HomeMy WebLinkAbout2009-10-29 - Agendas - FinalFayetteville Fireman's Pension and Relief Fund
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Firemen's Pension and Relief Fund
Board of Trustees Meeting Agenda
October 29, 2009
Pete Reagan
Gene Warford
Ron Wood
Position 2/Retired
Position 3/Retired
Position 4/Retired
A meeting of the Fayetteville Firemen's Pension and Relief Fund Board of Trustees will be
held at 3:00 PM on October 29, 2009 in Room 326 of the City Administration Building.
Approval of the Minutes:
• August 27, 2009 meeting minutes
• September 24, 2009 meeting minutes
Approval of the Pension List:
• November, 2009 pension list
Old Business:
• Osborn, Carreiro & Associates, Inc. actuarial study.
New Business:
• Donald Miller deceased
• Revenue/expense report
• 2008 actuarial valuation
• Alliant fiduciary liability insurance letter
Longer Investments:
• Longer Investment — investment report
• Longer Investment — 3`d quarter report
Board Members
Mayor Jordan Chairman
Sondra E. Smith Secretary
Marion Doss Position I/Retired
Pete Reagan Position 2/Retired
Gene Warford Position 3/Retired
Ron Wood Position 4/Retired
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ARKANSAS
Firemen's Pension and Relief Fund
Board of Trustees Meeting Minutes
August 27, 2009
Firemen's Pension and Relief Fund
Board of Trustees Meeting Minutes
August 27, 2009
Page 1 of' 19
DRAFT
A meeting of the Fayetteville Firemen's Pension and Relief Fund Board of Trustees was held at
1:00 PM on August 27, 2009 in Room 326 of the City Administration Building.
Mayor Jordan called the meeting to order.
Present: Mayor Jordan, Marion Doss, Gene Warford, Pete Reagan, Ronnie Wood, Sondra
Smith, City Attorney Kit Williams, Paul Becker Finance Director, Jody Carreiro, Audience
and Press.
Approval of the Minutes:
July 16, 2009 Firemen's Pension and Relief Fund Board of Trustees meeting minutes
Pete Reagan moved to approve the July 16, 2009 Firemen's Pension and Relief Fund Board
of Trustees meeting minutes. Gene Warford seconded the motion. Upon roll call the
motion passed unanimously.
Old Business:
Osborn, Carreiro & Associates, Inc. letter and report dated August 27, 2009.
Jody Carreiro: There's a lot of ground work we have to lay before we talk about breaking down
two or three possible solutions. If you will allow me to trudge through some of that we will get
our ground work laid and then I've got two or three solutions for us to talk through what the pros
and cons are and then see if I need to fill in some more blanks for you.
Everything is similar to what we discussed in February. A lot of the things are the same. At that
point in time we were using December 31, 2007 participant data and we had the un -compiled not
complete financials. The asset number is slightly different from then because after all the
receivables and payables that were added in we have all of that balanced and settled now. The
participant data is up to date As of a year ago January there was still one member that was on
DROP and as of this January everyone is a retired member and there are no DROP balances to
consider in that. That might make some of the consideration a little easier.
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Mayor Jordan: In other words it's closed.
Jody Carreiro: It is closed. Everybody is a retiree now. That may make some things a little
easier to digest but we still have hard things to digest. I did the cash flow model that we've done
in the past, similar to what we have given you six months ago. The step that I took beyond that
was all of this information I put it into a simulation which instead of saying here's the interest
rate we are assuming, we talked a lot about that in February that the assumption right now is 7%
and is 7% a good assumption. We really don't have to talk about that with a simulation because
what the simulation did, and the basis for some of my comments in the next few minutes, is that
it said here is your asset allocation. We have assets in money market, government bonds,
corporate bonds, a couple kinds of stocks, and international stocks. From the reports that I have
received I wrote that down and looked at your asset allocation and then used some formulas that
simulate what those things do and how they act and react to each other and then did that 2,000
times. It's not something where I'm assuming here is the route that the market is going to take.
I'm going to look at thousands of variations on the market and then instead of talking about
here's where we think the fund is going to go we can look at ranges, 50% of the time it is going
to be here, and 90% of the time it's going to be between here and etc. It gives us a better way of
trying to digest what we are looking at and what our issues are. That takes out the discussion
about what's the right discount assumption because we are looking at all of them. The charts
that I included in this report use the simulation.
The good news is when you compare the two things the portfolio that you have which is roughly
50/50 stocks and bonds at the beginning of the year and the way that all that was divvied up has
an expected return of between 6% and 7% under all the rules the investment guys thought
applied back before the last year. We are still seeing how those rules are going to play out as we
move forward. Using the old fashion and I did my old cash flow type study, if that's right and
the stimulation is right if they go together, then my main line where I assume 7% every year
should be close to the median of all the results of the simulation forecast and they are. We are
not doing something that's new that doesn't match what we have done before. It adds another
layer of interesting information but they are shaped the same, they follow the same path, the
median of the simulation is very close to the 7% per year type of projection that we have done in
the past.
The results aren't any better and aren't any different than what we talked about in February. We
have to start where we are at and where we are at is, that based on current interest assumptions
the plan is projected to run out of money in about ten years if everything stays as is, premium tax
behaves roughly the way that it is, and if millage behaves the way it has that is where we would
be in about ten years. The simulation produced similar results. I didn't print a graph of the
simulation results of absolutely no change because I did a graph similar to that for February and
it's so depressing to watch all those lines dive in the river. We know what that looks like. Right
now all of those things are going the wrong direction. There's a 90% chance in the simulation
90% of the time it goes broke in the ninth or tenth year. The two ways of looking at it look the
same. If everything followed the absolute best path all the way through the fund still runs out of
money in the twentieth year. We have a severe situation.
A discussion followed regarding the graphs that were handed out by Jody Carreiro.
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This is a 15% reduction and we will talk about why I looked at 15% and why this may or may
not be a good solution. This reduces everybody except the volunteers. If we did go into a
reduction discussion would we reduce the volunteers? All my projections ignored the
volunteers. They stayed the same. The reductions are only for the paid guys. In reality you are
paying out $1,440,000 a year to retirees in total and it's a $1,420,000 if you exclude the
volunteers. For all practical purposes there is no difference.
One thing you will see is a straight 15% reduction and 50% of the result line still runs out of
money. It runs out of money several years later but it still runs out of money. It is going to take
something more drastic or it is going to take a combination.
The next graph takes a step up to a 20% benefit reduction. With this benefit reduction between
50% and 80% of the time we stay in good territory. I may say risk of ruin and that means risk of
running completely out of money. Some people do not like for me to say risk of ruin. I don't
know a better term for that because if we run completely out of money that's the ruin. Clearly
under our current situation the risk of running completely out of money is close to the 100%
level, it's over 90%. The 15% reduction still has a pretty high risk of ruin. It's 43% to 44% as a
risk of ruin, when we move up to the 20% benefit reduction that drops down but it is still a 14%
risk of ruin.
The next question is what risk of ruin would we really want to have? The answer is there is not a
text book somewhere that I can go to and say if you are running a projection on a closed plan you
want a risk of ruin of this. My answer is when we are looking at funds and cash flowing funds
out there's always some terrible scenarios that are out there. Most everything that we have done,
and seen other people do, most everything that we have seen in the text books, is when you are
looking at some long term cash flow projection that if your probability of ruin is 5% or less then
you don't get excited. Between 5% and 10% you take a good hard look at it and look at your
other circumstances before you decide whether or not to get excited. You certainly don't want to
go over 10%. The 20% reduction just breaks that 10% at 14%. It's really out of bounds of what
I would really be comfortable with as far as a suggestion. This is still going to take some
combination of ideas to get where we need to be because really a 14% risk of failure is still
probably too high to make everybody comfortable.
Since the 20% reduction doesn't get rid of enough risk of ruin to make us happy a legitimate
question to ask, and you can discuss this with Elaine later in detail if you want to, and I'm not
trying to be the investment advisor, from an actuarial stand point a legitimate question to ask is
with those portfolio constraints would we reduce the risk of ruin some if we more immediately
moved to a more conservative portfolio. It is a legitimate question for you to ask and discuss
with Elaine. It is a legitimate question to run through the simulation to see what it says. That is
the three graphs that are in the report. As you look at that the thing to do is compare it with your
other 20% graph. At the bottom end there is a little bit better. When you look at the percents
every thing is held the same except your asset allocation. It gets to a 70/30 bond/stock portfolio
in a big hurry. Yes it does reduce the risk of ruin but only by about 2%. 50% of the results are
pretty much higher and the risk is only reduced a little bit. So you reduce your risk by getting
more conservative with your portfolio, yes. Do you reduce your risk enough to get excited about
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moving to a very conservative portfolio, probably not. If that would reduce the risk down to 7%
I would say have a serious discussion with your investment advisor about getting more
conservative sooner. Her long term plan is now that everyone is retired to slowly move the
portfolio more toward bonds. Is there a good reason to do that faster? According to the
simulation it does reduce risk a little bit but not enough o make that something that gets you very
excited.
Pete Reagan: On the 30/70 allocation with a 20% reduction, what are you using for the income
amount? What percentage are you looking there?
Jody Carreiro I did not make that calculation. The last time I made that type of calculation
instead of a long term average return of about 7% I think that type of portfolio would have a long
term average return of closer to 6% with a lower standard deviation.
If we had a fund that was growing, we had lots of actives, several income sources, and our other
income sources were greater than the benefits than we were paying out I wouldn't be that
concerned about standard deviation because I wouldn't be touching my corpus as much. Since
we are now completely closed our income sources, other than investment income, are only about
$575,000 a year and we are paying out a $1,400,000. The reason standard deviation is important
for you guys to keep in mind is since you are taking a little bit of money out of the corpus every
year when it goes down you still have to take money out and when it goes back up you never
have a chance to recover anything on that. When the market goes up and you take money out
and you don't have a chance to earn more. In a wasting trust type situation you want to watch
your standard deviation very closely for that reason. That is part of what we are facing right
now. We have all these benefits that we are paying that are coming out and we've had the most
horrible year since the great depression. It comes at a bad time in the life of the fund so to speak.
Mayor Jordan: I'm familiar with a retirement system that I was under at the University. All
my money was in high risk stock. There was also a much more conservative one, like a money
market account. Is that what you are talking about here? You didn't get as big a payout and you
didn't earn as much money but there wasn't as much risk involved. Is that sort of what you're
saying?
Jody Carreiro: That's exactly what I'm saying. The current portfolio of the plan as of the
beginning of the year was about 11% money market, 32% government bonds, 5% corporate
bonds, 45% various types of stocks, and 7% international. That in total is about 50/50 stock and
bond. What I was talking about is if you moved quickly to something like a 70/30 more
conservative side. It would reduce your average rate of return but reducing the risk might be
worth it. It helps some but it didn't help enough. That is not one of the solutions to the problem.
Paul Becker: When you talked about how you did your projections you talked about member
contributions and city contributions. You are aware that they no longer exist and that is not
factored into their study is it.
Jody Carreiro: That's correct. I'm taking 6% of all salaries paid into the plan which is zero.
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Sondra Smith: On page 11 under employer contributions you have 10% of all fines and
forfeitures collected by the Police Department. We do not collect fines and forfeitures.
Jody Carreiro: Ever solution apparently from the background we have laid so far, long term
solution that will work across the board, is going to have to be a combination of things. It's
pretty safe to say that just a benefit reduction is going to have to be more than 20% to get us
completely comfortable and once we go north of 20% we are getting into something that you
guys would have a real hard time with. There's a reasonable level that you can sell to the
membership not even discussing the legal issues.
What LOPFI does when you consolidate the LOPFI actuary values, the liabilities, basically the
same way we do for a regular actuarial evaluation, they use their same assumptions that they use
for the LOPFI system. Our mortality tables are almost exactly the same. The one difference that
is significant is our interest assumption. The last valuation and the valuation for this year we
discounted all the liabilities and valued those at a 7% discount rate. The LOPFI system since it
is a big state wide on going system they have justified a long term discount rate of 8%. One
difference is that the value of your liabilities from the evaluation that I do and the valuation that
LOPFI would do is that 1%. That lowers the values of your liabilities by 8% to 10%. It reduces
the value that's put on the liabilities and then to calculate the contribution to do that they
amortize that unfunded. They take the value of the liabilities minus the assets on hand at the
time and that's your unfunded then they amortize that over fifteen years. It use to be thirty and it
was thirty ever year. They re -amortized it every year and that actually has caused problems for
people because there are some cities that merged years ago that have an unfunded liability that's
almost twice what it was at the point that they merged. They changed their methodology for the
better I think so that it's a fifteen year close. The one thing that's a little odd where the mortgage
analogy doesn't quit fit is that they amortize that on a level percent of payroll. We don't have
payroll but they're doing it to combine with the LOPFI and make it a percent of the overall
payroll. With a consolidated plan you get the consolidated numbers and they send Paul a bill
instead of 16% or whatever for the Fire Department it becomes 36%. What that is, is the regular
cost for the guys that are working right now, plus this amortization piece that we are talking
about and they convert it all to a percent of payroll. When you convert it to a percent of payroll
you do the math a little differently so that if your first year payment is $900,000, like in this case
for the current plan without a COLA, if it consolidated, it doesn't stay $900,000 for fifteen years
because it's a level percent of pay not a level dollar.
Kit Williams: If we hired additional firefighters or we raised the firefighters pay then we would
be sending more money in to the plan.
Jody Carreiro: Yes, but ever year when they revalue they would say here's this cost and here's
what is left of this unfunded piece and they would adjust it and come up with a new percent of
payroll. There could be a short term disconnect. Long term in reality what happens is you
would pay $900,000 this year and about a 4% increase each year.
Paul Becker: The percent of payroll is nothing more than an easier way to do the calculation.
Jody Carreiro: It's supposed to be put in a way that everybody understands.
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Kit Williams: It would only go up about 4% a year.
Jody Carreiro: Right, when it's all said and done it would start at $900,000 and grow 4% per
year during that fifteen year period.
Kit Williams: Is there a guarantee that after fifteen years that's it?
Jody Carreiro Yes, because what they are doing now is they are not re -amortizing, they are
paying that off, so at the end of the first year, if there where gains and losses on that piece, they
re -amortize it over fourteen years. The result is that in fifteen years you will pay that stream of
payments and you will be done.
Pete Reagan: At the end when everybody is dead and gone from the old plan, if we
consolidated with LOPFI, what happens to the money that's left in the old plans account?
Jody Carreiro: It's accounted separately within the LOPFI system. They do still keep the two
separate for accounting purposes and when the last member dies if there's something left in that
piece it would be merged into the LOPFI piece.
If everybody died earlier than expected and there was money left in that piece than it would help
reduce the cost in years ahead for the rest of the Fayetteville Fire Department.
Pete Reagan: For the employee and the employer?
Jody Carreiro: No, the employee amount is set. It would be the employer.
Pete Reagan: The employer would be the one to benefit if that happened.
Jody Carreiro: Right and the other would be true too.
Kit Williams: The City takes a risk either way.
Jody Carreiro: Right, the way LOPFI works once everybody is in the retired part of it, the
mortality risk is kind of shared by the whole pool of the state. There is a certain gain or loss that
can come from that but for the most part that mortality risk is shared by the pool. If you have
enough people they tend to die on schedule, when you have a very small pool that doesn't
happen.
Audience: Are we a small pool or a large pool?
Jody Carreiro: From the standpoint of mortality you would be small. For mortality to be
pooled and be nice and smooth you need thousands of lives.
Let's talk about a few variations or combinations and what the long term costs of those are.
Audience: On the net City out of pocket is that a life time cost for the city.
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Mayor Jordan: That's yearly.
Jody Carreiro: For fifteen years.
Audience: The current plan would be $325,000 for fifteen years or yearly for fifteen years.
Mayor Jordan: Every year.
Jody Carreiro: Let's first talk about an option that none of us wants to talk about but for
comparison purposes we need to because it's a legitimate option and that is the fund is allowed
to be depleted. All the assets are paid out we don't have some miraculous market turn around
that saves the fund, based on the median of all the projections that's in about ten years. Let's say
the City says we can't let that happen we need to fill in the blank. We are not going to prorate
benefits, we are going to fill in the blank of what there is no income to cover. What would
happen is in about ten years the City would be on the hook for about $350,000 in the tenth year.
In years eleven through twenty five it would be a varying amount. You will still have millage
and premium tax. Based on the projections the city would need an amount that would be about
$350,000 and it would jump up to $600,000 for a few years. Many years it would be around
$300,000 and by year 2025 it's less than $100,000 then in 25 years with the number of people
expected to be around the millage and premium tax would pay for those benefits.
Pete Reagan: Why the increase in the millage?
Jody Carreiro: This the year the plan ran out of money.
Kit Williams: There was some money left.
Jody Carreiro: The biggest short fall is the year after.
Pete Reagan: Did you not say a couple years would be $600,000.
Jody Carreiro: Yes, it would jump up to $600,000 and then start creeping back down.
Pete Reagan: When would it jump?
Jody Carreiro: The 11th year. The $350,000 would be what the remainder is in the year it ran
out of money. Then the City would have to come up with another $600,000 for a few years then
$500,000, $400,000 and eventually zero after 25 years.
Marion Doss: That would be if they wanted too.
Jody Carreiro: If they wanted to and we all know that by law they don't have to do anything
and the plan would have to pro rate benefits.
Kit Williams: Do you have a total cost of what the City would be spending on that?
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Jody Carreiro: I have a total present value. In today's dollars that about a $1 7 million dollar
cost.
Kit Williams: If we pulled $1.7 million dollars out and let it sit and then start paying it off
that's what would be projected to be able to pay that off.
Jody Carreiro: Right, another way to look at that is that on average if there was $1.7 million
that Paul had hidden in a drawer somewhere that could just be injected into today's dollars into
the plan then on average it would be okay. That stream is worth $1.7 million in today's dollars.
To get apples to apples I did the present value of this stream of income versus that stream of
income. The present value of the stream of income if we just let the plan run out of money and
the City puts more money in it is about $1.7 million The stream of income of what the City
would additionally have to put in above and beyond their income sources is about $4.3 million.
Kit Williams: Are you using approximately 7% as the discount?
Jody Carreiro: Yes, I used 7% for all of them.
Jan Judy: Are you saying if the plan ran out and we didn't consolidate, we left it like it is it
would run out in ten years. At that point in order to continue to pay out the benefits to the
firefighters that were left it would cost $1.7 million but if we try to consolidate with LOPFI then
the City ends up paying out $4 million.
Jody Carreiro: Yes, all in today's dollars.
Jan Judy: We are a lot better off staying with the old plan?
Jody Carreiro: The City is a lot better off staying with the old plan because it's less money to
the City. I don't know if the City could even guarantee or step up and say we are going to
guarantee those benefits. You would have to talk to the City Attorney about that. I don't even
know if that is a possibility. From a numbers discussion possibility I thought it was important to
address what the short fall is going to be over that period and how much would the City have to
come up with.
Gene Warford: If the City says they're not going to pay out zero and for us to go to LOPFI we
have to be sound, it is not going to cost the City nothing is the only way they are going to want to
take it, then it looks like to me that our cost is going to be about three times. We are going to
have to reduce a lot bigger percentage on that basis.
Jody Carreiro: Yes sir and the only combination that is somewhat close, if you look at page
three of the letter, is the 20% benefit reduction and then consolidate with LOPFI without a
COLA. Right now the projected cost of that is about $50,000 the first year. I know that is not
zero but that is as close to zero as we have gotten as far as a combination of things.
Pete Reagan: This is using December 31, 2008 numbers correct?
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Jody Carreiro: Yes sir.
Pete Reagan: $50,000 the first year and a possible 4% increase the next year?
Jody Carreiro: Well, actually the $625 number in the first column is what would go up 4% a
year. The $575 we don't know how much it will go up. A big hunk of that will depend on how
much millage goes up. Millage in'the ten years leading up to last year probably increased 4% to
5% a year on average.
Kit Williams: I think it went from 5% to 6% and it's having a little pause now.
Paul Becker: A little more than that, we were generating about 6% on millage.
Jody Carreiro: Okay 6%? This year is probably not as good and in the next several years I
don't know what you're forecasting.
Paul Becker: Well the assessed value is still going up but collections you don't know about.
Jody Carreiro: Right, collections could be an issue. There's probably some pent up valuations
that won't come through that will hold the City off for a few.
Paul Becker: But putting this into perspective we would have to pay a minimum of $50,000
per year for 15 years.
Sondra Smith: And that is reducing the benefits.
Jody Carreiro: That is reducing the benefits by 20%. To me the best of all possible worlds, if
you had to do a reduction, would be to do a reduction and consolidate with a COLA so that the
reduction can be made up over a period of time.
Paul Becker: Did you take the simulation to zero? Did you take the simulation to what the net
cost to the City would be to zero? Were you able to do that?
Jody Carreiro: It would be 20% to 25%.
Mayor Jordan: That is what I figured too.
Jody Carreiro: Yeah, I did some numbers with 25% and that reduced it to less than zero. So it
is between 20% and 25%.
Mayor Jordan: So we could split the difference and say 23%.
Jody Carreiro: Okay, roughly yes. To me if you went down that road the best of all possible
worlds would be to go down that road with a COLA so that if you asked members to reduce
benefits they can make it up with a COLA over a period of time but that is without a COLA.
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Kit Williams: How much would you have to reduce it if you are going to leave a COLA in
because with a COLA it is $425,000?
Sondra Smith: Right.
Jody Carreiro: Yes sir.
Kit Williams: So if that was down to zero how low would it have to be if you wanted to leave a
COLA?
Jody Carreiro: I didn't calculate that. I can try to punch it in in a minute. It would be painful.
Paul Becker: That would be a huge percentage.
Marion Doss: Even a 1% or 2% COLA would be something where it would build and you
could look at it building back in time. I notice everything is shown on a 3% COLA. I am
assuming that is because that's what LOPFI gets.
Jody Carreiro: My understanding is they would look at any COLA up to 3%. I think a couple
people have merged with a COLA that is less than 3%. I think they would accept that from an
old plan.
Paul Becker: But the inclusion of the COLA is what is driving up these total costs if you send it
down.
Jody Carreiro: The inclusion of any type of COLA drives up the cost.
Jan Judy: Jody, I have another question that is not quite on this. All of the guys that were on
this retirement plan their Social Security is very much jeopardized. They can basically draw no
Social Security. If our plan fails do they then get to draw Social Security? The City made them
sign a contract that if they worked and got this pension fund then they could not have Social
Security and so they agreed to that. Now the City says they have no responsibilities so all these
guys who now are getting $124 to $138 per month Social Security and that is ridiculous.
Jody Carreiro: The way the old Social Security rules do, this was a Fire Department that did
not participate in Social Security. If a Firefighter had a job outside the Fire Department that paid
into Social Security they may have some Social Security but it can be subject to a reduction. I
would assume, but there is absolutely no documentation because I have never seen this, that if
you no longer were drawing your firefighter pension that if you did have a reduction because of
that goofy rule that the reduction would go away because the reduction is predicated on what
they are getting, but I don't know that.
Jan Judy: Some of our guys went to Social Security and asked them and they told them no.
Jody Carreiro: Social Security doesn't know. I don't know that this has happened before so I
don't know that anyone knows but you are right. That is my guess and their guess is no. Of
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course they are the ones that are writing the checks so you would have to appeal their decision.
That is a good question.
Let me mention another item. Everything takes money. I stated looking at a couple of
combinations to survive the next few years hopefully the markets catch up. I heard earlier this
week that when we finish this year it is going to be the first ten year period since the depression
where for ten years the markets are down over that entire period. The bond markets have earned
6% and the stock market is going to earn about negative 1% over a ten year period. That is not
very good and that has never happened twice in a row. We can certainly hope that the next ten
years will be at least some better although no one knows what the ultimate result is going to be.
One thing that could be a combination and this might be something you want to send me back to
the drawing board to work on some more. Here is where I started as far as my thought process.
Is there a stream of income that is roughly in a present value basis about the same as this number
that would keep the fund from going broke on the current basis without any type of reduction?
There is and it's about $150,000 per year and it is actually $1.8 million. In other words the City
says we know that you are in trouble and we want to keep it from running out of money so we
are going to put in an extra $150,000 per year for the next several years, the next thirty years and
that would do that. That gets the median back above zero. It keeps the fund as it is on average,
and out of bad areas. The value of it is roughly the same as that. It is level, spread out over time;
and it avoids the fund going down.
Kit Williams: You said thirty but you meant fifteen years.
Jody Carreiro: I meant over thirty because the projection was thirty years. I know the City
doesn't have $150,000 or $300,000 lying around but you probably can say it is $250,000 for
maybe fifteen years. I don't know that but that is probably about right. You can front some of it
and do something and it was also valued at about $1.8 million that would keep the plan afloat.
Now is it possible to do that with some smaller benefit decrease to get through the next five to
ten years and then be in a place to consolidate with LOPFI where either the City is better off
financially or the fund is better off financially and it becomes better to consolidate to LOPFI. I
don't know what everyone's attitude is about that I just want to kind of say here is another way
to think about this that may be of value and may not be of value. Frankly you may not like any
of the ideas I have thrown out so far and that is alright. I don't particularly like any of them.
You could extend the life of the fund with some City input somewhere in this range to keep the
fund afloat over this next ten year period and work hard with the markets to try and rehabilitate
the fund to the point that it might be able to be merged. Everyone gets older every year so the
value of the liabilities now go down, the liabilities aren't going to go up anymore, everyone is
retired. So the liabilities are going to go down every year and of course as people pass away the
liabilities go down. So if there was some in between thing like this where there could be some
help to the fund to rehabilitate it over the next several years to the point that maybe it would be
affordable, that is less than the cost of going to LOPFI as it is but it is still a cost that is not
anticipated and you may want me not to talk about that anymore.
Jan Judy: Jody, I have one more question. Are you keeping up with nationally the cities where
there are big court cases? I have seen at least three. St. Louis I believe was the one I saw that
was the big city that was ordered by the courts to maintain their firefighter's pensions. This is
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happening nationally and I have heard several states are doing this and requiring cities to pay it
up front. Is there any place where it has failed when there has actually been a lawsuit that you
are familiar with or have the firefighters prevailed everywhere?
Jody Carreiro: I haven't followed everyone but I have seen several of the same ones and of
course their state laws are different and all those kind of things so they may or may not be a good
benchmark to look at. I have to say before I make my next couple of remarks I am not a lawyer
and I am not trying to be a lawyer. I will leave that for the people that went to law school. I
hang around pension law everyday and I see a lot of things so I think I can speak intelligently
about certain things. No one knows what would happen if anything goes to court, you never
know for sure. The courts in general in benefit cases tend to have a tendency to favor the
member over the plan sponsor, I can say that. If there is any basis in law they will favor the
member over the sponsor. Having said that we get into the question and I put a caveat in the
report, I don't know if a benefit reduction would stand up or not whatever it was. I don't purport
to know that. I also don't know for sure what the court would do if a plan did run out of money
and a city refused to make that up. Especially since these are contributory plans there is history
where courts have upheld especially contributory plans and said the sponsor had to make up the
difference. That is not legal opinion that is actuarial observation as to what has happened. If I
was in this situation and you guys decided you wanted to seriously consider a benefit reduction
and I know you have talked about that and you have talked about getting all the members that
would be affected to sign off and all of those things. Frankly I would find one of the members
that would be willing to file a friendly lawsuit the day you voted to do it simply to find out
because eventually it will probably end up in court. Again that is just my observation. I don't
know if I will get a disagreement on that or not.
Sondra Smith: Jody, those court cases, were those plans enriched by the board or were those
plans at the level they were promised when they retired? That is the whole big issue.
Jody Carreiro: That's another complication with this plan that I don't think there is good
precedent in Arkansas or outside of Arkansas to stomp your foot one way or the other about that.
The additional benefits are the part that we would actually be talking about reducing and would
those have the same level of guarantee as the state based benefit, probably not, but to what level
that would be looked at we would all be guessing at this point.
Gene Warford: Didn't you say something about guaranteed in your statement there?
Sondra Smith: On the plans that have gone to court. The guaranteed amount of only 50%.
Gene Warford: Where was that guarantee at?
Sondra Smith: In the state statues, the guaranteed amount that you were supposed to retire at is
50%. The way you got to this higher level that has caused this problem is by the benefit
increases that have been done. My next question is when those benefit increases were done it
was before I was employed here at the City was there any warning to the board that those benefit
increases could be a risk to the plan and that the plan could be in this shape in the future?
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Jody Carreiro: I could go back and get those and we could look and see what the exact
wording was but ever since the pension review board put in what we call the cash flow
evaluations in one version or another there has always been an explicit caveat that these
projections will vary and they are not going to match this. If any of these assumptions are met it
could have a very significant effect on what that looked like. As those cash flows evolved over
the years and I don't know if this plan ever did an alternate cash flow or not but when it got to
the point to where we had an alternate cash flow five, six, or seven years ago, there was a second
disclosure beyond the report where the city board, not the plan board, but the city board also
signed off that they understood that there was additional risks and they were willing to take on
that risk.
Kit Williams: I talked with another city that has done that and they clearly are liable. I guess
you did this state wide for all these plans don't you? You do a bi-annual report?
Jody Carreiro: Yes sir.
Kit Williams: Approximately what kind of percentage of plans throughout the state are in the
kind of situation like we are that are projected to reach ruin within a decade?
Jody Carreiro: I am working on that right now. 2008 was not supposed to be an evaluation
year. In visiting with the board about it I said this has been a significant event we need to value
everybody. In June they said yes do evaluations for everybody this year also. We are about two
thirds of the way through that process. I don't that answer today but I will know that answer in
the next few weeks.
Kit Williams: Are the majority of plans in significant problems?
Jody Carreiro: There is more than a couple. There is a significant number that are going to
have some issues. This is not the only place and several people have either asked me directly or
indirectly about tell me about how the conversation goes in Fayetteville because we are going to
have a similar conversation soon. I'm meeting with the Little Rock police plan in a couple
weeks to have similar conversations. Their so optimistic they want to talk about benefit
increases, even though their funded percentage is as bad as yours.
Sondra Smith: Are those plans as rich as this plan.
Jody Carreiro: It's worse. Theirs maybe close.
Sondra Smith: They've received benefit increases.
Jody Carreiro: They didn't receive one big one like this plan did but they received eight
smaller ones. This isn't their discussion, but not telling their business, but it's all public
information. There are several plans and without going down the list I can think of five or six
that I will probably be having these types of difficult discussions with in the. second half of this
year. This is not my first hard discussion and this is certainly not going to be the last.
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Certainly one of the options and this depends on the board as a group and what their view point
is and you can talk about shapes of recoveries and I will leave that to the investment
professionals, part of it may be our view point on recovery. I will say this I did look at the
projection and say we earn 20% the next three years, we have a gang busters recovery for the
next three years, and then settle back into 7% a year, that's not enough. We have taken a very
significant hit. If your view point is that over the next five years we will see significant recovery
and get back up to those levels a certainly viable option is to keep a very close eye and wait and
see for another year or two. I don't know if I would vote to do that or not or if I would vote to
try to follow one of these combination plans.
Kit Williams: If they wait and there is not a large recovery would that mean they would have to
consider an even higher reduction to get down to zero cost to the City?
Jody Carreiro: That's certainly the risk. When you get close to a 40% reduction then you get
into the next level of legal argument of whether you can even do a reduction. Could you go
below 50%?
Paul Becker: To put things in prospective so far this year and I mean this is with 18.2%
increase on equities, our increase on our portfolio is about 11.3% so I don't think anybody
should be talking about 20% increases because this is a very good year. In prospective we are
talking about 7% rate of return or discount which ever terminology. To gain a 7% rate of return,
which is what was used on the actuarial study, based on our allocation of the current portfolio we
would have to achieve returns in the equity market, in stocks, of 11.75%. You're talking about
pretty good returns simply to meet the rate of return that we talked about that's factored into this
already. I think we should be careful before we get too optimistic of what may or may not
happen in the equity section certainly within the next few years.
Jan Judy: If we took a decrease in our percentage rate and left it here and kept it a private plan
would that work because I don't think we have really discussed that. The discussion has been at
what percent would we have to decrease to go to LOPFI? Would we be better off keeping
control of it? If we did that in the future without a COLA and say the fund did really well they
could actually raise our percentage back if we had not consolidated with LOPFI. Is that even an
option?
Jody Carreiro: The graph results were with the plan remaining stand alone. We didn't talk
about it in those terms but that's what the graphs were of was of the plan remaining stand alone
and doing it. Once you consolidate with LOPFI you have that level of guarantee. All those
benefits are guaranteed and in a sense it doesn't matter what the market does because it all flows
through in contribution rates to the City again so there is a guarantee but the City pays for that
guarantee. I think my favorite combination solution right now and as I said I don't really have a
great one that I would like to say here's the solution, here's what I suggest professionally that
you should take, basically I have laid out several and said here's the pros and cons to all of them.
I think possibly the best solution right now would be a smaller decrease and a possible either
putting aside money by the City of some funds or into the plan of some funds to work up to
trying to get the plan in better shape and maybe either having a side pot of money or adding
money to the plan to get in better shape so that the cost of the merger would be better. Then
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possibly you could merge with a cost of living in a couple of years. That depends on a lot of
things and that's a solution that makes everybody hurt because the City doesn't have and doesn't
want to put in additional money. None of the members want to take a benefit cut. It's one of
those things that cuts everybody to some extent. It's kind of a combo situation that may have a
little bit better chance of working no matter what the variation of results is.
Sondra Smith: Mayor Jordan does the City have any extra money because I know this year I
have had to cut my staff and next year my budget has been reduced drastically from this year in
order for us to even try to meet our budget. Are there any pots of money sitting around that I
don't know about?
Mayor Jordan: The only thing I can tell you is what we are facing is any where from a $2.2 to
a $3 million deficit by the end of the year. We are doing salary freezes right now and there is a
possibility we will be doing a staffing freeze in the next couple of months. We're scrapping for
$50,000, $75,000 and $100,000 to keep the City afloat right now.
Sondra Smith: Do the City employees get a COLA?
Mayor Jordan: No they don't. It's a very perilous time right now. I will just give you my
personal opinion I think the $150,000 or whatever it would be would have to be of Council
approval. Is that correct?
Paul Becker: Absolutely.
Mayor Jordan: I do not see at this point in time the Council doing it. I may be wrong.
Jody Carreiro: The only other source that might even be out there and I believe the millage that
goes into this plan is four tenths instead of the full millage.
Kit Williams: That's correct.
Jody Carreiro: You could go to the voters for that but I didn't even mention that because
previous discussion about going to the voters for a group of guys that are already retired just on
the voters good will especially with everybody's pocket book hurting is probably not politically
possible probably less politically possible than what the Mayor just talked about. I know it is
tough there is not a good solution out there.
Mayor Jordan: I wish I had the answer to all of this. I know that in our departments we have
cut most of the departments 10% this year.
Paul Becker: Not that drastically but were cutting them down and we are looking at selective
areas as much as possible. We already did not grant a COLA this year and we didn't grant a
COLA last year. We are struggling with budgets for next year right now and how we are going
to have to reduce them.
Mayor Jordan: We have cut departments.
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Paul Becker: That's correct.
Jan Judy: Jody you were talking about the millage and at one of the meetings they were talking
about when benefits could be decreased and if there was a state law that would kick in but the
City had to have a certain millage rate.
Kit Williams: That's a statue.
Jan Judy: Okay, what is that and how much do we lack. Would that be something the citizens
would have to pass to raise our rate?
Kit Williams: There are two requirements for that in order to get to that guarantee fund. One is
that the millage has to be at one and the second that your benefits have to be at 50%. There is
no reason to even look at that because you don't have to go down to 50% in order to make your
plan work without any additional millage. So why would you cut it to 50% when you don't
have to cut it that much.
Jody Carreiro: That's why I haven't talked about a guarantee fund in terms of the millage.
Pete Reagan: I have a question for you on page seven top line total market value of the fund as
of December 31, 2008 is $5,823,185 is that the number you are using to base the projections off
of?
Jody Carreiro: Yes sir. I used the December 31, 2008 market rate. I started to call and get an
update but every other plan I work on the first quarter was horrible the second quarter was great
so they are back about where they were at December 31, 2008 for the most part. I wish I had a
good solution to all of these things. I want to make sure that I have provided you everything that
you need. Are there some of these combinations that we have discussed that you want me to
write down and follow up with you on? What do you want me to do to complete what I
promised you I would do?
Kit Williams: The letter presented four scenarios that the board had voted on to ask you to do
including not a uniform reduction for everybody that is getting a pension now.
Jody Carreiro: Yes sir and I looked at some of those but not all of them and I need to follow up
and address each of those.
Kit Williams: If the board still wants you to do that it's their decision.
Jody Carreiro: I got so busy trying to find some overriding combination that I didn't
specifically address each of these in the report in what we have talked about today. That's what I
promised to do. I will follow up with that in writing.
Mayor Jordan: We want to wait on that information before we make any decisions.
Pete Reagan: Those were the ones that we voted on.
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Mayor Jordan: That's what I remember too.
Jody Carreiro: We've talked about several of those in one form or fashion today but let me
follow that up in writing. I'm sorry I will do that.
Pete Reagan: Jody do you think there is any possibility of any money coming out of the
Governors discretionary fund or some other type of insurance fund to assist these old plans?
Jody Carreiro: I talked to David Clark on the way up here about two or three subjects and one
of those subjects was there are a couple different groups that are trying to get together to
approach the Govemor again and you know that I have thrown out a different idea ever session
for the last five sessions and bits and pieces of those have come through but not all of them. I
don't know if the tough economic times will make the Governor bite or not. I really don't have a
feel. I have thrown some many things against the wall and very few have stuck. You have
watched this so you already know that answer but I really don't have a feel as to whether we can
get enough foot hold to make something happen to not. I think we certainly have good cause and
I think we have a couple good ideas that are brewing to do that as part of the over all premium
tax picture but getting someone to bite on them has been very difficult as you have watched.
Pete Reagan: If we can get Don Zimmerman on board it will help tremendously.
Jody Carreiro: That doesn't mean I'm quitting having ideas. I have a couple back at the office
that I'm going to throw out and see if they stick. We may get some more help but I wouldn't
bank on it because every other idea I have thrown out there hasn't gone very far.
Marion Doss: All of the things we have talked about here it looks like a 23% reduction in
current benefits would get us to go to LOPFI at no cost. Is that correct?
Jody Carreiro: Yes, roughly. I will get it down to a real number that I can say.
Kit Williams: The other guys will look at it too.
Jody Carreiro: They would have to look at it.
Kit Williams: That' s approximately.
Jody Carreiro: That's approximately, right. Their number will be different. Maybe a little
more or Less but it will be different.
Pete Reagan: But we know it's some where between twenty and twenty five.
Gene Warford: And that is with on COLA.
Pete Reagan: Right.
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Jody Carreiro: Yes sir.
Marion Doss: Is there a possibility of plugging just a 1% COLA into that 23% figure?
Jody Carreiro: I can stick that in the model pretty easily and put that in a follow up.
Mayor Jordan: I think we can work on any combination you all are interested in. I don't think
we have to make a hard fast decision today but I am just saying we need to get the information
and probably make a call on this. Is anybody in disagreement with that?
Gene Warford: Any time you put a COLA in that's going to raise that percentage up more,
right?
Jody Carreiro: Yes.
Gene Warford: Any time you put a COLA in you are taking away down here.
Mayor Jordan: Jody do you have enough direction to know what they are looking for?
Jody Carreiro: Yes sir. I need to legitimately address all these things in writing and then show
a combination with a partial COLA. I wish I had given you all good news but you all knew kind
of what the news was and I hope I have given you good information.
Pete Reagan: Thank you Jody I appreciate it.
Kit Williams: Thanks for coming.
Letter requesting actuarial study
A copy of the letter was given to the Board.
City Attorney letter dated July 16, 2009 regarding Attorney General's Opinion No. 2009-
049.
Kit Williams: Senator Madison has sent a little bit broader request. When the Attorney General
had their initial statement I sent them a letter and pointed out a few items that they had not
addressed in their original opinion and gave them a little bit more information part of which is
the fact that your plan is in fairly dire straights, not as bad as it was projected in February where
it looked like 2016. Risk of ruin is still out there. I thought the Attorney General needed to
know that as part of their analysis. I have not heard from the Attomey General and I don't think
Senator Sue Madison has either with the second request. I did request the Attorney General to
use Senator Madison's request to reconsider and to look at the other factors, cases, and statutes
that I had used when I made my opinion that you do have the power to reduce rates.
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Marion Doss: You haven't got an answer to yours?
Kit Williams: I have not received anything yet from Senators Madison's second request which
she made in response to my request.
Mayor Jordan: I think that would be a huge piece of information that we need.
Kit Williams: As Jody said we really won't know one way or the other until the court has
decided so it's not lawyer's giving opinions but the judge giving the ruling is what makes the
final decision on any legal dispute.
Longer Investments:
Longer Investment — Investment Report — July 31, 2009
A copy of the report was given to the Board.
Sondra Smith: The monthly report shows the total cost of the plan is now at $5.5 million and
the market value as of July 31st was about $5.7 million.
In light of the report today I would like to make a motion to reduce benefits for everyone except
the volunteers by 23%.
Pete Reagan: We don't have the questions back from Jody Carreiro that we originally asked for
and that was one of the things that we were looking for. Jody when do you think you can have
the answers to this?
Jody Carreiro: I went through tons of scenarios including these and didn't write them down. I
will do that and send something back in the next week or ten days. I will get that turned right
back around to you.
Pete Reagan: For the record I will plan on voting against the motion to reduce benefits.
Sondra Smith made a motion to reduce the benefits for everyone except for the volunteers
by 23%. Mayor Jordan seconded the motion. Upon roll call the motion failed 2-4. Mayor
Jordan and Sondra Smith voting yes. Marion Doss, Gene Warford, Pete Regan, and
Ronnie Wood voting no.
Meeting Adjourned at 2:40 PM
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Board Members
Mayor Jordan
Sondra E. Smith
Marion Doss
Pete Reagan
Gene Warford
Ron Wood
Chairman
Secretary
Position I/Retired
Position 2/Retired
Position 3/Retired
Position 4/Retired
aye
£V1 e
ARKANSAS
Firemen's Pension and Relief Fund
Board of Trustees Meeting Minutes
September 24, 2009
Firemen's Pension and Relief Fund
Board of Trustees Meeting Minutes
September 24, 2009
Page I of I
A meeting of the Fayetteville Firemen's Pension and Relief Fund Board of Trustees was held at
3:00 PM on September 24, 2009 in Room 326 of the City Administration Building.
Mayor Jordan called the meeting to order.
Present: Mayor Jordan, Marion Doss, Sondra Smith, Paul Becker Finance Director, Trish
Leach Accounting, Audience and Press.
Absent: Gene Warford, Pete Reagan, and Ronnie Wood
Upon roll call there was not a quorum present therefore there was no meeting.
Old Business:
Osborn, Carreiro & Associates, Inc. actuarial study
Longer Investments:
Longer Investment — Investment Report — August 31, 2009
A copy of the report was given to the Board.
Meeting Adjourned at 3:05 PM
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FIREMEN'S RELIEF AND PENSION
November 11 1
2009 9 8
THE FOLLOWING ARE THE OBLIGATIONS OF THE FIREMEN'S RELIEF FUND FOR THE MONTH LISTE
YOU ARE HEREBY INSTRUCTED TO ISSUE CHECKS TO THE PAYEES, IN THE AMOUNTS SHOWN ,
AND FOR THE PURPOSE SO STATED.
DATE OF Regular Mo Year To Date
EMP# RETIREMENT NAME Benefit Reg Benefit
Q 79 11/99 ARMSTRONG (DILL), PAMELA 1,812.74 19,940.14
R 177 4/04 BACHMAN, EDDIE 2,618.55 28,804.05
S 74 3/86 BAIRD, JULIA 1,802.08 19,822.88
✓ 63 5/72 BOLAIN, ANN 109.27 1,201.97
R 68 7/99 BONADUCE, MICHAEL 2,988.76 32,876.36
S 44 9/86 BOUDREY, BETTY MRS. 2,477.42 27,251.62
R 45 9/86 BOUDREY, HOWARD 2,089.28 22,982.08
R 49 7/88 BOUDREY, JACK 1,647.63 18,123.93
✓ 5 5/72 CASELMAN, ARTHUR 131.13 1,442.43
R 57 5/90 CATE, ROY 1,788.90 19,677.90
✓ 6 4/68 CHRISTIE, ARNOLD 109.27 1,201.97
✓ 8 10/76 COUNTS, WAYNE 109.27 1,201.97
R 77 11/99 DILL,GARYJOHN 1,812.75 19,940.25
R 188 12/05 DOSS, MARION H 5,376.91 59,146.01
R 188 12/05 DOSS, MARION H plus 25 additional pay 731.61 8,047.71
R 11 2/76 FARRAR,ALONZO 998.86 10,987.46
R 192 4/06 FARRAR, DANNY 4,155.36 45,708.96
R 38 5/84 FRALEY, JOSEPH G. 1,768.12 19,449.32
R 170 5/03 FREEDLE, LARRY 3,816.75 41,984.25
R 170 5/03 FREEDLE, LARRY plus 25 additional pay 141.37 1,555.07
R 92 03/02 GAGE,TOMMY 2,596.69 28,563.59
✓ 34 6/79 HARRIS, JAMES E. 109.27 1,201.97
✓ 70 11/99 HARRIS, MARY RUTH 109.27 1,201.97
Q 182 10/04 JENKINS, EILEEN 1,788.75 19,676.25
R 93 06/02 JENKINS, JOHN 1,788.76 19,676.36
R 86 07/01 JOHNSON,ROBERT 3,073.47 33,808.17
R 64 4/95 JORDAN, CHARLIE 2,274.95 25,024.45
S 76 5/88 JUDY, JAN 1,647.63 18,123.93
R 37 3/84 KING, ARNOLD D. 1,522.37 16,746.07
R 54 5/89 KING, ARVIL 1,711.21 18,823.31
R 13 10/67 LAYER, MERLIN 456.22 5,018.42
R 173 12/03 LEDBETTER, DENNIS 3,775.80 41,533.80
✓ 181 10/04 LEE, VIOLA LOUISE 109.27 1,201.97
R 51 10/88 LEWIS, CHARLES 1,647.63 18,123.93
R 40 9/85 LOGUE, PAUL D. 2,868.28 31,551.08
R 202 02/08 MAHAN, MARSHALL 4,077.28 44,850.08
R 50 9/88 MASON, LARRY 1,631.25 17,943.75
R 39 4/85 MC ARTHUR, RONALD A. 1,753.74 19,291.14
✓ 35 2/82 MC CHRISTIAN, DWAYNE 109.27 1,201.97
R 15 4/77 MC WHORTER, CHARLES 1,334.51 14,679.61
209 00 -Jan MILLER, ALICE GAYLE 1,304.07 1,304.07
R 29 8/81 MILLER, DONALD deceased 10/23/09 0.00 13,040.70
R 73 2/00 MILLER,KENNETH 3,180.02 34,980.22
R 73 2/00 MILLER,KENNETH plus 25 additional pay 170.60 1,876.60
✓ 42 2/86 MOORE, JAMES H. 109.27 1,201.97
✓ 176 4/04 MORRIS, DIXIE E. 125.66 1,382.26
R 48 7/88 MULLENS, DENNIS W. 2,191.30 24,104.30
R 184 3/05 NAPIER, LONNIE 3,518.28 38,701.08
R 196 01/02 ONEAL, TEDDY 4,120.99 45,330.89
R 46 5/88 OSBURN, TROY 1,899.66 20,896.26
10/27/2009 C:\DOCUME-1\ssmith\LOCALS--1\Temp\XPgrpwise\November 2009.xls WM
DATE OF
EMP# RETIREMENT NAME
Regular Mo Year To Date
Benefit Reg Benefit
R 81 02/01 PHILLIPS,LARRY 2,765.09 30,415.99
R 203 02/08 PIERCE, JOEY 3,647.18 40,118.98
R 53 2/89 POAGE, LARRY 2,346.70 25,813.70
R 186 06/05 REAGAN, PETE 3,535.71 38,892.81
✓ 201 "02/08 REED, JUNE 109.27 1,201.97
S 172 12/03 SCHADER, MADGE 1,386.01 15,246.11
R 41 9/85 SCHADER, TROY 1,524.99 16,774.89
R 190 04/06 SHACKELFORD, GLEN 3,647.18 40,118.98
R 36 5/76 SPRINGSTON, CARL 806.19 8,868.09
S 90 03/02 STOUT, IMOGENE W. 767.80 8,445.80
R 165 12/02 TATE, RALPH 3,668.10 40,349.10
✓ 65 3/66 TUNE, BILLIE SUE 136.59 1,502.49
R 71 1/00 WARFORD,THOMAS 2,502.72 27,529.92
R 28 7/68 WATTS, DONALD deceased 3/3/09 0.00 874.18
207 7/68 WATTS, MAGGIE 437.09 3,933.81
R 88 01/02 WOOD,RONNIE D 3,077.15 33,848.65
208 9/88 WRIGHT, Barbara 1,691.34 13,530.72
R 52 9/88 WRIGHT, RANDALL deceased 3/11/09 0.00 5,074.02
119, 540.61 1, 314, 946.71
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
NOTARY PUBLIC
MY COMMISSION EXPIRES :
10/27/2009 C:\DOCUME-1\ssmith\LOCALS-11Temp\XPgrpwise\November 2009.xls WM
Donald `Donnie'
Miller
FAYETTEVILLE — Donald'
"Donnie" Miller, 78, die
Friday, Oct. 23,2009, at North
west Medical
Center of
Springdale.
He was born
Sept. 28,1931,
in Sunset to
Robert Duard.
and Violet
Daisy Osburn
Miller. He
retired from the Fayetteville 44,
Fire Department in 1981 with
20 years of service. He was a
fa4mer, gardener, fisherman
'laird hunter. He attended the
t zel Valley Community 1
urch.
e was preceded in death .!
a son, Timothy Dale
Her, and two brothers,
actk Miller and Troy Miller.
urvivors include his wife of
:years, Alice Gayle Miller; --
e sons, Steven W Miller
Jon Miller, both of the
tzel Valley community,
andteward Miller and wife
1yson of Farmington; one
er, Donna Harper and
and Jeff of Springdale;
grandchildren, Matt and
'y Harper, and Nicholas
three brothers, Bobby
filler and wife Dorothy
o ea`eHazel Valley commu
Gerald Millerandwife
bbie of Elkins, and Randy
'ler and wife Pauline of
tForlq one sister, Janice
7,illiams and husband Bill of
e,at Fork; and several nieces
ai d°nephews.
;Graveside service will be
at 4, p.m. Monday, Oct. 26, at
Sunset Cemetery under the
direction of Moore's Chapel
w' Tim Gabbard officiat-
?isitation will be from
p.m. Sunday, Oct. 25 at
's Chapel.
norials may be made to
Fayetteville Fire Depart -
Firefighters Fund,
eat Center, Fayetteville,.
RECEIVED
OCT 2 62009
CITY OF FAYETTEVILLE
CITY CLERK'S OFFICE
FIREMEN'S PENSION & RELIEF FUND AFFIDAVIT
STATE OF ARKANSAS
COUNTY OF WASHINGTON
)
)ss:
RECEIVED
DEC 19 2008
CITY OF FAYETTEVILLE
CITY CLERK'S OFFICE
I, :DO Irl a U. 1�('.. m ; l l er do solemnly swear that:
(PIease check the appropriate statement below)
1. VI am a former firefighter for the Fayetteville Fire Department.
2. I am the spouse/former spouse/widow of a former firefighter for the Fayetteville Fire Department, and that Ihave not
remarried since becoming eligible for benefits.
3. I am an eligible dependent of a former firefighter for the Fayetteville Fire Department and submitted the attached
school affidavit for verification of school attendance. •
4. ✓I presently receive benefits from the Fayetteville Firemen's Pension and Relief Fund and I am eligible to continue
receiving the pension fund benefits as governed under state law.
My personal information is as follows:
Address:
7 65 / 7 Dpi An a ct
M -ye -I -f yr Ilei ArKansas 72701
Telephone:(1• j'Jt]) �ij i{ 3 .2-1
PLEASELISTALLBENEFICIARIES BELOW (complete only for spouse, minor children and/or children under 23 years of age enrolled
in a institute of higher education):
NAME
hi itce, r4y(e m`ttilev-
DATED this /'7 day of
SOCIAL SECURITY No.
BIRTH DATE• •
RELATIONSHIP
W Ore
6200 S' .
AFFIANT (signature)
SUBSCRIBED AND SWORN to before me, a Notary Public, this f'f fay
My Commission Expires: P8/0 0 //1
(This affidavit is required annually by the Firemen's Pension and Relief Fund Board ofTtustees a
Clerk, 113 West Mountain, Fayetteville, Arkansas, 72701 by January 31" each year.)
(Revised 12/2006)
OFFICIAL SEAL
STEPHANIE BAKER
NOTARY PUBLIC. ARKANSAS
WASHINGTON COUNTY
$2190,44104Wagatlake
Fayetteville City
J
Revenues:
Employee Contributions
Employer Contributions
State Insurance Tax
Local Millage (.4 mills)
Interest and Dividends
Gain (Loss) on Sales
Future Supplement
Misc Revenue
Total Revenue
Expenditures
Regular Monthly Benefits
Future Supplement
Drop Expense
Investment Manager Fees
Other Expenses:
Audit Fees
Professional Services
Legal Fees
Bank Fees
Publications and Dues
Travel and Training
Total Expenses $
Net Income (Loss) Before Market Adj $
Market Adjustment
Net Income (Loss) $
09-30-2009 YTD
Fire Pension Fund Revenue Expense Summary
2008 2007 2006 2005
$ 1,356.43 $ 6,987.00 $ 11,863.00 $ 23,439.00
$ 2,712.85 $ 13,973.00 $ 25,852.00 $ 46,878.00
125,710.67 $ 146,031.32 $ 150,067.00 $ 151,560.00 $ 225,492.00
232,707.78 $ 441,696.50 $ 388,877.00 $ 370,649.00 $ 339,416.00
130,997.27 $ 265,704.47 $ 292,444.00 $ 311,217.00 $ 308,578.00
64,467.74 $ (728,656.78) $ 421,630.00 $ 383,393.00 $ 297,771.00
24,192.00 $ 31,333.44 $ 38,917.00 $ 27,060.00 $ 24,480.00
373.60 $ 0.96 $ 1,044.00 $ 541.00 $ 176.00
2004
$ 25,393.00
$ 53,730.00
$ 185,445.00
$ 295,409.00
$ 328,158.00
$ 466,221.00
$ 16,661.00
$ 121.00
578,449.06 $ 160,179.19 $ 1,313,939.00 $ 1,282,135.00 $ 1,266,230.00 $ 1,371,138.00
1,075,865.49 $ 1,436,083.26
24,192.00 $ 31,333.44
2,973.17 $ 43,816.86
39,623.91 $ 67,758.33
42.00
3,500.00 $ 3,500.00 $
$ 1,430,646.00
$ 38,766.00
$ 125,419.00
$ 76,454.00
157.24 $ 228.60 $
$ 150.00 $
$ 2,548.88
1,146,353.81 $ 1,585,419.37 $
(567,904.75) $ (1,425,240.18) $
$ (967,119.37) $
(567,904.75) $ (2,392,359.55) $
$ 1,281,954.00 $
$ 26,749.00 $
$ 238,801.00 $
$ 78,764.00 $
3,500.00 $ 3,300.00 $
$ 2,200.00
$ 1,025.00
205.00 $ 202.00 $
150.00 $ 150.00 $
$ 3,462.00 $
1,675,140.00 ° $ 1,636,607.00 $
(361,201.00) $ (354,472.00) $
3,621.71 $ 280,562.00 $
(357,579.29) $ (73,910.00) $
1,097,427.00
24,390.00
398,082.00
84,005.00
$ 1,005,154.00
$ 16,349.00
$ 431,817.00
$ 86,515.00
3,210.00 $ 3,700.00
188.00
100.00
2,389.00
$ 129.00
$ 100.00
1,609,791.00 $ 1,543,764.00
(343,561.00) $ (172,626.00)
(378,645.00) $ (79,916.00)
(722,206.00) $ (252,542.00)
Book Value Total Reserve Assets *
Market Value Total Reserve Assets * $
*Assets less any liabilities
** Market Value calculated at year end
5,493,250.69 $ 6,061,155.44 $ 7,486,396.00 $
5,752,873.44 $ 5,823,183.74 $ 8,215,544.00 $
10/26/2009 C:\DOCUME-1\ssmith\LOCALS-1\Temp\XPgrpwise\Fire Pension Summary.xls tl
7,847,597.00 $ 8,202,070.00 $ 8,545,630.00
8,573,123.00 $ 8,647,034.00 $ 9,369,238.00