.75
143 JOHNSON, CHARLES 2,314.54 18,516.32 300.00 42.67 2,271.87
103 JOHNSON, WENDELL 738.19 5,905.52 300.00 738.19
118 JONES, BOB 3,110.99 24,887.92 300.00 0.00 3,110.99
144 KILGORE, DONALD 1,929.00 15,432.00 300.00 19.72 1,909.28
129 LAWSON, FORREST 1,477.89 11,823.12 300.00 350.00 1,127.89
150 LITTLE, PATSY R 688.43 4,283.56 300.00 688.43
153 LORCH, DONNA G 688.43 4,283.56 300.00 688.43
156 MARTIN, KENNETH 3,480.86 27,846.88 300.00 500.00 140.00 2,840.86
128 MCCAWLEY, LARRY 1,597.50 12,780.00 300.00 195.00 50.00 1,352.50
116 MCCHRISTIAN, MARIE 688.43 4,283.56 300.00 688.43
126 MCWHORTER, KAREN 954.00 5,936.00 300.00 954.00
136 MITCHELL, MICHAEL 2,172.96 17,383.68 300.00 150.00, 2,022.96
141 MUELLER, ROSEMARY 1,945.46 15,563.68 300.00 1,945.46
158 MUNSON,ANGELA 3,957.16 31,657.28 300.00 500.00 183.00 3,274.16
112 MURPHY, JAKE 382.46 3,059.68 300.00 0.00 382.46
137 PERDUE, LARRY 2,189.34 17,514.72 300.00 200.00 25.00 1,964.34
164 PERSHALL, ROBIN 1,437.52 11,500.16 0.00 190.00 67.00 1,180.52
132 PHILLIPS, HOMER GENE 1,653.73 13,229.84 300.00 300.00 1,353.73
105 PRESTON, GEORGE DAVID 1,509.45 12,075.60 300.00 100.00 100.00 1,309.45
135 RICKMAN, LOREN 2,10300 16,824.00 300.00 230.00 65.00 1,808.00
104 RIGGINS, RAYMOND C 1,573.54 12,588.32 300.00 125.00 25.00 1,423.54
183 ROBERTS, ELDON 7,050.02 56,400.16 300.00 1,244.00 400.00 5,406.02
159 SCHUSTER,JOHN H. 2,938.41 23,507.28 300.00 340.00 110.00 2,488.41
168 STANLEY, MELVIN 4,599.93 36,799.44 300.00 1,100.00 300.00 3,199.93
155 STOUT, BETTY 816.77 5,082.12 300.00 0.00 816.77
133 SURLES, JERRY 2,565.18 20,521.44 300.00 600.00 200.00 1,765.18
142 TAYLOR, DENNIS 1,945.46 15,563.68 300.00 110.00 0.00 1,835.46
106 UPTON, FRANKLIN 996.40 7,971.20 300.00 10.00 986.40
163 WATSON, RICHARD 7,442.56 59,540.48 300.00 1,950.00 400.00 5,092.56
149 WILLIAMS, JOYCE 2,393.87 14,895.20 300.00 217.07 2,176.80
134 WITT, DON 1,665.41 13,323.28 300.00 115.00 64.00 1,486.41
127 WOOD, PAUL J 1,490.17 11,921.36 300.00 0.00 1,490.17
120,166.09 945,883.40 0.00 0.00 14,700.00 0.00 15,598.60 4,215.60 100,351.89
6600-9600 6600-9800 6800-9800.
5335-00 5335-05 5335-06 Total
Year to Date 945,883.40 14,700.00 . 0.00 960,583.40
Widows benefit increased to 90%effective May 1, 2006.
4
1
" Benefit Amt changed effective 8/1/06 due to daughter of Mark and Janice Hanna turing 18
Per QDRO Mark Hanna paid Janice Hanna$508.00 per month in child support until the
daughter turns 18,which occurred on 7/18/06.
POLICE PENSION FUND
Sept 2006 6800-9800
6800-9800
Month 9 Regular Mo 5335-00
5335-05 Check
EMP# NAME Benefit YTD Reg Benefit Suppl. YTD Suppl. Fed Tax St Tax Net
154 ALLEN, CHARLES 2,436.27 21,926.43 50.00 450.00 220.00 66.89 2,199.38
130 BAYLES,DON 1,496.28 13,466.52 50.00 450.00 1,546.28
107 BLACK, JOE P 1,061.02 9,549.18 50.00 450.00 100.00, 20.00 991.02
147 BRADLEY, GERALD 4,543.40 40,890.60 50.00 450.00 940.53 217.32 3,435.55
139 BRADLEY, RANDALL 2,695.98 24,263.82 50.00 450.00 382.00 100.00 2,263.98
167 BROWN, JOHN 4,111.61 37,004.49 50.00 450.00 600.00 200.00 3,361.61
157 CARROLL,RONALD L 1,985.15 17,866.35 50.00 450.00 250.00 105.00 1,680.15
151 COLE, RUSTON 2,889.76 26,007.84 50.00 450.00 600.00 200.00 2,139.76
109 COOPER,ADRIAN 601.78 5,416.02 50.00 450.00 651.78
108 DENNIS, WARREN 1,297.84 11,680.56 50.00 450.00° 0.00 1,347,84
160 DUGGER,GARY 2,982.13 26,839.17 50.00 450.00 300.00 120.00 2,612.13
140 FOSTER, BILLIE D. 3,023.23 27,209.07 50.00 450.00 300.00 120.00 2,653.23
148 FRIEND,JERRY 2,971.70 26,745.30 50:00 450.00 725.00 150.00 2,146.70
161 HANNA, JANICE " 1,290.03 15,495.97 0.00 0.00 100.00 25.00 1,165.03
145 HANNA, MARK - 1,290.03 7,724.57 -50.00 450.00 1,340.03
162 HASKINS, IRENE 737.30 5,324.94 50.00 450.00 787.30
169 HELDER,TIM 5,502.99 49,526.91 50.00 450.00 750.00 250.00 4,552.99
180 HOYT, RICK 7,031.78 63,286.02 50.00 450.00 1,600.00 425.00 5,056.78
1.46 HUTCHENS, BERNICE 1,720.75 12,427.63 50.00 450.00 130.00 1,640.75
143 JOHNSON, CHARLES 2,314.54 20,830.86 50.00 450.00 42.67 2,321.87
194 JOHNSON, FRANK 7,166.91 7,166.91 50.00 50.00 1,600.00 500.00 5,116.91
103 JOHNSON, WENDELL 738.19 6,643.71 50.00 450.00 788.19
118 JONES, BOB 3,110.99 27,998.91 50.00 450.00 0.00 3,160.99
144 KILGORE, DONALD 1,929.00 17,361.00 50.00 450.00 19.72 1,959.28
129 LAWSON, FORREST. 1,477.89 13,301.01 50.00 450.00 350.00 1,177.89
150 LITTLE, PATSY R 688.43 4,971.99 50.00 450.00 738.43
153 LORCH, DONNA G 688.43 4,971.99 50.00 450.00 73843
156 MARTIN, KENNETH 3,480.86 31,327.74 50.00 450.00 500.00 140.00 2,890.86
128 MCCAWLEY, LARRY 1,597.50 14,377.50 50.00 450.00 195.00 50.00 1,402.50
116 MCCHRISTIAN, MARIE . 688.43 4,971.99 50.00 450.00 738.43
126 MCWHORTER, KAREN 954.00 6,890.00 50.00 450.00 1,004.00
136 MITCHELL, MICHAEL 2,172.96 19,556.64 50.00 450.00 150.00 2,072.96
141 MUELLER, ROSEMARY 1,945.46 17,509.14 50.00 450.00 1,995.46
158 MUNSON ANGELA 3,957.16 35,614.44 50.00 450.00 500.00 183.00 3,324.16
112 MURPHY, JAKE 382.46 3,442.14 50.00 450.00 0.00 432.46
137 PERDUE, LARRY 2,189.34 .19,704.06 50.00 450.00 200.00 25.00 2,014.34
164 PERSHALL, ROBIN 1,437.52 12,937.68 0.00 0.00 190.00 67.00 1,180.52
132 PHILLIPS, HOMER GENE 1,653.73 14,883.57 50.00 450.00 300.00 1,403.73
105 PRESTON, GEORGE DAVID 1,509.45 13,585.05 50.00 450.00 100.00 100.00 1,359.45
135 RICKMAN, LOREN 2,103.00 18,927.00 50.00 450.00 230.00 65.00 1,858.00
104 RIGGINS, RAYMOND C 1,573.54 14,161.86 50.00 450.00 125.00 25.00 1,473.54
183 ROBERTS, ELDON 7,050.02 63,450.18 50.00 450.00 1,244.00 400.00 5,456.02
159 SCHUSTER,JOHN H. 2,938.41 26,445.69 50.00 450.00 340.00 110.00 2,538.41
168 STANLEY, MELVIN 4,599.93 41,399.37 50.00 450.00 1,100.00 300.00 3,249.93
155 STOUT, BETTY 816.77 5,898.89 50.00 450.00 0.00 866.77
133"SURLES, JERRY 2,565.18 23,086.62 50.00" 450.00 600.00 200.00 1,815.18
142 TAYLOR, DENNIS 1,945.46 17,509.14 50.00 450.00 110.00 ` 0.00 1,885.46
106 UPTON, FRANKLIN 996.40 8,967.60 50.00 450.00 10.00 1,036.40
163 WATSON, RICHARD 7,442.56 66,983.04 50.00 450.00 1,950.00 400.00 5,142.56
149 WILLIAMS, JOYCE 2,393.87 17,289.07 50.00 450.00 217.07 2,226.80
134 WITT, DON 1,665.41 14,988.69 50.00 450.00 115.00 64.00 1,536.41
127 WOOD, PAUL J 1,490.17 13,411.53 50.00 450.00 0.00 1,540,17
127,333.00 1,073,216.40 2,500.00 22,100.00 17,123.60 4,690.60 108,018.80
108,018.80
6800-9800 6800-9800 6800-9800
5335-00 5335-05 5335-06 Total
Year to Date 1,073,216.40 22,100.00 0.00 1,095,316.40
Widows benefit increased to 90%effective May 1, 2006.
5
2
Benefit Amt changed effective 8/1/06 due to daughter of Mark and Janice Hanna turing 18
Per QDRO Mark Hanna paid Janice Hanna$508.00 per month in child support until the
daughter turns 18,which occurred on 7/18/06.
POLICE PENSION FUND Added to Added to
Oct 2006 6800.9M 6800-9800 Sept Check Sept Check
Month 10 Regular Mo 5335-00, 5335-05 Check Backpay Future
EMPII NAME Benefit YTD Reg Benefit Suppl. YTD Suppl. Fed Tax St Tax Net Supplement Supplement
154 ALLEN,CHARLES 2,436.27 24,362.70 50.00 500.00 220.00 66,89 2,199.38 100.00 1,201.E
130 BAYLES, DON 1,496.28 14,962.80 50.00 500.00 1,546.28 100.00 1,201.20
107 BLACK,JOE P 1,061.02 10,610.20 50.00 500.00 100.00 20.00 991.02 100.00 1,201.20
147 BRADLEY,GERALD 4,543.40 45,434.00 50.00 500.00 940.53 217.32 3,435.55 100.00 1,201.20
139 BRADLEY,RANDALL 2,695.98 26,959.80 50.00 500.00 382.00 100.00 2,263.98 100.00 1,201.20
167 BROWN,JOHN 4,111.61 41,116.10 50.00 500.00 600.00 200.00 3,361.61 100.00 1,201.20
157 CARROLL,RONALD L 1,985.15 19,851.50 50.00 500.00 250.00 105.00 1,680.15 100.00 1,201.20
151 COLE, RUSTON 2,889.76 28,897.60 50.00 500.00 600.00 200.00 2,139.76 100.00 1,201.20
109 COOPER,ADRIAN 601.78 6,0170 50.00 500.00 651.78 100.00 1,20120
108 DENNIS,WARREN 1,297.84 12,978.40 50.00 500.00 0.00 1,347.84 -100.00 1,20120
160 DUGGER,GARY 2,982.13 29,821.30 50.00 500.00 300.00 120.00 2,612.13 100.00 1,201.20
140 FOSTER, BILLIE D. 3,023.23 30,232.30 50.00 500.00 300.00 120.00 2,653.23 100.00 1,201.20
148 FRIEND,JERRY 2,971.70 29,717.00 50.00 500.00 725.00 150.00 2,146.70 100.00 1,201.20
161 HANNA,JANICE " 1,290.03 16,786.00 0.00 0.00 100.00 25.00 1,165.03 0.00 0.00
145 HANNA, MARK " 1,290.03 9,014.60 50.00 500.00 1,340.03 100.00 1,201.20
162 HASKINS, IRENE 737.30 6,062.24 50.00 500.00 787.30 100.00 1,201.20
169 HELDER,TIM 5,502.99 55,029.90 50.00 500.00 750.00 250.00 4,552.99 100.00 1,20130
180 HOYT,RICK 7,031.78 70,317.80 50.00 500.00 1,600.00 425.00 5,056.78 100.00 1,201.20
146 HUTCHENS, BERNICE 1,720.75 14,148.38 50.00 500.00 130.00 1,640.75 100.00 1,201.20
143 JOHNSON,CHARLES 2,314.54 23,145.40 50.00 500.00 42.67 2,321.87 100.00 1,201.20
194 JOHNSON,FRANK 7,517.02 14,683.93 50.00 100.00 1,600.()0 500.00 5,467.02 1,201-20
103 JOHNSON,WENDELL 738.19 7,381.90 50.00 500.00 788.19 100.00 1,20120
118 JONES,BOB 3,110.99 31,109.90 50.00 500.00 0.00 3,160.99 100.00 1,201.20
144 KILGORE,DONALD 1,929.00 19,290.00 50.00 500.00 19.72 1,959.28 100.00 1,201.20
129 tAWSON,FORREST 1,477.89 14,778.90 50.00 50000 350.00 1,177.89 100.00 120120
150 LITTLE, PATSY R 688.43 5,660.42 50.00 500.00 738.43 100.00 1,20120
153 LORCH, DONNA G 688.43 5,660.42 50.00 500.00 738.43 100.00 1,201.20
156 MARTIN, KENNETH 3,480.86 34,808.60 50.00 500.00 500.00 140.00 2,890.86 100.00 1,201.20
128 MCCAWLEY,LARRY 1,597.50 15,975.00 50.00 500.00 195.00 5fl.00 1,402.50 100.00 1,20120
116 MCCHRISTIAN,MARIE 688.43 5,660.42 50.00 500.00 738.43 100.00 1,20120
126 MCWHORTER, KAREN 954.00 7,844.00 50.00 500.00 1,004.00 100.00 1,201.20
136 MITCHELL,MICHAEL 2,172.96 21,729.60 50.00 500.00 150.00 2,072.96 100.00 1,201.20
141 MUEL ER,ROSEMARY 1,945.46 19,454.60 50.00 500.00 1,995.46 '100.00 1,20120
158 MUNSON,ANGELA 31957.16 39,571.60 50.00 . 500.00 500.00 183.00 3,324.16 100.00 1,201.20
112 MURPHY,JAKE 382.46 3,824.60 50.00 500.00 0.00 432.46 100.00 1,201.20
137 PERDUE, LARRY 2,189.34 21,893.40 50.00 500.00 200.00 25.00 2,014.34 100.00 1,201.20
164 PERSHALL,ROBIN 1,437.52 14,37520 0.00 0.00 190.00 67.00 1,180.52 0.00 0.00
132 PHILLIPS, HOMER GENE 1,653.73 16,537.30 50.00 500.00 300.00 1,403.73 100.00 1,201.20
105 PRESTON,GEORGE DAVID 1,509.45 15,094.50 50.00 500.00 100.00 100.00 1,359.45 100.00 1,201.20
135 RICKMAN, LOREN 2,103.00 21,030.00 50.00 500.00 230.00 65.00 1,858.00 100.00 1,201.20
104 RIGGINS,RAYMOND C 1,573.54 15,735-40 50.00 500.00 125.00 25.00 1,473.54 100.00 1,20120
183 ROBERTS,ELDON 7,050.02 70,500.20 50.00 500.00 1,244.00 400.00 5,456.02 100.00 1,201.20
159 SCHUSTER,JOHN H. 2,938.41 29,384.10 50.00 500.00 340.00 110.00. 2,538.41 100.00 1,201.20
168 STANLEY, MELVIN 4,599.93 45,999.30 50.00 500.00 1,100.00 300.00 3,249.93 100.00 1,201.20
155 STOUT,BETTY 816.77 6,715.66 50.00 500.00 0.00 866.77 100.00 1,201.20
133 SURLES,JERRY 2,565.18 25,651.80 50.00 500.00 600.00 200.00 1,815.18 100.00 1,201.20
142 TAYLOR, DENNIS 1,945.46 19,454.60 50.00 500.00 110.00 0.00 1,885.46 100.00 1,201.20
106 UPTON,FRANKLIN 996.40 9,964.00 50.00 500.00 10.00 1,036.40 100.00 1,201.20
163 WATSON,RICHARD 7,442.56 74,425.60 50.00 500.00 1,950.00 400.00 5,142.56 100.00 1,201.20
149 WILLIAMS,JOYCE 2,393.87 19,682.94 50.00 500.00 217.07 2,226.80 100.00 1,201.20
134 WITT, DON 1,665.41 16,654.10 50.00 500.00 115.00 64.00 1,536.41 100.00 1,201.20
127 WOOD,PAUL J 1,490.17 14,901.70 50.00 500.00 0.00 1,540.17 100.00 1,20120
127,683.11 1,200,899.51 2,500.00 24,600.00 17,123.60 4,690.60 108,368.91 4,9W.00 22AM.00
108,368.91
October 11, 2006
Re: July 20, 2006 Meeting Minutes for Review
December 31, 2005 Actuarial Report for Review
October 4, 2006 City Attorney Memo
Attached you will fmd a copy of the July 20, 2006 meeting minutes. The minutes will be
on the October meeting agenda for approval. I have also attached a copy of the Actuarial
Report that we received from the Arkansas Fire & Police Pension Review Board (PRB).
Please review this report before our October meeting. Please note that on page 10 of this
report the fund has an unfunded actuarial liability of $9,568,908. The plan at this
time is only 52.5% funded. I have also enclosed a memo from City Attorney Kit
Williams regarding the pension fund's lack of actuarial soundness.
Our next scheduled meeting will be on October 19, 2006 at 1:30 PM in Room 326. If
you have any questions please let me know.
Sincerely,
Sondra Smith
City Clerk/Treasurer
Treasurer Policemen's Pension & Relief Fund Board of Trustees
r
,.. ,<,..
FAYETTEVILLE
THE CITY OF FAYETTEVILLE, ARKANSAS
KIT WILLIAMS,CITY ATTORNEY
s
DAVID WHITAKER, ASST. CITY ATTORNEY v.
DEPARTMENTAL CORRESPONDENCE
LEGAL DEPARTMENT
TO: Police Pension. Board of Trustees
FROM: Kit Williams, City Attorney
DATE: October 4, 2006
RE: Pension Fund's Lack of Actuarial Soundness
We have just received the 2005 Actuarial Valuation of the Fayetteville
Police Pension. and Relief Fund from the Arkansas.Fire and Police Pension
Review Board. As noted on the front page (attached), the pension fund_
does not meet any of the three actuarial soundness tests. I have also
attached the Accounting Information of Exhibit 3 and Exhibits 4 and 5.
These exhibits show a disturbing trend in that the pension plan went
from a funded surplus on December 31 , 1997 to an almost TEN MILLION
DOLLAR deficit on December 31 , 2005. These eight years saw a benefit
increase from 55%-to 90% of ending salary in 1999 and additional benefits
in 2003 and 2005 (including the current 3% Compounded Interest ,Increase
through 200.8). The funded ratio of the Police Pension Fund plummeted
from over 112% on December 31 , 1997, to less than 53% at the end of 2005.
This means your pension fund has barely half the funds on hand needed for
your current benefits.
.Although the Fayetteville Police Pension and Relief Fund is supported
by Fayetteville city millage-pursuant to a vote of the citizens, the City of
Fayetteville, itself, is NOT responsible to make pension payments if the
P fund goes broke. The Pension Board administers the Pension Fund
and is responsible to make certain itrema ins healthy.
ARKANSAS FIRE & POLICE PENSION REVIEW BOARD
620 W.3rd, Suite 200
Little Rock, Arkansas 72201-2212
Telephone: (501) 682-1745
To: Board of Trustees Toll-Free: (866) 859-1745
FAYETTEVILLE Police Pension and Relief Fund Fax: (501) 68271,751
email: info@lopfi-prb.com
From: David B. Clark website: www.lopfi-prb.com
Executive Director
Re: 2005 Actuarial Valuation
Date: October 2; 2006
In accordance with State law the actuary under contract to this office periodically tests all
local fire and police pension funds' for actuarial soundness. The 2005 actuarial study for
yourr fund is enclosed. The financial tests for the fund are designed to answer the
following questions:
YES NO
1. Is there enough income to the pension
fund to fully fund it (see page 4)?
2. Are current assets sufficient to cover 97%
of all accrued actuarial liabilities (seepage 10),
OR are there enough assets to cover all active
member contributions; all payments to current
beneficiaries and 100% of future payments
earned by active members (see page 11)?`
3. Is the pension fund considered actuarial
sound under State law?
EXHIBIT 4
COMPARISON WITH PRIOR YEARS
This 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 32251,235 1,712,937 23.9% 65.5%
12/31/1987 * 28 666,941 37.8% 252,114 3,374,250 2,065,775 24.6% 62.0%
12/31/1989 25 634,711 38.8% 246,132 4,009,866 2,175,493 27.2% 64.8%
12/31/1991 24 675,900 35.9% 242,541 5,144,950 1,632,194 28.2% 75.9%
12/31/1.993 17 536,070 37.2% 199,314 67293,999 1,232,923 27.8% 83.6%
12/31/1995 * 15 518,643 37.5% 194,517 7,187,710 989,655 27.7% 87.9%
12/31/1997 12 491,422 15.16/o 74,142 9,126,449 (255,9-d6) 26.9% 102.9%
12/31/1999 * 11 . 482;457 175.7% 847,558 10,572,573 4,788,608 45.2% 68.8%
12/31/2001 7 3847312 252.4% 969,851 11,353,564 4,549,239 41.6% 71.4%
12/31/2003 * 3 2.192008 766.3% 1,678,182 11,125,006 7,471,969 36.4% 59.8%
12/31/2005 * 1 70,279 766.3% 2,071,290 10,564,072 97568,908 40.6% 52.5%
* Benefits or assumptions changed
Note: Normal cost prior to 12/31/89 is net of 6% employee contributions.
10
Page 1 of 2
2441 -406. Administration of small
funds by Arkansas Local Police and
Fire Retirement System.
(a) In those local police pension and relief funds which cover fewer than four
(4) active members, a local board of trustees may no longer exist, and the fund
may be designated as inactive by the employer.
(b) Administrative responsibility for the fund shall be assigned to the
Arkansas Local Police and Fire Retirement System, as allowed by §§ 24-10-
301 and 24-10-302 and as provided in the following procedure:
(1)(A) The actuary under contract to the system shall compute the retirement
reserve for vested and active members and for eligible beneficiaries of the
inactive fund. After receiving the report of the actuary, the employer shall
transfer the computed reserve to the system to be held in an account
designated as the retirement reserve for the inactive fund and from which the
system shall pay eligible beneficiaries.
(B) The retirement reserve and any additional employer contributions shall
include such amounts as are necessary to provide administrative expenses for
the system, but such expenses shall not exceed a total of one-half of one
percent (0.5%) of active member payroll, if any, plus one percent (1%) of
annual reserve assets.;
(2) Any excess assets of the fund remaining after the retirement reserve is
created shall be transferred to an account designated by the employer, to be
used solely for the purpose of making payments to the system for employee
coverage administered under the system and for no other purpose;
(3) If a former member of the local pension fund returns to service in which
the employee would have again become a member of the local fund, the past
service credit may be purchased by the employer for the employee under the
system, and the purchase costs shall be amortized in the same manner as other
service credit purchases are amortized under the system;
(4)(A) No benefit amendments shall be made in benefits payable from the
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inactive fund under,the administration of the system.
(B) Should the law mandate an increase in benefits to retired members or
their beneficiaries, the increases shall be payable from the retirement reserve
of the inactive fund.
(C) No prorating of benefits shall be allowed in inactive funds under the
administration of the system.
(D) If the retirement reserve of an inactive fund shall become inadequate to
pay full benefits to eligible recipients, the system shall require of the
employer, and the employer shall remit, such actuarially computed amounts as
are necessary to pay full benefits to current and future eligible recipients;
(5)(A) Once a fund becomes inactive and a retirement reserve is created as
required by this section, the employer may continue to collect such millages,
fines, fees, state insurance tax turnback, and other revenues as allowed by law
for the support of police retirement programs.
(B) The revenues shall be deposited locally in an account designated by the
employer solely for making payments to the system and shall be used for no
other purpose; and
(6)(A) All employer contributions for inactive funds shall be made in such
amounts, and in such manner, form, and frequency, as the Board of Trustees
of the Arkansas Local Police and Fire Retirement System shall require.
(B) The pension records of inactive funds, and other materials and reports as
may be required by the board to administer the inactive funds, shall be
provided to the Arkansas Local Police and Fire Retirement System in such
manner as the board shall require.
History. Acts 1937, No. 250, § 4; Pope's Dig., § 9859; Acts 1985, No. 927, §
1 ; A.S.A. 19471, § 19-1804.
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Page 1 of 1
24- 11 -416 . Proration where fund
insufficient.
If at any time there should not be sufficient money in the fund to pay each
person a full amount to which he or she may be entitled, the beneficiaries shall
be paid by prorating the fund available among them.
History. Acts 1937, No. 250, § 11 ; Pope's Dig., § 9866; A.S.A. 1947, § 19-
1811 .
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•
eL PIT
ITYe
ARKANSAS 113 West Mountain
Fayetteville, AR 72701
Telephone: (479) 575-8323
Fax: (479) 718-7695
city_clerk@ci.fayetteville.ar.us
City Clerk/Treasurer Division
September 12, 2006
G. Pierson Callahan
Merrill Lynch
Financial Advisor
2200 North Rodney Parham Road Suite 300
Little Rock, AR 72212
RE: Policemen's Pension and Relief Fund Board of Trustees
Dear Mr. Callahan:
Thank you for your interest in attending the Policemen's Pension and Relief Fund Board
of Trustees meeting and the information you sent for the Board to review. The Board is
currently pleased with our investment advisor and is not interested in making a change
with their investment advisor at this time. Again, thank you for your interest.
Sincerely,
Sondra Smith
Treasurer
Fayetteville Policemen's Pension and.Relief Fund
Board of Trustees