HomeMy WebLinkAbout2013-07-18 - Agendas - Final Fayefteville Policeman's Pension and Relief Fund
Meeting Date —7- I
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Eldon Roberts Eldon Roberts
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Melvin Stanley Melvin Stanley
Fayetteville Policeman's Pension and Relief Fund
Meeting Date 17 -443
Adjourn Time
Attendees:
Subject: Subject:
Motion To: Motion To:
Motion By: 13 Motion By:
Seconded: A 6 Seconded:
Jerry Friend VO Jerry Friend
John Brown WO, John Brown
Frank Johnson Frank Johnson
Mayor Jordan Mayor Jordan
Eldon Roberts Eldon Roberts
Sondra Smith Isondra Smith
Melvin Stanley IMelvin Stanley
Subject: Subject:
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Motion By: Motion By:
Seconded: Seconded:
Jerry Friend Jerry Friend
John Brown John Brown
Frank Johnson WI, Frank Johnson
Mayor Jordan 601, Mayor Jordan
Eldon Roberts r*106-1 Eldon Roberts
Sondra Smith Sondra Smith
Melvin Stanley Melvin Stanley
Melvin Stanley Retired Position 4
Frank Johnson Retired Position 5
Lioneld Jordan Chairman Jerry Friend Retired Position 2
SondmE.Smith Treasurer John Brown Retired Position 3
Eldon Roberts Secretary/Retired Position 1 Tayve e 1 le
ARKANSAS
Policemen's Pension and Relief Fund
Board of Trustees Meeting Agenda
July 18, 20113
A meeting of the Fayetteville Policemen's Pension and Relief Fund Board of Trustees will be
held on July 18, 2013 at 3:00 PM in Room 326 of the City Administration Building located at 113
West Mountain Street, Fayetteville, Arkansas.
Roll Call
Introduction of Board Members:
Lioneld Jordan, Mayor
Sondra Smith, City Clerk Treasurer
Eldon Roberts, Police Department Retired
Jerry Friend, Police Department Retired
John Brown, Police Department Retired
Melvin Stanley, Police Department Retired
Frank Johnson, Police Department Retired
Approval of the Minutes:
Approval of the April 18, 2013 meeting minutes
Pension List Changes: None
Approval of the Pension List:
Approval of the August, September, October, 2013 pension lists
Unfinished Business:
0 GFOA Best Practices email
New Business:
Flower expenses
Revenue & expense report
Ist Quarter March 31, 2013 report (Revised)
2 nd Quarter—June 30, 2013 report
Election Results—Board member listing
Election of Board Secretary
Turn back and Future Supplement funds
Discussion Items:
LOPF1
Longer Investments:
Longer View
Longer Investments 2 M quarter 2013 report
Longer Investments monthly report
Informational:
2013 Meeting schedule
Policemen's Pension and Relief Fund
Board of Trustees Meeting Minutes
April 18,2012
Page I of 20
Lioneld Jordan Chairman Jerry Friend Retired Position 2
Sondra E.Smith Treasurer Tim Helder Retired Position 3
Eldon Roberts Secretary/Retired Position I Melvin Stanley Retired Position 4
Faye le Frank Johnson Retired Position 5
ARKANSAS
Policemen's Pension and Relief Fund
Board of Trustees Meeting Minutes
April 18,2013
A meeting of the Fayetteville Policemen's Pension and Relief Fund Board of Trustees was held
on April 18, 2013 at 3:00 PM in Room 326 of the City Administration Building located at 113
West Mountain Street, Fayetteville, Arkansas.
Mayor Jordan called the meeting to order.
PRESENT: Frank Johnson, Eldon Roberts, Melvin Stanley, Jerry Friend, Mayor Jordan,,
Kit Williams, City Attorney, Sondra Smith, City Clerk, Gail Eads, City Clerk's office,
Elaine Longer and Kim Cooper,Longer Investments and audience.
ABSENT: Tim Helder
Eldon Roberts stated he wanted to introduce two people in the audience. One is the oldest
living retired police officer that Fayetteville Police Department had, Jake Murphy. Jake went to
work for the Fire Department in 1961 and decided he would rather fight crime than fires and
moved over to the Police Department. The other is Buddy Ledford, everybody knows Buddy is
from here and has been in the banking business for forty years. He is a member of the Pension
Review Board in Little Rock, the one we are always referring to that we get information from.
Approval of the Minutes:
Approval of the February 7, 2013 meeting minutes
Eldon Roberts moved to approve the February 7, 2013 meeting minutes. Melvin Stanley
seconded the motion. Upon roll call the motion passed 6-0. Tim Helder was absent.
Pension List Changes: None
Approval of the Pension List:
Approval of the May June and July,2013 pension lists.
Polic,ennen's Pension and Relief Fund
Board of Trustees Meeting Minutes
April 18,2012
Page 2 of 20
Jerry Friend moved to approve the pension lists. Melvin Stanley seconded the motion.
Upon roll call the motion passed 6-0. Tim Helder was absent.
Unfinished Business:
Letter to Pensioners and City Council regarding Local Plan at Risk Status
Sondra Smith: At the last meeting we devised the letter. That is a copy of the letter that was
sent to the pensioners.
Frank Johnson discussion item: Will a vote to increase the millage Possibility cause us to
lose the current millage.
Mayor Jordan: The City Attorney is working on that right now. He is going to be here but he
is looking at some statutes regarding it.
Frank Johnson: Will this be enough time for him to really look into it is the really important
question.
Mayor Jordan: He has been out of town.
Frank Johnson: We can listen to what he has to say but I think it's more than last minute
leaping through the statutes. I trust Ids judgment to a degree but this is, an important agenda
item.
Mayor Jordan: I agree.
Eldon Roberts: It was kicked around at one of the Pension Review Board meetings in Little
Rock, David Clark gave me a couple copies of the statutes. Can the City Council move the
millage back up by the vote of the Council?
Mayor Jordan: I am not an attorney but I think that has to go to a vote of the people. I'm
almost certain of that but I think your question is do you put at risk the millage that you already
have ifyou do that. I don't know the answer to that. I will tell you any time there is increases in
taxes, 99.9% of the time is usually takes a vote of the people,particularly with property taxes.
Eldon Roberts: When you look at this millage .4 of a mill that we are receiving generates
$511,000 a year. That's not even a half of the full mill. We would be over a million dollars a
year if we hadn't got rolled back. I know the City didn't roll us back it was a state statute that
rolled us back but that is considerable dollars there that we have lost over the years. When .4 of
a mill generates $511,000, .8 would generate over a million and a full mill is quite a bit of
money.
Policemen's Pension and Relief Fund
Board of Trustees Meeting Minutes
April 18,2012
Page 3 of 20
Mayor Jordan: There is some discretionary millage that the Council has authority over. Is that
correct Kit?
Kit Williams: They certainly do, however it has to be spent for legitimate governmental
purposes. There is the millage specifically for the closed pension plan. As you said it is
authorized up to a mill. When it was initially adopted it was a mill split between the police and
fire. Then we had the property tax roll back suit based upon Amendment 56 they rolled back a
.10 of a mill each and they have never been hit with another roll back, the school district has. It
has never reached the amount of increase that would cause another roll back. That has always
been an issue about what you want to do in relation to that and what the City would do. The
Mayor told me right before the meeting that you were talking about potentially doing this. The
amendment that is printed in the code section talks about it and says "After consent of the
majority of those voting on the question in cities of the first or second class, the cities may
annually thereafter, levy a tax on assessed value not to exceed two mills on the dollar,for which
would be afundfor the retirementfor both Police and Firefighters so they did one mill and split
it between you all. It says the annual levy for the Police shall not exceed one mill and annual
for the Firefighters shall not exceed one mill.
I don't think necessarily that you all would have to join with the Fire Pension group in order to
do this, it was done that way the first time but that is just my understanding. I have not gone
back and looked at the election. Apparently it was done at the same time. Do any of you
remember that,the original millage?
Eldon Roberts: I've seen the ordinance that created the old fire and police pension plans. It
was back in the late forties but I don't know exactly if it was both. I think it was for fire and
police both voted s a tax on themselves that they could pay a retirement to their fire and police. If
I read Frank's question right, if we were to try to have a vote on this millage and roll it back up
and it failed then we would lose what we are getting now.
Kit Williams: I think we could probably structure the question in such a way that you would not
lose everything. It's like the school district asked for an increase in millage, they don't get the
increase in millage they still get the same millage. We'd just be asking for an increase in millage.
We wouldn't say this is the new millage, we'd say we want an increase in millage. It sounds like
a lesser amount if you ask for an increase in millage. It's a pure way to let people really know
what you're asking for which is a smaller increase not the whole thing. It's my preliminary view
that it won't endanger that. If we got serious that we want to present it to the voters,then I'd look
at it more closely, but I think it'd be safe.
Eldon Roberts: It wouldn't be worth doing it if we stand a chance of losing everything.
Kit Williams: There's a statue as well as a constitutional amendment that says the City Council
may appropriate this every year. I think City Council shall levy this as long as there are pensions
to be paid according to what the voters have said.
Frank Johnson: The latter is still on a referendum though,right?
Polic;ernen's Pension md Relief Nor!
Board of Trustees Meeting Minutes
April 18,2012
Page 4 of 20
Mayor Jordan: Yes. What I told them is that I thought it would have to go to a vote of people
instead ofjust a vote of the council. There is discretionary millage but it's not used in that regard.
Kit Williams: No, this would have to go to a vote of the people. That's why it was not affected
by the TIF district, because it was established by the constitution. They held that that particular
part of the constitution was not inipliedly repealed by Amendment 78, which established TIF
district. That's why you haven't lost anything in relation to the TIF district.
Eldon Roberts: Some cities across the state of Arkansas have taken it upon themselves to do
this and it passed. Pine Bluff sticks in my mind as being one, and others have rolled their millage
back up by the vote of the people. I don't know how successful we would be if we were to ever
try that but we'd want to be in conjunction with the fire department.
Mayor Jordan: Yes, because I'm sure the fire department is going to want to do the same.
Sondra Smith: Little Rock is the other one that did that.
Mayor Jordan: It'll have to go from here to the City Council. Then the City Council will have
to decide whether they put it before the vote of the people. Then the people have to decide on it.
Eldon Roberts: Let's say one came up in 30 or 60 days, how do you determine what passes?
Percentage of the last people that voted or how does that pass?
Kit Williams: Majority of the people that voted.
Sondra Smith: And it does have to go to the City Council, Mt?
Kit Williams: When you look in the amendments it is clear how your county library and city
library millage is passed and increased, then you look at amendment 31 Police and Fire Fighters
retirement salary and it only has one section. It talks about the election and if it passes it passes,
it doesn't talk about how you get to the election. A city library is when it is 100 or more tax
paying electors of any city ask.
Eldon Roberts: How may thousands is it for a regular referendum?
Sondra Smith: It's fifteen percent on the people that voted in the last election for the office of
mayor.
Kit Williams: You are talking thousands of thousands if it had to be a petition. If you are
interested in doing that I will look at exactly what the procedure would be whether the City
Council needs to do it and submit it to voters or if there needs to be a petition of citizens that
would request it and how many if there are. Maybe that's an option either way.
Eldon Roberts: Has the Fire Department ever talked about it or mentioned it?
Kit Williams: I mentioned it to them when they were first getting their big problems. At that day
in time it looked questionable that they would have a very good chance to pass a millage in that
Policemen's Pension and Relief Fund
Board of Trustees Meeting Minutes
April 18,2012
Page 5 of 20
climate. That's a judgment call, who knows. If you do something like that you should plan to do
a campaign.
Frank Johnson: This is just a matter of discussion and knowing what our options are for
increasing revenue streams. At some point we need to talk about a strategy to keep the plan
solvent. We have had a discussion about a reduction of benefits, but we need to have as many
discussions about what we need to do to increase revenue to the plan and keep the plan solvent.
It's important for us to know what we can do in terms of our fiduciary responsibilities as a board.
It seems to me that it would be important for the City Council to know as well if our insolvency
is to the detriment to the city's credit rating. It seems like they would be as interested in
exploring opportunities to keep the plan solvent.
Kit Williams: At this point, because it is not a city debt, it would not be detrimental to our credit
rating. In the future, it could be a city debt too. If a legislature changes the rules, they could
make the city responsible just as the city is for the new LOPE plan. That is in fact a city
responsibility. There has been a bill or two in the past that would have done that and they have
not passed the legislature. I haven't seen one for this year.
Mayor Jordan: Keep in mind as you think about your strategy, the people will be asked to vote
on refinancing the town center bond some time this year. You will be competing with them
voting on that tax plus your tax.
Frank Johnson: I suspect that with competing interest they may look at a bunch of retired cops
and think yeah right, But at the same time, as a board, we are in a position to leverage all the
opportunities available to us to keep the plan solvent.
Kit Williams: I think there is a lot of community support for the police whether they are active
or retired. You all enjoy a good repute in our society and our city.
Frank Johnson: Visit with the Fire Department board and let's see what they want to do and
they can kind of count us in. It's got to be a joint effort.
Jerry Friend: Should we plan a meeting with us and the Fire Department? It seems like it
would help to get on the same page.
Kit Williams: The police plan is in much better shape than the fire plan. Not to say it's perfect,
it's not. It'd be nice if it was "actuarially sound"but it's not in dire straights, which is one reason
the board is waiting to see what the fire board is going to do. They are the ones that have to make
the decision much more quickly than you all would do because they are much more up against
the wall than your pension.
Mayor Jordan: I suppose we are talking some sort of joint meeting. I look forward to chairing
that one. It should be a good discussion. We did that back in 2009 where we discussed a lot of
these very same issues. Is there any public comment?
Larry Perdue: You're talking of the millage that we've lost, how much?
Policemen's Pension and Relief Fund
Boud of Trustees Meeting Minutes
April 18,2012
Page 6 of 20
Eldon Roberts: It's one tenth. I was thinking it was a full milll, but that's the fire department
and police department together. Each had half a milll, and we lost a 10 lh
Kit Williams: Tbat's 20%.
Eldon Roberts: Our four tenths of a milll that we are generating right now is $511,000.
Kit Williams: That's over$100,000 per 10th.
Eldon Roberts: So $650,000 is what it would be if we hadn't rolled back. It would've been
considerably more every year.
Mayor Jordan: I don't know what the pay out is. Isn't the pay out around a million dollars a
year? You're still behind,but it strings it on out.
Sondra Smith: The plan is paying out in monthly benefits $128,000 a month.
Lonaer Investments:
Longer Investments 1st quarter 2013 report: A copy was given to the board.
Longer Investments monthly report: A copy was given to the board.
Longer Investment Report:
Elaine Longer: I'll make it a short report. I know you have a busy agenda. First page of the
report shows the portfolio evaluation as of March 31", the end of the first quarter. Equity as a
percent of total portfolio is 47% and the dividend yield is at 3.92%. We have been emphasizing
the high income more safe stock in this environment. We have almost two and one half times
the long bond or the 10 year treasury yield on the dividend that comes from your stock.
The next category is the other income securities which we are using that give us a higher income
yield than we can achieve in the fixed income market, but it also has growth potential. That
category is 9.2% of total portfolio and gives an income yield of 5.28%. During the time we have
held it, you can see that the Guggenheim Multi-asset Income Fund has appreciated from $20.8 to
$23.8 while yielding almost 6% in income. That's why we've incorporated these types of assets
into the portfolio, because to compare to a five year treasury yield of 0.7% and a 10 year treasury
yield of 1.6% with no growth potential, we are also trying to incorporate growth plus income.
We can achieve higher by going away from the treasury market.
The next category is your fixed income mutual funds, this equals 14% of portfolio and yields
close to 4%. The next page shows your treasuries which were purchased at a time where you
could achieve five and one eighth on a treasury or 4% on a treasury. That equals approximately
14.7% of portfolio. They were purchased to yield 4%, but at this point in time they wouldn't
Policemen's Pension and Relief Fund
Board of Trustees Meeting Minutes
April 18,2012
Page 7 of 20
yield 4%. If we were to sell these we would be selling them at a take out yield or a yield at
market of about 1%. You can see on this 4% treasury that we purchased a$103.76, it's currently
trading at S 116.74. As interest rates go down, the price of bonds appreciates because that 4%
treasury is worth more now in the market than when we bought it. Conversely, as interest rates
rise, bond prices go down. We saw in the first quarter of the year a feeling that the economy was
growing again. We were looking at a potential for 3% growth in the first quarter, so interest rates
actually ticked up a little bit but have since come back down. The bond market returns in the l't
quarter were flat to slightly negative. It doesn't mean you didn't earn the 4%. It means the prices
of bonds declined a little bit in the first quarter as interest rates rose. We will see that on the
performance reports when we get to the back.
You still have a government agency with 6.125% income yield. That's about 3% of portfolio
yielding 6%. Then we have gold, which represents about 4% of portfolio. The cash reserves are
at 5%. We also have a Master Limited Partnership Fund that holds energy investments and yields
6%. The bottom line is your portfolio is about $7.7 million and the overall income yield, even
though you have a growth component that is over 55%, is still yielding 4% in income. You can't
leave growth because where do you go, to a .5% or .7% five year or 1.6% 10 year or something
else that gives you a straight income. It's not very attractive relative to what you can get in the
stock market. So, we've been trying to stick to a pretty conservative structure and incorporate
other assets into the portfolio like the preferred and the Guggenheim Fund and Utility Fund and
Master Limited Partnerships Funds to be able to be able to get your income needs but also to be
able to get a higher income than we can get in fixed income.
We weren't over 50% on equity this time, so we don't have to get approval to be over 50%. The
next report is an April 16th update. It's pretty much the same except you'll see that our equity
exposure is a little bit lighter at 44%. That's because there are a number of things in the market
and the international markets that is causing us to be a little more cautious. We have more cash
reserves we are a little bit more in a defensive posture, which has been a good thing the past few
days. We are seeing some weakness in the earnings report. We are just heading into the bulk of
carning season. We are seeing some surprises in the terms of guidance going forward with the
international economy slowing in Asia, Japan, China and Europe with recession. We are seeing
that a lot of multi-national corporations are reporting earnings that meets street estimates that are
guiding lower into the 2 nd quarter. That's why you see the market pulling back. Today after the
close we had IBM report, and although they hit the earning's number just a slight miss, the
revenue number was weak so the stock is down about 4% after market. We are seeing this on a
number of companies. It's time to be a little more cautious and we have built cash reserves. We
will just wait and see how we get through the earnings season and we will know more.
Kit Williams:. Isn't this kind of what happened last year too, where the spring looked pretty
good and then faded a little bit?
Elaine Longer: It does. There's a saying in this business"sell in May and go away."It's kind of
interesting because the market typically has this I'd quarter strength and then you do tend to
weaken going into a second quarter and then strengthen into the fourth quarter. April has started
off a bit rocky. In some of the earning numbers, what we are seeing in particular, is an impact
from the increase payroll tax that took effect in January but also the sequestration cuts that took
Policemen's Pension and Relief Fund
Board of Trustees Meeting Minutes
April 18,2012
Page 8 of 20
effect in February/March. We are seeing some weakness in retail sales and in some of the reports
that are coming out there's reference to the sequestration and what kind of uncertainty that's
creating in the corporate boardrooms from a planning standpoint.
Frank Johnson: The analyst interpretations of the earning reports and how it influences the
stock value, I'm confused how that played out over the previous quarters when the values were
going up as opposed as to what they are forecasting.
Elaine Longer: What happened last year earnings were really not up very much, not nearly as
much as the stock market. The earnings improvement last year was pretty flat to 2% or 3%,
depending on which index you were looking at. The stock market appreciated multiplies of that
amount last year. What happened is the evaluation applied to those earnings which is the PE
multiple improved more than earnings. That is what gave you that growth in the stock market.
The market price performance was much stronger thari the market earnings performance last
year. So when we close the year, we were trading back above that average multiple of 15 times
trailing earning. When we came into this year, you've got a lot of expectation that we are going
to have stronger growth and that the Fed is going to continue to case and that Europe may come
out of the recession. What happened is the Fed is continuing to ease, Europe is remaining in a
recession, and China's growth is looking weaker than expected. You are at an evaluation level
that doesn't really support negative surprises. That's why you see a company like IBM, even
though they only missed by a nickel on earnings, you can have a 4% decline. Federal Express
didn't miss that large as far as this quarter,but their guidance was a little bit negative so the stock
is hit harder. A lot of it depends upon expectations relative to evaluation and whether or not the
market at these levels had discounted better earnings from what we are actually seeing. It's not
necessarily whether the earnings are supported by price. It's an expectation that evaluations
respond to earnings that could be flat or a little bit disappointing.
What's happening is we are at an all time high operating margin. At this point, you need to see
some top line growth and revenue growth. That's dependent upon economic growth. Corporate
America has been able to deliver earnings by streamlining operations and cutting expenses and
increasing profit margins,while the economy was fairly sluggish. What the investing community
is looking for is top line growth rate, revenues. When they come in and the earnings are there and
the revenue is light and the guidance is weak, it is bringing a response into the market that is
more so than what you would probably think by just looking at the earnings.
If you look at the next page, you will see realized gains year to date is approximately $96,000,
and income year to date is $46,000. That is realized gains and dividends and interest income that
have come in. The next page is the summary of the bond portfolio. The average yield to maturity
on bonds is 4.4% with a weighted average maturity of 4.7 years. Compare that to 0.7% in a
current 5 year treasury, you still have a very high income on your fixed income portfolio relative
to what market interest rates are within this type of maturity structure.
The average coupon is 4.50%. If you look down to the next table you will see that 17% of the
bond holding gives an average yield to maturity to 6.1% and an average duration of 2.5.
Basically, you have 6.1% of the total bond portfolio that is in a short maturity of 3 years or
shorter. This is liquid for us. We can turn those bonds into cash if we wanted too. If we get an
Policemen's Pension and Relief Fund
Board of Trustees Meeting Minutes
April 18,2012
Page 9 of 20
opportunity to buy higher yield, we can do that. At this point we aren't letting go of these
coupons because we can't replace them.
On the next page,the performance report from inception to date. The bottom line is year to date
stocks have in the 1"quarter returned 6.8%. The fixed income component, which is the bond part
of portfolio, is a minus .4%. You are still earning your coupon but the price fluctuation in the l't
quarter, because interest rates rose a little bit is a negative total return. The other income assets,
which are the Guggenheim Fund, the Utility Fund, the things we have incorporated into a
portfolio that are income plus growth, gave an 11% return in the l't quarter. The total return in
the I st quarter was 4%. Then the important thing from the standpoint of your actuary assumption
is the compound annual return inception to date is 6.3% net of all expenses. That compares to
the actuary assumption at the time that we started managing the portfolio which was 6%. From
that standpoint, the compound annual return over time, which incorporates a few bear markets
during that time period, you still met your actuary return assumption, and then exceeded it by 5%
of what the return assumption was.
The next page shows your withdrawals year to date which are $219,000. The next page is the
inception to date, what we call asset reconciliation. It shows your beginning value that came in
during 1990. Then we have contributions and transfer security that came in subsequent to that
initial deposit. Total distributions during that entire time period have been $9.759 million. If you
drop down to the bottom line, the net investment return has been $8.325 million, giving an
ending portfolio value of $7.774 million. You can see the distributions have out run the net
invest return by about $1.4 million.
The investment policy describes how the portfolio is to be managed and lays out the assets
allocation requirements which we are well within those guidelines.
Eldon Roberts stated one of the smartest decisions we made was to use Longer Investments.
City Attorney Kit Williams: One of the reasons this board is in better shape is because you
went with Elaine early on. The Fire Pension board did not go with her for a long time. Elaine
has done a better job than other people they attempted to use.
Elaine Longer: We operate from a position of caution. If you look at the performance report
2001 to 2002, the bear market that lasted three years was the first time that we had three years
consecutive negative market returns since 1939 to 1942. You can see that during that time period
that although the stock market was down about 45% and the NASDAQ was down over 80%,
your total portfolio draw down was only about 4%. That's why you see in this year, the stock
part of the portfolio at 6.8% is a little bit behind the stock market the S&P 500. We are in that
defensive mode again where we want to continue to participate in the growth side but do so in a
way that if we have an event or a another European situation that causes everyone to hit the sale
button at one time, we are positioned to capitalize on it when it happens but to also survive it.
Over the period of time, it's not the performance in the up years that really gets us our return or
the 6.3% compound annual as much as the defensiveness in the downturn.
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Board of Trustees Meeting Minutes
April 18,2012
Page 10 of 20
Frank Johnson: Is this relative to the policy, variance of 10% plus or minus, in terms of
investment strategy is that enough room?
Elaine Longer: Yes. I think your investment policy at 50% with a variance 10% either way and
being able to approve that over time that has been flexible enough for us but has given you
enough participation in the up market. If you look at the Guggenheim and the Utility Fund,
technically they hold stock. That plus the 47%, we're still at about 56% and maybe we should
get a vote to approve that. I look at it as income, not necessarily stocks, but they are funds that
hold conservative income type stocks. Your policy gives us the opportunity to be more
aggressively postured when we feel like we can push the pedal to the medal. I think it is flexible
enough.
GFOA Best Practices email
Mayor Jordan: Next on the agenda I have the GFOA Best Practices email.
Sondra Smith: We received that at the last meeting. I brought it to your attention and we were
going to put it back on the agenda. We do not have to do anything. If we want to set up best
practices for the pension plan,we can. We can leave that off the agenda for the future or continue
to leave it on to jog everyone's memory. It's something that we need to decide if we want to
adopt best practices for our pension plan, or don't want to adopt any.
Eldon Roberts: We don't have too?
Sondra Smith: We don't have too.
Jerry Friend: Is it sort of the same thing as our policy?
Sondra Smith: No. It came from PRB, I believe. It's something the Government Financial
Officers are recommending. It's not something that we have to do according to what I'm reading.
Frank Johnson: Will that require our looking at it. If it's a matter of best practices, it seems like
we'd be in alignment with whatever is out there. Is that something that we would have to look
at?
Sondra Smith: It would be like setting a policy and procedure for your plan and how you are
going to do things on your plan. You would have to adopt a best practices manual or procedure.
Jerry Friend: Was there an example somewhere?
Sondra Smith: No.
Eldon Roberts: I can see this applying to a corporation or out in the private sector, but so much
of our guidelines, rules, and regulations that are in that statue book. I don't see a need to have a
government involved in it anymore than the state government is with these statues we have to
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Page I I of 20
follow. My recommendation is to leave it off for now because I think we are doing what we need
to be doing the best that we can do.
Jerry Friend: What benefit is there to have one?
Sondra Smith: The email came from Patricia Leach and it was forwarded to her from Traci at
LOPFI. It's a GFOA which is Government Finance Officers Association best practices on the
government of public employment post retirement benefit system. This is coming from the
Government Financial Officers Association and they recommend that state or local government
or other designated governing entity establish rules of governance for its post retirement benefit
systems that define the key elements necessary for trustees and other fiduciaries to fulfill their
responsibilities in accordance with fiduciary standards.
Frank Johnson: I can look at it and do a side by side comparison of where we are at now. If
there's no value in it then we shouldn't waste a lot of time with it.
Mayor Jordan: Why don't we just leave it on the agenda for next time and then if it's good then
we'll be good.
Revenue& expense repo
Sondra Smith: That's the copy of the report that accounting does for us. In December, 2012
your market value was $7,689,491.43 and your market value at March 31, 2013 with
$7,774.343,80.
Request for an actuarial study
Sondra Smith: We talked about that at the last meeting. 1 wanted to let you know that I did
follow up. We used to get an actuarial study every two years. I noticed we had been getting them
every year for the past 5 years. I talked to Patricia Leach in accounting and asked her if she knew
why we were getting them more often, and she didn't know either. She sent an email to PRB,
and the reason we are getting them more often is because of the plan status. They decided that
they needed to do the actuarial study more often. So we are getting a yearly actuarial study now.
That started about five years ago. That helps you stay on top of your plan a little bit better
because the actuary is doing it yearly. You said you might want to request to do an actuarial
study. They are in the process of doing one now. We usually don't get it until July or August.
They aren't going to be able to do one because they are currently working on the yearly one we
get and they wouldn't be able to get you any numbers until they get that one finished. You might
want to postpone that until the next meeting.
Jerry Friend: What we wanted to ask was if we reduce benefits,what would it look like.
lUt Williams: By how far you'd have to reduce some.
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Sondra Smith: He's not going to be able to give you that information. He is going to want
current numbers. He's not going to be able to get that information to you until he gets that study
done.
A discussion followed on when we normally receive the actuary study.
Eldon Roberts: This actuary that they do every year for us doesn't address the question about
what benefit decrease we take.
Jerry Friend: But once it's done, it shouldn't cost as much to plug some numbers in as it would
to do a whole actuary.
Sondra Smith: I know when we did that for the Fire Pension, they charge on the number of
scenarios you do.
John Brown (pensioner): I am John Brown. I am a beneficiary of this particular pension
system. I'm in receipt of the letter that came from David Clark as well. Several of us got
together and we had a discussion about this. We were concerned about the potential of an
actuarial study that perhaps someone wanted to have conducted to see what we may or may not
need to do. That being said, I'm going to read the letter to the trustees. It says, "Reference
requestfrom pension plan members. Dear Trustees, 15 members,pensioners, of the local police
fund recently met and discussed the letter we have all now received about local plans in
Arkansas and the possibility the Fayetteville plan may be considered at risk All present at the
meeting were concerned about this issue, but we are also concerned that there seems to be talk
of doing a special actuarial study and spending our pension money to conduct such a study. The
purpose of this letter is to let you know the undersigned members are opposed to any special
study. We believe it is a premature action and an un-needed expenditure at this time. I know
sometime in July of this year a written report will be issued by Arkansas Pension Review Board
and the members believe we should wait until those findings are released so they may be
examined as to their accuracy and recommendations. We are respeqfully asking thaty'allplease
take no action towards any sort ofspecial study until the state reports have been here and we get
a chance to review all of that " Again,there are two other letters attached to this from two police
pension members that were unable to attend the meeting. I have been in contact via phone with
seven confirmed widows of former police officers. They are of the same mind. They feel like we
have that luxury of waiting and let's see what the study suggests. And then, if we need to revisit
it,then look at it and see what we need to do. That's why I'm here.
I don't know anything specifically about any benefit reductions. That's something that perhaps
the board could address. I don't know if there's that possibility. That is the concern of the people
drawing the benefits. A benefit reduction, especially to a lot of the widows, is significant. Those
people are on a fixed income. I have the luxury of still being able to work and have another
income, some do not. It would be huge to them. They were really concerned. I would like to be
able to call them and tell them we are looking pretty good. I don't think y'all need to be overly
concerned at this time. Not to say it won't happen if things go south. We don't know what
tomorrow brings obviously. As we currently sit, I don't think there is a big need for it at this
point.
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Kit Williams: I can tell you when the Fire Pension did a special request an actuarial study for
numerous scenarios about possibly reducing benefits, Jody Carreiro, the actuary, came here and
presented the "Risk of Ruin7 when a pension might run out of money. In the various scenarios
there was 1%of risk ruin and another would be less and another one would be less, so it was all a
guessing game. You are guessing at what Elaine is going to do. But for them, they have
substantially less of a fund than you all do. So, when you get below $5 million in your fund then
the type of investment that you can do is what Elaine won't do anymore because you can't buy
new stock. So the type of very good advice you have received for decades from Elaine will be
gone. You can still have mutual funds and things like that. You won't have the benefit of Longer
Investments anymore. The Fire Pension is already there. They are below $5 million. They have
less opportunity to maintain the type of returns that you all have seen with Longer Investments.
That's why we have primarily concentrated on them.
What my advice has been to the Police Pension Board is basically to wait for a while because the
Fire Pension Board is going to lead the way, one way or the other. Eventually, if they do nothing,
it might get to be at a point where you all would think that you need to do something even if they
aren't going to do anything. There's a dispute it is uncertain whether or not a pension board can
reduce the benefits. The PRB, the attorney general says no. I think you can. The only way to
determine that is by what the court would say. At this point in time, that's uncertain if there's
even that power to do that. The only reason the pension board was thinking about possibly
having a precise actuarial study, to see what it would cost, to get into the LOPFI where
everybody would be safe. The sooner something like that would happen, the smaller any
pension benefits would have to be reduced. The longer you wait, the more we spend out, and
more they have to be reduced. That was the only reason people were even considering looking at
something like that at this point in time.
John Brown: Do we not have a little bit of a luxury of time to see what may happen to some of
the other pension systems that are so much further below us.
Kit Williams: You are certainly in a better situation than they are.
John Brown: Exactly. And my point being, would it not be ok for us to wait for a little bit
anyway and see whatArill happen with them.
Kit Williams: I can't answer for your board. There are always pluses and minuses in every
decision.
Frank Johnson: This never rose to an action item. It was just part of discussion. If you look at
the policy that governs what we do as trustees, it's more about investment policies than it is
about if we somehow find ourselves in a situation where we weren't able to maintain that
threshold then we basically aren't in a position to do anything at that point. The whole idea of
looking at what options would be available for us was just discussion. There wasn't a motion to
do it.
John Brown: That was the main concern. We felt like perhaps someone was getting ready to
initiate some action. We were thinking, if you can, please wait.
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Kit Williams: It makes sense to wait until we get the next study. As Sondra was saying, even if
we requested one now, they probably wouldn't have time to be working on it because they are
doing these other studies. On the other hand, there is a timing thing every year. You can only go
into LOUT once a year. You would have to get all your ducks in line by October, before you
could go forward. Even if you've done a special study to determine what it would cost and how
far you might have to reduce your benefits, if you had to go that way, they would still do another
study. They would do their own study to basically confirm what the actual cost would be to the
city. The City Council would have to agree. It would always be risky for the City Council
because even if it looked like a net nothing, not an increase immediately, once it goes in to
LOPFI, any changes in the state law, like adding cost of living, means the cost to the city is
going to start going up. Where in this plan right now, there's no cost to the city beyond the
millage that out taxpayers pay, and there's some turn back funds. There's no cost to the general
fund of the city, and there would be if it was combined with LOPFI.
Eldon Roberts: There is another group of plans out here besides the at-risk group which we are
a member of. There are 20 of those across the state. There's another group that has been labeled
projected insolvent, it means they are projected to go insolvent. Fayetteville Fire Department is
on that plan but there is seven others across the state, old fire and old police pension plans that
are on that projected insolvent list. Somewhere the rubber is going to meet the road and then we
will have some kind of guidelines to go by. I don't know what that's going to be, but you are
looking at lawsuits or state legislature getting involved.
Does the Arkansas Municipal League ever mention these predicted problems coming down the
road for cities? Paul is always at those meeting in Little Rock, and I'm beginning to see more
concern and more intense looking into this problem than I have seen as long as I have been on
this pension board. It's beginning to hit home now. Municipal League is pretty strong, whatever
they wanted they kind of got. I can't believe they won't get together and put pressure on the
Senators and Representative in their own cities. We've got the benefit of sitting back and waiting
to see because somebody somewhere is going to get to that insolvent position long before we do.
Then we'll see what happens. If there's no help anywhere when these funds get to the insolvent
level, then we're going to have to start taking some action that we will all regret. Given the level
that we are at, I'm waiting to see. I'm not playing my cards right now.
Kit Williams: You can't necessarily count on the legislature to help though. Their help may be
something that would be worse than what we're looking out. Their help might be this plan
started 50% so we are going to move everybody back to 50%. If you want your funds guaranteed
then that's what you have to take. You never know what they are going to do. That's what makes
us nervous.
Sondra Smith: I have sat on the Municipal League boards. There are several boards that issues
like this come before at Municipal League and they take a vote to see if the cities choose to
support this or not choose to support this? Municipal League does what the cities would like for
them to do, normally. If other cities don't' have old pension plans or don't have problems with
their pension plans, it's going to be very hard to get Municipal League to support something
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April 18,2012
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because you are going to have a bunch of cities that don't need them to support something. Just
from sitting there from experience,that's one thing that I have seen.
Eldon Roberts: I have no idea how many cities in the state have this potential train wreck
coming at them but we know of 27 right off the bat.
Kit Williams: A lot of cities have both fire and pension.
Frank Johnson: You mentioned John that you spoke to some people, some beneficiaries that
are concerned that the trustees were moving in a direction to reduce benefits. The law doesn't
allow that, more importantly it was just discussions, not limited to reducing benefits but more
broadly to keep the plan solvent. That was the foundation of the discussion. A reduction of
benefits and what you referred to in the letter of an actuarial study was just discussion as well.
Eldon Roberts: For those out there who pay attention, and there's several who watch this pretty
closely, they realize that this special actuarial study that was given a lot of credit to at the last
meeting is the first step toward reduction of benefits. You have to have that actuarial study done
and then they come back with two or three scenarios. The very first step toward a reduction of
benefits is to have this special actuarial study done. It was given a lot of credit at the last
meeting.
Sondra Smith: You have to remember what we did for fire, which is in a lot worse shape than
police, three ago? There was a study and everything and nothing's been done.
Eldon Roberts: So they wasted their money really. Because anything you go to do now, those
numbers will be so irrelevant they wouldn't even recognize the study was done.
Sondra Smith: You'd have to do it again.
John Brown: That's our point. We have a little luxury of time here. Our consensus is that we
understand the discussion, we understand the responsibility of keeping the plan solvent to make
sure it's there until the last member can draw. We wanted to make sure that there wasn't some
sort of action about to occur that we thought might be a little premature.
Kit Williams: You are right to come and talk to your pension board and express your opinions.
Eldon Roberts: The last five will be cared for because I think when a plan gets down to five or
less,they have to be joined in LOPFI.
Mayor Jordan: When your plan gets below that$5 million mark, then it starts to nose dive. The
Firemen Pension plan is there right now.
John Brown: Believe it or not,we are well aware. We keep an eye on what's happening to them
as well.
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Mayor Jordan: But once that hits below $5 million, Elaine Longer no longer handles the
account. Then it goes into the safe investment.
John Brown: I understand that.
Sondra Smith: If you'll look at that revenue expense report, it gives you the history. On the
back page it shows 2005. In 2005 that you were at $10,562,465 and now it shows where you are
at currently today at $7,774,000. That kind of gives you a little bit that you have dropped in the
plan.
Kit Williams: You haven't dropped near as fast as the Fire.
Sondra Smith: That's from paying out benefits.
Mayor Jordan: I can still remember seeing the graph of 2009 which showed the Firemen's
Pension plan nose diving and yours was scraping along.
Kit Williams: They were in trouble before that. You are not going to have a risk of rain for
several years. If the desire was to make yours sound enough so that whatever we get is never
going to go away then the sooner you do it the smaller the reduction would be. The longer you
wait the bigger it would be.
Eldon Roberts: Dennis, I would want to think that as we start down the slippery slope toward
$5.5 million or that $5 million then we might want to look at this. Something could happen
where we could do that over night. We don't want to live our life that that's going to happen but
from $5.5 million we need to start looking at it. That's roughly $2 million away from what
Elaine said we are worth right now, without anything happening to the stock market like in 2008,
we may be able to buy a few years and then these other plans aren't going to last that long. We
are going to take note what they do and what happens.
Sondra Smith: That's the concern is the market. You have a very good investment advisor. All
of us think highly of Elaine, she's good at what she does. That's a help to each and everyone one
of you. It is not that the Fire Pension didn't have a good investment advisor, they did several
things that contributed to the down turn of their plan. They didn't go to Longer Investments as
quickly as you all did and they did a DROP in their plan. So there were several things that
contributed to their downward spiral.
Larry Perdue: My main thing is, as far as any reductions, I'm not saying it might not come at
some point, if that's what it needs to be then that's fine. But there are a couple of things the
reductions hinges on even for us to get over to LOPFI, how much of a reduction, and will the
city of Fayetteville Council approve of us being put over. From what you said a while ago, if we
went to LOPFI, if the council approved it, I would say that your advice to the council is to tell
them what you told us. That it is going to cost x number of dollars or it's not going to cost us
anything. But the liability is going to be there in the future that it could cost the city. Is that not
right Kit?
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Kit Williams: That is correct. I talked to the fire pension people about that also and certain
members of the City Council attended that meeting too. My gut feeling is that the City Council is
willing to take that kind of moderate risk and smaller risk to the finances. Obviously they would
like to make sure that your pension is safe. They want to do that. Everybody on this board wants
to do that. There's some give and take. What the City Council indicated that they were not
willing to do is to do that without reducing the benefits so that at least at the transfer time it was
pretty much a net zero at that point in time. They would know that they would be assuming
additional risks to do that. I think they'd be willing to do that. That was a different City Council,
we have new members now. It's hard to guess what they would do.
Larry Perdue: The council wants assurance that they are going to pay a certain percent a
month. Then we will determine if we will vote for it. We can take the reduction and the council
could look it over and say I don't think so. We are never going to get it back if we give it up.
Kit Williams: We might be able to somehow structure it different. There would have to be
something that would be clear that it was continuative on the City Council approving it.
Melvin Stanley: Once precedence is set one way or the other that would give the council a
whole lot more to go on, on what their liability might be. We should be able to wait and find that
out, 1 would hope.
Frank Johnson: Larry just so you know, what you are talking about right now is a part of our
discussion. If in the future we have to take this to the City Council, how do you frame it up
where they see that this is not something that we rushed to throw together but that over the last
year, if not longer, as a matter of due diligence we have been looking at every possible avenue
there is to keep the plan solvent. The discussions have not been only focused on a reduction of
benefits by any means at all. They are discussions that have to be had and as a matter of public
record too.
Kit Williams: Your board has been very responsible with this issue for years. They are showing
great foresight in saying I know it's not terrible yet but let's look at it.
Larry Perdue: I agree, this is the first time you've seen us here. We've had faith in this board. I
watch the meetings on local access after you have the meetings. I think you're doing a pretty
good job. But, I think it was time we all came up here because of the letter that we received and
the possibility that it might be leaning towards the actuarial study as far as how much of a
reduction will cost. In my opinion, it's not time for that yet. It's just not time. Even if it's done
and looked at on any reductions,you made a statement earlier that it was illegal.
Kit Williams: There is a question whether they have the power to do that.
Larry Perdue: Kit thinks it is legal but the Attorney General opinion says it is not.
Kit Williams: We would actually like to see that if that happens so that we could get a court to
tell us so that it wouldn't be on lawyer saying one that and another lawyer saying something else.
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Larry Perdue: As long as it didn't cost the board for you to defend these guys.
Kit Williams: The only time they've had to have a separate attorney is when potentially the city
was in contrary against them, even though we really weren't against each other. Since they were
a different party in this TIF suit, they had to argue something I couldn't argue, so we had to get
an attorney to represent.
Larry Perdue: The board is doing a good job for us. You're doing what we ask you. Maybe
what y'all are looking at wasn't as major to you as it was to us when we got these letters. We
knew that you were then calling out for an actuarial study which referred to the reduction and all.
Elections: Eldon Roberts, Tim Helder and Melvin Stanley terms will end in May.
Sondra Smith: I have a copy of the proposed letter that I'd like to mail out, or the ballot, if y'all
would like to look at that to make sure it meets your needs.
Eldon Roberts: If one of those three names, after they have been elected by receiving enough
votes to be elected opt to not serve,just drop down and get the forth.
Sondra Smith: Yes. Tim Helder has contacted me to let me know that he is not willing to serve
another term. We always call everyone we receive votes on to make sure they are willing to
serve. We won't know until we get the ballots back and we can do a count.
Eldon Roberts: Tim has spoken to you about not wanting to serve again?
Sondra Smith: He did.
Larry Perdue: In the past the retirees get the letter from Sondra that elections are coming up
and the positions are held by who ever. From that point on, unless I've had contact with all of
these people, I don't know if they even want it, or if there's anybody else that wants it. I think we
need to look at something a little bit different on our members that want to serve on the board.
Sondra Smith: I always ask are you willing to serve again if so chosen to serve again. I guess
we can revise the letter that Tim Helder is not willing to serve so that people will vote for him if
you want to do that. I'm more than happy to do that.
Larry Perdue: I voted for these up here on the board not really knowing for sure if they wanted
to get back in on this.
Dennis Taylor: Can we send a letter out to see who is interested in serving?
Sondra Smith: It does not matter to me. The Firemen's Pension sends out a letter of
nomination. We do not get a good response from the letter of nomination. When I get the
nominations back, people are confused because they think they have already elected somebody.
They don't understand why they are getting a ballot and you don't get as many votes. But, we
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Board of Trustees Meeting Minutes
April 18,2012
Page 19 of 20
can do it however you want to. I can tell you on the Fire Pension nominations don't work out too
well.
Eldon Roberts: What if ask the three currently serving are you willing to serve again before you
send the letter. Then mention in that letter that Tim Helder has requested that he not be elected to
serve any longer.
Sondra Smith: I can put that in this letter.
Frank Johnson: Or conversely someone may want to run.
Sondra Smith: I think if they are interested in serving then they would express an interest in that
to others. John Brown came in our office to express interest.
Frank Johnson: We can not unilaterally make a decision.
Sondra Smith: Just because they say that want to serve another term doesn't mean they will be
serving another term. There's an election process.
Larry Perdue: At least I know that Eldon wants to serve another term.
Sondra Smith: I can put that on the letter.
Larry Perdue: If John Brown wants a position that's coming open, I don't know in general that
John Brown wants to.
Sondra Smith: I don't know that either. The only ones I know if they tell me they are interested
in serving again or no they are not interested. The election process is a process that has been
determined by the board, and the board has not put that in their process. We try to follow it real
strictly. We have state laws that we have to follow too in the election process. It's getting kind of
late because we really need to get ballots out this year. If that's something you so wish to change
you may talk to your board members and tell them a different process because it's up to this
board to determine the election process. All it says in the state statue is the retired member or
members shall be chosen in May of each year by a method to be determined by the board with
the memberlmembers to be chosen in alternating years. They are two year terms. So the method
has to be determined by the board.
Larry Perdue: The reason I brought that up is for the members that don't have continual contact
with board members. The board members get their list of all retirees and call prior to the
election.
Jerry Friend: I think that's what John should do. Call all you guys and say that.
Larry Perdue: If someone lives out of state and is voted in, we would not be able to serve we
would have to do the process over again.
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April 18,2012
Page 20 of 20
Sondra Smith: No, we wouldn't because we go to the next person. So, if you live out of state
and you get 10 votes someone underneath you had 8 votes, then I'd call you and ask are you
willing to serve and then it just drops down. 1 get enough spread of different people that we
could go through several people. The other thing that is different with your plan than the fire plan
the state laws says that if there are no active members on the pension fund, which there are not,
none of you work anymore, all five members shall be elected by the retired membership of the
pension fund and the surviving spouses of the deceased members currently receiving benefits. In
the fire pension plan, only the pensioners themselves get to vote. In your plan, the surviving
spouses get to vote. Now, if there's someone that is getting a pension benefit because they are a
divorcee, they do not get to vote because they are a divorcee and their spouse votes. Then the
board has to select a member of the board as secretary. Eldon has been elected to that position
currently but he gives me all the duties to do. I have no problem with that. I'm reading you the
state law as it was before any legislature changes. If there had been changes I always look at
those laws and make sure it's correct. My concern right now is because there are people that live
out of state; I want to get those ballots out so I can get them back in plenty of time before May
3 l't, If the board wants to change a process, I have no problem with that.
Frank Johnson: Would it be inappropriate to say that they are willing to.
Sondra Smith: I put in there that they are willing to continue to serve. I can put Tim Helder is
not willing to continue to serve.
Eldon Roberts: That pretty much sums it up with the three people that are up for election. I
realize what Larry is saying but I don't know how to go about the nomination process. If
someone is really interested, go see Sondra and get a copy of every retired person's address and
phone number and start calling them and let them know you are interested. That's the only way I
know that could maybe work. The letter should address if they do or they don't want to be
reelected. If Tim doesn't want to be reelected and you mention that in this cover letter, he may
still get a few votes, but he wouldn't get as many as if he was still interested in serving.
Mayor Jordan: If everybody is paying attention that would be the case.
Sondra Smith: We will add it to the ballot letter. The next meeting will be July 18'h.
Mayor Jordan: We need a motion to adjourn. All right, we are adjourned.
Informational:
2013 Meeting schedule
A copy was given to the board.
Meeting Adjourned at 4:35 PM
POLICE PENSION FUND a 8 8 8 8
August 2013
Mordh 8 Regular Mo
8
EMPO NAME Bemffl YTD Reg BmWit Suppl. YTD Suppl.
164 ALLEN,CHARLES $ 2,684.64 $ 20,677.12 $ 50.00 $ 400.00
206 BAYLES,BOBBI J $ 1,587,41 $ 12,699.28 11 50.00 It 400.00
216 BLACK,MILDRED $ 1,126.64 $ 9,005.12 $ 5D.00 $ 400.00
147 BRADLEY,GERALD $ 4,820.09 $ 38,660.72 $ 50.00 $ 400.00
139 BRADLEY,RANDALL $ 2.860.17 $ 22,881.36 $ 5D.00 $ 400.00
167 BROWN,JOHN $ 4,362.01 $ 34,898.08 $ 5D.00 $ 40D.00
157 CARROLL,RONALD L $ 2,106.04 $ 16,848.32 $ 50.00 $ 400.00
151 COLE.RUSTON III 3,065�74 $ 24.525.92 $ 50.00 $ 400.00
160 DUGGER.GARY $ 3,16174 $ 25.309.92 $ 60.00 $ 400.00
M FOSTER,BILLY D. $ 3,207.35 $ 25,658.80 $ 50.00 $ 400.00
W FRIEND,JERRY $ 1.970.42 $ 15,763.36 $ 5D.OD $ 400.00
161 HANNA,JANICE $ 1,368.59 $ 10,948.72 $ - $ -
M HANNA.MARK $ 1,368.69 $ 10,948.72 S 50.00 $ 400.00
169 HELDER,TIM $ 5.8W.12 $ 46,704.96 $ 50.00 $ 400.00
180 HOYT,RICK $ 7,4W.01 $ 69,680.08 $ SMOO 11 400.00
146 HUTCHENS,BERNICE $ 1,826.64 $ i4,W4.32 $ 60.00 $ 400.00
194 JOHNSON,FRANK $ 7,974.81 S 63,798.48 111 50.OD $ 400.00
2iS JOHNSON,JOYCE $ 2,455.50 $ i%64t.0D $ 50.00 $ 400.00
103 JOHNSON,WENDELL $ 783.15 $ 6,265.20 $ 50.00 $ 400.00
1 IS JONES,BOB $ 3.300.46 $ 26.403.60 $ 50.00 $ 400.00
211 JONES,MICHELE $ 1,182.26 $ 9,458.08
144 KILGORE,DONALD $ 2,046.48 It 16,371.04 $ 50.00 $ 400.00
218 MARTIN,CONNIE $ 3.692.85 $ 29,542.80 $ 50.OD $ 50.OD
128 MCCAWLEY,LARRY $ 1,694.79 $ 13,658.32 $ 50.00 $ 40D.00
128 MCWHORTER,KAREN cleceated 111012013 $ 1,012.10 $ - $ 5D.00
136 MITCHELL,MICHAEL $ 2,305.29 $ 18,442.32 $ 50.00 $ 400.00
141 MUELLER.ROSEMARY $ 2,063.93 $ 16,511.44 $ 50.00 $ 400.00
158 MUNSON.ANGELA $ 4,198.16 $ 33,585.2D $ 60.00 $ 400.00
112 MURPHY,JAKE $ 405.75 $ 3,246.00 $ 50.00 $ 400.00
137 PERDUE,LARRY $ 2,322.67 $ 18,581.36 $ 60.00 $ 400.00
164 PERSHALL,ROBIN $ 1,525.07 $ 12,2W.56 $ - $ -
132 PHILLIPS,HOMER GENE $ 1,754.44 $ 14,035.52 It 50.00 $ 400.00
199 PRESTON,NORMA J $ 1,601.37 $ 12.810.96 $ 50.00 $ 400.OD
135 RICKMAN,LOREN $ 2,231.07 $ 17,848.56 $ 50.OD $ 400.00
214 RIGGINS,BONNIE $ 1,659-37 $ 13,364.96 $ 50.00 $ 400.00
183 ROBERTS,ELDON $ 4263.24 $ 34,105.92 $ 50.OD $ 400.00
183 ROBERTS,ELDON Plus 26 add pay $ 587.09 $ 4,698.72 $ - $ -
212 ROBERTS.CAROLYN K $ 3,216.13 $ 25,729.04 $ -
212 ROBERTS,CAROLYN K Plus 25 add pay $ 442.89 $ 3,643.12 $ -
159 SCHUSTER,JOHN H. $ 3,iff.36 $ 24.938.88 $ 50.OD $ 400.00
168 STANLEY,MEL\RN $ 4.880.07 $ 39.040.56 $ 50.00 $ 400.0D
165 STOUT,BETTY $ 86&51 $ 6.932.08 $ 50.00 $ 400.OD
133 SURLES,JERRY $ 2,721.40 $ 21,771.20 $ 50.00 $ 400.00
142 TAYLOR,DENNIS $ 2,063.93 $ 16,511.44 $ 50.00 S 400.00
163 WATSON,RICHARD $ 6.947.05 S 55,576.40 $ 60.00 $ 400.00
163 WahmmI,Richard Plus 25 AdcN Pay $ 948.76 $ 7,59D.08 $ - $ -
149 WILLLAMS,JOYCE $ 2,SWAS $ 2D.317.28 $ 50.00 $ 400.00
195 WITT,BETTY J $ 1,766.83 $ 14,134.64 $ 50.00 $ 400.OD
213 WOOD,RUTHIE $ 1,680.93 $ 12,647.44 $ 50.00 $ 400.00
$ IZ7,863.35 $ 1,023,918.90 $2�060.00 $ 18,100.00
POLICE PENSION FUND 9 9 9 9 9
September 2013
Month 9 Reg"Mo
9
EMPO NAME Benefit YTD Reg Benefit suppi. YTD Suppi.
154 ALLEN,CHARLES $ 2,684.64 $ z3,26i.76 s 50.00 $ 450-00
206 BAYLES,BOBBI J $ 1,697.41 $ 14,286.69 $ 50-00 $ 450-00
216 BLACK MILDRED $ 1,125.64 $ 10,130.76 If 60.00 $ 450.00
147 BRADLEY,GERALD $ 4,820.09 $ 43,380.81 $ 50.00 $ 460.00
139 BRADLEY,RANDALL $ 2,860.17 $ 25,741.53 $ 50.OD $ 450.00
167 BROWN,JOHN If 4,362.01 $ 39,258.09 $ 50.OD $ 450.00
167 CARROLL,RONALD L $ 2,106.04 $ lexcas s 50.00 $ 460.00
151 COLE,RUSTON $ 3,066.74 $ 27.591.66 If 50.1DO, $ 450.00
160 DUGGERGARY $ 3,163.74 If 28,473.66 $ 60.OD ; 460.00
W FOSTER,BILLY D. $ 3.ZD7.35 $ 28.865.15 $ 50.OD $ 450.OD
148 FRIEND,JERRY $ 1,970.42 ; 17,733.78 $ 50-00 $ 450.00
161 HANNA,JANICE $ 1,368.59 $ 12,317.31 $ - $ -
145 HANNA,MARK $ 1,368.69 $ 12,317.31 $ 50.00 $ 450.00
169 HELDER TIM $ 5.838.12 If 62,543.08 $ 50.00 $ 450.00
180 HOYT,RICK $ 7,460.01 $ 67,140.09 $ 50.00 $ 45D.00
146 HUTCHENS,BERNICE $ l.M.54 If 16,429.86 $ 50.OD $ 450.DD
194 JOHNSON,FRANK $ 7,974.81 $ 71.773.29 $ 50-00 $ 450-00
215 JOHNSON,JOYCE $ 2,455.50 $ 22,099.50 $ 50.00 $ 450.00
103 JOHNSON,WENDELL 11 783.15 $ 7,0a.35 $ 50.00 $ 450.00
1 IS JONES,BOB $ 3.300.45 $ 29,704.05 $ 50.00 $ 450.00
211 JONES,MICHELE $ 1,182.26 $ 10,640.34
144 KILGORE,DONALD $ 2,D46.48 $ 18,418.32 $ 50.00 $ 460-00
218 MARTIN,CONNIE $ 3,692.85 $ 33,236.65 $ 60.00 $ 50.00
128 MCCAWLEY,LARRY $ 1,694.79 $ 15,253.11 $ 60.OD $ 450.00
126 MCWHORTER,KAREN deooased 1/IQW13 $ 1,012.10 $ - $ 50.OD
136 MITCHELL,MICHAEL If 2,305.29 $ 2D,747.61 $ 50.00 $ 450.00
141 MUELLER,ROSEMARY $ 2,063.93 $ 18,576.37 If 60.00 $ 450.00
158 MUNSOWANGELA $ 4,198.15 If 37,783.35 $ 50.00 $ 450.00
112 MURPHY.JAKE If 405.75 $ 3,651-75 $ 50-00 $ 45100
137 PERDUE,LARRY $ 2,32Z67 $ 2D,904 03 $ 50.00 $ 460.00
164 PERSHALL,ROBIN $ 1,525.07 $ 13,725A3 $ - $ -
132 PHILLIPS,HOMER GENE $ 1,754.44 $ 15,789.96 $ 50.W $ 450.00
199 PRESTON.NORMA J $ 1,601.37 $ 14,412.33 $ 50.00 $ 450.00
135 RICKMAN.LOREN $ 2,231.07 $ 20,079.63 $ 50.00 $ 450.00
214 RIGGINS,BONNIE $ 1,669.37 $ 16,024.33 $ 50.00 $ 460.00
183 ROBERTS,ELDON $ 4,25324 S 38,35916 $ 60-00 $ 450-00
183 ROBERTS,ELDON PIM 25 add pay $ 587.09 $ 5,283.81 $ - $ -
212 ROBERTS,CAROLYN K $ 3,216.13 $ 28,945.17 $ -
212 ROBERTS,CAROLYN K Pita$25 add pay $ 442.89 $ 3,9116.01 $ -
159 SCHUSTER.JOHN H, $ 3.117.36 $ 28,056.24 $ 50.OD $ 450.00
168 STANLEY,MEL%RN $ 4,880.07 $ 43,920.63 $ 60.00 $ 450.OD
165 STOUT,BETTY $ 866.51 $ 7,798.69 $ 50.410 $ 460.00
133 SURLES.JERRY $ 2,721.40 $ 24,492.60 $ 60.00 $ 45D.00
142 TAYLOR,DENNIS S 2,063.93 If 18.575.37 $ 60.0D $ 450.00
163 WATSON.RICHARD $ 6.947.05 s 62.523.46 $ 50.00 It 450.00
163 Watson,Rwtwd Pka 25AdcrI Pay $ 948.76 $ 8,538.84 If - $ -
149 WILLIAMS,JOYCE $ 2,539.66 $ 22,856.94 $ 60.00 S 450.00
195 WITT,BETTY J $ 1.766.83 $ 15,901.47 $ 50.00 $ 460.OD
213 WOOD,RUTHIE $ 1,580.93 $ 14,228.37 $ 60-00 $ 45D-Oa
S 127.SM.35 3 1.151,782.25 $2�050.00 $ 13,100.00
POLICE PENSION FUND 10 10 10 10 10
October 2013
Month 10 Regular Mo
10
EMPN NAME Benefit YTD Reg Benefit Suppl. Ym Suppl.
154 ALLEN,CHARLES $ 2.654.64 $ 25,13,16.40 $ 50.00 $ 500�00
2D6 BAYLES,BOBBI J $ 1,587.41 $ 15,BT4.10 $ 50.00 $ W0.00
216 BLACK,MILDRED It 1�1125.64 $ 11,256.40 $ 50.00 $ 5W,00
147 BRADLEY,GERALD $ 4,1320.09 $ 48,2DO.90 $ 50.00 $ 5M.DD
139 BRADLEY,RANDALL $ 2,860.17 $ 28,601.70 $ 50.00 S 5DO.00
167 BROWN,JOHN $ 4,362.01 $ 43,62D.10 $ 50.0D $ 500.00
157 CARROLL,RONALD L $ 2,106.04 It 21.060.40 $ 50.00 $ 500�00
161 COLE,RUSTON $ 3,065.74 $ 30,657.40 $ 50.00 $ 600.00
160 DUGGEFLGARY $ 3,163.74 $ 31,637.40 $ 50.00 $ 5N.00
140 FOSTER,BILLY D. S 3,207.35 $ 32,073.50 $ 50.00 $ 600.0D
148 FRIEND,JERRY $ 1,970.42 $ 19.704.20 $ 50.01) S 5DO.00
161 HANNA,JANICE $ 1,368.59 $ 13,686.90 $ - $ -
145 HANNA,MARK $ 1,368.59 $ 13,685.90 $ 50.00 $ 5(10.00
169 HELDER,TIM $ 5.838.12 $ 58,381.20 $ SM00 $ Sm.00
180 HOYT,RICK $ 7.460.01 $ 74,600.10 111 50.00 $ 600.01)
146 HUTCHENS,BERNICE $ 1,825.54 111 18,255.40 S 50.00 S 5W.OD
194 JOHNSON,FRANK $ 7,974.81 111 79,748.10 $ SILOD $ 5W.00
215 JOHNSON,JOYCE $ 2,465.51), It 24,555.01) $ 60.01) $ 5w.00
103 JOHNSON,WENDELL $ 783.15 $ 7,831.50 $ 50.00 $ 5110.00
118 JONES,BOB $ 3,300.45 $ 33,004.50 $ 50.00 $ 5W.00
211 JONES.MICHELE $ 1,182.26 It 11,822.60
144 KILGORE.DONALD $ 2,046.48 $ 20,464.80 $ 50.00 $ 50(100
218 MARTIN,CONNIE $ 3,692.85 $ 36,928.50 $ 50.00 $ 50.00
128 MCCAWLEY,LARRY $ 1.694.79 $ 16,947.90 $ 50.00 $ 5DO.00
126 MCWHORTER.KAREN deosased 1/10/2013 $ 1,012.10 $ - $ 60.00
136 MITCHELL,MICHAEL $ 2,306.29 $ 23,052.90 $ 50.00 $ 600.01)
141 MUELLER,ROSEMARY $ 2,06313 $ 20.639.30 $ 50.00 $ SM.00
158 MUNSONANGELA $ 4,193.15 $ 41,981.50 $ 50.00 $ 500.00
112 MURPHY,JAKE $ 405.75 $ 4,057.50 $ 50.00 $ SM.00
137 PERDUE,LARRY $ 2.32267 $ 23,226.70 $ -%0D $ 5W.00
164 PERSHALL.ROBIN It 1,525.07 $ 15.250.70 $ - $ -
132 PHILLIPS,HOMER GENE $ 1.764.44 $ 17.644.40 $ 50.00 $ 600.0D
199 PRESTON,NORMA J It 1,601.37 $ 16,013-70 $ 50.00 $ 5W.0D
135 RICKMAN,LOREN $ 2,231.07 $ 22,310.70 It 50.00 $ SD0.00
214 RIGGINS,BONNIE $ 1,669.37 $ 16,693.70 $ 50.00 $ 5XL00
183 ROBERTS,ELDON $ 4,263.24 $ 42,632-40 $ 5000 $ 5110.00
183 ROBERTS,ELDON Plus 25 add pay $ 587.09 $ 5,870.90 $ $ -
212 ROBERTS,CAROLYN K $ 3,216.13 $ 32,161.30 $ -
212 ROBERTS,CAROLYN K Plus 25 add pay $ 442.89 $ 4,428.90 $ -
169 SCHUSTER.JOHN H. $ 3,117.36 $ 31,173.60 $ 50.00 $ 5DD.00
168 STANLEY,MELIAN -$ 4,880.07 $ 48,88=70 $ 50.00 $ 5W.00
155 STOUr,BETTY $ 550.51 $ 8,655.10 $ 50.00 $ wo.00
133 SURLES,JERRY $ 2.721.40 $ 27,214.00 $ 50.00 $ 500.00
142 TAYLOR,DENNIS $ 2,063.93 111 2D,639,30 $ 60.00 $ 500.00
163 WATSON,RICHARD $ 6,947.05 111 69,470.50 It 50.00 $ 500.00
163 Watson,Rldmud Plus 25 Adcrl Pay $ 948.76 $ 9,487.6D $ - $ -
149 WILLIAMS,JOYCE $ 2,639.66 $ 25.396.60 $ 50.OD $ 5M.00
195 WITT,BETTY i $ 1,766.83 S 17,6511.31) $ 50.0) $ 500.00
213 WOOD,RUTHIE $ 1,6110.93 $ 15,809.30 $ 50.1DO $ 500.00
$ 127,863.35 $ 1,279,645.60 $2,050.00 $ A100.00
13� Sondra Smith- Fwd: 2013 Evaluating Local Plan Investments Memo eite 1
'0"
From: Patricia Leach
To: Becker, Paul; Hertweck, Marsha; Smith,Sondra
Date: 6/4/2013 1:47 PM
Subject: Fwd:2013 Evaluating Local Plan Investments Memo
Attachments: Evaluating Investments 2013.docx
>>> TracyWarfe <twarfePlopfi-prb.com> 6/4/2013 11:39 AM >>>
Good morning-
Attached you will find the 2013 Evaluating Local Plan Investments Memo.
Please provide the information to the Local Fire and Police Pension Fund Board of Trustees.
If you should have any questions please call our office toH free at 866-859-1745.
Sincerely,
PRB Staff
PRB
ARKANSAS FIRE & POLICE PENSION REVIEW BOARD 620 W.3rd,Suite 200
Little Rock,Arkansas 72201-2223
Telephone: (501)682-1745
To: Local Fire and Police Pension Fund Boards' of Trustees Toll-Free: (866)859-1745
Fax: (501)682-1751
From: Arkansas Fire and Police Pension Review Board (PRB) email: info@lopfi-prb.com
website:www.lopfi-prb.com
Re: Evaluating Local Plan Investments
Date: June 4, 2013
The following information is intended to assist Local Plan trustees with a regular review
of the Local Plan's investment portfolio,which is one of the essential roles as a trustee.
Trustees must ensure the holdings and fees comply with the local board's investment
policy and state law. The board should obtain advice from their investment
professional(s) and legal counsel to verify compliance with ACA 24-11-805 (fire funds)
and 24-11-410 (police funds). Local Plans that utilize an investment advisor should also
review ACA 24-10-402 for additional restrictions on allowable investments. The PRB
understands these code sections to say that permissible asset classes for Local Plans with
assets over $100,000 and under $5,000,000 are Cash(including savings accounts and
CDs), state and federal government bonds, and no load mutual funds. Annuity products
are not considered an allowable investment.
At a minimum, items for review should include:
0 Liquidi!y Is an asset able to be sold with relative ease? Will the Local Plan incur
surrender charges or other costs to exit a holding? If so, were such charges fully
disclosed to the trustees when the asset(s) were purchased?
0 Performance-Does each investment produce the expected return and is
performance consistent with the asset's benchmark(index)?
e Index-What information was used to show that a specific index is the correct one
to use?
* Allocation-Is each style (equities, bonds, domestic, international, etc.) operating
within the board's investment policy or is rebalancing the portfolio necessary?
0 Fees-Clear disclosure of all investment related fees must be on all monthly,
quarterly, and annual statements prepared for the board. Trustees should be able
to easily determine the total amount the Local Plan spends on all fees.
0 Prohibited investments-Do all assets conform to the board's investment policy?
Were assets purchased in violation of the policy or, in the case of a bond holding,
was the bond downgraded? Are there any assets not allowed under ACA 24-11-
805, 24-11-410 or 24-10-402?
This memo is neither a complete checklist nor a legal opinion. It should be used as a
guide to assist local boards with a regular review of their investment program. Please
contact Denise Reed with any questions.
ZU ZUS PET LS GIFT
1206 H COLLEBE AVE
FAYETTEVILLE AR 72701
479-443-5599
Terminal 1! 66668962
JUR 07, 13 lW45 AN
VISA . . 1449
SALE REF#s@05
BATC1 1; 622 AUTH #: 001816
AMOUNT $56.81
APPROUED
CUSTOMER COPY