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HomeMy WebLinkAbout2013-07-18 - Agendas - Final Fayefteville Policeman's Pension and Relief Fund Meeting Date —7- I Adjourn Time 56 .0a/x Attendees: PdM Robp/A . aat� grouin. '64dol� MLIAAA DU&JIUI 4AA &O441a 44�.AC�, 4W444�" v v Subject: Roil Subject: Motion To: Motion To: Motion By: Motion By: Seconded: Seconded: Jerry Friend VII, Jerry Friend if John Brown John Brown Frank Johnson A,&iM) Frank Johnson Mayor Jordan Mayor Jordan Eldon Roberts Eldon Roberts S dra Smith Wool on Sondra Smith Melvin Stanley IMelvin Stanley Subject: Subject: Aj�Aioa L Motion To: Motion To: 'I ADLrDJe, (AANQIfQJ9- Motion By: .I A Motion By: V LAt %7/LU4�g Qo Seconded: Seconded: C64sen Jerry Friend Jerry Friend John Brown John Brown Frank Johnson Frank Johnson woe Mayor Jordan Mayor Jordan Eldon Roberts Eldon Roberts Sondra Smith Sondra Smith 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: Motion To: Motion To: 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. Policemen's Pension and Relief Fund 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 Policemen's Pension wd Relief Fund Board of Trustees Meeting Minutes April 18,2012 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. Policemen's Pension and Relief Fund Boud of Trustees Meeting Minutes April 18,2012 Page 12 of 20 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. Policemen's Pension and Relief Fund Board of Trustees Meeting Minutes April 18,2012 Page 13 of 20 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. Policemen's Pension and Relief Fund Board of Trustees Meeting Minutes April 18,2012 Page 14 of 20 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 Polionten's Pension end Relief Fund Board of Trustees Meeting Minutes April 18,2012 Page 15 of 20 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. Policemen's Pension and Relief Fund Board of Trustees Meethg Minutes April 18,2012 Page 16 of 20 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? Policemen's Pension and Relief Fund Board of Trustees Meeting Minutes April 18,2012 Page 17 of 20 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. Policemen's Pension and Relief Fund Board of Trustees Meeting Minutes April 18,2012 Page 18 of 20 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 Policemen's Pension and Relief Fund 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. Policemen's Pension and Relief Fund Board of Trustees Meethg Minutes 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