HomeMy WebLinkAbout2015-07-16 - Agendas - FinalFayetteville Policeman's Pension and Relief Fund
Meeting Date Aua
Adjourn Time S "t p , M ,
Subject:
UL
Motion To:
9
Motion By:
Seconded:
John Brown
John Brown
}} t
R t)ti} f i)t
Ruston Cole
J
Frank Johnson
Mayor Jordan
Mayor Jordan
Eldon Roberts
Eldon Roberts
Sondra Smith
Sondra Smith
Sondra Smith
Melvin Stanley
I/
Subject:
{i
Motion To:
Motion By:
9
Seconded:
Seconded:
John Brown
Ruston Cole
Ruston Cole
Frank Johnson
Frank Johnson
Mayor Jordan
Ma or Jordan
Eldon Roberts
Eldon Roberts
Sondra Smith
Sondra Smith
Sondra Smith
Melvin Stanley
Melvin Stanley{/
Subject:
Motion To:
�¢p
Motion By:
Seconded:
Seconded:
John Brown
Ruston Cole
Ruston Cole
Frank Johnson
Frank Johnson
Ma or Jordan
Ma or Jordan
Eldon Roberts
Eldon Roberts
Sondra Smith
Sondra Smith
OLbALk
Melvin Stanley{/
/
Subject:
Motion To:
Motion By:
Seconded:
John Brown
Ruston Cole
Frank Johnson
Ma or Jordan
Eldon Roberts
Sondra Smith
Melvin Stanley
Lioneld Jordan Chairman
Sondra E. Smith Treasurer
Eldon Roberts Secretary
Retired Position I
Policemen's Pension Meeting
July 16, 2015
Page 1 of 78
Ruston Cole Retired Position 2
John Brown Retired Position 3
Melvin Stanley Retired Position 4
Frank Johnson Retired Position 5
Policemen's Pension and Relief Fund
Board of Trustees Meeting Agenda
July 16, 2015
A meeting of the Fayetteville Policemen's Pension and Relief Fund Board of Trustees will be held
on July 16, 2015 at 3:00 p.m. in Room 326 of the City Administration Building located at 113 West
Mountain Street, Fayetteville, Arkansas.
Roll Call
Garrison Financial:
• 2nd Quarter reports
Approval of the Minutes:
Approval of the April 16, 2015 meeting minutes
Pension List Changes:
• None
Approval of the Pension List:
• Approval of the August, September and October, 2015 pension lists
Unfinished Business:
• None
New Business:
• Revenue & Expense Reports: 1st Quarter— March 31, 2015 report and 2nd Quarter— June
30, 2015
• PRB — 2014 Annual Actuarial Valuation
• 2015 Evaluating Local Plan Investments Memo
• Election results — Eldon Roberts, Melvin Stanley, and John Brown
Informational:
• Longer View July 10, 2015
0 2015 Meeting calendar — October 15, 2015 next meeting
Policemen's Pension Meeting
July 16, 2015
Page 2 of 78
Meeting
GARRISON ' 6,Zo,5
Page 3 of 78
JUL 13 2015
F I N A N C I A L CIiY OF FA ffT$VILLE
crTr agar E
July 9, 2015
Ms. Sondra Smith
City of Fayetteville
113 West Mountain Street
Fayetteville, Arkansas 72701
Dear Ms. Smith,
Enclosed are the quarterly reports for both Firemen's Pension & Relief Fund and Police
Pension and Relief Fund for the quarter ended June 30, 2015.
Slight gains in the equity markets in April and May gave way to a June retreat leaving year
to date gains about where they were at the end of the 15t quarter. Turmoil in the Eurozone
led to increased volatility and a decline in the U.S. equity markets of around -2% the last
month of the quarter leaving 2nd quarter gains for the S&P 500 +.28% and +1.23% for the
first six months. Developed global markets were relatively flat as well for the quarter up
only +.62%, for a +5.52% gain year to date coming off of dismal performance the last few
years.
Sector performance weakened with only three sectors in the black year to date. Health
Care (+8.74%), Consumer Discretionary (+6%) and Telecom (+.61%) are positive for the
year with the other seven sectors now in the red. The worst performing sectors were
Utilities (-12.32%) and Energy (-6.05%).
Although economic conditions continue to be mixed, interest rates (as measured by the 10
year Treasury bond) rose dramatically during the second quarter, from 1.92% to 2.35°/x.
Rates peaked near 2.50% in late May and again in late June. The low in rates occurred at
the beginning of the quarter at 1.86%.
Year-to-date the rise was not as pronounced, with rates up from 2.18% to the 2.35%
mentioned above. Volatility continues. For the year ended June rates are actually down
slightly, peaking at 2.64% in early July 2014, falling to a low of 1.64% at the end of January
2015, and then beginning their rise into mid -2015.
Although the continuing crisis in Greece, and more recently in Puerto Rico, have caused
their fair share of a flight to quality into US Treasuries, the Fed still seems to be poised to
raise rates slightly at least once during 2015. For the year-to-date period through June the
market was up less than 1 % at +,82% as measured by the Barclay's Intermediate
Government/Credit Index.
Garrivon Financia!
605 W. Dickson Street, Suite 201 • Fayetteville, Arkansas 72701
479-587-1045 • 888-442-7637. 479-587-1257 Facsimile • www.GarrisonFinancial.com
Policemen's Pension Meeting
July 16, 2015
Page 4 of 78
Economic data on the home front improved moderately in the quarter. The jobless rate
fell to a seven year low of 5.3% mainly due to folks dropping out of the workforce.
Consumers are finally beginning to open up their wallets after a year of declining energy
prices. Consumer purchases rose +.9% in May, the biggest gain since August 2009.
University of Michigan's index of sentiment increased to 96.1 in June registering the
most optimistic first half for households since 2004. Housing starts retreated -11 % in
May which was expected given the surge in April, but despite the pullback in May,
housing continues to make progress as permits for future projects climbed to the
highest level in almost eight years. Consensus for GDP growth for the year remain
modest, in the 2% camp in spite of the contraction in the 1st quarter of -.2%.
As always, the positives in the economy can certainly be counter balanced with a
number of clouds on the horizon. We continue to expect muted returns in the mid-term
from stocks and bonds given the expectation of rising rates and subdued global
economic growth, but remain optimistic the forces of capitalism will prevail and the
future of this great nation remains bright.
As we just celebrated our country's independence, we would like to remind everyone to
reflect on the freedoms we enjoy and send out a heartfelt thank you to all the military
and public servants past and present. We hope you had a great 4th of July and God
Bless America!
"My God! How little do my countrymen know what precious blessings they are in
possession of, and which no other people on earth enjoy!" — Thomas Jefferson
Cordially,
e.�lli
Kerry Bradley, CFA, MBA
Equity Portfolio Manager
Policemen's Pension Meeting
July 16, 2015
Page 5 of 78
a akIsor�
F I N A N C I A L
City of Fayetteville Police Pension and Relief Fund
Charles Schwab #2448-5630
Quarter Ending June 30, 2015
Policemen's Pension Meeting
July 16, 2015
Page 6 of 78
PORTFOLIO SUMMARY
City of Fayetteville Police Pension and Relief Fund
Charles Schwab #2448-5630
June 30, 2015
5.3%
■ Cash & Equivalents 346,736.60
■ Account Fixed Income 2,289,399.37
■ Account Equities 3,883,121.87
Policemen's Pension Meeting
July 16, 2015
Page 7 of 78
Garrison Financial
PORTFOLIO APPRAISAL
City of Fayetteville Police Pension and Relief Fund
Charles Schwab #2448-5630
June 30, 2015
Adj Unit
Total Adjusted
Market
Pct.
Unit
Annual
Quantity
Security
Cost
Cost
Price
Value
Assets
Income
Income
Yield
CASH AND EQUIVALENTS
Schwab Advisor Cash Res -
346,736.60
346,736.60
5.3
0.010
34.67
0.0
Premier
346,736.60
346,736.60
5.3
34,67
0.0
TREASURY NOTE
700,000
US Treasury Note
101.44
710,058.13
109.17
764,203.30
11.7
4.000
28,000.00
1.0
4.000% Due 08.15-18
Accrued Interest
-,
10,441.99
0.2
710,058.13
774,645.29
11.9
28,000.00
1.0
AGENCYBONDS
200,000
Federal Farm Credit
100.00
199,996.75
102.88
205,758.40
3.2
6.125
12,250.00
0.3
Bank
6.125% Due 12-29-15
Accrued Interest
_ 34.03
0.0
199,996.75
205,792.43
3.2
12,250.00
0.3
CORPORATE BONDS
125,000
Verizon
99.94
124,930.59
99.86
124,822.87
1.9
1.350
1,687.50
1.4
Communications
1.350% Due 06-09-17
125,000
Lab Corp. of America
101.01
126,263.61
100.84
126,048.37
1.9
2.500
3,125.00
2.2
l
2.500% Due 11-01-18
125,000
Kroger COmpuny
100.20
125,246.63
100.37
125,468.00
1.9
2.300
2,875.00
2.2
2.300% Due 01-15-19
125,000
Honeywell International
111.20
139,004.04
111.06
138,821.37
2.1
5.000
6,250.00
1.8
5,000% Due 02-15-19
125,000
Union Pacific Corp.
101.51
126,892.17
101.31
126,642.50
1.9
2.250
2,812.50
1.9
2.250% Due 02-15-19
125,000
1 B Hunt Transportation
101.70
127,120.09
100.91
126,139.00
l.9
2.400
3,000.00
2,2
Svcs.
2.400% Due 03-15-19
125,000
Walt Disney Co.
99.90
124,877.47
100.01
125,014.50
1.9
1.850
2,312.50
1.9
1.850% Due 05.30-19
125,000
Berkshire Hathaway
105.70
132,123.13
103.00
128,755.75
2.0
2.900
3,625.00
2.3
Financial
2.900% Due 10-15-20
125,000
AT&T, Inc.
100.46
125,576.31
97.61
122,013.37
1.9
3.000
3,750.00
3.4
3.000% Due 02.13-22
Accrued Interest
8,555.90
0.1
1,152,034.04
1,152,281.65
17.7
29,437.50
2.1
CONVERTIBLE PREFERRED
300
Bunge4.875%Conv.
108.63
32,588.95
108.99
32,696.10
0.5
4.875
1,462.50
4.5
Pfd.
32,588.95
32,696.10
0.5
1,462.50
45
COMMONSTOCK
300
3MCorp.
164.93
49,479.55
154.30
46,290.00
0.7
4.100
1,230.00
2.7
2,000
AT&T, Inc.
28.24
56,475.88
35.52
71,040.00
1.1
1.880
3,760.00
5.3
905
AbbVie, Inc.
66.58
60,253.90
67.19
60,806.95
0.9
2,040
1,846.20
3.0
1,965
Abbott Laboratories
40.06
78,727.14
49.08
96,442.20
l.5
0.960
1,886.40
2.0
550
Accenture Plc.
90.81
49,943.51
96.78
53,229.00
0.8
2.040
1,122.00
2.1
440
Airgas, Inc.
112.76
49,614.11
105.78
46,543.20
0.7
2.400
1,056.00
23
120
Alliance Data Systems
283.98
34,077.36
291.94
35,032.80
0.5
0.000
0.00
0.0
Policemen's Pension Meeting
July 16, 2015
Page 8 of 78
Garrison Financial
PORTFOLIO APPRAISAL
City of Fayetteville Police Pension and Relief Fund
Charles Schwab #2448-5630
June 30, 1015
Adj Unit
Total Adjusted
Market
Pct.
Unit
Annual
Quantity
Security
Cost
Cost
Price
Value
Assets
Income
Income
Yield
625
Amgen, Inc.
114.33
71,456.06
153.52
95,950.00
1.5
3.160
1,975.00
2.1
825
Anadarko Petroleum
85.82
70,805.10
78.06
64,399.50
1.0
1.080
891.00
1.4
500
Ansys, Inc.
75.67
37,836.95
91.24
45,620.00
0.7
0.000
0.00
0.0
1,680
Apple Computer
72,69
122,121.54
125.42
210,714.00
3.2
2,080
3,494.40
1.7
785
AptarGroup, Inc.
63.47
49,825.05
63.77
50,059.45
0.8
1.120
879.20
1.8
125
AutoZone, Inc.
516.09
64,511.70
666.90
83,362.50
1.3
0.000
0.00
0.0
1,350
BCE, Inc. Cl F
24.40
32,934.20
42.50
57,375.00
0.9
2.650
3,577.50
6.2
350
Becton, Dickinson &
113.97
39,889.45
141.65
49,577.50
0.8
2,400
840.00
1.7
Company
1,500
Broadridge Financial
41.33
62,000.35
50.01
75,015.00
1.2
1.080
1,620.00
2,2
Solutions
675
Brown-Forman Corp.
88.81
59,946.93
100.18
67,621,50
1.0
1.260
850.50
1.3
665
CH Robinson
74.84
49,768.25
62.39
41,489,35
0.6
1.520
1,010.80
2.4
Worldwide
3,000
CSX Corporation
28.88
86,627.40
32.65
97,950.00
1.5
0.720
2,160.00
2.2
1,300
Cal -Maine Foods, Inc.
36.68
47,687.88
52.20
67,860.00
1.0
1.400
1,820.00
2.7
585
Check Point Software
85.44
49,979.59
79.55
46,536.75
0.7
0.000
0.00
0.0
400
Chevron Corporation
85.21
34,084.61
96.47
38,588.00
0.6
4.280
1,712.00
4.4
2,800
Cisco Systems, Inc.
19.70
55,168.69
27.46
76,888.00
1.2
0.840
2,352.00
3.1
1,400
Coca-Cola Company
30.98
43,374.60
39.23
54,922.00
0.8
1.320
1,848.00
3.4
680
Compass Minerals Ind
87.89
59,765.06
82.14
55,855.20
0.9
2.640
1,795.20
3.2
1,150
ConocoPhillips
55.58
63,918.42
61.41
70,621.50
1.1
2.920
3,358.00
4.8
565
Deere & Co.
87.76
49,585.72
97.05
54,833.25
0.8
2.400
1,356,00
2.5
500
Disney, Walt Holdings
110.91
55,454.90
114.14
57,070.00
0.9
1.320
660.00
1.2
2,000
EMC Corp.
25.64
51,282,21
26.39
52,780.00
0.8
0.460
920,00
1.7
830
Eastman Chemical
86.14
71,495.64
81.82
67,910.60
1.0
1.600
1,328.00
2.0
1,310
Emerson Electric
68.00
89,080.00
55.43
72,613.30
1.1
1.880
2,462.80
3.4
3,825
General Electric Co.
19.53
74,709.32
26.57
101,630.25
1.6
0.920
3,519.00
3.5
1,200
GlaxoSmithKline Plc.
50.10
60,124.15
41.65
49,980.00
0.8
2.290
2,748.00
5 5
2,250
Intel Corp,
20.53
46,202.71
30.41
68,433.75
1.0
0.960
2,160.00
3.2
800
Johnson & Johnson
64.70
51,756.60
97.46
77,968.00
1.2
3.000
2,400.00
3.1
465
Kimberly Clark Corp.
107.07
49,786.64
105.97
49,276.05
0.8
3.520
1,636.80
3.3
395
Laboratory Corp.
125.86
49,715.75
121.22
47,881.90
0.7
0.000
0.00
0.0
1,000
Lincoln Electric
6721
67,209.18
60.89
60,890.00
0.9
1.160
1,160.00
1.9
640
Medtronic Plc.
77.60
49,662.77
74.10
47,424.00
0.7
1.520
972.80
2.1
1,100
Merck &Co., Inc.
51.39
56,525.78
56,93
62,623.00
1.0
1.800
1,980.00
3.2
800
National Oilwell Varco
85.35
68,280.15
48.28
38,624.00
0.6
1.840
1,472.00
3.8
1,000
Patterson Companies
51.07
51,074.75
48.65
48,650.00
0.7
0.880
880,00
1.8
530
Pepsico, Inc.
93.75
49,690.09
93.34
49,470.20
0,8
2.810
1,489.30
3.0
830
Phillips 66
72.18
59,911.86
80.56
66,864.80
1.0
2.240
1,859.20
2.8
1,000
Procter&Gamble Co.
59.42
59,417.61
78.24
78,240.00
1.2
2.650
2,650.00
3.4
1,000
Qualcomm, Inc.
63.62
63,616.39
62.63
62,630.00
1.0
1.920
1,920.00
3.1
2,790
Raven Industries, Inc.
28.37
79,148.48
20.33
56,720.70
0.9
0.520
1,450.80
2.6
700
Sanofi ADR
55.71
38,995.10
49.53
34,671.00
0.5
1.320
924.00
27
770
Sensienl Technologies
64.55
49,704.67
68.34
52,621.80
0.8
1.000
770.00
1.5
900
St. Jude Medical, Inc.
66.56
59,900.53
73.07
65,763.00
1.0
1.160
1,044.00
1.6
1,055
Syngenla AG ADR
71.44
75,370.40
81.61
86,098.55
1.3
1.970
2,078.35
2.4
850
Texas Instruments
58.53
49,754.69
51.51
43,783.50
0.7
1.360
1,156.00
2.6
465
Valmont Industries
128.60
59,797.26
118.87
55,274.55
0.8
1.500
697.50
1.3
450
Wabtec Corp.
93.64
42,137.64
94.24
42,408.00
0.7
0.320
144.00
0.3
1,150
Wal-Mart Stores, Inc.
62.11
71,423.42
70.93
81,569.50
1.3
1.960
2,254.00
2.8
2,000
Waste Management
42.21
84,414.32
46.35
92,700.00
1.4
1.540
3,080.00
3.3
3,265,502.02
3,587,193.10
55.0
88,256.75
25
MUTUAL FUNDS
2,248.991
Dodge & Cox Intl Stk
45.41
102,132.74
43.75
98,393.36
1.5
0.970
2,181.52
2.2
Policemen's Pension Meeting
July 16, 2015
Page 9 of 78
Garrison Financial
PORTFOLIO APPRAISAL
City of Fayetteville Police Pension and Relief Fund
Charles Schwab #2448-5630
June 30, 2015
Adj Unit Total Adjusted Market Pet Unit Annual
Quantity Security Coat Cost Price Value Assets Income Income Yield
2,587.463 Oppenheimer 39.33 101,776.46 35.31 9063.32 1.4 0.100 258.75 0.3
Developing Mkts A
203,909.20 189,756.67 2.9 2,440.27 1.3
UNIT TRUSTS
2,340 FT Energy Income & 34.20 80,032.95 31.40 73,476.00 1.1 2.200 5,148.00 7.0
Growth
4,000 iShares S&P US Pfd Sdr 38.34 153,340.30 39.17 _ 156,680.00 2.4 2.400 _ 91600.00 6.1
233,373.25 230,156.00 3.5 14,748.00 6,4
TOTAL PORTFOLIO 6,144,198.95 6,519,257.84 100.0 176,629.69 2.2
You should carefully compare this statement to the statement you receive from your custodian and notify us immediately of any discrepancies.
3
Policemen's Pension Meeting
July 16, 2015
Page 10 of 78
Garrison Financial
PURCHASE AND SALE
City of Fayetteville Police Pension and Relief Fund
Charles Schwab #2448-5630
From 01-01-15 To 06-30-15
Trade Settle Unit
Date Date Quantity Security Price Amount
PURCHASES
03-19-15
03-24-15
300
3M Corp.
164.93
49,479.55
03-24-15
03-27-15
125,000
AT&T, Inc.
100.48
125,597.62
3.000% Due 02-13-22
03-19-15
03-24-15
550
Accenture Plc.
90.81
49,943.51
03-19-15
03-24-15
200
Airgas,lnc.
112.76
22,551.87
03-19-15
03-24-15
100
Airgas, Inc.
112.76
11,275.93
03-19-15
03-24-15
140
Airgas, Inc.
112.76
15,786.31
03-19-15
03-24-15
785
AptarGroup,Inc.
63.47
49,825.05
03-24-15
03-27-15
125,000
Berkshire Hathaway Financial
105.98
132,470.38
2.900% Due 10-15-20
03-19-15
03-24-15
200
CH Robinson Worldwide
74.85
14,970.69
03-19-15
03-24-15
100
CH Robinson Worldwide
74.83
7,483.35
03-19-15
03-24-15
365
CH Robinson Worldwide
74.83
27,314.21
03-10-15
03-13-15
1,300
Cal -Maine Foods, Inc.
36.68
47,687.88
03-19-15
03-24-15
585
Check Point Software
85.44
49,979.59
03-19-15
03-24-15
565
Deere & Co.
87.76
49,585.72
06.04-15
06-09-15
500
Disney, Walt Holdings
110.91
55,454.90
03-19-15
03-24-15
100
FT Energy Income & Growth
34.18
3,418.38
03-19-15
03-24-15
100
FT Energy Income & Growth
34.18
3,418.38
03-19-15
03-24-15
100
FT Energy Income & Growth
34.20
3,420.38
03-19-15
03-24-15
140
FT Energy Income & Growth
34.20
4,788.54
03-19-15
03-24-15
60
FT Energy Income & Growth
34.20
2,052.23
03-19-15
03-24-15
20
FT Energy Income & Growth
34.20
684.08
03-19-15
03-24-15
100
FT Energy Income & Growth
34.20
3,420.38
03-19-15
03-24-15
900
FT Energy Income & Growth
34.20
30,783.44
03-19-15
03-24-15
100
FT Energy Income & Growth
34.20
3,420.38
03-19-15
03-24-15
300
FT Energy Income & Growth
34.20
10,261.15
03-19-15
03-24-15
300
FT Energy Income & Growth
34.20
10,261.15
03-19-15
03-24-15
100
FT Energy Income & Growth
34.20
3,420.38
03-19-15
03-24-15
20
FT Energy Income & Growth
34.20
684.08
05-08-15
05-13-15
125,000
J B Hunt Transportation Svcs.
101.76
127,201.62
2.400% Due 03-15-19
03-19-15
03-24-15
100
Kimberly Clark Corp.
107.07
10,706.72
03-19-15
03-24-15
100
Kimberly Clark Corp.
107.07
10,706.82
03-19-15
03-24-15
65
Kimberly Clark Corp.
107.07
6,959.44
03-19-15
03-24-15
100
Kimberly Clark Corp.
107.07
10,706.82
03-19-15
03-24.15
100
Kimberly Clark Corp.
107.07
10,706.84
03-19-15
03-24-15
395
Laboratory Corp.
125.86
49,715.75
03-19-15
03-24-15
640
Medtronic Plc.
77.60
49,662.77
01-28-15
02-02-15
1,000
Patterson Companies
51.07
51,074.75
03-19-15
03-24-15
530
Pepsico,Inc.
93.75
49,690.09
03-19-15
03-24-15
770
Sensient Technologies
64.55
49,704.67
Policemen's Pension Meeting
July 16, 2015
Page 11 of 78
Garrison Financial
PURCHASE AND SALE
City of Fayetteville Police Pension and Relief Fund
Charles Schwab #2448-5630
From 01-01-15 To 06-30-15
Trade
Settle
Unit
16.34
Date
Date Quantity Security
Price
Amount
03-19-15
03-24-15 850 Texas Instruments
58.53
49,754.69
03-12-15
03-17-15 450 Wabtec Corp.
93.64
42,137.64
1,308,168.13
SALES
03-19-15
03-24-15
2,000 Alerian MLP
16.34
32,676.02
03-19-15
03-24-15
3,000 Alerian MLP
16.34
49,014.03
05-07-15
05-12-15
200 Cisco Systems, Inc.
28.81
5,762.90
05-07-15
05-12-15
1,300 Cisco Systems, Inc.
28.81
37,458.85
03-19-15
03-24-15
100 Ensco Plc.
20.62
2,061.55
03-19-15
03-24-15
250 Ensco Plc.
20.62
5,153.88
03-19-15
03-24-15
300 Ensco Plc.
20.62
6,184.66
03-19-15
03-24-15
300 Ensco Plc.
20.62
6,184.66
03-19-15
03-24-15
800 Ensco Plc.
20.61
16,491.60
03-19-15
03-24-15
100 Freeport-McMoRan Copper & Gold,
17.20
1,720.02
Inc.
03-19-15
03-24-15
200 Freeport-McMoRan Copper & Gold,
17.20
3,440.04
Inc.
03-19-15
03-24-15
100 Freeport-McMoRan Copper & Gold,
17.20
1,720.02
Inc.
03-19-15
03-24-15
100 Freeport-McMoRan Copper & Gold,
17.20
1,720.02
Inc.
03-19-15
03-24-15
100 Freeport-McMoRan Copper & Gold,
17.20
1,720.02
Inc.
03-19-15
03-24-15
100 Freeport-McMoRan Copper & Gold,
17.20
1,720.02
Inc.
03-19-15
03-24.15
100 Freeport-McMoRan Copper & Gold,
17.20
1,720.02
Inc.
03-19-15
03-24-15
100 Freeport-McMoRan Copper & Gold,
17.20
1,720.02
Inc.
03-19-15
03-24-15
1,100 Freeport-McMoRan Copper & Gold,
17.20
18,915.85
Inc.
05-07-15
05-12-15
250 Intel Corp.
32.32
8,080.37
05-07-15
05-12-15
750 Intel Corp.
32.32
24,241.09
05-07-15
05-12-15
450 Johnson & Johnson
99.86
44,938.97
03-19-15
03-24-15
5,650 Keycorp
14.41
81,406.62
05-08-15
05-13-15
635 McDonald's Corp.
98.51
62,554.99
04-08-15
04-13-15
150 Microsoft Corp.
41.35
6,201.93
04-08-15
04-13-15
2,675 Microsoft Corp.
41.35
110,601.00
03-19-15
03-24-15
1,750 Noble Corp.
13.53
23,685.79
04-08-15
04-13-15
50 Pfizer, Inc.
34.66
1,732.85
04-08-15
04-13-15
3,600 Pfizer, Inc.
34.66
124,765.24
03-19-15
03-24-15
2,000 Sector SPDR Fncl Select Shs
24.41
48,818.36
2
Garrison Financial
PURCHASE AND SALE
City of Fayetteville Police Pension and Relief Fund
Charles Schwab #2448-5630
From 01-01-15 To 06-30-15
Trade
Settle
Unit
Date
Date
Quantity Security
Price
03-19-15
03-24-15
1,775 Sector SPDR Fuel Select Shs
24.41
03-19-15
03-24-15
1,700 Sector SPDR Utility Select Shs
44.91
03-19-15
03-24.15
2,300 Sector SPDR Utility Select Shs
44.91
03-19-15
03-24-15
3,000 iShares DJ Select Div
78.45
03-24-15
03-27.15
800 iShares IBOXX Inv Grade Corp Bond
121.86
03-24-15
03-27-15
46 iShares IBOXX Inv Grade Corp Bond
121.86
03.24-15
03-27-15
1,204 MareslBOXX Inv Grade Corp Bond
121.86
05-08-15
05-13.15
1,250 iSharesIBOXX Inv Grade Corp Bond
119.06
3
Policemen's Pension Meeting
July 16, 2015
Page 12 of 78
Amount_
43,324.52
76,343.50
103,288.25
235,336.72
97,490.72
5,605.72
146,723.52
148,825.94
1,589,350.28
Policemen's Pension Meeting
July 16, 2015
Page 13 of 78
Garrison Financial
REALIZED GAINS AND LOSSES
City of Fayetteville Police Pension and Relief Fund
Charles Schwab #2448-5630
From 01-01-15 Through 06-30-15
Cain Or
Loss
Open
Close
Cost
Amort. or
Date
(late
Quantity
Security
Basis
Accretion
Proceeds
Short Term
Lonil
04.16.14
03.19-15
100
Ensco Plc.
5,034.33
2,061.55
-2,972.78
04.16.14
03.19.15
250
Ensco Pie.
12,585.82
5,153.88
-7,431.94
04-16-14
03.19.15
300
Ensco Plc.
15,102.98
6,184.66
-8,918.32
04-16-14
03-19-15
300
Ensco Plc.
15,102.98
6,184.66
-8,918.32
04.16.14
03-19.15
800
Ensco Plc.
40,274.61
16,491.60
-23,783.01
06-10-14
03.19.15
1,750
Noble Corp.
48,930.13
23,685.79
-25,244.34
06.26.14
03-19-15
2,000
Alerian MLP
36,190.60
32,676.02
-3,514.58
01-16-13
03-19-15
3,000
Alerian MLP
51,451.61
49,014.03
-2,437.58
12-20-10
03-19-15
1,700
Sector SPDR Utility Select
58,043.02
76,343.50
18,300.48
Shs
12-20-10
03-19-15
2,300
Sector SPDR Utility Select
78,528.80
103,288.25
24,759.45
Shs
05-19-14
03-19-15
5,650
Keycorp
75,839.95
81,406.62
5,566.67
02-10-14
03-19-15
2,000
Sector SPDR Friel Select Shs
43,639.23
48,818.36
5,179.13
02-10-14
03-19-15
1,775
Sector SPDR Fncl Select Shs
38,729.82
43,324,52
4,594.70
05-12-14
03.19-15
100
Freeport-McMoRan Copper
3,487.70
1,720.02
-1,767.68
& Gold, Inc.
05-12.14
03-19-15
200
Freeport-McMoRan Copper
6,975.40
3,440.04
-3,535.36
& Gold, Inc.
05-12-14
03-19-15
100
Freeport-McMoRan Copper
3,487.70
1,720.02
-1,767.68
& Gold, Inc.
05-12-14
03-19-15
100
Freeport-McMoRan Copper
3,487.70
1,720.02
-1,767.68
& Gold, Inc.
05-12-14
03-19.15
100
Freeport-McMoRan Copper
3,487.70
1,720,02
-1,767.68
& Gold, Inc.
05-12-14
03-19-15
100
Freeport-McMoRan Copper
3,487.70
1,720.02
-1,767.68
& Gold, Inc.
05-12-14
03-19-15
100
Freeport-MCMORan Copper
3,487.70
1,720.02
-1,767.68
& Gold, Inc.
05-12-14
03-19-15
100
Freeport-McMoRan Copper
3,487.70
1,720,02
-1,767.68
& Gold, Inc.
05-12-14
03-19.15
1,100
Freeport-McMoRarr Copper
38,364.70
18,915.85
-19,448.85
& Gold, Inc.
08-08-11
03-19-15
3,000
iShares D1 Select Div
156,695.97
235,336.72
78,640.74
10-06-09
03-24-15
800
iShares IBOXX Inv Grade
87,773.42
97,490,72
9,717.30
Corp Bond
10-06-09
03.24-15
46
iShares IBOXX Inv Grade
5,046.97
5,605,72
558.75
Corp Bond
10-06-09
03-24-15
1,204
iShares IBOXX Inv Grade
132,099.00
146,723.52
14,62452
Corp Bond
06-26-14
04.08-15
150
Microsoft Corp.
6,271.50
6,201.93
-69.57
11-05-13
04.08-15
2,675
Microsoft Corp.
100,543.80
110,601.00
10,057.20
06.26.14
04-08-15
50
Pfizer, Inc.
10,088.00
1,732.85
-8,355.15
05-07-10
04-08-15
3,600
Pfizer, Inc.
72,441.75
124,765.24
52,323.49
06.26-14
05-07-15
250
Intel Corp,
7,037.50
8,080.37
1,042.87
06-22-06
05-07-15
750
Intel Corp,
15,400.90
24,241.09
8,840.18
06-26-14
05-07-15
200
Cisco Systems, Inc.
4,642.00
5,762.90
1,120,90
03-29-I1
05.07.15
1,300
Cisco Systems, Inc.
25,614.04
37,458.85
11,844.81
04.15-11
05-07-15
450
Johnson & Johnson
29,113.09
44,938.97
15,825.88
10-06-09
05-08-15
1,250
iShares IBOXX Inv Grade
137,145.97
148.825.94
11,679.97
Corp Bond
Garrison Financial
REALIZED GAINS AND LOSSES
City of Fayetteville Police Pension and Relief Fund
Charles Schwab #2448-5630
From 01-01-15 Through 06-30-15
Open Close
Date Date Quantity Security
12.31-14 05.08-15 635 McDonald's Corp.
TOTAL GAMS
TOTAL LOSSES
TOTAL REALIZED GAINILOSS 150,162.51
NO CAPITAL GAINS DISTRIBUTIONS
Cost Amort. or
Basis Accretion Proceeds
Policemen's Pension Meeting
July 16, 2015
Page 14 of 78
Gain Or Loss
Short Term Lang Term
60,065.98 62,554.99 2,489.01
10,219.45
-124,565.97
1,439,187.77 0.00 1,589,350.28 -114,346.52
2
266,946.61
-2,437.58
264,509.03
Garrison Financial
PERFORMANCE SUMMARY
GROSS OF FEES
City of Fayetteville Police Pension and Relief Fund
Charles Schwab #2448-5630
June 30, 2015
PORTFOLIO COMPOSITION
Total
Account
40% Fixed Income/60%
Equity Blended Index
Account Fixed Income
Barclays Capital Intermed
Govt/Credit
Account Equities
S&P 500
6,519,257.84 100.0 2.2
Policemen's Pension Meeting
July 16, 2015
Page 15 of 78
CHANGE IN PORTFOLIO
Portfolio Value on 12-31-14 7,023,870.27
Accrued Interest 16,134.03
Net Additions/Withdrawals
Market
Pct.
-48,890.72
Unrealized Gains
Value
Assets
Yield
Cash & Equivalents
346,736.60
5.3
0.0
Account Fixed
2,289,399.37
35.1
1.9
Income
1.14
2.23
2.23
Account Equities
3,883,121.87
59.6
2.5
Account
0.00
0.0
-
Commodities
1.23
7.42
7.42
Total
Account
40% Fixed Income/60%
Equity Blended Index
Account Fixed Income
Barclays Capital Intermed
Govt/Credit
Account Equities
S&P 500
6,519,257.84 100.0 2.2
Policemen's Pension Meeting
July 16, 2015
Page 15 of 78
CHANGE IN PORTFOLIO
Portfolio Value on 12-31-14 7,023,870.27
Accrued Interest 16,134.03
Net Additions/Withdrawals
-480,585.48
Realized Gains
-48,890.72
Unrealized Gains
-79,602.83
Income Received
85,434.68
Change in Accrued Interest
2,897.89
Portfolio Value on 06-30-15
6,500,225.92
Accrued Interest
19,031.92
5.20
6,519,257.84
TIME WEIGHTED RETURN
Annualized
Quarter
Year
Last 12
Inception
To Date
To Date
Months
To Date
-0.09
-0.61
0.04
0.04
-0.08
1.15
5.20
5.20
-0.48
1.14
2.23
2.23
-0.62
0.82
1.69
1.69
0.10
-1.66
-1.25
-1.25
0.28
1.23
7.42
7.42
All "Account' returns refer to your portfolio. Benchmark indexes are also listed for reference. All returns are reported as
percentages.
This report is calculated using industry -standard accounting and performance calculation methodologies and is generated by our Axys
portfolio accounting software. Calculations are a time -weighted total return series based on monthly valuations, including all cash
and equivalents. All calculations are done based on trade date, employing the accrual method of accounting and include cash,
interest, dividends and realized and unrealized gains and losses. Performance is adjusted to accurately reflect portfolio deposits and
withdrawals. Results are presented after transaction costs but before management fees. Inception -to -date returns are annualized
numbers, except for accounts under management less than one year. Unsupervised assets are excluded in performance calculation.
At any given point in time an investment may be worth more or less than the original purchase price.
Owl
GARRISON
F l N A N C l A L
July 7, 2015
City of Fayetteville Police Pension and Relief Fund
Charles Schwab #2448-5630
113 West Mountain
Fayetteville, AR 72701
STATEMENT OF MANAGEMENT FEES
Policemen's Pension Meeting
July 16, 2015
Page 16 of 78
For The Period April 1 through June 30, 2015
Portfolio Value as of 03-31-15 6,736,027
Portfolio Value as of 04-30-15 6,685,525
Portfolio Value as of 05-31.15 6,632,855
Portfolio Value as of 06-30-15 6,519,258
Average of 4 Months 6,643,416
6,643,416 @ 0.5000% per annum 8,304
Quarterly Management Fee 8,304
TOTAL DUE AND PAYABLE 8,304
This statement is for informational purposes only. As you requested, the fee will be automatically
deducted from your account. Please be advised that it is the responsibility of the client to verify the
accuracy of each fee calculation. The custodian will not determine whether the fee is properly calculated.
Lioneld Jordan Chairman
Sondra E. Smith Treasurer
Eldon Roberts Secretary
Retired Position 1
Policemen's Pension Meeting
Policemen's Pension & Relief Fundjuly 16, 2015
Board of Trustees Meeting MinuteBage 17 of 78
April 16, 2015
Page 1 of 8
Ruston Cole
Retired Position 2
John Brown
Retired Position 3
Melvin Stanley
Retired Position 4
Frank Johnson
Retired Position 5
Policemen's Pension and Relief Fund
Board of Trustees Meeting Agenda
April 16, 2015
A meeting of the Fayetteville Policemen's Pension and Relief Fund Board of Trustees was held
on April 16, 2015 at 3:00 P.M. in Room 326 of the City Administration Building located at 113
West Mountain Street, Fayetteville, Arkansas.
Eldon Roberts called the meeting to order.
PRESENT: Frank Johnson, Melvin Stanley, Eldon Roberts, Ruston Cole, Sondra Smith,
City Clerk, Dee McCoy, City Clerk Office, Glenn Atkins, James Bell, Garrison Financial,
Trish Leach, Accounting, Kit Williams, City Attorney, Paul Becker, Finance Director
ABSENT: Mayor Jordan, John Brown
Garrison Financial:
1St Quarter reports
Glenn Atkins: Thank you for allowing us to be here. We appreciate your business and confidence.
What I'd like to do briefly is walk you through your first quarterly report. I will talk a little bit on
the fixed income markets then I will tum it over to James Bell. He will talk about the stocks. Then
we'll take some questions, comments, ideas and thoughts.
My name is Glenn Atkins and I do the bond portion of the portfolio. If you will look at the pie
chart in your package we are about 63%, at the end of the quarter, in stocks and about 35% in
bonds, and a little bit in cash. Your policy is 60% equity and 40% bonds. We're essentially right
on target there. Given what interest rates are doing, we're comfortable being a little overweight in
equity. A lot of that is market fluctuations over time. We're well positioned in terms of your policy.
I will call your attention to the performance page, which is very near the back of our quarterly
report. For the first quarter, the account was down fractionally and the market was up fractionally.
We underperformed slightly, which is not unusual. We don't like it but it's not unusual as we're
structuring portfolios and getting them into things that we like. I would not put too much credence
in that as long as it doesn't continue for five or ten years. From the fixed income side, we did a
Policemen's Pension Meeting
Policemen's Pension & Relief Funduly 16, 2015
Board of Trustees Meeting Minut&ge 18 of 78
April 16, 2015
Page 2 of 8
couple of things in the quarter. We bought a couple of individual bonds that we thought had some
value, specifically AT&T, which is the big telephone company. We also bought a position in
Berkshire Hathaway, which is Warren Buffett's Company. Those two bonds, and others that we
will purchase going forward, tend to be cheap to the market. In other words, they provide more
yield than similarly rated and similarly mature securities.
We sold about $250,000 in the LQD position, which is the iShares Bond ETF that we had. The
reason that we sold that position was to try to shorten up the maturity of the portfolio a little bit.
The maturity of that ETF that we sold, actually is the duration, but it's functionally equivalent, the
duration on that ETF is 7.7 years. There is some interest rate risk in there because it's longer
maturity than we're running our portfolios now. We liquidated that position and bought those two
bonds.
We have talked in the past and we will in the future probably sell the Treasury note and the agency
security that's in there. Even though they have high coupons, the yields are relatively low and we
can go into bonds that pay more yield. We wanted to sell the EFT first to shorten the average
maturity of the portfolio. Right now, the average duration on your fixed income is about 3.5 years.
The index that we benchmark ourselves to, its duration is about 3.8 years. We are right on top of
that. Where I would like to end up, as we continue to restructure this, is a duration that is about a
year longer than the index. It's not so long that if rates rise rapidly you get hurt too bad, but it's
long enough to get just a little bit of extra yield and it should outperform almost any scenario where
the rates goes up or down. We'll be more heavily weighted in corporate bonds than index. I would
like to be about a year longer than the index. Over the next year you will probably see that average
maturity somewhere in the 4.5 to 5 range, roughly. I was telling the group that we sold some of
the long ETF's and brought the maturities down to 3.75 years right now, which is about the index.
I want to be about a year longer than the index.
Paul Becker: And that's for fear of interest rate increase?
Glenn Atkins: Well, it is and that's the reason we sold the ETF because its duration was 7.75
years. I would like to be, when we get it totally restructured, about a year longer than the index
and more heavily weighted in corporate bonds than the index.
Paul Becker: So 4.5 to 5 is what you're looking at?
Glenn Atkins: 4.5 to 5 is where I want to be. That's where we've got the majority of our other
portfolios. If we're at 4.5 years, a year from now we'll be at 3.5 years but the index will stay the
same. The Index really never changes much. That gives us a little more yield without a whole lot
of price risk. If rates stay where they are or go down slightly, we should be in a position to get a
little bit more yield in income than the market. Long way of saying we're trying to find the sweet
spot of that.
The total withdrawals for the year ended March were, and this is from our portfolio, so it is not the
entire pension payment, $465,000 went to the pension payments and about $18,000 for the year
ended March for management fees. At the end of the quarter the portfolio had an ending market
value of about $6.7 million.
Policemen's Pension Meeting
Policemen's Pension & Relief FurJPIY 16, 2015
Board of Trustees Meeting Minutes ge 19 of 78
April 16, 2015
Page 3 of 8
From the fixed income side we are making a lot of progress in terms of getting it restructured how
we would like to see it, in individual bonds and out of that longer maturity or ETF. We called it
the liquid, it's basically a longer corporate bond fund. I passed out some pictures. We use the 10
year yield on the 10 year Treasury as our proxy for the market. The first page is what it's done
year to date in yield. The second page is what it's done for the past year. The third page is what
it's done for the past five years. The point that we keep talking to our clients about is this volatility,
these rapid moves in the market particularly as you see on the first page. The market can move
twenty or thirty basis points in a couple weeks' time in either direction. It's a little bit harrowing
to me, so what I'm trying to do is be opportunistic in terms of restructuring the portfolio without
trying to time the market. I want to be in the market but I want to try to be opportunistic as we
restructure it. With that, I will turn it over to Mr. James Bell, who will talk about equities.
James Bell: On the stock side, as Glenn mentioned, we did underperform for the quarter. From
our perspective, any quarter like that is not really a good gage of performance. You can have great
quarters, you can have poor quarters, that's really not kind of a long term time horizon that we like
to focus on performance. Just so you know, the contributors to the underperformance mainly were
the oil field services stocks that we inherited from the previous manager. With perfect hindsight
we should have been quicker to roll out of those stocks. With the price of oil doing what it's done
over the past nine months, those stocks have been hit probably the hardest of any energy related
stocks.
We also saw, just in the quarter, a tendency for growth stocks to outperform value stocks. We're
never going to be all growth and we're never going to be all value stocks. We want to have a good
mix of both in your portfolio to the extent that we own value stocks in addition to growth stocks.
Growth way outperformed value this quarter. That contributed some to the underperformance.
Going forward, over the course of the quarter, the equity portion is essentially completely
rebalanced. The portfolio that you see on the equity side is essentially more or less where we want
to see it going forward. We have more or less cycled out of any of the securities that came from
the prior manager. We are very, very comfortable with the portfolio as it is going forward. What
that entailed was selling a number of those energy and oil field services stocks as well as a number
of the utility stocks that were in the portfolio. We sold utility for the same reasons that Glenn's
talking about shortening duration on the fixed income side. A lot of utility stocks are high yielding
dividend paying stock, but they are sensitive to interest rates just like bonds are because they do
tend to pay out a lot of income. They act kind of like bonds. We want to shift out of some of those
things in anticipation of eventually higher interest rates. We think utility stocks might be the most
affected by that scenario. What we bought were other dividend paying stocks, consumer staple
type stocks, stocks that are focused on U.S. businesses. As you know, the dollar has been very,
very strong so a lot of companies that are selling outside of the U.S. have to convert those
currencies back to dollars and that's hurt their performances. We had a particular focus on U.S.
based companies.
The market has been strong since the end of the quarter, and your stocks are up since the end of
the quarter almost 2.5%. The negative performance that you see on this quarter end report has been
erased and the account is actually up 1% through yesterday's close. We're starting to see some of
the things improve. That's where we are on the equity side. We'll continue to work for you going
forward. I'll certainly be happy to answer any questions you might have.
Policemen's Pension Meeting
Policemen's Pension & Relief Fually 16, 2015
Board of Trustees Meeting MinutEgge 20 of 78
April 16, 2015
Page 4 of 8
Glenn Atkins: Thank you for having us. We appreciate your business and confidence. If you need
us in the middle of the quarter give us a buzz and we'll do whatever it is you need.
Approval of the Minutes:
Approval of the January 22, 2015 meeting minutes
Sondra Smith: I sent the minutes out. I send them to Garrison Financial also. They had two or
three minor changes to them, just typos. We've made those changes, so they're ready for your
approval. If you want a new copy of them we can send another copy out.
Frank Johnson: What were the changes that Garrison made?
Sondra Smith: One of them was, we had a dollar amount instead of a percentage. When they are
talking in a meeting they will say 220, we don't know when we're typing when we're transcribing
it if its $2.20 or 2.20%. Just minor things like that. I can send them out. He sent them to me in red
if you want to see it.
Frank Johnson: It was just grammar, mechanic kind of stuff? I just felt that there was a discussion
that you had about what they reported on here on our portfolio and the risk associated with interest
rates. I have an opinion on that, but anyway.
Sondra Smith: There's are what I would call scrivener's errors.
Melvin Stanley moved to approve the January 22, 2015 meeting minutes. Frank Johnson
seconded the motion. The motion passed with a 5-0 vote. Mayor Jordan and John Brown
were absent.
Pension List Changes:
None
Approval of the Pension List:
Approval of the May, June and July, 2015 pension lists
Frank Johnson moved to approve the May, June, and July, 2015 pension lists. Eldon Roberts
seconded the motion. The motion passed with a 5-0 vote. Mayor Jordan and John Brown
were absent.
Unfinished Business:
None
Policemen's Pension Meeting
Policemen's Pension & Relief Fundy 16, 2015
Board of Trustees Meeting Minuf8age 21 of 78
April 16, 2015
Page 5 of 8
New Business:
Revenue & Expense Report: 411 Ouarter — December 31, 2014 report
Trish Leach: I noticed, looking at this, we didn't update it for the end of the quarter. It's just
through the end of December. I will get with Toni and have her do the one for the quarter and e-
mail it.
Sondra Smith: I've already talked to her and she's going to do both the first and second quarter.
It will be on our July agenda.
LOPFI — Consolidation of Local Plan Letter — January 2015
Sondra Smith: That's a standard letter we get regarding if you're interested in consolidation then
this is the process that you have to go through to consolidate.
Kit Williams: I want to let you know that the city asked Representative Whitaker to have a bill
that would actually give clear authority to pension plans, to your board of trustees, to reduce
benefits if you believed that was necessary to save your plan, and if the state actuary said that your
plan is in extreme risk of ruin. In other words, about to go bankrupt. It passed through the joint
committee, it passed in the House but then the Senate defeated it. So, you're left in the same
position you were before where the former Attorney General has said that he does not believe that
the boards had that power. It's been my opinion you. Nothing has been changed in the state law. I
will say the members of the Fayetteville Firemen's Pension Board went to the state and opposed
that. They did not want that authority. They were successful in not having that authority given to
them.
Frank Johnson: In the future, I'm not asking for a civics lesson here necessarily, but I think the
language that made it to the bill that gives us the authority to reduce benefits, to me the difference
in giving us the power to reduce benefits versus the authority to adjust benefits are quite different.
In the future, if we're just part of the discussion, moving forward I think it would be really
important.
Kit Williams: You already have the power to increase benefits. The only argument or
disagreement is whether you have the power to reduce benefits. I don't think that we would have
wanted to put in just to adjust benefits, if that would circumscribe the procedure already set up for
the increasing the benefits, which is set forth in the statutes. That's why the city had suggested to
the legislature that in fact you all, every closed pension plan in the state, be authorized to have that
authority to look at that, and if the state actuary had determined that there was substantial risk of
ruin that the board could determine by a majority vote to reduce benefits. It was interesting down
there that there six very similar to the firefighters' pension and likely to run out of money within
ten years. There's another twenty that are in fairly serious position. I don't think you all are listed
in the twenty. There are over a 100 of the 160 that are not actuarially sound, which is where I think
you all are. That doesn't mean that you're likely in the near term at all to have a risk of ruin to
where you can't pay your bills. Y'all are in far better shape at this point than the Fire Pension.
Policemen's Pension Meeting
Policemen's Pension & Relief FunWly 16, 2015
Board of Trustees Meeting MinutEs9ge 22 of 78
April 16, 2015
Page 6 of 8
Eldon Roberts: Whenever you said the city went to David Whitaker to have this legislation
proposed, was the council involved in that?
Kit Williams: No, it was the city administration and myself. You wouldn't have the power yet
because you don't fit the criteria, but the Fire Pension Board would have the power, if they wanted
too, to adjust their benefits downwards. But, that did not pass. Everything is just the way it was.
Melvin Stanley: I think pretty much everybody's fear is that if we did have the authority to reduce
our benefits by 10%, 15%, 20%, whatever, and then five years from now our fund goes crazy with
the stock market and there's $20 million in there, way more than we'd ever need. Our fear is that
we would never get back to where we are now. We fear that we wouldn't have the votes.
Kit Williams: That can be a fear. If you look at past history, I think that any time that a fund has
requested or wants to raise the benefits because they're actuarially sound and you can do that, I
think the Mayor and the City Clerk, the city's representatives have gone with the board on each
one of those votes. I can't guarantee what future mayors and city clerks would do. Fortunately,
you all don't have to worry about that right now because you're not in the kind of financial strains
that the Fire Pension is.
Sondra Smith: I don't see this plan shooting up to an unrealistic amount of money being in the
plan. It would take an event where half of the pensioners on the plan deceased before that could
happen.
Melvin Stanley: But whenever all these benefits were increased to 100%, even the widows'
benefits, no one foresaw what was going to happen in 2008. Things can happen, or they could go
the other direction too. That's everyone's fear that even if we had the authority to reduce our
benefits by 10% or 15%, we would never see that again we would die and that would go to the city
and the state. That's our fear, at least that's mine, and that's what I understand from other people.
Kit Williams: It's legitimate for you to think about that. You need to think about your own
personal interest.
Sondra Smith: I don't think people felt like they'd get those benefits increases in the past and
they were all voted in. If it's sound, it probably wouldn't be an issue with anybody.
Kit Williams: Of course the reason that motivated the administration and me to propose this to
Representative Whitaker was to make sure there wouldn't come a time that you wouldn't get
benefits because the pension plan had run dry. They would always have the millage that comes in,
but when that got distributed for the year and was out then that would be it. There would be no
more benefits and that's something that obviously I don't think anybody in this room wants to see.
I know that we don't and I think that's why we thought at least the pension board ought to have a
right to look at it. I also believe, because of what you said and that kind of feelings that even if
they had the power you all wouldn't want to exercise it. I knew you would be the best guardians
of it. It wouldn't be reduced any more than absolutely necessary. I just thought you all should have
the power as the board of trustees looking over the pension plan to do whatever you thought was
in the best interest of your beneficiaries.
Policemen's Pension Meeting
Policemen's Pension & Relief Fuddly 16, 2015
Board of Trustees Meeting MinuRRge 23 of 78
April 16, 2015
Page 7 of 8
Melvin Stanley: But you already say that we have the authority
Kit Williams: The Attorney General and I disagree on a particular interpretation of the statue.
That can't be tested unless we actually lowered the benefits and somebody sues. You can't test it
the other way until the fund runs out of money.
Eldon Roberts: The articles I read in the newspaper, for someone who doesn't know, they sound
kind of slanted. They look like that this board arbitrarily raised the rates just to sit here one day
and raised them, not that we worked with state law, met all the criteria, the actuary signed off on
it, the mayors of the city signed off on it too. It just sounds like, to somebody who's reading it
that's not familiar with how it really works, that those guys raised their benefits now to where
they're going to go broke and good enough for them, they just raised their benefits on their own.
None of us ever speak to those people that write those articles. I see Pete Reagan's name mentioned
in there a time or two. We did everything right and we followed the law, the Mayor signed off on
it. Nothing is gone afoul of the law here. We just ran into a situation where the fund's not
generating the revenue now. I guess it's partially due to the year 2008. Everybody else that has
pension funds and 401 k's are facing the same dilemma. That doesn't make it any easier to put up
with, but that happened. I just wanted to point out that we followed the rules and regulations that
set out by Arkansas Code when we did these benefit increases, they weren't just arbitrarily done.
Kit Williams: That's absolutely correct. Both you and the Fire Pension did follow the state law as
set forth. The one thing that could be questioned is not any of that but what the state retirement
board chose as to determine what was going to be the rate of return on the pension fund. They say
it's going to make this much money per year and they were wrong. They chose an amount that
was too high. I don't criticize the actuary, he's taken there figures that they gave him to run.
Unfortunately it was too rosy a scenario and it has not lived up what they predicted would happen
in the stock market.
Sondra Smith: I can tell you, Eldon, the city does not slant that story
Eldon Roberts: I'm just saying it sounds that way.
Kit Williams: They never hear that from us, I guarantee you.
Eldon Roberts: I didn't say that, I'm saying it sounds that way to someone who doesn't know
how it really happens.
Sondra Smith: I understand, I read that story.
Melvin Stanley: When I heard it on the local talk radio, talking about how reckless the Fayetteville
Fire Pension was in increasing their benefits.
Kit Williams: I wouldn't necessarily take all my facts out of talk radio.
Paul Becker: He does tend to slant some things. But, unfortunately, I think all of us thought there
were certain things in that article that weren't portrayed exactly fairly and unfortunately we don't
write the article.
Policemen's Pension Meeting
Policemen's Pension & Relief FunWly 16, 2015
Board of Trustees Meeting Minutegge 24 of 78
April 16, 2015
Page 8 of 8
Eldon Roberts: Pete Reagan was just as right as you all are because it hadn't been determined in
a court of law yet. We just have differences of opinion. You say the city's not responsible for these
pension plans, we think they are. It will take a court decision. We'll have to follow suit with
whatever the court's decision is whenever some pension fund sues the city.
Other:
Sondra Smith: We're getting ready to start the election so we'll be sending out election ballots
here in the next week or so.
Eldon Roberts: It's myself, Melvin and John Brown?
Sondra Smith: I think so.
Frank Johnson: I remember reading something in the minutes, maybe there was still some open
decision that had to be made on the process?
Kit Williams: No, she just talked about how the Fire Pension does it. They do a whole nominating
process before they go to the election.
Sondra Smith: This board was happy with the way we do the process.
Eldon Roberts: Ours seems to work pretty well.
Informational:
2015 Meeting calendar
Eldon Roberts: Look at the last page, the next meeting is July 16th.
Sondra Smith: I think I am on vacation during that time. We may have to reschedule if we don't
have a quorum.
Adjourn: 3:36 p.m.
POLICE PENSION FUND
August 2015
Month 8
8
EMP# NAME
154 ALLEN, CHARLES
206 BAYLES, BOBBI J
216 BLACK, MILDRED
147 BRADLEY, GERALD
139 BRADLEY, RANDALL
167 BROWN, JOHN
157 CARROLL,RONALD L
151 COLE, RUSTON
160 DUGGER,GARY
140 FOSTER, BILLY D.
148 FRIEND, JERRY
161 HANNA, JANICE
145 HANNA, MARK
169 HELDER, TIM
180 HOYT, RICK
180 HOYT, RICK Plus 25 add pay
146 HUTCHENS, BERNICE
194 JOHNSON, FRANK
215 JOHNSON, JOYCE
103 JOHNSON, WENDELL
118 JONES, BOB
211 JONES, MICHELE
144 KILGORE, DONALD
218 MARTIN, CONNIE
128 MCCAWLEY, LARRY
136 MITCHELL, MICHAEL
158 MUNSON,ANGELA
112 MURPHY, JAKE
137 PERDUE, LARRY
164 PERSHALL, ROBIN
132 PHILLIPS, HOMER GENE
199 PRESTON, NORMA J
135 RICKMAN, LOREN
214 RIGGINS, BONNIE
183 ROBERTS, ELDON
183 ROBERTS, ELDON Plus 25 add pay
212 ROBERTS, CAROLYN K
212 ROBERTS, CAROLYN K Plus 25 add pay
159 SCHUSTER,JOHN H.
168 STANLEY, MELVIN
133 SURLES, JERRY
142 TAYLOR, DENNIS
163 WATSON, RICHARD
163 Watson, Richard Plus 25 Add1 Pay
149 WILLIAMS, JOYCE
195 WITT, BETTY J
213 WOOD, RUTHIE
8 8 8 Policemen's Pension Meeting
6800-9800 6800-9800 July 16, 2015
Regular Me 5335 -OD 5335-05 Page 25 of 78
Benefit YTD Reg Benefit Suppl. YTD Suppl. Future Supple
$
2,584.64
$
20,677.12
$
50.00
$
400.00
$
1,587.41
$
12,699.28
$
50.00
$
400.00
$
1,125.64
$
9,005.12
$
50.00
$
400.00
$
4,820.09
$
38,560.72
$
50.00
$
400.00
$
2,860.17
$
22,881.36
$
50.00
$
400.00
$
4,362.01
$
34,896.08
$
50.00
$
400.00
$
2,106.04
$
16,848.32
$
50.00
$
400.00
$
3,065.74
$
24,525.92
$
50.00
$
400.00
$
3,163.74
$
25,309.92
$
50.00
$
400.00
$
3,207.35
$
25,658.80
$
50.00
$
400.00
$
1,970.42
$
15,763.36
$
50.00
$
400.00
$
1,368.59
$
10,948.72
$
-
$
-
$
1,368.59
$
10,948.72
$
50.00
$
400.00
$
5,838.12
$
46,704.96
$
50.00
$
400.00
$
7,460.01
$
59,680.08
$
50.00
$
400.00
$
272.01
$
2,176.08
$
1,825.54
$
14,604.32
$
50.00
$
400.00
$
7,974.81
$
63,798.48
$
50.00
$
400.00
$
2,455.50
$
19,644.00
$
50.00
$
400.00
$
783.15
$
6,265.20
$
50.00
$
400.00
$
3,300.45
$
26,403.60
$
50.00
$
400.00
$
1,182.26
$
9,458.08
$
2,046.48
$
16,371.84
$
50.00
$
400.00
$
3,692.85
$
29,542.80
$
50.00
$
50.00
$
1,694.79
$
13,558.32
$
50.00
$
400.00
$
2,305.29
$
18,442.32
$
50.00
$
400.00
$
4,198.15
$
33,585.20
$
50.00
$
400.00
$
405.75
$
3,246.00
$
50.00
$
400.00
$
2,322.67
$
18,581.36
$
50.00
$
400.00
$
1,525.07
$
12,200.56
$
-
$
-
$
1,754.44
$
14,035.52
$
50.00
$
400.00
$
1,601.37
$
12,810.96
$
50.00
$
400.00
$
2,231.07
$
17,848.56
$
50.00
$
400.00
$
1,669.37
$
13,354.96
$
50.00
$
400.00
$
4,263.24
$
34,105.92
$
50.00
$
400.00
$
587.09
$
4,696.72
$
-
$
-
$
3,216.13
$
25,729.04
$
-
$
442.89
$
3,543.12
$
-
$
3,117.36
$
24,938.88
$
50.00
$
400.00
$
4,880.07
$
39,040.56
$
50.00
$
400.00
$
2,721.40
$
21,771.20
$
50.00
$
400.00
$
2,063.93
$
16,511.44
$
50.00
$
400.00
$
6,947.05
$
55,576.40
$
50.00
$
400.00
$
948.76
$
7,590.08
$
-
$
-
$
2,539.66
$
20,317.28
$
50.00
$
400.00
$
1,766.83
$
14,134.64
$
50.00
$
400.00
$
1,580.93
$
12,647.44
$
50.00
$
400.00
$
125,204.92
$
1,001,639.36
$1,950.00
$
15,250.00 $ -
POLICE PENSION FUND
September 2015
Month 9
9
EMP# NAME
154 ALLEN, CHARLES
206 BAYLES, BOBBI J
216 BLACK, MILDRED
147 BRADLEY, GERALD
139 BRADLEY, RANDALL
167 BROWN, JOHN
157 CARROLL,RONALD L
151 COLE, RUSTON
160 DUGGER,GARY
140 FOSTER, BILLY D.
148 FRIEND, JERRY
161 HANNA, JANICE
145 HANNA, MARK
169 HELDER, TIM
180 HOYT, RICK
180 HOYT, RICK Plus 25 add pay
146 HUTCHENS, BERNICE
194 JOHNSON, FRANK
215 JOHNSON, JOYCE
103 JOHNSON, WENDELL
118 JONES, BOB
211 JONES, MICHELE
144 KILGORE, DONALD
218 MARTIN, CONNIE
128 MCCAWLEY, LARRY
136 MITCHELL, MICHAEL
158 MUNSON,ANGELA
112 MURPHY, JAKE
137 PERDUE, LARRY
164 PERSHALL, ROBIN
132 PHILLIPS, HOMER GENE
199 PRESTON, NORMA J
135 RICKMAN, LOREN
214 RIGGINS, BONNIE
183 ROBERTS, ELDON
183 ROBERTS, ELDON Plus 25 add pay
212 ROBERTS, CAROLYN K
212 ROBERTS, CAROLYN K Plus 25 add pay
159 SCHUSTER,JOHN H.
168 STANLEY, MELVIN
133 SURLES, JERRY
142 TAYLOR, DENNIS
163 WATSON, RICHARD
163 Watson, Richard Plus 25 Add'I Pay
149 WILLIAMS, JOYCE
195 WITT, BETTY J
213 WOOD, RUTHIE
9 9 9 Policemen's Pension Meeting
6800-9800 6800-9800 July 16, 2015
Regular Mo 5335-00 5335-05 Page 26 of 78
Benefit YTD Reg Benefit Suppl. YTD Suppl. Future Supple
$
2,584.64
$
23,261.76
$
50.00
$
450.00
$
1,587.41
$
14,286.69
$
50.00
$
450.00
$
1,125.64
$
10,130.76
$
50.00
$
450.00
$
4,820.09
$
43,380.81
$
50.00
$
450.00
$
2,860.17
$
25,741.53
$
50.00
$
450.00
$
4,362.01
$
39,258.09
$
50.00
$
450.00
$
2,106.04
$
18,954.36
$
50.00
$
450.00
$
3,065.74
$
27,591.66
$
50.00
$
450.00
$
3,163.74
$
28,473.66
$
50.00
$
450.00
$
3,207.35
$
28,866.15
$
50.00
$
450.00
$
1,970.42
$
17,733.78
$
50.00
$
450.00
$
1,368.59
$
12,317.31
$
-
$
-
$
1,368.59
$
12,317.31
$
50.00
$
450.00
$
5,838.12
$
52,543.08
$
50.00
$
450.00
$
7,460.01
$
67,140.09
$
50.00
$
450.00
$
272.01
$
2,448.09
$
1,825.54
$
16,429.86
$
50.00
$
450.00
$
7,974.81
$
71,773.29
$
50.00
$
450.00
$
2,455.50
$
22,099.50
$
50.00
$
450.00
$
783.15
$
7,048.35
$
50.00
$
450.00
$
3,300.45
$
29,704.05
$
50.00
$
450.00
$
1,182.26
$
10,640.34
$
2,046.48
$
18,418.32
$
50.00
$
450.00
$
3,692.85
$
33,235.65
$
50.00
$
50.00
$
1,694.79
$
15,253.11
$
50.00
$
450.00
$
2,305.29
$
20,747.61
$
50.00
$
450.00
$
4,198.15
$
37,783.35
$
50.00
$
450.00
$
405.75
$
3,651.75
$
50.00
$
450.00
$
2,322.67
$
20,904.03
$
50.00
$
450.00
$
1,525.07
$
13,725.63
$
-
$
-
$
1,754.44
$
15,789.96
$
50.00
$
450.00
$
1,601.37
$
14,412.33
$
50.00
$
450.00
$
2,231.07
$
20,079.63
$
50.00
$
450.00
$
1,669.37
$
15,024.33
$
50.00
$
450.00
$
4,263.24
$
38,369.16
$
50.00
$
450.00
$
587.09
$
5,283.81
$
-
$
-
$
3,216.13
$
28,945.17
$
-
$
442.89
$
3,986.01
$
-
$
3,117.36
$
28,056.24
$
50.00
$
450.00
$
4,880.07
$
43,920.63
$
50.00
$
450.00
$
2,721.40
$
24,492.60
$
50.00
$
450.00
$
2,063.93
$
18,575.37
$
50.00
$
450.00
$
6,947.05
$
62,523.45
$
50.00
$
450.00
$
948.76
$
8,538.84
$
-
$
-
$
2,539.66
$
22,856.94
$
50.00
$
450.00
$
1,766.83
$
15,901.47
$
50.00
$
450.00
$
1,580.93
$
14,228.37
$
50.00
$
450.00
$
125,204.92
$
1,126,844.28
$1,950.00
$
17,150.00 $ -
POLICE PENSION FUND 10 10 10 1 Policemen's Penosion Meeting
October 2015 6800-9800 6800-9800 July 16, 2015
Month 10 Regular Mo 5335-00 5335-05 Page 27 of 78
10
EMP# NAME Benefit YTD Reg Benefit Suppl. YTD Suppl. Future Supple
154 ALLEN, CHARLES
$
2,584.64
$
25,846.40
$
50.00
$
500.00
206 BAYLES, BOBBI J
$
1,587.41
$
15,874.10
$
50.00
$
500.00
216 BLACK, MILDRED
$
1,125.64
$
11,256.40
$
50.00
$
500.00
147 BRADLEY, GERALD
$
4,820.09
$
48,200.90
$
50.00
$
500.00
139 BRADLEY, RANDALL
$
2,860.17
$
28,601.70
$
50.00
$
500.00
167 BROWN, JOHN
$
4,362.01
$
43,620.10
$
50.00
$
500.00
157 CARROLL,RONALD L
$
2,106.04
$
21,060.40
$
50.00
$
500.00
151 COLE, RUSTON
$
3,065.74
$
30,657.40
$
50.00
$
500.00
160 DUGGER,GARY
$
3,163.74
$
31,637.40
$
50.00
$
500.00
140 FOSTER, BILLY D.
$
3,207.35
$
32,073.50
$
50.00
$
500.00
148 FRIEND, JERRY
$
1,970.42
$
19,704.20
$
50.00
$
500.00
161 HANNA, JANICE
$
1,368.59
$
13,685.90
$
-
$
-
145 HANNA, MARK
$
1,368.59
$
13,685.90
$
50.00
$
500.00
169 HELDER, TIM
$
5,838.12
$
58,381.20
$
50.00
$
500.00
180 HOYT, RICK
$
7,460.01
$
74,600.10
$
50.00
$
500.00
180 HOYT, RICK Plus 25 add pay
$
272.01
$
2,720.10
146 HUTCHENS, BERNICE
$
1,825.54
$
18,255.40
$
50.00
$
500.00
194 JOHNSON, FRANK
$
7,974.81
$
79,748.10
$
50.00
$
500.00
215 JOHNSON, JOYCE
$
2,455.50
$
24,555.00
$
50.00
$
500.00
103 JOHNSON, WENDELL
$
783.15
$
7,831.50
$
50.00
$
500.00
118 JONES, BOB
$
3,300.45
$
33,004.50
$
50.00
$
500.00
211 JONES, MICHELE
$
1,182.26
$
11,822.60
144 KILGORE, DONALD
$
2,046.48
$
20,464.80
$
50.00
$
500.00
218 MARTIN, CONNIE
$
3,692.85
$
36,928.50
$
50.00
$
50.00
128 MCCAWLEY, LARRY
$
1,694.79
$
16,947.90
$
50.00
$
500.00
136 MITCHELL, MICHAEL
$
2,305.29
$
23,052.90
$
50.00
$
500.00
158 MUNSON,ANGELA
$
4,198.15
$
41,981.50
$
50.00
$
500.00
112 MURPHY, JAKE
$
405.75
$
4,057.50
$
50.00
$
500.00
137 PERDUE, LARRY
$
2,322.67
$
23,226.70
$
50.00
$
500.00
164 PERSHALL, ROBIN
$
1,525.07
$
15,250.70
$
-
$
-
132 PHILLIPS, HOMER GENE
$
1,754.44
$
17,544.40
$
50.00
$
500.00
199 PRESTON, NORMA J
$
1,601.37
$
16,013.70
$
50.00
$
500.00
135 RICKMAN, LOREN
$
2,231.07
$
22,310.70
$
50.00
$
500.00
214 RIGGINS, BONNIE
$
1,669.37
$
16,693.70
$
50.00
$
500.00
183 ROBERTS, ELDON
$
4,263.24
$
42,632.40
$
50.00
$
500.00
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
$
-
159 SCHUSTER,JOHN H.
$
3,117.36
$
31,173.60
$
50.00
$
500.00
168 STANLEY, MELVIN
$
4,880.07
$
48,800.70
$
50.00
$
500.00
133 SURLES, JERRY
$
2,721.40
$
27,214.00
$
50.00
$
500.00
142 TAYLOR, DENNIS
$
2,063.93
$
20,639.30
$
50.00
$
500.00
163 WATSON, RICHARD
$
6,947.05
$
69,470.50
$
50.00
$
500.00
163 Watson, Richard Plus 25 Add'I Pay
$
948.76
$
9,487.60
$
-
$
-
149 WILLIAMS, JOYCE
$
2,539.66
$
25,396.60
$
50.00
$
500.00
195 WITT, BETTY J
$
1,766.83
$
17,668.30
$
50.00
$
500.00
213 WOOD, RUTHIE
$
1,580.93
$
15,809.30
$
50.00
$
500.00
$
125,204.92
$
1,252,049.20
$1,950.00
$
19,050.00 $ -
Policemen's Pension Meeting
July 16, 2015
Page 28 of 78
Police Pension Fund Revenue Expense Summary
Book Value Total Reserve Assets' $ 6,389,748.27 $ 6,653,793.10 $ 6,682,459.70 $ 7,081,891.04 $ 7,468,021.86 $ 7,785,041.00 $ 7,950,215.00 $ 8,398,199.00 $ 9,880,601.00 $ 10,104,083.00
Market Value Total Reserve Assets" $ 6,740,291.56 $ 7,030,014.20 $ 7,443,057.63 $ 7,689,491.43 $ 8,168,105.82 $ 8,555,897.00 $ 8,360,804.00 $ 8,046,356.00 $ 10,819,789.00 $ 10,891,530.00
'Assets less any liabilities
Market Value calculated at year end
7/7/2015 K:\Police Pension\Revenue 8 Expense Summary\2015 PP Revenue Expense Summary\Revenue and Expense Report 033115
Policemen's Pension Meeting
3/31/2015
2014
2013
2012
2011
2010
2D09
2008
2007 July
16FM5
Revenues:
Five
29 0 7
Employee Contributions
$
-
$
-
$ -
$
-
$ -
$ -
$
-
$
-
$
-
d, 139.00
Employer Contributions
$
-
$
-
$ -
$
-
$ -
$ -
$
-
$
-
$
-
$
8,278.00
State Insurance Tax
$
-
$
152,519.00
$ 142,151.31
$
138,410.77
$ 205,694.53
$ 213,357.83
$
214,429.30
$ 186,429.42
$
190,192.00
$
226,826.00
Local Millage (A mills)
$
25,008.36
$
525,620.07
$ 494,749.58
$
511,961.22
$ 498,380.57
$ 508,192.07
$
485,345.06
$ 441,696.50
$
388,877.00
$
370,649.00
10% City Fines and Forfeitures
$
34,388.47
$
101,595.92
$ 112,992.59
$
125,274.87
$ 126,045.40
$ 130,723.07
$
123,653.64
$ 131,583.83
$
106,385.00
$
119,147.00
Sale of Confiscated Goods
$
727.22
$
5,367.25
$ 1,898.28
$
3,491.81
$ 5,026.40
$ 5,487.59
$
9,732.16
$ 7,715.61
$
10,806.00
$
6,343.00
Interest and Dividends
$
40,702.17
$
250,152.16
$ 263,480.49
$
285,514.18
$ 263,520.02
$ 267,714.80
$
256,907.42
$ 359,998.26
$
356,699.00
$
373,776.00
Gain (Loss) on Sales
$
25,467.15
$
513,762.17
$ 160,066.59
$
168,288.38
$ 209,001.15
$ 362,318.64
$
153,193.23
$ (885,460.76)
$
395,378.00
$
420,298.00
Police Supplement
$
11,700.00
$
37,200.00
$ 37,800.00
$
39,900.00
$ 40,500.00
$ 42,000.00
$
31,200.00
$ 30,000.00
$
30,000.00
$
30,300.00
Future Supplement
$
-
$
44,280.00
$ 46,62D.00
$
55,575.00
$ 36,450.00
$ 26,061.50
$
38,350.D0
$ 41,370.00
$
86,040.00
$
60,060.00
Mise Revenue
$
2.00
$
-
$ 195.77
$
53.39
$ 1134.60
$ 1,561.27
$
5,757.99
$ 161.46
$
907.00
$
1,126.00
Total Revenue
$
137,995.37
$
1,630,496.57
$ 1,259,954.61
$
1,328,469.62
$ 1,384,722.67
$ 1,557,416.77
$
1,318,568.80
$ 313,494.32
$
1,565,284.00
$
1,620,942.00
Expenditures
Regular Monthly Benefits
$
375,614.76
$
1,533,945.72
$ 1,535,372.30
$
1,551,087.50
$ 1,564,986.62
$ 1,582,900.00
$
1,628,521.36
$ 1,638,067.76
$
1,581,319.00
$
1,456,466.00
Police Supplement
$
5,850.00
$
24,550.00
$ 24,650.00
$
25,500.00
$ 26,400.00
$ 27,250.00
$
29,300.00
$ 30,000.00
$
30,000.00
$
29,600.00
Future Supplement
$
-
$
44,280.00
$ 45,510.00
$
51,870.00
$ 35,640.00
$ 24,952.50
$
36,816.00
$ 41,370.00
$
86,040.00
$
60,060.00
Investment Manager Fees
$
8,858.00
$
56,395.86
$ 66,240.45
$
69,500.53
$ 71,050.23
$ 70,369.02
$
68,150.57
$ 82,754.75
$
87,712.00
$ -
86,243.00
Other Expenses:
$
-
$
-
$ -
$
-
$
-
$ -
$
-
$
-
$
-
$
-
Office Supplies/printing
$
-
$
51.52
$ 56.81
$
46.20
$
-
$ -
$
84.00
$
-
$
-
$
-
Audit Fees
$
-
$
3,500.00
$ 3,400.00
$
3,600.00
$ 3,500.00
$ 3,500.00
$
3,500.00
$ 3,500.00
$
3,500.00
$
3,300.00
Professional Services
$
-
$
103.75
$ -
$
-
$
-
$ -
$
-
$
-
$
-
$
-
Legal Fees
$
-
$ -
$
-
$
-
$ -
$
-
$
-
$
-
$
1,025.00
Bank Fees
$
17.44
$
77.18
$ 99.10
$
89.83
$ 164.48
$ 119.34
$
161.69
$ 203.21
$
195.00
$
156.00
Total Expenses
$
390,340.20
$
1,662,904.03
$ 1,675,328.66
$
1,701,694.06
$ 1,701,741.33
$ 1,709,090.86
$
1,766,553.62
$ 1,795,895.72
$
1,788,766.00
$
1,636,850.00
Net Income (Loss) Before Market Adj"`
$
(252,344.83)
$
(32,407.46)
$ (415,374.05)
$
(373,224.44)
$ (317,018.66)
$ (151,674.09)
$
(447,984.82)
$ (1,482,401.40)
$
(223,482.00)
$
(15,908.00)
Market Adjustment
$
-
$
(355,917.05)
$ 95,442.84
$
(13,498.87)
$ (687.82)
$ 360,267.86
$
762,432.96
$ (1,291,031.77)
$
151,740.00
$
344,973.00
Net Income (Loss)
$
(252,344.83)
$
(388,324.51)
$ (319,931.21)
$
(386,723.31)
$ (317,706.48)
$ 208,593.77
$
314,448.14
$ (2,773,433.17)
$
(71,742.00)
$
329,065.00
Book Value Total Reserve Assets' $ 6,389,748.27 $ 6,653,793.10 $ 6,682,459.70 $ 7,081,891.04 $ 7,468,021.86 $ 7,785,041.00 $ 7,950,215.00 $ 8,398,199.00 $ 9,880,601.00 $ 10,104,083.00
Market Value Total Reserve Assets" $ 6,740,291.56 $ 7,030,014.20 $ 7,443,057.63 $ 7,689,491.43 $ 8,168,105.82 $ 8,555,897.00 $ 8,360,804.00 $ 8,046,356.00 $ 10,819,789.00 $ 10,891,530.00
'Assets less any liabilities
Market Value calculated at year end
7/7/2015 K:\Police Pension\Revenue 8 Expense Summary\2015 PP Revenue Expense Summary\Revenue and Expense Report 033115
Book Value Total Reserve Assets * $ 6,373,437.93 $ 6,653,793.10 $ 6,682,459.70 $ 7,081,891.04 $ 7,468,021.86 $ 7,785,041.00 $ 7,950,215.00 $ 8,398,199.00 $ 9,880,601.00 $ 10,104,083.00
Market Value Total Reserve Assets * $ 6,498,639.03 $ 7,030,014.20 $ 7,443,057.63 $ 7,689,491.43 $ 8,158,105.82 $ 8,555,897.00 $ 8,360,804.00 $ 8,046,356.00 $ 10,819,789.00 $ 10,891,530.00
"Assets less any liabilities
Market Value calculated at year end
7/15/2015 K:\Police Pension\Revenue & Expense Summary\2015 PP Revenue Expense Summary\Revenue and Expense Report 063015
Police
Pension Fund
Revenue Expense Summary
Policemen's
Pension Meeting
6/30/2015
2014
2013
2012
2011
2010
2009
2008
2007
July
162A915
Revenues:
Page
30 of 78
Employee Contributions
$
-
$ -
$
-
$
-
$ -
$
-
$ -
$
-
$
-
$
4,139.00
Employer Contributions
$
-
$ -
$
-
$
-
$ -
$
-
$ -
$
-
$
-
$
8,278.00
Stale Insurance Tax
$
-
$ 152,519.00
$ 142,151.31
$
138,410.77
$ 205,694.53
$
213,357.83
$ 214,429.30
$ 186,429.42
$ 190,192.00
$
226,826.00
Local Millage (A mills)
$
224,365.65
$ 525,620.07
$ 494,749.58
$
511,961.22
$ 498,380.57
$
508,192.07
$ 485,345.06
$ 441,696.50
$ 388,877.00
$
370,649.00
10% City Fines and Forfeitures
$
64,276.75
$ 101,595.92
$ 112,992.59
$
125,274.87
$ 126,045.40
$
130,723.07
$ 123,653.64
$ 131,583.83
$ 106,385.00
$
119,147.00
Sale of Confiscated Goods
$
1,717.86
$ 5,367.25
$ 1,898.28
$
3,491.81
$ 5,026.40
$
5,487.59
$ 9,732.16
$ 7,715.61
$ 10,806.00
$
6,343.00
Interest and Dividends
$
87,245.32
$ 250,152.16
$ 263,480.49
$
285,514.18
$ 263,520.02
$
267,714.80
$ 256,907.42
$ 359,998.26
$ 356,699.00
$
373,776.00
Gain (Loss) on Sales
$
122,520.56
$ 513,762.17
$ 160,066.59
$
168,288.38
$ 209,001.15
$
362,318.64
$ 153,193.23
$ (885,460.76)
$ 395,378.00
$
420,298.00
Police Supplement
$
11,700.00
$ 37,200.00
$ 37,800.00
$
39,900.00
$ 40,500.00
$
42,000.00
$ 31,200.00
$ 30,000.00
$ 30,000.00
$
30,300.00
Future Supplement
$
-
$ 44,280.00
$ 46,620.00
$
55,575.00
$ 36,450.00
$
26,061.50
$ 38,350.00
$ 41,370.00
$ 86,040.00
$
60,060.00
Misc Revenue
$
2.00
$ -
$
195.77
$
53.39
$ 104.60
$
1,561.27
$ 5,757.99
$ 161.46
$ 907.00
$
1,126.00
Total Revenue
$
511,828.14
$ 1,630,496.57
$ 1,259,954.61
$
1,328,469.62
$ 1,384,722.67
$
1,557,416.77
$ 1,318,568.80
$ 313,494.32
$ 1,565,284.00
$
1,620,942.00
Expenditures
Regular Monthly Benefits
$
751,229.52
$ 1,533,945.72
$ 1,535,372.30
$
1,551,087.50
$ 1,564,986.62
$
1,582,900.00
$ 1,628,521.36
$ 1,638,067.76
$ 1,581,319.00
$
1,456,466.00
Police Supplement
$
11,700.00
$ 24,550.00
$ 24,650.00
$
25,500.00
$ 26,400.00
$
27,250.00
$ 29,300.00
$ 30,000.00
$ 30,000.00
$
29,600.00
Future Supplement
$
-
$ 44,280.00
$ 45,510.00
$
51,870.00
$ 35,640.00
$
24,952.50
$ 36,816.00
$ 41,370.00
$ 86,040.00
$
60,060.00
Investment Manager Fees
$
17,524.02
$ 56,395.86
$ 66,240.45
$
69,500.53
$ 71,050.23
$
70,369.02
$ 68,150.57
$ 82,754.75
$ 87,712.00
$
86,243.00
Other Expenses:
$
-
$ -
$
-
$
-
$ -
$
-
$ -
$
-
$
-
$
-
Offce Supplies/printing
$
-
$ 51.52
$
56.81
$
46.20
$ -
$
-
$ 84.00
$
-
$
-
$
-
Audit Fees
$
-
$ 3,500.00
$ 3,400.00
$
3,600.00
$ 3,500.00
$
3,500.00
$ 3,500.00
$ 3,500.00
$ 3,500.00
$
3,300.00
Professional Services
$
-
$ 103.75
$
-
$
-
$ -
$
-
$ -
$
-
$
-
$
-
Legal Fees
$
-
$
-
$
-
$ -
$
-
$ -
$
-
$
-
$
1,025.00
Bank Fees
$
29.77
$ 77.18
$
99.10
$
89.83
$ 164.48
$
119.34
$ 181.69
$ 203.21
$ 195.00
$
156.00
Total Expenses
$
780,483.31
$ 1,662,904.03
$ 1,675,328.66
$
1,701,694.06
$ 1,701,741.33
$
1,709,090.86
$ 1,766,553.62
$ 1,795,895.72
$ 1,788,766.00
$
1,636,850.00
Net Income (Loss) Before Market Adj ***
$
(268,655.17)
$ (32,407.46)
$ (415,374.05)
$
(373,224.44)
$ (317,018.66)
$
(151,674.09)
$ (447,984.82)
$ (1,482,401.40)
$ (223,482.00)
$
(15,908.00)
Market Adjustment
$
-
$ (355,917.05)
$ 95,442.84
$
(13,498.87)
$ (687.82)
$
360,267.86
$ 762,432.96
$ (1,291,031.77)
$ 151,740.00
$
344,973.00
Net Income (Loss)
$
(268,655.17)
$ (388,324.51)
$ (319,931.21)
$
(386,723.31)
$ (317,706.48)
$
208,593.77
$ 314,448.14
$ (2,773,433.17)
$ (71,742.00)
$
329,065.00
Book Value Total Reserve Assets * $ 6,373,437.93 $ 6,653,793.10 $ 6,682,459.70 $ 7,081,891.04 $ 7,468,021.86 $ 7,785,041.00 $ 7,950,215.00 $ 8,398,199.00 $ 9,880,601.00 $ 10,104,083.00
Market Value Total Reserve Assets * $ 6,498,639.03 $ 7,030,014.20 $ 7,443,057.63 $ 7,689,491.43 $ 8,158,105.82 $ 8,555,897.00 $ 8,360,804.00 $ 8,046,356.00 $ 10,819,789.00 $ 10,891,530.00
"Assets less any liabilities
Market Value calculated at year end
7/15/2015 K:\Police Pension\Revenue & Expense Summary\2015 PP Revenue Expense Summary\Revenue and Expense Report 063015
Policemen's Pension Meeting
July 16, 2015
Page 31 of 78
ARKANSAS FIRE & POLICE PENSION REVIEW BOARD 620 W. 3rd, Suite 200
Little Rock, Arkansas 72201-2223
Telephone: 501.682.1745
Toll -Free: 866.859.1745
Fax: 501.682.1751
email: info@lopfi-prb.com
website: www.lopfi-prb.com
To: Board of Trustees
FAYETTEVILLE Police Pension Fund
From: PRB Staff
Re: 2014 Annual Actuarial Valuation
Date: May 11, 2015
Under state law the actuary for the PRB tests each local fire and police pension fund for actuarial
soundness. The PRB uses an annual valuation cycle to assist each Local Plan in monitoring the funding
progress of their plan. The enclosed valuation for December 31, 2012, answers the following questions
about your plan:
YES NO
Does income meet or exceed the Necessary XX
Employer Contribution (see page 4)?
2. Is the funded percentage at least 97% (see page 10),
OR are there enough assets to cover: all active
member contributions; all payments to current
beneficiaries; and 100% of all future payments
earned by active members (see page 11)? XX
Is the Local Plan actuarially sound?
(YES response to items 1 and 2) XX
Policemen's Pension Meeting
July 16, 2015
Page 32 of 78
FAYETTEVILLE POLICE PENSION FUND
ACTUARIAL VALUATION
AS OF DECEMBER 31, 2014
Osborn, Carreiro & Associates, Inc.
Actuaries Consultants Analysts
Little Rock, Arkansas
Osborn, Carreiro & Associates, Inc.
ACTUARIES CONSULTANTS ANALYSTS
May 8, 2015
Board of Trustees
Fayetteville Police Pension Fund
Gentlemen:
Policemen's Pension Meeting
July 16, 2015
Page 33 of 78
124 West Capitol Avenue, Suite 1690
Little Rock, Arkansas 72201
(501) 376-8043
This report presents the results of our actuarial valuation of the assets and liabilities of the Fayetteville
Police Pension Fund as of December 31, 2014.
This valuation is required by Arkansas Code Annotated 24-11-205. The purpose of this report is to (1)
evaluate the actuarial status of the Fund, (2) determine the level contribution requirement needed, (3)
review the development of the Fund over the past several years, and (4) present certain actuarial items
on page 9 for disclosure under Governmental Accounting Standards. This report is not intended for
any other purpose.
The Arkansas Fire & Police Pension Review Board reviewed the experience study we performed and a
change in the assumed interest discount rate was made to 5%. If your plan assumed something other
than 5% in previous valuations, the effect of this change in assumption is disclosed on page 5 of this
report.
The implementation of Government Accounting Standards Board Statement No. 67 (GASB 67) is
included in this report for the first time. GASB 68 will be added for the next valuation. There are four
Appendices added to this report to disclose the necessary items for GASB 67.
The member and financial information used in this report was supplied by the Arkansas Fire & Police
Pension Review Board. We did not audit this information, although we did review it for
reasonableness and consistency.
I certify that this report has been prepared in accordance with generally accepted actuarial principles
and practices. In my opinion, the actuarial methods used are appropriate and the actuarial assumptions
produce results which, in the aggregate, are reasonable.
Sincerely/,
Jody Carreiro, A.S.A., M.A.A.A.
Actuary
Policemen's Pension Meeting
July 16, 2015
Page 34 of 78
TABLE OF CONTENTS
EXHIBIT 1
CONTRIBUTIONS
EXHIBIT 2
COST AND LIABILITIES
EXHIBIT 3
SUMMARY OF FINANCIAL INFORMATION
EXHIBIT 4
COMPARISON WITH PRIOR YEARS
EXHIBIT 5
SHORT CONDITION TEST
EXHIBIT 6
EMPLOYEE AND RETIREE PROFILES
EXHIBIT 7
PRINCIPLE PROVISIONS OF THE PLAN
EXHIBIT 8
ACTUARIAL METHODS AND ASSUMPTIONS
APPENDIX I
DISSCUSSION OF GASB 67
APPENDIX 2
NOTES TO THE FINANCIAL STATEMENTS
APPENDIX 3
REQUIRED SUPPLEMENTARY INFORMATION
APPENDIX 4
CALCULATION OF SINGLE DISCOUNT RATE
3
Policemen's Pension Meeting
July 16, 2015
Page 35 of 78
EXHIBIT 1
CONTRIBUTIONS
The following contribution level reflects the payment of the current year Normal Cost for benefits
attributable to said year (see Exhibit 2) plus an amount sufficient to pay off the Unfunded Actuarial
Liability over a 5 -year period. These costs DO NOT include the contributions due to the Local
Police and Firefighters Retirement System ("LOPFI") for persons hired after 1982.
2015 Necessary Annual Contribution to pay:
1 Normal Cost, plus
2 Pay off the Unfunded Actuarial
Accrued Liability
3 Total necessary
Less
4 Expected Employee Contribution
(6.00% of salary)
Necessary Employer Contribution
(This is the amount needed in
addition to investment income)
Covered Payroll
Necessary Employer Rate
$ 0
2,950,140
$ 2,950,140
0
$ 2,950,140
$ 0
0.00%
The contributions are assumed to be made continuously throughout the year.
The actual 2014 contribution was $782,624 from the employer.
4
Policemen's Pension Meeting
July 16, 2015
Page 36 of 78
EXHIBIT 2
COSTS AND LIABILITIES
5
December 31.2014
A Normal Cost
Dollar
Percent
(Cost to fund current active members)
Amount
of pay
1 Regular Retirement Benefits
$
0
0.00%
2 Voluntary Termination Benefits
0
0.00%
3 Survivors' Benefits
0
0.00%
4 Disability Benefits
0
0.00%
TOTAL
$
0
0.00%
B Actuarial Accrued Liability
1 Active Lives
Regular Retirement Benefits
$
0
Voluntary Termination Benefits
0
Survivors' Benefits
0
Disability Benefits
0
TOTAL ACTIVE LIVES
$
0
2 Inactive Lives
Retirees
$
14,463,340
Disability Retirees
2,712,594
Widows & Children
2,504,520
TOTAL INACTIVE LIVES
$
19,680,454
3 Total Liability
$
19,680,454
C Assets
$
6,596,365
D Unfunded Actuarial Accrued Liability
$
13,084,089
5
Policemen's Pension Meeting
July 16, 2015
Page 37 of 78
EXHIBIT 3
SUMMARY OF FINANCIAL INFORMATION
(Items C, F -H, and I determined by Osborn, Carreim and Associates, Inc.)
6
Year Ended
Year Ended
Year Ended
Year Ended
Year Ended
Year Ended
Year Ended
Year Ended
Year Ended
Year Ended
A. INCOME
12/31/2014
12/31/2013
12/312012
12/312011
12/312010
12/312009
12/312008
12/312007
121312006
12/312005
I Employee Contributions $
0 $
0 $
0 $
0 $
0 $
0 $
0 $
0 $
4,139
$ 5,193
2 Emplaver Contributions
Employer/Gaon Fines/Other
106,536
127,094
128,767
131,071
136,210
133,386
139,299
117,191
133,768
137,338
Local Mdlage
523,569
527,430
511,961
498,381
508,192
485,345
441,697
388,877
370,649
339,416
3 State Insurance Premium Tax
Premium Tax Allocation
120,410
117,370
103,808
205,695
213,358
214,429
186,429
190,192
226,826
353,271
Additional Allocation
32,109
24,781
34,603
0
0
0
0
0
0
0
Guarantee Fund
0
0
0
0
0
0
0
0
0
0
4 Other Income
LOPFI Subsidy
0
0
0
0
0
0
0
0
0
0
Police Supplement (Act 1452 of 199
25,500
25,200
27,300
27,600
28,500
31,200
30,000
30,000
30,000
31,275
Future Supplement (Act 1373 of200
44,280
46,620
55,575
36,450
26,062
38,350
41,370
86,040
60,060
51,199
Other lncome/Donations
427
196
53
0
1,561
5,758
161
907
1,427
2,401
Adjustment to prior year value
0
0
0
0
0
0
0
0
0
0
5 Net inveshnem Income
707,518
357,307
384,301
401,576
559,665
341,867
(608,217)
664,365
707,831
492,771
TOTALINCOME S
1,560,349 $
1,225,998 S
1,246,368 S
1,300,773 $
1,473,548 $
1,250,335 $
230,739 S
1,477,572 $
1,534,700
$ 1,412,864
B. EXPENSES
1 Administrative $
3,732 $
3,556 $
3,736 $
3,671 $
3,619 $
3,682 $
3,703 $
3,695 $
4,481
$ 5,366
2 Benefits Paid
Monthly Benefits
1,533,946
1,535,372
1,551,087
1,564,987
1,582,900
1,628,521
1,638,068
1,581,319
1,456,466
1,362,068
Police Supplements
24,550
24,650
25,500
26,400
27,250
29,300
30,000
30,000
29,600
29,800
Future Supplements
44,280
45,510
51,870
35,640
24,953
36,816
41,370
86,040
60,060
48,245
DROP Payouts
0
0
0
0
0
0
0
0
0
0
Paid Cutsent Year for Previous Year
0
0
0
0
0
0
0
0
0
0
3 Refunds
0
0
0
0
0
0
0
0
0
0
4 Ocher Expenses
0
0
0
0
0
0
0
0
0
0
TOTAL EXPENSES S
1,606,508 $
1,609,088 $
1,632,193 $
1,630,698 $
1,638,722 $
1,698,319 S
1,713,141 $
1,701,054 $
1,550,607
$ 1A45,479
C. Non -Investment Cash Flow $
(753,677) $
(740,397) S
(770,126) $
(731,501) $
(724,839) S
(789,851) S
(874,185) S
(887,847) S
(723,738)
$ (525,386)
6
Policemen's Pension Meeting
July 16, 2015
Page 38 of 78
EXHIBIT 3 (Continued)
D. ASSETS (at book value) 12/312014
12/312013
12/312012
12/31/2011
12/31/2010
12/3111009
12/312008
12/312007
12/312006
12/312005
1 Cash & Checking Accounts $ 25,812 $
4,403 $
10,906 $
19,643 $
3,018 $
0 $
0 $
0 $
0 $
0
2 Bank Deposits 0
0
0
0
0
2,932
1,818
5,952
1,260
18,524
3 Savings and Lcen Deposits 0
0
0
0
0
0
0
0
0
0
4 Other Cash Equivalents 429,234
167,633
116,827
109,154
212,637
91,470
882,635
503,276
272,024
13,795
5 US Gevt. Securities 1,148,919
1,258,389
1,352,185
1,279,004
1,586,099
1,963,872
2,455,193
4,049,437
4,395,290
4,559,937
6 Non -US Govt Securities 0
0
0
0
0
0
0
0
0
0
7 Mortgages 0
0
0
0
0
0
0
0
0
0
8 Corporate Bonds 950,077
883,239
1,443,125
1,324,587
922,200
1,024,106
401,276
258,140
381,729
482,122
9 Common Stocks 4,068,324
4,329,152
4,135,803
4,711,054
5,044,965
4,842,939
4,601,263
5,003,139
4,984,362
4,985,062
10 Other 29,375
55,985
23,044
24,574
29,622
38,696
71,029
75,657
84,418
75,850
tl Payables (11,700)
(12,600)
(12,600)
(12,900)
(13,500)
(13,800)
(15,015)
(15,000)
(15,000)
(15,300)
TOTAL ASSETS S 6,640,042 $
6,686,201 $
7,069,291 $
7,455,116 $
7,785,041 $
7,950,215 $
8,398,199 $
9,880,601 S
10,104,083 $
10,119,990
E. TOTAL MARKET VALUE S 7,136,238 5
7,538,314 S
7,825,962 $
8,225,285 $
8,555,897 $
8,360,804 $
8,046,356 $
10,819,789 $
10,891,530 $
10,562,465
F. RATIO OF ASSETS TO ANNUAL EXPENSES
Book Value Basis 4.1
4.2
4.3
4.6
4.8
4.7
4.9
5.8
6.5
7.0
Market Value Basis 4.4
4.7
4.8
5.0
5.2
4.9
4.7
6.4
7.0
7.3
G. RATIO OF ASSETS TO NON -INVESTMENT CASH
OUTFLOW
Book Value Basis g8
9.0
9.2
10.2
10.7
10.1
9.6
11.1
14.0
19.3
Markel Value Basis 9.5
10.2
10.2
11.2
11.8
10.6
9.2
12.2
15.0
20.1
H. SUMMARY OF NET INVESTMENT RETURNS
Book Value Rate of Return 11.21%
5.33%
5.44%
5.41%
7.38%
4.27%
-6.44%
6.88%
7.25%
4.98%
10 Year Average Return 5.08%
Market Value Rate ofRaturn 4.91%
6.07%
4.73%
4.89%
1150%
14.43%
-18.29%
7.81%
10.32%
1.22%
10 Year Average Return 4.37
Note: The assumed liability discount rate is 5%. Ifthe plan does not realise an investment return of 5% or more over the long
term, the ultimate cost of the plan will be greater than the liabilities shown
in this report.
That is, the plan would need more money to meet its obligations.
7
EXHIBIT 3 (Continued)
I. TOTAL MARKET VALUE
1. Market Value, end of year
(Used for GASB calculations, page 9)
2. Market Value, beginning of year
Policemen's Pension Meeting
July 16, 2015
Page 39 of 78
12/31/2014 12/31/2013 12/31/2012 12/31/2011 12/31/201
7,136,238 7,538,314 7,825,962 8,225,285 8,555,897
7,538,314 7,825,962 8,225,285 8,555,897 8,360,804
J.
DEVELOPMENT OF ACTUARIAL VALUE
OF ASSETS
1.
Actuarial Value of Assets, beginning of year
6,897,517
7,088,826
7,815,210
8,429,143
8,923,776
2.
Non Investment Net Cash Flow
(753,677)
(740,397)
(770,126)
(731,501)
(724,839)
3.
Development of Investment Income
(a)
Total Market Investment Income (I14242)
351,602
452,749
370,803
400,889
919,932
(b)
Assumed Rate for Immediate Recognition
5%
5%
5%
5%
5%
(c)
Amount for Immediate Recognition (JI x b)
344,876
354,441
390,761
421,457
446,189
(d)
Amount for Phased In Recognition (a -c)
6,726
98,308
(19,958)
(20,568)
473,743
(e)
Phased In Recognition
Current year: 20% of 3(d)
1,345
19,662
(3,992)
(4,114)
94,749
First Prior Year
19,662
(3,992)
(4,114)
94,749
88,341
Second Prior Year
(3,992)
(4,114)
94,749
88,341
(522,003)
Third Prior Year
(4,114)
94,749
88,341
(522,003)
39,138
Fourth Prior Year
94,749
88,341
(522,003)
39,138
83,792
Total Phased In Recognition
107,650
194,646
(347,018)
(303,889)
(215,983)
(f)
Actuarial Value Investment Income
452,526
549,088
43,742
117,568
230,205
( 3(c) + 3(e) )
4.
Actuarial Value of Assets, End of year
( l +2+3(f))
6,596,365
6,897,517
7,088,826
7,815,210
8,429,143
5.
Net Investment Return on the
6.9%
8.2%
0.60/.
1.5%
2.7%
Actuarial Value of Assets
Note: The Pension Review Board's Board Rule #I I fast applies this methodology to determine the Actuarial Value
of Assets for the 12/31/99 actuarial valuation report Different methods were used to determine the Actuarial
Value of Assets for the 12/31/98 and earlier reports.
EXHIBIT 3 (Continued)
ACCOUNTING INFORMATION
Policemen's Pension Meeting
July 16, 2015
Page 40 of 78
This page is included to provide the information required by the Governmental Accounting Standards Board Statement
No. 25 and 27. The values below are based on the assumptions contained in Exhibit 8.
The Annual Pension Cost disclosed in this exhibit will almost always differ from the actual cash contribution to the fund.
We must emphasize that these disclosures are shown in the city's financial statements; Sound actuarial projections
should be used to determine the actual cash contribution requirements.
RECONCILIATION OF NET PENSION OBLIGATION (NPO)
E
2012
2013
2014
1.
Actuarially Required Contribution
2,944,130
2,919,366
2,872,624
2.
Interest on NPO
361,595
406,393
441,216
3.
Adjustment to (1)
1,630,615
1,832,634
1,989,666
4.
Annual Pension Cost(1)+(2)-(3)
1,675,110
1,493,125
1,324,173
5.
Actual Contribution Made
779,139
796,675
782,624
6.
Increase in NPO (4)-(5)
895,971
696,450
541,550
7.
NPO Beginning of Year
7,231,898
8,127,868
8,824,318
8.
NPO End of Year
8,127,868
8,824,318
9,365,868
REQUIRED SUPPLEMENTARY INFORMATION
(a)
(b) (c)
(d)
(e)
(f)
(g)
Unfunded
Entry Age
Accrued
UAL as a %
Actuarial
Market Actuarial
Liability
Funded
Annual
of Covered
Valuation
Value of Accrued
(UAL)
Ratio
Covered
Payroll
Date
Plan Assets Liability
(c) -(b)
(b)/(c)
Payroll
(d)/(f)
12/31/2003
10,937,721 18,596,975
7,659,254
58.8%
219,008
3497.2%
12/31/2005
10,562,465 20,132,980
9,570,515
52.5%
70,279
13617.9%
12/31/2007
a 10,819,789 18,707,210
7,887,421
57.8%
0
N/A
12/31/2008
8,046,356 19,015,138
10,968,782
42.3%
0
N/A
12/31/2009
b 8,360,804 22,485,442
14,124,638
37.2%
0
N/A
12/31/2010
8,555,897 21,801,583
13,245,686
39.2%
0
N/A
12/31/2011.
8,225,285 21,282,718
13,057,433
38.6%
0
N/A
12/31/2012
7,825,962 20,773,565
12,947,603
37.7%
0
N/A
12/31/2013
c 7,538,314 20,278,614
12,740,300
37.2%
0
N/A
12/31/2014
7,136,238 19,680,454
12,544,216
36.3%
0
N/A
a Includes change in assumptions to 7% discount rate
and 83GAM mortality.
b Includes change in assumptions to 5% discount rate
and 83GAM mortality.
c Includes change in assumptions to 5% discount rate
and 83GAM mortality.
E
Policemen's Pension Meeting
July 16, 2015
Page 41 of 78
EXHIBIT 4
COMPARISON WITH PRIOR YEARS
10
Full Paid
Actuarial Computed
Active Members
Employer Contribution
Total Plan
Unfunded
Normal
Valuation
Annual
Percent
Dollar
Actuarial
Cost
Funded
Date
No.
Payroll
of Pay
Amount
Assets
Liability
Percent
Percent
12/31/1984
38
691,245
32.9%
227,671
2,637,566
1,685,881
23.7%
61.0%
12/31/1986
29
604,566
35.5%
214,342
3,251,235
1,712,937
23.9%
65.5%
12/31/1987
* 28
666,941
37.8%
252,114
3,374,250
2,065,775
24.6%
62.0%
12/31/1989
25
634,711
38.8%
246,132
4,009,866
2,175,493
27.2%
64.8%
12/31/1991
24
675,900
35.9%
242,541
5,144,950
1,632,194
28.2%
75.9%
12/31/1993
17
536,070
37.2%
199,314
6,293,999
1,232,923
27.8%
83.6%
12/31/1995
* 15
518,643
37.5%
194,517
7,187,710
989,655
27.7%
87.9%
12/31/1997
12
491,422
15.1%
74,142
9,126,449
(255,946)
26.9%
102.9%
12/31/1999
* 11
482,457
175.7%
847,558
10,572,573
4,788,608
45.2%
68.8%
12/31/2001
7
384,312
252.4%
969,851
11,353,564
4,549,239
41.6%
71.4%
12/31/2003
* 3
219,008
0.0%
1,678,182
11,125,006
7,471,969
36.4%
59.8%
12/31/2005
* 1
70,279
0.0%
2,071,290
10,564,072
9,568,908
40.6%
52.5%
12/31/2007
* 0
0
0.0%
1,872,657
10,153,822
8,553,388
0.0%
54.3%
12/31/2008
0
0
0.0%
2,108,536
9,384,367
9,630,771
0.0%
49.4%
12/31/2009
0
0
0.0%
3,057,822
8,923,775
13,561,667
0.0%
39.7%
12/31/2010
* 0
0
0.0%
3,015,156
8,429,143
13,372,440
0.0%
38.7%
12/31/2011
0
0
0.0%
3,036,591
7,815,210
13,467,508
0.0%
36.7%
12/31/2012
0
0
0.0%
3,085,572
7,088,826
13,684,739
0.0%
34.1%
12/31/2013
0
0
0.0%
3,017,108
6,897,517
13,381,097
0.0%
34.0%
12/31/2014
0
0
0.0%
2,950,140
6,596,365
13,084,089
0.0%
33.5%
* Benefits or assumptions changed
10
Policemen's Pension Meeting
July 16, 2015
Page 42 of 78
EXHIBIT 5
SHORT CONDITION TEST
The Arkansas General Assembly has stated that the funding objective for these plans is to pay for
benefits with contributions that remain level as a percentage of employee payroll. Thus, the long-
term condition test is met when the actual contributions are fairly level and are paid when due.
A short condition test can be used to measure a plan's progress. Under the short condition test, the
fund's assets are compared with:
1) Active member contributions;
2) The liabilities for future benefits to the present retirees and inactive members;
3) The liabilities for service already rendered by active members.
If the plan has been following level cost funding, liability (1) and liability (2) above will almost
always be fully covered by the rest of the present assets. In
addition, liability
(3) above will at least
partially funded.
The larger the funded portion
of liability (3), the stronger
the condition
of the fund.
For a closed fund i.e., one like yours, where no new members are admitted), the funded portion of
liability (3) should be steadily increasing.
The following table illustrates the history of
the short condition test for this plan:
Computed Actuarial Liabilities
Portion of Liabilities
(1) (2)
(3)
covered by Assets
Active Retirees
Actives -
Valuation
Members and
Employer
Valuation
Date
Contributions Inactives
Financed
Assets
(1)
(2)
(3)
12/31/1984
186,492 2,220,660
1,916,295
2,637,566
100%
100%
12%
12/31/1986
200,487 2,982,120
1,781,565
3,251,235
100%
100%
4%
12/31/1987
229,457 3,095,232
2,115,336
3,374,250
100%
100%
2%
12/31/1989
266,726 3,719,388
2,199,245
4,009,866
100%
100%
1%
12/31/1991
336,940 3,674,180
2,766,024
5,144,950
100%
100%
41%
12/31/1993
299,612 4,834,716
2,392,594
6,293,999
100%
100%
48%
12/31/1995
319,728 5,358,162
2,499,475
7,187,710
100%
100%
60%
12/31/1997
317,594 5,944,842
2,608,067
9,126,449
100%
100%
110%
12/31/1999
347,267 10,047,770
4,966,144
10,572,573
100%
100%
4%
12/31/2001
291,291 11,488,981
4,122,531
11,353,564
100%
96%
0%
12/31/2003
155,251 16,072,819
2,368,905
11,125,006
100%
68%
0%
12/31/2005
50,523 19,314,460
767,997
10,564,072
100%
54%
0%
12/31/2007
0 18,707,210
0
10,153,822
100%
54%
0%
12/31/2008
0 19,015,138
0
9,384,367
100%
49%
0%
12/31/2009
0 22,485,442
0
8,923,775
100%
40%
0%
12/31/2010
0 21,801,583
0
8,429,143
100%
39%
0%
12/31/2011
0 21,282,718
0
7,815,210
100%
37%
0%
12/31/2012
0 20,773,565
0
7,088,826
100%
34%
0%
12/31/2013
0 20,278,614
0
6,897,517
100%
34%
0%
12/31/2014
0 19,680,454
0
6,596,365
100%
34%
0%
11
Policemen's Pension Meeting
July 16, 2015
Page 43 of 78
EXHIBIT 6
Employee Profile
Employee data needed for the valuation was obtained from the records famished by the
Arkansas Fire and Police Pension Review Board. The following table shows a detailed
breakdown of the present participants by the number of participants and total salary.
Actives
Years of Service
30 and
Age
0-5 5-10
10-15
15-20
20-25
25-30
Over Total
Under
Count
0
0
0
0
0
0
0 ', 0
25
Salary
0
0
0
0
0
0
0 Q`
25-29
Count
0
0
0
0
0
0
0
Salary
0
0
0
0
0
0
0,
30-34
Count
0
0
0
0
0
0
0 '^0
Salary
0
0
0
0
0
0
0:'
35-39
Count
0
0
0
0
0
0
0 0-..
Salary
0
0
0
0
0
0
0 s a '. A`
40-44
Count
0
0
0
0
0
0
0.,."
Salary
0
0
0
0
0
0
0 ". U
45-49
Count
0
0
0
0
0
0
0
Salary
0
0
0
0
0
0
0
50-54
Count
0
0
0
0
0
0
0
Salary
0
0
0
0
0
0
0 +Q
55-59
Count
0
0
0
0
0
0
0 ,�: "
Salary
0
0
0
0
0
0
60-64
Count
0
0
0
0
0
0
0
Salary
0
0
0
0
0
0
0 0
65 &
Count
0
0
0
0
0
0
0 A
Over
Salary
0
0
0
0
0
0
0., i 0�
Unknown
Count
0
0
0
0
0
0
0., Q,
Age
Salary
0
0
0
0
0
0
0 "' : V
Total
Count
00
Q
0
0` -
,:0,-'
Salary
0,
? . Q..'
0
12
Policemen's Pension Meeting
July 16, 2015
Page 44 of 78
EXHIBIT 6
Inactive Profile
Employee data needed for the valuation was obtained from the records furnished by the Arkansas
Fire and Police Pension Review Board. The following table shows a detailed breakdown of the
present payees by the number of payees and total annual benefit.
Retirees and Survivors
Years Since Retirement
10 and
n i i o 1_9 a -d d-5 5-10 Over Total
Under
Count
0
0
0
0
0
0
0
0
40
Benefit
0
0
0
0
0
0
0
0
40-44
Count
0
0
0
0
0
0
0
0
Benefit
0
0
0
0
0
0
0
0
45-49
Count
0
0
0
0
0
0
0
0
Benefit
0
0
0
0
0
0
0
-0
50-54
Count
0
0
0
0
0
0
1
1
Benefit
0
0
0
0
0
0
18,301
18,301
55-59
Count
0
0
0
0
0
1
9
-10
Benefit
0
0
0
0
0
95,698
293,461
389,159
60-64
Count
0
0
0
0
0
1
4
5
Benefit
0
0
0
0
0
92,784
138,675
231,459
65-69
Count
0
0
0
0
0
3
7
10
Benefit
0
0
0
0
0
102,113
256,552
358,665
70-74
Count
0
0
0
0
0
0
10
'.10
Benefit
0
0
0
0
0
0
238,589
238,589
75-79
Count
0
0
0
0
0
0
5
5.
Benefit
0
0
0
0
0
0
203,956
203,956
80-84
Count
0
0
0
0
0
0
2
2
Benefit
0
0
0
0
0
0
43,357
43,357
85 &
Count
0
0
0
0
0
0
1
1
Over
Benefit
0
0
0
0
0
0
18,971
18,971
Unknown
Count
0
0
0
0
0
0
0
0
Age
Benefit
0
0
0
0
0
0
0
0
Total
Count
0
0
0
0
0
5
39
44
Benefit
0
0
0
0
0
290,595
1,211,862
1,501,457.
This includes 25 retirees with annual benefit of $1,029,935 .
This includes 9 disableds with annual benefit of $234,382 .
This includes 10 survivors with annual benefit of $238,140 .
13
Policemen's Pension Meeting
July 16, 2015
Page 45 of 78
EXHIBIT 7
PRINCIPLE PROVISIONS OF THE PLAN
EMPLOYEE Member of Police Department
EMPLOYER Fayetteville Police Department
MEMBERSHIP Condition of Employment. Police officers hired after 1982 must join the
statewide Local Police and Firefighters Retirement System
CREDITABLE SERVICE Determined on basis of service since employment
CONTRIBUTIONS
Employee 6% of salary. Refundable if member terminates before retirement eligibility.
Emnlover 1. Matching contribution equal to employee contribution
2. State Insurance Premium Tax tumback
3. Local Millage
4. 10% of all fines & forfeitures collected by the Police Department.
FINAL SALARY Highest salary for any continuous twelve-month period of time worked prior
to retirement.
RETIREMENT BENEFITS
Eligibili1y 20 Years of Service regardless of age.
Benefit 95% of Final Salary, but not less than $4,200. If service exceeds 20 years, the
annual benefit is increased by $240 for each year over 20, up to $1,200/year
extra.
If service is more than 25 years, member receives an extra 1.25% (for each
year over 25) of Final Salary, payable once the retiree reaches age 60. The
benefit cannot exceed 100% of Final Salary.
DEATH BENEFITS
Eligibility Death of an active member or member receiving benefits.
Benefit 1. Widow receives same amount as member is receiving or eligible to
receive, excluding the 1.25% additional formula for service over 25
years.
2. Each child under age 18 (23 if still in school) receives $1,500/year.
If no surviving spouse, children receive spouse's benefit to age 18.
3. If no widow or children, widowed mother receives $1,500/year.
14
Policemen's Pension Meeting
July 16, 2015
Page 46 of 78
EXHIBIT 7 (Continued)
DISABILITY BENEFITS
Eli ibili Permanent physical or mental disability. Five year service requirement unless
disability is incurred in the line of duty.
Benefit Non -duty disability
Retirement benefit but not less than $4,200/year.
Duty related disability
Retirement benefit but not less than 65% of Final Salary and not less
than $4,200/year.
15
Policemen's Pension Meeting
July 16, 2015
Page 47 of 78
EXHIBIT 8
ACTUARIAL METHODS AND ASSUMPTIONS
The assumptions for this valuation have been selected in accordance with Actuarial Standards of Practice No. 27.
The asset valuation method is prescribed in Arkansas Code Annotated 24-11-207. This prescribed asset
valuation method directly impacts the investment return assumption. The assumed salary growth is restricted by
A.C.A. 24-11-205 in relation to the investment return assumption.
ACTUARIAL COST METHOD The "entry age normal' cost method has been used.
PRE -RETIREMENT MORTALITY Deaths have been projected on the basis of the 1983 Group
Annuity Table for Males, set back five years for females.
Mortality rates at a few sample ages are:
Age Mortality rate per 1.000
25 0.464
35 0.860
45 2.183
55 6.131
POST RETIREMENT MORTALITY The 1983 Group Annuity Mortality Table was used. For females,
the male table was used with a five-year setback. The life
expectancy according to this table is as follows:
Age Males Females
55 24.87 29.23
65 16.74 20.68
MORTALITY BASIS AND PROJECTION The mortality assumptions do not include a projection for
mortality improvement. These rates were chosen after an
experience study for 2007-2012. No projection was deemed
necessary at this time since the recent experience study did not
show significant improvement over an experience study for 2000-
2006 deaths.
The 1971 Group Annuity Table for Males, set back five years for
females was used before the 12/31/2007 Valuation.
VOLUNTARY TERMINATIONS Annual termination rates at a few sample ages are:
Age
Termination rate per 1.000
20
50
25
45
30
39
35
23
40
9
45
5
50
5
55
5
16
EXHIBIT 8 (Continued)
Policemen's Pension Meeting
July 16, 2015
Page 48 of 78
When a person had less than 4 years of service, we assumed that
his chances of voluntary termination were a multiple of thereafter
rates, with the following multiples being used:
1st year 2.85
2nd year 2.00
3rd year 1.50
4th year 1.15
ASSUMED DISCOUNT RATE 5.0%
The reports for the valuations as of 12/31/2009 through 12/31/
2012 were completed using an assumed discount rate of 5%.
A study of the returns of all fire and police plans was made of the
2006-2012 experience. The components and variations of
appropriate portfolios were also reviewed. The Pension Review
Board determined that for comparison with previous years and
with other similar plans that a single discount assumption of 5%
should be used.
DISABILITIES We continued the disability rates used in prior reports. Disability
rates at a few sample ages are:
Age Disability rate per 1.000
20 0.8
25 0.8
30 0.8
35 0.8
40 2.0
45 2.6
50 4.9
55 8.9
60 14.1
One third of the disabilities were assumed to be service related.
For mortality after disability, we assumed rates based on the
Eleventh Actuarial Valuation of the Railroad Retirement System,
for occupational disabilities
ASSET VALUATION See Exhibit 3, Part J
17
Policemen's Pension Meeting
July 16, 2015
Page 49 of 78
EXHIBIT 8 (Continued)
SALARY GROWTH We have used the salary scale used in prior reports. Annual
assumed growth at a few sample ages is:
ANNUAL SALARY INCREASE
Age
Base
Merit
Total
20
4.0%
4.0%
8.0%
25
4.0%
3.2%
7.2%
30
4.0%
2.8%
6.8%
35
4.0%
2.5%
6.5%
40
4.0%
2.2%
6.2%
45
4.0%
1.7%
5.7%
50
4.0%
1.2%
5.2%
55
4.0%
0.7%
4.7%
60
4.0%
0.2%
4.2%
EXPECTED RETIREMENT PATTERN Since the plan allows full benefits at ages younger than the
traditional "65", an assumption that will have an important impact
is what percentage of people who are eligible for this early
retirement will actually take advantage of it.
This will depend on intangible things such as the economy, health,
financial ability to retire, Social Security eligibility, and work
patterns. Based on recent experience, we are using the following
assumed rates:
Retirement rate per 1.000
Age
40-44
200
45-50
250
51
250
52-58
250
59
250
60+
1,000
Note:
A member was assumed to be eligible for retirement
after attaining age 40 with 20 years of service. It is
also assumed that twice the normal number will
retire in the first year of eligibility.
18
APPENDIX 1
Discussion of GASB 67
Accounting Standard
Policemen's Pension Meeting
July 16, 2015
Page 50 of 78
For pension plans that are administered through trusts or equivalent arrangements, Govermental
Accounting Stands Board (GASB) Statement No. 67, "Financial Reporting for Pension Plans,"
(GASB 67) replaces Statements No. 25 and No. 50. GASB 67 establishes standards of financial
reporting and specifies the required approach for measuring the pension liability of employers
for benefits provided through the pension plan.
This discussion provides a summary of the information that is required to be disclosed under
GASB 67. A number of these disclosure items are provided in this report as noted. However,
certain information, such as notes regarding accounting policies and investments, is not included
in this report, and your internal staff will be responsible for preparing that information to fully
comply with this accounting standard.
Financial Statements
GASB 67 requires defined benefit pension plans to present two financial statements: a statement
of fiduciary plan net position and a statement of changes in fiduciary plan net position. Based
on the information that was provided to our firm, we compiled the Financial Statements that are
included in this report as Exhibit 3.
Notes to Financial Statements
Paragraph 30 of GASB 67 is an extensive list of notes to the plan's financial statements that are
required to provide additional disclosure. Many of these notes concern the plan provisions and
the actuarial assumptions used in making the calculations under this standard. Those items are
included as Exhibits 7 and 8 in this report.
Please note that several items mentioned in Paragraph 30 are beyond the scope of the included
information. Your internal staff will be responsible for preparing those notes.
This report includes some notes that are actuarial in nature and are written in the format we
understand is desired by GASB 67. These notes are included as Appendix 2 of this report.
These are only selected notes and not intended to be a complete compilation of notes to the
financial statements.
19
Policemen's Pension Meeting
July 16, 2015
Page 51 of 78
Required Supplementary Information
GASB 67 requires a 10 -fiscal year history of various information about the pension liability.
These schedules may be built prospectively since the presentation is not the same as all previous
years under previous standards. The four schedules are:
• Schedule of changes in the net pension liability.
• Schedule of the components of net pension liability along with related ratios.
• Comparison of actual employer contributions to the actuarially determined contributions
based on the plan's funding policy.
• Schedule of the annual money -weighted rate of return on pension plan investments.
These compilations can be found in Appendix 4 of this report. Please note that the money -
weighted rate of return schedule is based on all transactions occurring at mid -year. The standard
calls for a monthly calculation of the weighted, but we do not have the data sufficient to make
that calculation.
Single Discount Rate
Projected benefit payments are required to be discounted to actuarial present values using a
single discount rate that reflects (1) a long-term expected rate of return on pension plan
investments (to the extent that the plan's fiduciary net position is projected to be sufficient to pay
benefits) and (2) a tax-exempt municipal bond rate based on an index of 20 -year general
obligation bonds with an average AA credit rating as of the measurement date (to the extent that
the plan's net position with contributions associated with current plan member and the long-term
expected rate of return are not sufficient to pay benefits).
For the purpose of this valuation, the expected rate of return on pension plan investments is
5.0%; the municipal bond rate is 4.29%; and the resulting single discount rate is 5.0%. The
resulting demonstration of the single discount rate calculation is shown in Appendix 4.
Valuation Date, Effective Date and Transition
GASB 67 is effective for fiscal years beginning after June 15, 2013. Since the fiscal year under
consideration for this report is 2014, the corresponding financial statement covers the fiscal year
from January 1, 2014 to December 31, 2014. We understand that the plan fiscal year and the
employer's fiscal year are the same. Therefore, the calculations included in this report are not
projected and reflect the beginning and the end of the above stated fiscal year.
RM
Policemen's Pension Meeting
July 16, 2015
Page 52 of 78
APPENDIX 2
Notes to the Financial Statements
Cost of Living Adjustment (COLA)
The board of trustees has the ability to make ad hoc cost of living adjustments (COLA) and other
benefit improvements through a process that requires actuarial soundness and approval by the
Pension Review Board. Therefore, in the opinion of the actuary, any increases are not
substantively automatic, and no COLA is included in the determination of the Total Pension
Liability.
Long -Term Expected Return on Plan Assets
The Long -Term Expected Rate of Return on pension plan investments was determined using a
building block method in which best -estimate ranges of expected future real rates of return. The
rates were built on a target allocation for all local police and fire pension funds, the target for an
individual fund will vary within the guidelines of Arkansas law and regulation. The target
allocation and the long-term expec rates of return are shown in the table below:
Asset Class
Target Allocation
Long-term
Expected Rate
of Return
Domestic Fixed Income
80%
5.0%
International Fixed Income
Domestic Equity
10%
7.8%
Foreign Equity
Cash
10%
2.0%
Total
100%
5.0%
Single Discount Rate
A single discount rate of 5.0% was used to measure the Total Pension Liability. This single
discount rate was based on the expected rate of return on pension plan investments of 5.0%. The
projection of cash flows, based on the assumptions made, found that the pension plan's net
position was available to make all projected future benefit payments of current plan members.
Therefore, the long-term expected rate of return on pension plan investments was applied to all
periods of projected benefit payments to determine the Total Pension Liability.
Regarding the sensitivity of the Net Pension Liability to changes in the single discount rate, the
follow presents the plan's net pension liability, calculated using a single discount rate of 5.0%, as
well as what the plan's net pension liability would be if it were calculated using a single discount
rate that is 1 -percentage point lower or 1 -percentage point higher:
1% Current Single 1%
Decrease Rate Assumed Increase
4.00% 5.00% 6.00%
Total Pension Liability 21,948,777 19,680,454 17,927,905
Net Pension Liability 14,812,539 12,544,216 10,791,667
21
Policemen's Pension Meeting
July 16, 2015
Page 53 of 78
APPENDIX 3
Required Supplementary Information
GASB 67 requires a 10 -fiscal year history of various information about the pension liability.
These schedules may be built prospectively since the presentation is not the same as all previous
years under previous standards. The four schedules are:
• Schedule of changes in the net pension liability.
• Schedule of the components of net pension liability along with related ratios.
• Comparison of actual employer contributions to the actuarially determined contributions
based on the plan's funding policy.
• Schedule of the annual money -weighted rate of return on pension plan investments.
Please note that the money -weighted rate of return schedule is based on all transactions occurring
at mid -year. The standard calls for a monthly calculation of the weighted return, but we do not
have the data sufficient to make that calculation.
The actuarially determined contribution rate was not calculated in the fashion described
historically. Therefore, that schedule will be completed prospectively.
The schedules follow this page.
22
Fiscal Year ending December 31,
Total Pension Liability
Service Cost
Interest
Benefit Changes
Difference between Actual & Expected
Experience
Assumption changes
Benefit Payments
Net Change in Total Pension Liability
Total Pension Liability - Beginning
Total Pension Liability - Ending
Plan Fiduciary Net Position
Contributions - Employee
Contributions - Employer
Net Investment Income
Benefit Payments
Administrative Expense
Reconciliation
Net Change in Plan Net Position
Plan Fiduciary Net Position - Beginning
Plan Fiduciary Net Position - Ending
Plan Fiduciary Net Position as a
Percentage of Total Pension Liability
Covered Employee Payroll
Net Pension Liability as a Percentage of
Covered Employee Payroll
Policemen's Pension Meeting
July 16, 2015
Page 54 of 78
City of Fayetteville, Arkansas Police Pension Fund
Schedules of Required Supplementary Information
Schedule of Changes in the Employers' Net Pension Liability and Related Ratios
2014 2013 2012 2011 2010 2009 2008 2007 2006 2005
0 0 0 0 0 0 0
975,582 1,000,294 1,025,359 1,050,954 1,084,700 910,044 894,409
0 0 0 0 0 0 0
-39,796 40,127 16,575 -4,832 -185,659 145,511 1,051,587
0 0 0 0 0 4,043,270 0
-1,533,946 -1,535,372 -1,551,087 -1,564,987 -1,582,900 -1,628,521 -1,638,068
-598,160 -494,951 -509,153 -518,865 -683,859 3,470,304 307,928
19,680,454
20,278,614
20,773,565
21,282,718
21,801,583
22,485,442
19,015,138
0
0
0
0
0
0
0
782,624
796,675
779,139
835,147
859,321
838,918
767,586
349,246
451,049
372,625
399,228
918,672
1,104,051
-1,902,951
-1,533,946
-1,535,372
-1,551,087
-1,564,987
-1,582,900
-1,628,521
-1,638,068
0
0
0
0
0
0
0
0
0
0
0
0
0
0
-402,076
-287,648
-399,323
-330,612
195,093
314,448
-2,773,433
7,538,314
7,825,962
8,225,285
8,555,897
8,360,804
8,046,356
10,819,789
7,136,238
7,538,314
7,825,962
8,225,285
8,555,897
8,360,804
8,046,356
36.26% 37.17% 37.67% 38.65%
0 0 0 0
N/A N/A N/A N/A
23
39.24°% 37.18% 42.32%
0 0 0
N/A N/A N/A
Policemen's Pension Meeting
July 16, 2015
Page 55 of 78
Appendix 3 — Continued
City of Fayetteville, Arkansas Police Pension Fund
Schedule of Required Supplementary Information
Schedule of Net Pension Liability
FY ending
December 31,
(TPL) Total
Pension
Liability
Plan Net
Position
(NPL) Net
Pension
Liability
Net Position
as % of
TPL
Covered
Payroll
NPL
as % of
Payroll
12/31/2007
a
18,707,210
10,819,789
7,887,421
57.84%
0
N/A
12/31/2008
a
19,015,138
8,046,356
10,968,782
42.32%
0
N/A
12/31/2009
b
22,485,442
8,360,804
14,124,638
37.18%
0
N/A
12/31/2010
b
21,801,583
8,555,897
13,245,686
39.24%
0
N/A
12/31/2011
b
21,282,718
8,225,285
13,057,433
38.65%
0
N/A
12/31/2012
b
20,773,565
7,825,962
12,947,603
37.67%
0
N/A
12/31/2013
b 1
20,278,614
7,538,314
12,740,300
37.17%
0
N/A
12/31/2014
b
19,680,454
1 7,136,238
12,544,216
36.26%
0
1 N/A
Note: a full 10 year schedule will be completed as information is available.
a. 1983 GAM, 7.00%
b. 1983 GAM, 5.00%
24
Policemen's Pension Meeting
July 16, 2015
Page 56 of 78
Appendix 3 —Continued
City of Fayetteville, Arkansas Police Pension Fund
Schedule of Required Supplementary Information
Schedule of Contributions
FY ending
December 31,
Actuarially
Determined
Contribution
Actual
Contribution(Excess)
Contribution
Deficiency
Covered
Payroll
Contribution
as % of
Payroll
2005
Market Value
Investment rate of return
5.00%
Mortality
1983 Group Annuity Mortality
2006
2007
2008
2009
2010
2011
2012
2,944,130
779,139
2,164,991
N/A
N/A
2013
2,919,366
796,675
2,122,691
N/A
N/A
2014
2,872,624
1 782,624
2,090,000
N/A
N/A
Key Assumptions for ADC:
Cost Method
Entry Age Normal
Amortization Method
Level dollar, open
Remaining amortization
5 years
Asset Valuation
Market Value
Investment rate of return
5.00%
Mortality
1983 Group Annuity Mortality
Note: a full 10 year schedule will be completed as information is available.
25
Policemen's Pension Meeting
July 16, 2015
Page 57 of 78
Appendix 3 —Continued
City of Fayetteville, Arkansas Police Pension Fund
Schedule of Required Supplementary Information
Schedule of Investment Returns
FY ending
December 31,
Annual
Money -weighted
Rate of Return
2005
1.22%
2006
10.32%
2007
7.81%
2008
-18.29%
2009
14.43%
2010
11.50%
2011
4.89%
2012
4.73%
2013
6.07%
2014
4.91%
The amounts shown are net of investment expenses.
The actuary calculated these rates with the information that was provided, therefore, these rates are annual
money -weighted. Monthly money -weighted returns are not available.
OR
Policemen's Pension Meeting
July 16, 2015
Page 58 of 78
APPENDIX 4
Calculation of the Single Discount Rate
GASB 67 includes a specific requirement for the discount rate that is used for the purpose of
the measurement of the Total Pension Liability. This rate considers the ability of the fund to
meet benefit obligations in the future. To make this determination, employer contributions,
employee contributions, benefit payments, expenses and investment returns are projected into
the future. The Plan Net Position (assets) in future years can then be projected and compared
to the obligation to make benefit payments in those years. As long as assets are projected to
be on hand in a future year, the assumed valuation discount rate is used. In years where
assets are not projected to be sufficient to meet benefit payments, the use of a "risk-free" rate
is required. The single discount rate is equivalent to applying these two rates to the benefits
that are projected to be paid during the different time periods.
For the purpose of this valuation, the expected rate of return on pension plan investments if
5.0%; the municipal bond rate is 4.29%; and the resulting single discount rate is 5.0%.
The following tables are shown in this exhibit to provide the background for the development
of the single discount rate:
• Projection of Benefit Payments and Actuarially Determined Contributions
• Projection of Contributions. Since this plan is frozen with no new participants, there
are no expected contributions projected for new participants
• Projection of Plan Fiduciary Net Position
• Present Values of Projected Benefit Payments
The Local Police and Fire Pension Funds do not have formal funding policies. They
typically contribute the amounts required by law as outlined in Exhibit 7. For purposes of
this projection, any millage amount is assumed to increase by 1% annually; the premium tax
and additional allocation revenues, if any, are changed in proportion to the Net Pension
Liability; all other sources are assumed to remain level.
These projections are generated under the guidelines of GASB 67 and the related
implementation guide. They should be used solely to determine the single discount rate as
defined in the GASB statements. Any implication beyond that determination is beyond the
scope of this report.
27
Year
Policemen's Pension Meeting
July 16, 2015
Page 59 of 78
28
City of Fayetteville, Arkansas Police Pension Fund
Single Discount Rate Devleopment
Projection of Benefit Payments Beginning January 1, 2015
Projected
Projected
Proiected Benefit Payments
Net Pension
Actuarially
Current
Current
Liability at
Determined
Retirees
DROP
Actives
Total
Beg of Year
Contribution
1
1,498,393
0
0
1,498,393
12,716,514
2,867,261
2
1,489,458
0
0
1,489,458
12,534,741
2,826,276
3
1,479,114
0
0
1,479,114
12,340,760
2,782,538
4
1,467,194
0
0
1,467,194
12,134,062
2,735,932
5
1,453,506
0
0
1,453,506
11,914,117
2,686,340
6
1,437,879
0
0
1,437,879
11,680,379
2,633,638
7
1,420,113
0
0
1,420,113
11,432,278
2,577,698
8
1,399,980
0
0
1,399,980
11,169,225
2,518,386
9
1,377,319
0
0
1,377,319 -
10,890,608
2,455,564
10
1,352,058
0
0
1,352,058
10,595,792
2,389,090
11
1,324,092
0
0
1,324,092
10,284,118
2,318,816
12
1,293,305
0
0
1,293,305
9,954,901
2,244,585
13
1,259,736
0
0
1,259,736
9,607,432
2,166,239
14
1,223,470
0
0
1,223,470
9,240,972
2,083,612
15
1,184,598
0
0
1,184,598
8,854,757
1,996,530
16
1,143,336
0
0
1,143,336
8,447,988
1,904,813
17
1,100,028
0
0
1,100,028
8,019,838
1,808,276
18
1,055,053
0
0
1,055,053
7,569,447
1,706,724
19
1,OD8,707
0
0
1,008,707
7,095,919
1,599,955
20
961,294
0
0
961,294
6,598,322
1,487,759
21
913,083
0
0
913,083
6,075,688
1,369,918
22
864,268
0
0
864,268
5,527,011
1,246,205
23
814,931
0
0
814,931
4,951,245
1,116,384
24
765,190
0
0
765,190
4,347,305
980,210
25
715,259
0
0
715,259
3,714,061
837,429
26
665,391
0
0
665,391
3,050,341
687,777
27
615,830
0
0
615,830
2,354,927
530,978
28
566,810
0
0
566,810
1,626,554
366,748
29
518,665
0
0
518,665
863,905
194,789
30
471,640
0
0
471,640
65,614
14,794
31
425,912
0
0
425,912
0
0
32
381,804
0
0
381,804
0
0
33
339,481
0
0
339,481
0
0
34
299,063
0
0
299,063
0
0
35
260,833
0
0
260,833
0
0
36
225,019
0
0
225,019
0
0
37
191,887
0
0
191,887
0
0
38
161,630
0
0
161,630
0
0
39
134,422
0
0
134,422
0
0
40
110,366
0
0
110,366
0
0
41
89,394
0
D
89,394
0
0
42
71,430
0
0
71,430
0
0
43
56,373
0
0
56,373
0
0
44
43,960
0
0
43,960
0
0
45
33,884
0
0
33,884
0
0
46
25,835
0
0
25,835
0
0
47
19,508
0
0
19,508
0
0
48
14,601
0
0
14,601
0
0
49
10,832
0
0
10,832
0
0
50
7,955
0
0
7,955
0
0
28
Policemen's Pension Meeting
July 16, 2015
Page 60 of 78
City of Fayetteville, Arkansas Police Pension Fund
Single Discount Rate Devleopment
Projection of Benefit Payments Beginning January 1, 2015
Projected Projected
Projected Benefit Payments Net Pension Actuarially
Current Current Liability at Determined
Year Retirees DROP Actives Total Beg of Year Contribution
51
5,779
0
0
5,779
0 0
52
4,147
0
0
4,147
0 0
53
2,934
0
0
2,934
0 0
54
2,043
0
0
2,043
0 0
55
1,399
0
0
1,399
0 0
56
941
0
0
941
0 0
57
621
0
0
621
0 0
58
402
0
0
402
0 0
59
256
0
0
256
0 0
60
160
0
0
160
0 0
61
99
0
0
99
0 0
62
60
0
0
60
0 0
63
37
0
0
37
0 0
64
22
0
0
22
0 0
65
13
0
0
13
0 0
66
7
0
0
7
0 0
67
4
0
0
4
0 0
68
2
0
0
2
0 0
69
1
0
0
1
0 0
70
0
0
0
0
0 0
71
0
0
0
0
0 0
72
0
0
0
0
0 0
73
0
0
0
0
0 0
74
0
0
0
0
0 0
75
0
0
0
0
0 0
76
0
0
0
0
0 0
77
0
0
0
0
0 0
78
0
0
0
0
0 0
79
0
0
0
0
0 0
80
0
0
0
0
0 0
81
0
0
0
0
0 0
82
0
0
0
0
0 0
83
0
0
0
0
0 0
84
0
0
0
0
0 0
85
0
0
0
0
0 0
86
0
0
0
0
0 0
87
0
0
0
0
0 0
88
0
0
0
0
0 0
89
0
0
0
0
0 0
90
0
0
0
0
0 0
91
0
0
0
0
0 0
92
0
0
0
0
0 0
93
0
0
0
0
0 0
94
0
0
0
0
0 0
95
0
0
0
0
0 0
96
0
0
0
0
0 0
97
0
0
0
0
0 0
98
0
0
0
0
0 0
99
0
0
0
0
0 0
100
0
0
0
0
0 0
29
Policemen's Pension Meeting
July 16, 2015
Page 61 of 78
30
City of Fayetteville, Arkansas Police Pension
Fund
Single Discount Rate Devleopment
Projection of Benefit Payments
Beginning January 1, 2015
Payroll for
Employee
Employer
Employer
Employer
Employer
Current
Contributions
Contributions
Contributions Contributions
Contributions
Total
Year
Employees
Current Emps.
Millage
Other
Prem Tax
Add Alloc
Contribuitons
1
0
0
525,000
115,000
120,000
32,000
792,000
2
0
0
530,250
115,000
118,285
31,543
795,077
3
0
0
535,553
115,000
116,454
31,054
798,061
4
0
0
540,908
115,000
114,504
30,534
800,946
5
0
0
546,317
115,000
112,428
29,981
803,726
6
0
0
551,780
115,000
110,222
29,393
806,395
7
0
0
557,298
115,000
107,881
28,768
808,948
8
0
0
562,871
115,000
105,399
28,106
811,376
9
0
0
568,500
115,000
102,770
27,405
813,675
10
0
0
574,185
115,000
99,988
26,663
815,836
11
0
0
579,927
115,000
97,047
25,879
817,852
12
0
0
585,726
115,000
93,940
25,051
819,716
13
0
0
591,583
115,000
90,661
24,176
821,420
14
0
0
597,499
115,000
87,203
23,254
822,956
15
0
0
603,474
115,000
83,558
22,282
824,315
16
0
0
609,509
115,000
79,720
21,259
825,487
17
0
0
615,604
115,000
75,680
20,181
826,465
18
0
0
621,760
115,000
71,429
19,048
827,237
19
0
0
627,977
115,000
66,961
17,856
827,795
20
0
0
634,257
115,000
62,265
16,604
828,127
21
0
0
640,600
115,000
57,334
15,289
828,222
22
0
0
647,006
115,000
52,156
13,908
828,070
23
0
0
653,476
115,000
46,723
12,459
827,658
24
0
0
660,011
115,000
41,024
10,940
826,974
25
0
0
666,611
115,000
35,048
9,346
826,005
26
0
0
673,277
115,000
28,785
7,676
824,737
27
0
0
680,010
115,000
22,222
5,926
823,158
28
0
0
686,810
115,000
15,349
4,093
821,252
29
0
0
693,678
115,000
8,152
2,174
819,004
30
0
0
700,615
115,000
619
165
816,399
31
0
0
707,621
115,000
0
0
822,621
32
0
0
714,697
115,000
0
0
829,697
33
0
0
721,844
115,000
0
0
836,844
34
0
0
729,062
115,000
0
0
844,062
35
0
0
736,353
115,000
0
0
851,353
36
0
0
743,716
115,000
0
0
858,716
37
0
0
751,154
115,000
0
0
866,154
38
0
0
758,665
115,000
0
0
873,665
39
0
0
766,252
115,000
0
0
881,252
40
0
0
773,914
115,000
0
0
888,914
41
0
0
781,653
115,000
0
0
896,653
42
0
0
789,470
115,000
0
0
904,470
43
0
0
797,365
115,000
0
0
912,365
44
0
0
805,338
115,000
0
0
920,338
45
0
0
813,392
115,000
0
0
928,392
46
0
0
821,526
115,000
0
0
936,526
47
0
0
829,741
115,000
0
0
944,741
48
0
0
838,038
115,000
0
0
953,038
49
0
0
846,419
115,000
0
0
961,419
50
0
0
854,883
115,000
0
0
969,883
30
Policemen's Pension Meeting
July 16, 2015
Page 62 of 78
City of Fayetteville, Arkansas Police Pension Fund
Single Discount Rate Devleopment
Projection of Benefit Payments Beginning January 1, 2015
31
Payroll for
Employee
Employer
Employer
Employer
Employer
Current
Contributions
Contributions
Contributions
Contributions
Contributions
Total
Year
Employees
Current Emps.
Millage
Other
Prem Tax
Add Alloc
Contribuitons
51
0
0
863,432
115,000
0
0
978,432
52
0
0
872,066
115,000
0
0
987,066
53
0
0
880,787
115,000
0
0
995,787
54
0
0
889,595
115,000
0
0
1,004,595
55
0
0
898,490
115,000
0
0
1,013,490
56
0
0
907,475
115,000
0
0
1,022,475
57
0
0
916,550
115,000
0
0
1,031,550
58
0
0
925,716
115,000
0
0
1,040,716
59
0
0
934,973
115,000
0
0
1,049,973
60
0
0
944,323
115,000
0
0
1,059,323
61
0
0
953,766
115,000
0
0
1,068,766
62
0
0
963,303
115,000
0
0
1,078,303
63
0
0
972,936
115,000
0
0
1,087,936
64
0
0
982,666
115,000
0
0
1,097,666
65
0
0
992,492
115,000
0
0
1,107,492
66
0
0
1,002,417
115,000
0
0
1,117,417
67
0
0
1,012,442
115,000
0
0
1,127,442
68
0
0
1,022,566
115,000
0
0
1,137,566
69
0
0
1,032,792
115,000
0
0
1,147,792
70
0
0
1,043,120
115,000
0
0
1,158,120
71
0
0
1,053,551
115,000
0
0
1,168,551
72
0
0
1,064,086
115,000
0
0
1,179,086
73
0
0
1,074,727
115,000
0
0
1,189,727
74
0
0
1,085,474
115,000
0
0
1,200,474
75
0
0
1,096,329
115,000
0
0
1,211,329
76
0
0
1,107,292
115,000
0
0
1,222,292
77
0
0
1,118,365
115,000
0
0
1,233,365
78
0
0
1,129,549
115,000
0
0
1,244,549
79
0
0
1,140,845
115,000
0
0
1,255,845
80
0
0
1,152,253
115,000
0
0
1,267,253
81
0
0
1,163,775
115,000
0
0
1,278,775
82
0
0
1,175,413
115,000
0
0
1,290,413
83
0
0
1,187,167
115,000
0
0
1,302,167
84
0
0
1,199,039
115,000
0
0
1,314,039
85
0
0
1,211,029
115,000
0
0
1,326,029
86
0
0
1,223,140
115,000
0
0
1,338,140
87
0
0
1,235,371
115,000
0
0
1,350,371
88
0
0
1,247,725
115,000
0
0
1,362,725
89
0
0
1,260,202
115,000
0
0
1,375,202
90
0
0
1,272,804
115,000
0
0
1,387,804
91
0
0
1,285,532
115,000
0
0
1,400,532
92
0
0
1,298,387
115,000
0
0
1,413,387
93
0
0
1,311,371
115,000
0
0
1,426,371
94
0
0
1,324,485
115,000
0
0
1,439,485
95
0
0
1,337,730
115,000
0
0
1,452,730
96
0
0
1,351,107
115,000
0
0
1,466,107
97
0
0
1,364,618
115,000
0
0
1,479,618
98
0
0
1,378,264
115,000
0
0
1,493,264
99
0
0
1,392,047
115,000
0
0
1,507,047
100
0
0
1,405,968
115,000
0
0
1,520,968
31
Policemen's Pension Meeting
July 16, 2015
Page 63 of 78
32
City of Fayetteville, Arkansas Police Pension
Fund
Single Discount
Rate Devleopment
Projection
of Benefit Payments Beginning January
1, 2015
Projected
Projected
Beginning
Projected
Projected Projected
Investment
Ending
Plan Net
Total
Benefit Admin
Earnings
Plan Net
Year
Position
Contributions
Payments Expenses
5.00%
Position
1
7,136,238
792,000
1,498,393
0
339,152
6,768,997
2
6,768,997
795,077
1,489,458
0
321,090
6,395,707
3
6,395,707
798,061
1,479,114
0
302,759
6,017,413
4
6,017,413
800,946
1,467,194
0
284,214
5,635,379
5
5,635,379
803,726
1,453,506
0
265,524
5,251,124
6
5,251,124
806,395
1,437,879
0
246,769
4,866,409
7
4,866,409
808,948
1,420,113
0
228,041
4,483,285
8
4,483,285
811,376
1,399,980
0
209,449
4,104,131
9
4,104,131
813,675
1,377,319
0
191,115
3,731,602
10
3,731,602
815,836
1,352,058
0
173,175
3,368,554
11
3,368,554
817,852
1,324,092
0
155,772
3,018,086
12
3,018,086
819,716
1,293,305
0
139,065
2,683,562
13
2,683,562
821,420
1,259,736
0
123,220
2,368,467
14
2,368,467
822,956
1,223,470
0
108,410
2,076,364
15
2,076,364
824,315
1,184,598
0
94,811
1,810,891
16
1,810,891
825,487
1,143,336
0
82,598
1,575,641
17
1,575,641
826,465
1,100,028
0
71,943
1,374,021
18
1,374,021
827,237
1,055,053
0
63,006
1,209,210
19
1,209,210
827,795
1,008,707
0
55,938
1,084,236
20
1,084,236
828,127
961,294
0
50,883
1,001,952
21
1,001,952
828,222
913,083
0
47,976
965,067
22
965,067
828,070
864,268
0
47,348
976,217
23
976,217
827,658
814,931
0
49,129
1,038,073
24
1,038,073
826,974
765,190
0
53,448
1,153,304
25
1,153,304
826,005
715,259
0
60,434
1,324,484
26
1,324,484
824,737
665,391
0
70,208
1,554,039
27
1,554,039
823,158
615,830
0
82,885
1,844,252
28
1,844,252
821,252
566,810
0
98,574
2,197,267
29
2,197,267
819,004
518,665
0
117,372
2,614,978
30
2,614,978
816,399
471,640
0
139,368
3,099,104
31
3,099,104
822,621
425,912
0
164,873
3,660,686
32
3,660,686
829,697
381,804
0
194,232
4,302,810
33
4,302,810
836,844
339,481
0
227,575
5,027,748
34
5,027,748
844,062
299,063
0
265,012
5,837,759
35
5,837,759
851,353
260,833
0
306,651
6,734,930
36
6,734,930
858,716
225,019
0
352,589
7,721,216
37
7,721,216
866,154
191,887
0
402,917
8,798,401
38
8,798,401
873,665
161,630
0
457,721
9,968,156
39
9,968,156
881,252
134,422
0
517,079
11,232,065
40
11,232,065
888,914
110,366
0
581,067
12,591,680
41
12,591,680
896,653
89,394
0
649,765
14,048,705
42
14,048,705
904,470
71,430
0
723,261
15,605,007
43
15,605,007
912,365
56,373
0
801,650
17,262,649
44
17,262,649
920,338
43,960
0
885,042
19,024,069
45
19,024,069
928,392
33,884
0
973,566
20,892,142
46
20,892,142
936,526
25,835
0
1,067,374
22,870,208
47
22,870,208
944,741
19,508
0
1,166,641
24,962,082
- 48
24,962,082
953,038
14,601
0
1,271,565
27,172,084
49
27,172,084
961,419
10,832
0
1,382,369
29,505,040
50
29,505,040
969,883
7,955
0
1,499,300
31,966,269
32
Policemen's Pension Meeting
July 16, 2015
Page 64 of 78
33
City of Fayetteville, Arkansas Police Pension Fund
Single Discount Rate Devleopment
Projection of Benefit
Payments Beginning January 1, 2015
Projected
Projected
Beginning
Projected
Projected Projected
Investment
Ending
Plan Net
Total
Benefit Admin
Earnings
Plan Net
Year
Position
Contributions
Payments Expenses
5.00%
Position
51
31,966,269
978,432
5,779
0
1,622,630
34,561,551
52
34,561,551
987,066
4,147
0
1,752,651
37,297,121
53
37,297,121
995,787
2,934
0
1,889,677
40,179,651
54
40,179,651
1,004,595
2,043
0
2,034,046
43,216,249
55
43,216,249
1,013,490
1,399
0
2,186,115
46,414,455
56
46,414,455
1,022,475
941
0
2,346,261
49,782,251
57
49,782,251
1,031,550
621
0
2,514,886
53,328,066
58
53,328,066
1,040,716
402
0
2,692,411
57,060,791
59
57,060,791
1,049,973
256
0
2,879,282
60,989,791
60
60,989,791
1,059,323
160
0
3,075,969
65,124,922
61
65,124,922
1,068,766
99
0
3,282,963
69,476,551
62
69,476,551
1,078,303
60
0
3,500,784
74,055,578
63
74,055,578
1,087,936
37
0
3,729,976
78,873,454
64
78,873,454
1,097,666
22
0
3,971,114
83,942,212
65
83,942,212
1,107,492
13
0
4,224,798
89,274,489
66
89,274,489
1,117,417
7
0
4,491,660
94,883,559
67
94,883,559
1,127,442
4
0
4,772,364
100,783,360
68
100,783,360
1,137,566
2
0
5,067,607
106,988,532
69
106,988,532
1,147,792
1
0
5,378,121
113,514,444
70
113,514,444
1,158,120
0
0
5,704,675
120,377,238
71
120,377,238
1,168,551
0
0
6,048,076
127,593,865
72
127,593,865
1,179,086
0
0
6,409,170
135,182,121
73
135,182,121
1,189,727
0
0
6,788,849
143,160,698
74
143,160,698
1,200,474
0
0
7,188,047
151,549,219
75
151,549,219
1,211,329
0
0
7,607,744
160,368,292
76
160,368,292
1,222,292
0
0
8,048,972
169,639,557
77
169,639,557
1,233,365
0
0
8,512,812
179,385,734
78
179,385,734
1,244,549
0
0
9,000,400
189,630,683
79
189,630,683
1,255,845
0
0
9,512,930
200,399,458
80
200,399,458
1,267,253
0
0
10,051,654
211,718,365
81
211,718,365
1,278,775
0
0
10,617,888
223,615,029
82
223,615,029
1,290,413
0
0
11,213,012
236,118,454
83
236,118,454
1,302,167
0
0
11,838,477
249,259,098
84
249,259,098
1,314,039
0
0
12,495,806
263,068,943
85
263,068,943
1,326,029
0
0
13,186,598
277,581,570
86
277,581,570
1,338,140
0
0
13,912,532
292,832,242
87
292,832,242
1,350,371
0
0
14,675,371
308,857,984
88
308,857,984
1,362,725
0
0
15,476,967
325,697,676
89
325,697,676
1,375,202
0
0
16,319,264
343,392,142
90
343,392,142
1,387,804
0
0
17,204,302
361,984,249
91
361,984,249
1,400,532
0
0
18,134,226
381,519,007
92
381,519,007
1,413,387
0
0
19,111,285
402,043,679
93
402,043,679
1,426,371
0
0
20,137,843
423,607,894
94
423,607,894
1,439,485
0
0
21,216,382
446,263,761
95
446,263,761
1,452,730
0
0
22,349,506
470,065,997
96
470,065,997
1,466,107
0
0
23,539,953
495,072,057
97
495,072,057
1,479,618
0
0
24,790,593
521,342,268
98
521,342,268
1,493,264
0
0
26,104,445
548,939,978
99
548,939,978
1,507,047
0
0
27,484,675
577,931,700
100
577,931,700
1,520,968
0
0
28,934,609
608,387,277
33
Policemen's Pension Meeting
July 16, 2015
Page 65 of 78
34
City of Fayetteville, Arkansas Police Pension Fund
Single Discount
Rate Devleopment
Projection
of Benefit Payments Beginning January
1, 2015
Present Value
Present Value
Present Value
Beginning
Projected
Funded
Unfunded
Funded
Unfunded
Projected
Plan Net
Benefit
Portion of
Portion of
Portion of
Portion of
Payments at
Year
Position
Payments
Payments
Payments
Payments
Payments
Single Disc. Rate
1
7,136,238
1,498,393
1,498,393
0
1,468,240
0
1,468,240
2
6,768,997
1,489,458
1,489,458
0
1,389,984
0
1,389,984
3
6,395,707
1,479,114
1,479,114
0
1,314,602
0
1,314,602
4
6,017,413
1,467,194
1,467,194
0
1,241,912
0
1,241,912
5
5,635,379
1,453,506
1,453,506
0
1,171,739
0
1,171,739
6
5,251,124
1,437,879
1,437,879
0
1,103,944
0
1,103,944
7
4,866,409
1,420,113
1,420,113
0
1,038,385
0
1,038,385
8
4,483,285
1,399,980
1,399,980
0
974,917
0
974,917
9
4,104,131
1,377,319
1,377,319
0
913,463
0
913,463
10
3,731,602
1,352,058
1,352,058
0
854,010
0
854,010
11
3,368,554
1,324,092
1,324,092
0
796,519
0
796,519
12
3,018,086
1,293,305
1,293,305
0
740,952
0
740,952
13
2,683,562
1,259,736
1,259,736
0
687,352
0
687,352
14
2,368,467
1,223,470
1,223,470
0
635,775
0
635,775
15
2,076,364
1,184,598
1,184,598
0
586,262
0
586,262
16
1,810,891
1,143,336
1,143,336
0
538,897
0
538,897
17
1,575,641
1,100,028
1,100,028
0
493,794
0
493,794
18
1,374,021
1,055,053
- 1,055,053
0
451,053
0
451,053
19
1,209,210
1,008,707
1,008,707
0
410,704
0
410,704
20
1,084,236
961,294
961,294
0
372,761
0
372,761
21
1,001,952
913,083
913,083
0
337,206
0
337,206-
22
965,067
864,268
864,268
0
303,980
0
303,980
23
976,217
814,931
814,931
0
272,978
0
272,978
24
1,038,073
765,190
765,190
0
244,111
0
244,111
25
1,153,304
715,259
715,259
0
217,316
0
217,316
26
1,324,484
665,391
665,391
0
192,538
0
192,538
27
1,554,039
615,830
615,830
0
169,711
0
169,711
28
1,844,252
566,810
566,810
0
148,764
0
148,764
29
2,197,267
518,665
518,665
0
129,646
0
129,646
30
2,614,978
471,640
471,640
0
112,277
0
112,277
31
3,099,104
425,912
425,912
0
96,563
0
96,563
32
3,660,686
381,804
381,804
0
82,441
0
82,441
33
4,302,810
339,481
339,481
0
69,812
0
69,812
34
5,027,748
299,063
299,063
0
58,572
0
58,572
35
5,837,759
260,833
260,833
0
48,652
0
48,652
36
6,734,930
225,019
225,019
0
39,973
0
39,973
37
7,721,216
191,887
191,887
0
32,464
0
32,464
38
8,798,401
161,630
161,630
0
26,043
0
26,043
39
9,968,156
134,422
134,422
0
20,628
0
20,628
40
11,232,065
110,366
110,366
0
16,130
0
16,130
41
12,591,680
89,394
89,394
0
12,442
0
12,442
42
14,048,705
71,430
71,430
0
9,469
0
9,469
43
15,605,007
56,373
56,373
0
7,117
0
7,117
44
17,262,649
43,960
43,960
0
5,286
0
5,286
45
19,024,069
33,884
33,884
0
3,880
0
3,880
46
20,892,142
- 25,835
25,835
0
2,817
0
2,817
47
22,870,208
19,508
19,508
0
2,026
0
2,026
48
24,962,082
14,601
14,601
0
1,444
0
1,444
49
27,172,084
10,832
10,832
0
1,020
0
1,020
5o
29,505,040
7,955
7,955
0
714
0
714
34
Policemen's Pension Meeting
July 16, 2015
Page 66 of 78
35
City of Fayetteville, Arkansas Police Pension Fund
Single Discount Rate Devleopment
Projection
of Benefit Payments Beginning January
1, 2015
Present Value
Present Value
Present Value
Beginning
Projected
Funded
Unfunded
Funded
Unfunded
Projected
Plan Net
Benefit
Portion of
Portion of
Portion of
Portion of
Payments at
Year
Position
Payments
Payments
Payments
Payments
Payments
Single Disc. Rate
51
31,966,269
5,779
5,779
0
494
0
494
52
34,561,551
4,147
4,147
0
337
0
337
53
37,297,121
2,934
2,934
0
227
0
227
54
40,179,651
2,043
2,043
0
151
0
151
55
43,216,249
1,399
1,399
0
98
0
98
56
46,414,455
941
941
0
63
0
63
57
49,782,251
621
621
0
40
0
40
58
53,328,066
402
402
0
24
0
24
59
57,060,791
256
256
0
15
0
15
60
60,989,791
160
160
0
9
0
9
61
65,124,922
99
99
0
5
0
5
62
69,476,551
60
60
0
3
0
3
63
74,055,578
37
37
0
2
0
2
64
78,873,454
22
22
0
1
0
1
65
83,942,212
13
13
0
1
0
1
66
89,274,489
7
7
0
0
0
0
67
94,883,559
4
4
0
0
0
0
68
100,783,360
2
2
0
0
0
0
69
106,988,532
1
1
0
0
0
0
70
113,514,444
0
0
0
0
0
0
71
120,377,238
0
0
0
0
0
0
72
127,593,865
0
0
0
0
0
0
73
135,182,121
0
0
0
0
0
0
74
143,160,698
0
0
0
0
0
0
75
151,549,219
0
0
0
0
0
0
76
160,368,292
0
0
0
0
0
0
77
169,639,557
0
0
0
0
0
0
78
179,385,734
0
0
0
0
0
0
79
189,630,683
0
0
0
0
0
0
80
200,399,458
0
0
0
0
0
0
81
211,718,365
0
0
0
0
0
0
82
223,615,029
0
0
0
0
0
0
83
236,118,454
0
0
0
0
0
0
84
249,259,098
0
0
0
0
0
0
85
263,068,943
0
0
0
0
0
0
86
277,581,570
0
0
0
0
0
0
87
292,832,242
0
0
0
0
0
0
88
308,857,984
0
0
0
0
0
0
89
325,697,676
0
0
0
0
0
0
90
343,392,142
0
0
0
0
0
0
91
361,984,249
0
0
0
0
0
0
92
381,519,007
0
0
0
0
0
0
93
402,043,679
0
0
0
0
0
0
94
423,607,894
0
0
0
0
0
0
95
446,263,761
0
0
0
0
0
0
96
470,065,997
0
0
0
0
0
0
97
495,072,057
0
0
0
0
0
0
98
521,342,268
0
0
0
0
0
0
99
548,939,978
0
0
0
0
0
0
100
577,931,700
0
0
0
0
0
0
19,852,752
0
19,852,752
19,852,752
35
Policemen's Pension Meeting
July 16, 2015
Smith, Sondra Page 67 of 78
From: Leach, Trish
Sent: Tuesday, June 02, 2015 1:24 PM
To: Smith, Sondra; Becker, Paul; Hertweck, Marsha
Subject: FW: Evaluating Investments
Attachments: Evaluating Investments 2015.docx
Importance: High
From: Tracy Warfe [mailto twarfe@lopfi-prb.comj
Sent: Tuesday, June 02, 2015 11:38 AM
Cc: Denise Collins; len Sines
Subject: Evaluating Investments
Importance: High
Good morning -
Attached you will find the 2015 Evaluating Local Plan Investments Memo.
Please provide the information to the Local Fire and Police Pension Plan's Board of Trustees.
If you should have any questions please call our office toll free at 866-859-1745.
Sincerely,
PRB Staff
ARKANSAS FIRE & POLICE PENSION REVIEW BOARD
To: Local Fire and Police Pension Fund Boards' of Trustees
From: Arkansas Fire and Police Pension Review Board (PRB)
Re: Evaluating Local Plan Investments
Date: June 2, 2015
Policemen's Pension Meeting
July 16, 2015
Page 68 of 78
620 W. 3rd, Suite 200
Little Rock, Arkansas 72201-2223
Telephone: (501) 682-1745
Toll -Free: (866) 859-1745
Fax: (501) 682-1751
email: info@lopfi-prb.com
website: www.lopfi-prb.com
The following information is meant to assist Local Plan trustees with a regular review of
the Local Plan's investment portfolio, which is an essential function as a trustee.
Trustees must ensure all holdings and fees comply with the local board's investment
policy and state law. The local board should seek 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 (this also means no
sales or redemption charges for mutual funds). Annuity products are not an allowable
investment.
At a minimum, items for review should include:
• Liquidity 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?
• Performance -Does each investment produce the expected return and is
performance consistent with an asset's benchmark (index)?
• Index -What information was provided to the local board to demonstrate 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?
• 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 identify the total amount the Local Plan spends on all fees.
• 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 the above
referenced code sections?
This memo is not a complete checklist or a legal opinion. It should be used as a guide to
assist local boards with a regular review of their investment program. Please feel free to
contact Denise Collins with any questions.
OFFICE OF THE CITY CLERK TREASURER
Sondra E. Smith — City Clerk Treasurer
Lisa Branson — Deputy City Clerk
May 26, 2015
113 W. Mountain Street, Suite 308
Fayetteville, AR 72701
Dear Policemen's Pension Fund Member,
Policemen's Pension Meeting
July 16, 2015
Page 69 of 78
Phone 479.575.8323
cityclerk@fayetteville-ar.gov
The Policemen's Pension and Relief Fund Board of Trustees has completed the 2015
board elections. Eldon Roberts, Melvin Stanley, and John Brown have been elected.
Their term will begin June 1, 2015 and end May 31, 2017.
Enclosed is the current list of Board members with their term end dates. The next
Policemen's Pension Board meeting will be on July 16, 2015 at 3:00 p.m, at City Hall.
This meeting date and time is subject to change. If you have any questions please call
the City Clerk office at (479) 575-8323.
Sincerely,
Sondra E. Smith
City Clerk Treasurer
Policemen's Pension & Relief Fund
Board of Trustees Treasurer
Policemen's Pension Meeting
July 16, 2015
Page 70 of 78
Policemen's Pension and Relief Fund Board of Trustees
DESCRIPTION: The Policemen's Pension and Relief Fund Board of Trustees was established
pursuant to the A.C.A 24-11-405.
The board shall make all necessary rules and regulations for its government and the discharge of
its duties and shall hear and decide all applications for relief or pension. The Board shall have the
power to make all rules and regulations needful of its guidance to implement the provisions
regarding Board composition.
TERMS: Two-year terms, ending May 31.
MEMBERS: The Board shall be composed of seven members as follows:
• The chief executive, who shall serve as chairman of the board
• The city treasurer, who shall be the treasurer of the fund;
• Five active or retired members of the pension fund;
APPOINTMENT: If there are no active members of the pension fund, all five members shall be
elected from and by the retired membership of the pension fund. The retired member or members
shall be chosen in May of each year by a method to be determined by the board, with the member
or members to be chosen in alternating years.
CONTACT: Sondra Smith, City Clerk, 575-8323.
PUBLIC NOTIFICATION: A weekly meetings list is prepared by the Office of the City Clerk
Treasurer which is distributed to the press and posted on the City's web site: www.fayetteville-
ar.gov
MEETING TIMES: Regular meetings are held the third Thursday of each quarter in January,
April, July and October at 3:00 p.m. in Room 326 at the City Administration Building.
Due to elections not being held until May of each year, the term end date was changed to May 31
at the Police Pension meeting on October 21, 2004
37
Policemen's Pension Meeting
July 16, 2015
Page 71 of 78
Policemen's Pension and Relief Fund Board of Trustees
Chairman
Retired Position 3
Mayor Lioneld Jordan
John Brown
113 W. Mountain
11701 Illinois Chapel Road
Fayetteville, AR 72701
Prairie Grove, AR 72753
575-8330 — Business
846-6414 — Home
01/01/09-Indef
225-3540 — Cell
Replaced Tim Helder
Treasurer
06/01/13-05/31/15 1" Term
Sondra Smith
06/01/15-05/31/17 2nd Term
113 W. Mountain
Fayetteville, AR 72701
Retired Position 4
442-7838 — Home
Melvin W. Stanley
575-8323 —Business
PO Box 289
02/03/03-Indef.
Greenland, AR 72737
839-3106 — Home
Secretary
601-1224 — Cell
Retired Position 1
Replaced Dr. James Mashburn
Eldon Roberts
11/15/06-05/31/07 Unexpired Term
4199 E. Huntsville Rd.
06/01/07-05/31/09 1" Term
Fayetteville, AR 72701
06/01/09-05/31/112 d Term
521-0183 —Home
06/01/11-05/31/13 3`d Term
601-6469 — Cell
06/01/13-05/31/15 4th Term
Replaced Randy Bradley
06/01/15-05/31/17 5th Term
06/01/05-05/31/07 1" Term
06/01/07-05/31/09 2"d Term
Retired Position 5
06/01/09-05/31/113 d Term
Frank Johnson
06/01/11-05/31/13 4th Term
3328 Jasper Lane
06/01/13-05/31/15 5th Term
Fayetteville, AR 72704
06/01/15-05/31/17 6th Term
204-2588 —Business
Replaced Jerry Surles
Retired Position 2
06/01/06-05/31/08 1" Term
Ruston Cole
06/01/08-05/31/10 2nd Term
4201 East Canvas Road
06/01/10-05/31/12 3`d Term
Fayetteville, AR 72701
06/01/12-05/31/14 4th Term
841-2356 — Cell
06/01/14-05/31/16 5th Term
Replaced Jerry Friend
06/01/14-05/31/16 1 st Term
In 2005 Act 386 changed the composition of
the board eliminating the physician position
and adding one active member. The active
position is now a retired position due to the
fact that there are no current active members
on the pension plan. The physician position
was also replaced by a retired member.
38
Policemen's Pension Meeting
July 16, 2015
Page 72 of 78
c•'
Policemen's Pension Meeting
In the first half of 2015, the market_ -
continued todisplay volatility. Bondprices
declined as interest Fates rose. In the second
quarter, stocks continued the narrow trading
behavior of the first quarter, closing flat (S&P
500 index +0.2%) to slightly lower (Dow Jones
Industrial Average -1.1 %) for the first half of
the year. In this newsletter, we'll review the
activity in the markets and discuss our outlook
for the second half of the year.
Table l
U.S. Treasury Yields
Maturity
12/31/14
03/31/15
6/30/15
_
Page 73 of 78
1.37%
1.63%
COMMENTS
2.14%
=a.,i' AND OUTLOOKS FROM LONGER
INVESTMENTS INCORPORATED
30 -Year
2.75%
2.54%
3.i0%
July 10, 2015
In the first half of 2015, the market_ -
continued todisplay volatility. Bondprices
declined as interest Fates rose. In the second
quarter, stocks continued the narrow trading
behavior of the first quarter, closing flat (S&P
500 index +0.2%) to slightly lower (Dow Jones
Industrial Average -1.1 %) for the first half of
the year. In this newsletter, we'll review the
activity in the markets and discuss our outlook
for the second half of the year.
Table l
U.S. Treasury Yields
Maturity
12/31/14
03/31/15
6/30/15
Five -Year
1.65%
1.37%
1.63%
10 -Year
2.14%
1.93%
2.33%
30 -Year
2.75%
2.54%
3.i0%
In 2014 the Federal Reserve ended
Quantitative Easing (QE), the program through
which it purchased Treasury debt by expanding
its balance sheet. The Fed is expected to begin
raising interest rates in the second half of 2015.
Fed Chair Janet Yellen has not named the date
when this will happen, indicating the Fed will be
data dependent instead of date dependent.
Most market participants expect the first
increase of 0.25% to be announced in
September. However, anything that would
cause a growth slowdown before then could
cause the Fed to rethink its rate increase
schedule. The Fed wants to see unemployment
near 5% and inflation at 2% before it makes its
move. The most recent unemployment number
in June was 5.3%; the current year -over -year
Consumer Price inflation number is 1.4%.
Janet Yellen is a "dovish" Fed chair, which
means she will tend to err on the side of caution
as the Fed begins to raise rates.
Our strategy in the fixed-income markets
has been to hold top-quality U.S. Treasury,
corporate, and municipal bonds of short or
moderate maturities. We also trade the long
end of the Treasury curve on a tactical basis by
using an exchange -traded fund (ETF) that
mirrors the 20 -year Treasury bond. There is a
duration risk inherent in longer -dated bonds at
this point in the bond market cycle, so we
exercise a stop -loss discipline for downside
protection. We believe that the economy is not
yet on a flight path to stronger growth.
Therefore we are willing to be somewhat
opportunistic in the fixed-income arena,
watching the volatility for good entry points.
This active trading strategy represents only
about 5% to 6% of portfolio value.
We have also allocated some capital to
"other income assets." These are investments
that offer growth potential while generating
more income than bonds. This asset class, a
strong performer since 2012, was down in the
first half of the year as interest rates rose. We
have the cash balances to make additional
investments in this asset class if conditions are
right. However, we expect the bond market to
continue to be volatile as we move toward the
Fed's first rate hike since 2006.
The Stock Market
The stock market's activity so far in 2015
can best be characterized as' -violently flat." In
the first six months of 2015, the market (as
measured by the DJ1A) traded between a high
of 18,351 and a low of 17,037. This is a range
of about 7.5%. At June 30, the S&P 500 was
up 0.2%; the DJ1A was down 1.1%.
Although the S&P 500 and the DJ1A were
relatively quiet in the first half, there was
volatility elsewhere, The Dow Jones Utility
Index was down 11.4%, and the economically
sensitive Dow Jones Transportation Index
(DJTI) was down 10.7%. The Transportation
Index, which peaked in the fourth quarter of
2014, did not confirm the new DJiA high in
May. This discordant behavior --the
Transportation Index and the Industrial Index
failing to move in the same direction — is an
example of "Dow Theory non -confirmation."
Briefly, the Dow Theory states that when the
DJ1A advances past a previously important high,
the DJTI should advance too. When there is no
such confirmation, investors are right to be
skeptical about the durability of the new DJIA
high. Economically sensitive stocks trailed the
more defensive stocks in the first half. As the
quarter drew to a close, we were seeing other
signs of technical deterioration or weakness.
The markets are anticipating, indeed hoping
for, a return to growth in both the domestic
economy and the world economy- Growth is
vital to support further advances in stock prices
from these levels.
Stock prices depend on two elements: the
stock's earnings and the valuation (or price/
earnings multiple) applied to those earnings, The
combination gives us the price of the stock and,
cumulatively, the price of the stock market
indices.
At mid -year, the price/earnings multiple was
about 18 times the estimated 2015 earnings of
Chart A
Policemen's Pension Meeting
1 -do Is_ tea, -c
Page 74 of 78
$115 for the S&P 500 (Chart A). This is a
valuation that has not been seen since the late
1990s, in the run-up to the tech bubble. This
multiple ranks in the 80th percentile of
valuations going back to 1990. Atthis level, the
market is no longer cheap- It is possible that
the multiple could go to 20 times earnings or
higher, of course. But that is not an assumption
upon which to build an investment strategy.
When valuation is bumping against its
historical ceiling, the only way left forthe
market to produce a positive return is through
earnings growth. As we entered 2015,
projections called for S&P 500 earnings growth
of 5% to 8% this year. Following a first-
quarter GDP decline of 02%, the estimates for
earnings growth fell. The estimate is now 0%
to 2%. In our year-end newsletter we wrote,
"Our forecast calls for equity returns to
mirror earnings growth in 2015. Whether
that will be 5% to 8% or some other amount
is hard to determine until more of these
variables precipitate into hard facts." Now
that the 2015 earnings growth outlook is only
0% to 2%, markets have adjusted to the
weaker numbers. That explains the flat but
volatile performance we saw in the first half of
the year.
S&P 500 Valuation
25 25
S&P valuattpns are stretched accordingta
23 history, cych tally adj usted earnings and 23
21 - macro tactors - 21
19 119
17 17
t
It 11
g 9
7 Source: Evercere 151 (6117115) 7
1990 1992 1994 19% 199e 2000 2002 2004 2006 2008 2010 2012 2014 2015
S&P 500MTM PE - - - LT Median —80th Pctlle — — 20th Pctlle
This combination of high valuation (at the
high end of historical ranges) and low earnings
growth gives us a market that is heavily
dependent upon a resumption of economic
growth domestic and foreign to advance
to a higher level. Anything that threatens the
outlook for growth (Greek crisis, Chinese
slowdown, Mideast turmoil) also threatens the
outlook for the stock market.
Chart B
S&P 500 Operating Margins (Quarterly)
Policemen's Pension Meeting
Irly 16 5
Page 75 of 78
At this point, operating margins appear to
have peaked (Chart B). They came under
pressure in early 2015 as labor wage costs
started to rise (Chart C on page 4). In June,
the unemployment rate fell to 5.3%. As a
result of higher wages and other corporate
expenses, productivity declined in the first half
putting profit margins at risk. To support
earnings at these levels, revenue growth (the
top line) must pick up.
Revenue growth is directly correlated with
economic growth. Any risks to economic
1415 margins inaea5ed40bpsversv5
6V11.f Fart am Fmm�-iRhncYnV
law iQo1 1= roes WIN 1QJ5 1a, 1Q, 1QM low lata 10U 1412 1413 1014 1Q15
■ 5&p 500 operat nr y
source, Everwro !SI (6115,15)
Let's look for a moment at the components
of earnings growth. Earnings are a function of
a company's top line (its gross revenue) and the
operating profit margin achieved on that
revenue base. The resultant number, earnings,
can be divided by the number of shares
outstanding to find the company's earnings per
share, or EPS. Companies can improve their
EPS in three ways: by increasing revenues, by
increasing operating profit margins, or by
decreasing the number of outstanding shares
through corporate share buybacks. Since the
2008-2009 financial crisis, earnings growth has
dramatically exceeded revenue growth chiefly
because operating margins improved (Chart B).
Better operating margins and fewer shares
outstanding (as corporations repurchased
stock) propelled EPS growth.
The information provided herein is illustrative only. It
should not he construed as a formal recommendation
by Longer Investments Inc.
a growth —
domestic and
foreign --could
e threaten the
e% outlook for revenue
growth and hence,
4% earnings growth.
2% At this point, in
spite of massive
Fed monetization
of debt (QE I, QE2,
and QE3) and
similarly aggressive monetization of debt by
other central banks (the People's Bank of
China, the Bank of Japan, the European Central
Bank), growth has yet to break out of its post-
crisis range of 3% to 5% nominal GDP, or 1%
to 3% real GDP (Chart D on page 4). In a
world where margins appear to be peaking and
valuations are no longer cheap. investors are
wat.Nng for a resumption of nominal GDP
growth that can support revenue growth, and
thus earnings growth.
We have maintained a conservative stance
in the equity market. We emphasize large blue-
chip companies that pay good dividends and
exhibit strong balance sheets and cash flow.
The dividend yield on our established equity
portfolios is 3.5% to 4.0%. Since the DJIA
peak in May, the stock market has declined,
and it has challenged important price support
levels. The technical overlay we use with our
fundamental research triggered the sale of
select stocks. As a result, you will see higher
than normal cash balances in the June reports.
Policemen's Pension Meeting
LONGER INVESTMENTS I?NCORPORA-ED Page 76 of 78
Chart C
U.S. Employment Rate and Average
Hourly Earnings
moll=
Chart D
U.S. Nominal GDP
U.S. NOMINAL GDP
Y/Y % 2015:10: 3.6%
r z
41 U
�a �l1fN�J source: Evercdre tsr (6�4a15)
lIS AVEML�c NO`JIAIEMHHGS -
1998 2001 2004 2007 2070 2013
z°elf Y `Y" decline in the stock market with policy changes
is 99 92 9. 9' li m m m ue m iu ',2 is
will instill greater fear and uncertainty in
source: Em cora ISI (rVlaiS) investors' minds.
It's unclear if they will be successful or if they
We anticipate a correction in the stock market
as a result of the risks to growth we see now in
Greece, the Eurozone, and in China.
We close the quarter cautiously positioned.
The situation in Greece drags on as Greece
tries to negotiate with the Eurozone officials for
yet another extension of its debt repayment.
China's stock market is in turmoil, having
declined over 30% since mid-June. At this
point we know these events will dampen the
world growth outlook, but we don't know the
extent nor the duration of the impact on world
economies. As this newsletter is written,
Greece and Eurozone officials head into the
weekend for what appears to be a "final'
summitondebt renegotiation. China's
government officials are ftghtingthe violent
Next week we begin "earnings release
season" where second-quarter earnings and
attendant conference calls will shine a light on
the current state of revenues and profitability of
U.S. corporations. And so, as we close this
newsletter, there are more questions than
answers. But over the next few weeks there
will be more cards turned up, and we will have
a better picture of the second half of the year.
We are well positioned to respond as
appropriate and anticipate that we will be
investing cash balances at a more opportune
time.
LONGER INVESTMENTS INCORPORATED
Srnues I'nmiJr�! br l.miger hivvsf��iniM Grr: ih - w�r�i , �. ii : • Yi:' T �;- r;� .;,��._ • !]rn d0;
c'i. J ' 21,.1" _ -1 :i r'R:i �.;., '.d'I ;i l 11 'ti!IR'!I I I?i .. .I. it i�Idl. 1Lt!I
�.,i ;'r �;i. i`.
PI'. foi r?d�•1:r. rlln�il5_,h.laii;,.=__..L
h. (;iuJ-0
.', l:ii Sli:': it II". r.lcuur�wia ani
Policemen's Pension Meeting
July 16, 2015
Page 77 of 78
Policemen's Pension and Relief Board of Trustees
Third Thursday of the First Month of each Quarter
3:00 p.m.
City Administration Room 326
January 22, 2015
April 16, 2015
July 16, 2015
October 15, 2015
Policemen's Pension Meeting
July 16, 2015
Page 78 of 78
0001,
GARRISON
F I N A N C I A L
City of Fayetteville Police Pension and Relief Fund
Charles Schwab #2448-5630
Quarter Ending June 30, 2015
PORTFOLIO SUMMARY
City of Fayetteville Police Pension and Relief Fund
Charles Schwab #2448-5630
June 30, 2015
5.3%
■ Cash & Equivalents 346,736.60
■ Account Fixed Income 2,289,399.37
■ Account Equities 3,883,121.87
Garrison Financial
PORTFOLIO APPRAISAL
City of Fayetteville Police Pension and Relief Fund
Charles Schwab #2448-5630
June 30, 2015
Adj Unit Total Adjusted Market Pct. Unit Annual
Quantity Security Cost Cost Price Value Assets Income Income
CASH AND EQUIVALENTS
Schwab Advisor Cash Res
Premier
TREASURY NOTE
700,000 US Treasury Note 101.44
4.000% Due 08-15-18
Accrued Interest
AGENCY BONDS
200,000 Federal Farm Credit 100.00
Bank
6.125% Due 12-29-15
Accrued Interest
CORPORATE BONDS
53 0.010
125,000
Verizon
99.94
2,000
Communications
28.24
905
1.350% Due 06-09-17
66.58
125,000
Lab Corp. of America
101.01
550
2.500%Due I1-01-18
90.81
125,000
Kroger Company
100.20
120
2.300% Due 0 1 -15-19
283.98
125,000
Honeywell International
111.20
5.000% Due 02-15-19
125,000
Union Pacific Corp.
101.51
2.250% Due 02-15-19
125,000
J B Hunt Transportation
101.70
Svcs.
2.400% Due 03-15-19
125,000
Walt Disney Co.
99.90
1.850% Due 05-30-19
125,000
Berkshire Hathaway
105.70
Financial
2.900% Due 10-15-20
125,000
AT&T, Inc.
100.46
3.000% Due 02-13-22
Accrued Interest
CONVERTIBLE PREFERRED
300 Bunge4-875%Conv- 108.63
Pfd.
COMMON SPOCK
53 0.010
300
3M Corp.
164.93
2,000
AT&T, Inc.
28.24
905
AbbVie, Inc.
66.58
1,965
Abbott Laboratories
40.06
550
Accenture Plc
90.81
440
Airgas, Inc.
112.76
120
Alliance Data Systems
283.98
346,736.60
346,736.60
710,058.13 109.17
710,058.13
199,996.75 102.88
199,996.75
124,930.59 99.86
126,263.61
53 0.010
100.84
125,246.63
764 203.30
100.37
139,004.04
0.2
111.06
126,892.17
205.758.40
101.31
127,120.09
1.9
100.91
124,877.47
1.9
100.01
132,123.13
2.0
103,00
125,576.31 97.61
1,152,034.04
32,588.95 108.99
32,588.95
49,479.55
53 0.010
154.30
56,475.88
764 203.30
35.52
60,253.90
0.2
67.19
78,727.14
205.758.40
49.08
49,943.51
1.9
96.78
49,614.11
1.9
105.78
34,077.36
2.0
291.94
346,736.60
53 0.010
346,736.60
5.3
764 203.30
11.7 4.000
10,441.99
0.2
774,645.29
11.9
205.758.40
3.2 6-125
34.03 0.0
205,792.43 3.2
124,822.87 1.9 1.350
126,048.37
1.9
2.500
125,468.00
1.9
2.300
138,821.37
2.1
5.000
126,642.50
1.9
2.250
126,139.00
1.9
2.400
125,014.50
1.9
1.850
128,755.75
2.0
2.900
122,013.37 1.9 3.000
8,555.90 0.1
1,152,281.65 177
32,696.10 0.5 4.875
32,696.10 0.5
46,290.00
0.7
4.100
71,040.00
1.1
1.880
60,806.95
0.9
2040,
96,442.20
1.5
0.960
53,229.00
0.8
2040,
46,543.20
0.7
2.400
35,032.80
0.5
0.000
Yield
34.67 00
34.67 0.0
28,000.00 1 0
28,000.00 LO
12,250.00 03
12,250.00 0.3
1,687.50 1.4
3,125.00 2.2
2,875.00 2.2
6,250.00 1.8
2,812.50 1.9
3,000.00 2.2
2,312.50 1.9
3,625.00 2.3
3,750.00 3.4
29,437.50 2.1
1,462.50 4.5
1,462.50 4.5
1,230.00 2.7
3,760.00 5.3
1,846.20 3.0
1,886.40 2.0
1,122.00 2.1
1,056.00 2.3
0.00 0.0
Garrison Financial
PORTFOLIO APPRAISAL
City of Fayetteville Police Pension and Relief Fund
Charles Schwab #2448-5630
June 30, 2015
Adj Unit Total Adjusted Market Pct. Unit Amoral
Quantity Security Cost Cost Price Value Assets Income Income Vivid
625
Amgen, Inc.
11433
71,456.06
153,52
95,950.00
1 5
3.160
1,975.00
2.1
825
Anadarko Petroleum
85.82
70,805,10
78.06
64,399.50
1.0
1,080
89100
IA
500
Ansys, Inc-
75.67
37,836.95
91.24
45,620.00
0-7
0.000
0.00
0.0
1,680
Apple Computer
72.69
122,121,54
125.42
210,714.00
3.2
2.080
3,494.40
1.7
785
AptarGroup, Inc.
63.47
49,825.05
63.77
50,059.45
0.8
1.120
879.20
1,8
125
AutoZone, Inc.
516.09
64,511,70
666.90
83,362.50
1.3
0.000
0.00
0.0
1,350
BCE, Inc. Cl F
24.40
32,934 20
42.50
57,375.00
09
2.650
3,577.50
6.2
350
Becton, Dickinson &
113.97
39,889 45
141.65
49,577.50
0.8
2.400
84000
1 7
Company
1,500
Broadridge Financial
4133
62,000.35
5001
75,015.00
12
1.080
1,62000
2.2
Solutions
675
Brown-Forman Corp.
88.81
59,94693
100.18
67,621.50
1.0
1.260
850,50
1.3
665
CH Robinson
74.84
49,768.25
6239
41,489.35
0.6
1.520
1,010,80
2.4
Worldwide
3,000
CSX Corporation
28.88
86,62740
32.65
97,950.00
1.5
0.720
2,160.00
22
1,300
Cal -Maine Foods, Inc.
36.68
47,687.88
52.20
67,860.00
1,0
1.400
1,820.00
2.7
585
Check Point Software
85.44
49,979.59
79.55
46,536.75
0.7
0.000
0.00
Ott
400
Chevron Corporation
85.21
34,084.61
96.47
38,58800
0.6
4.280
1,712.00
4.4
2,800
Cisco Systems, Inc.
19.70
55,16869
27.46
76,888.00
1.2
0-840
2,352.00
3.1
1,400
Coca-Cola Company
3098
43,374.60
3923
54,922.00
08
1.320
1,848.00
3,4
680
Compass Minerals Intl
87.89
59,765.06
82.14
55,855.20
0.9
2,640
1,795.20
3.2
1,150
ConocoPhillips
55.58
63,918,42
6141
70,621.50
1.1
2.920
3,358.00
4.8
565
Deere &Co.
87,76
49,585.72
97.05
54,833.25
0.8
2.400
1,35600
2,5
500
Disney, Walt Holdings
110.91
55,454.90
114.14
57,070.00
09
1320
660.00
12
2,000
EMC Corp-
25.64
51,282.21
26.39
52,780.00
0.8
0.460
92000
1.7
830
Eastman Chemical
86,14
71,495.64
8182
67,910.60
1-0
1.600
1,328.00
2.0
1,310
Emerson Electric
68.00
89,080.00
55.43
72,613.30
1.1
1.880
2,46280
3.4
3,825
General Electric Co.
19.53
74,709.32
26.57
101,630.25
1.6
0.920
3,519.00
3.5
1,200
GlaxoSmithKline Plc.
50,10
60,124.15
41.65
49,980.00
0.8
2.290
2,748,00
5.5
2,250
Intel Corp.
20.53
46,202.71
3041
68,433.75
10
0.960
2,160.00
32
800
Johnson & Johnson
64.70
51,756.60
97-46
77,968.00
1.2
3.000
2,400.00
3 1
465
Kimberly Clark Corp.
107.07
49,786.64
105.97
49,276.05
0.8
3.520
1,636,80
3.3
395
Laboratory Corp.
125,86
49,715.75
121.22
47,881.90
0.7
0000
0.00
0.0
1,000
Lincoln Electric
67.21
67,209.18
60.89
60,890.00
0.9
1,160
1,160.00
1.9
640
Medtronic Pie,
77.60
49,662 77
74.10
47,424.00
0.7
1.520
972.80
2.1
1,100
Merck & Co., Inc.
5139
56,525.78
56,93
62,623.00
10
1,800
1,980.00
32
800
National Oilwell Varco
8535
68,280.15
4828
38,624-00
0.6
1,840
1,472.00
3.8
1,000
Patterson Companies
51.07
51,074.75
48,65
48,650.00
0.7
0.880
880.00
1.8
530
Pepsico, Inc.
93.75
49,690.09
93.34
49,47020
0.8
2.810
1,489.30
3.0
830
Phillips 66
72.18
59,911.86
80.56
66,864.80
1.0
2240
1,85920
2.8
1,000
Procter & Gamble Co.
59.42
59,41761
78.24
78,240.00
1.2
2650
2,65000
3.4
1,000
Qualcomm, Inc.
63.62
63,616.39
62.63
62,630,00
1.0
1.920
1,920.00
3.1
2,790
Raven Industries, Inc.
28.37
79,148.48
20.33
56,720.70
0-9
0.520
1,450.80
2.6
700
Sanofi ADR
55.71
38,995.10
49.53
34,671.00
0.5
1320
924.00
2.7
770
Sensient Technologies
64.55
49,704.67
68.34
52,621.80
0.8
1.000
770.00
1,5
900
St. Jude Medical, Inc,
66.56
59,900.53
73.07
65,763.00
1.0
1, 160
1,044.00
1.6
1,055
Syngenta AG ADR
71.44
75,370,40
81.61
86,098.55
1.3
1.970
2,078.35
2.4
850
Texas Instruments
58.53
49,754.69
51.51
43,783.50
0,7
1.360
1,156.00
2.6
465
Valmont Industries
128.60
59,797.26
118.87
55,274.55
0.8
1.500
697.50
1.3
450
Wabtec Corp,
93.64
42,137,64
9424
42,408.00
0.7
0.320
144.00
0.3
1,150
Wal -Marl Stores, Inc.
62.11
71,423,42
70.93
81,569.50
13
1,960
2,254.00
2.8
2,000
Waste Management
42.21
84.414.32
46.35
92,700.00
1-4
1-540
3,080.00
3.3
3,265,502-02
3,587,193-10
55.0
88,256.75
2.5
MUTUALFUNDS
2,248,991
Dodge &Cox Intl Sik
45.41
102,132,74
43.75
98,393.36
1.5
0.970
2,181.52
2.2
You should carefully compare this statement to the statement you receive from your custodian and notify us immediately of any discrepancies.
3
Garrison Financial
PORTFOLIO APPRAISAL
City of Fayetteville Police Pension and Relief Fund
Charles Schwab #2448-5630
June 30, 2015
Adj Unit Total Adjusted Market
Pct
Unit
Annual
Quantity
Security
Cost Cost Price Value
Assets
Income
Income
Yield
2,587.463
Oppenheimer
39.33 101,776.46 35.31 91,363.32
1.4
0.100
258.75
0.3
Developing Mkts A
203,909.20 189,756.67
2.9
2;44027
1.3
UNIT TRUSTS
2,340
FT Energy Income&
.5420 80,032.95 31,40 73,476.00
I.1
2.20a
5,148.110
7.0
Growth
4,000
iShares S&P US Pfd Stk 38.34 153,340.30 39.17 156,680.00
2.4
2-100
9.60000
6.1
233,373.25 230,156.00
3.5
14.748W
6.4
TOTAL PORTFOLIO
6,144,198.95 6,519,257.84
100.0
176,629.69
2.2
You should carefully compare this statement to the statement you receive from your custodian and notify us immediately of any discrepancies.
3
Garrison Financial
PURCHASE AND SALE
City of Fayetteville Police Pension and Relief Fund
Charles Schwab #2448-5630
From 01-01-15 To 06-30-15
Trade
Settle
Unit
Date
Date
Quantity
Security
Price
Amount
PURCHASES
03-19-15
03-24-15
300
3M Corp.
164.93
49,479.55
03-24-15
03-27-15
125,000
AT&T, Inc.
100.48
125,597.62
3.000% Due 02-13-22
03-19-15
03-24-15
550
Accenture Plc.
90.81
49,943.51
03-19-15
03-24-15
200
Airgas, Inc.
112.76
22,551.87
03-19-15
03-24-15
100
Airgas,lnc.
112.76
11,275.93
03-19-15
03-24-15
140
Airgas,lnc.
112.76
15,786.31
03-19-15
03-24-15
785
AptarGroup,Inc.
63.47
49,825.05
03-24-15
03-27-15
125,000
Berkshire Hathaway Financial
105.98
132,470.38
2.900% Due 10-15-20
03-19-15
03-24-15
200
CH Robinson Worldwide
74.85
14,970.69
03-19-15
03-24-15
100
CH Robinson Worldwide
74.83
7,483.35
03-19-15
03-24-15
365
CH Robinson Worldwide
74.83
27,314.21
03-10-15
03-13-15
1,300
Cal -Maine Foods, Inc.
36.68
47,687.88
03-19-15
03-24-15
585
Check Point Software
85.44
49,979.59
03-19-15
03-24-15
565
Deere & Co.
87.76
49,585.72
06-04-15
06-09-15
500
Disney, Walt Holdings
110.91
55,454.90
03-19-15
03-24-15
100
FT Energy Income & Growth
34.18
3,418.38
03-19-15
03-24-15
100
FT Energy Income & Growth
34.18
3,418.38
03-19-15
03-24-15
100
FT Energy Income & Growth
34.20
3,420.38
03-19-15
03-24-15
140
FT Energy Income & Growth
34.20
4,788.54
03-19-15
03-24-15
60
FT Energy Income & Growth
34.20
2,052.23
03-19-15
03-24-15
20
FT Energy Income & Growth
34.20
684.08
03-19-15
03-24-15
100
FT Energy Income & Growth
34.20
3,420.38
03-19-15
03-24-15
900
FT Energy Income & Growth
34.20
30,783.44
03-19-15
03-24-15
100
FT Energy Income & Growth
34.20
3,420.38
03-19-15
03-24-15
300
FT Energy Income & Growth
34.20
10,261.15
03-19-15
03-24-15
300
FT Energy Income & Growth
34.20
10,261.15
03-19-15
03-24-15
100
FT Energy Income & Growth
34.20
3,420.38
03-19-15
03-24-15
20
FT Energy Income & Growth
34.20
684.08
05-08-15
05-13-15
125,000
J B Hunt Transportation Svcs.
101.76
127,201.62
2.400% Due 03-15-19
03-19-15
03-24-15
100
Kimberly Clark Corp.
107.07
10,706.72
03-19-15
03-24-15
100
Kimberly Clark Corp.
107.07
10,706.82
03-19-15
03-24-15
65
Kimberly Clark Corp.
107.07
6,959.44
03-19-15
03-24-15
100
Kimberly Clark Corp.
107.07
10,706.82
03-19-15
03-24-15
100
Kimberly Clark Corp.
107.07
10,706.84
03-19-15
03-24-15
395
Laboratory Corp.
125.86
49,715.75
03-19-15
03-24-15
640
Medtronic Plc.
77.60
49,662.77
01-28-15
02-02-15
1,000
Patterson Companies
51.07
51,074.75
03-19-15
03-24-15
530
Pepsico,Inc.
93.75
49,690.09
03-19-15
03-24-15
770
Sensient Technologies
64.55
49,704.67
Garrison Financial
PURCHASE AND SALE
City of Fayetteville Police Pension and Relief Fund
Charles Schwab #2448-5630
From 01-01-15 To 06-30-15
Trade Settle
Date Date Quantity
Seen rity
Unit
Price Amount
03-19-15 03-24-15 850 Texas Instruments 58.53 49,754.69
03-12-15 03-17-15 450 Wabtec Corp. 93.64 42,137.64
1,308,168.13
SALES
03-19-15
03-24-15
2,000
Alerian MLP
16.34
32,676.02
03-19-15
03-24-15
3,000
Alerian MLP
16.34
49,014.03
05-07-15
05-12-15
200
Cisco Systems, Inc.
28.81
5,762.90
05-07-15
05-12-15
1,300
Cisco Systems, Inc,
28.81
37,458.85
03-19-15
03-24-15
100
Ensco Plc.
20.62
2,061.55
03-19-15
03-24-15
250
Ensco Plc.
20.62
5,153.88
03-19-15
03-24-15
300
Ensco Plc.
20.62
6,184.66
03-19-15
03-24-15
300
Ensco Plc.
20.62
6,184.66
03-19-15
03-24-15
800
Ensco Plc.
20.61
16,491.60
03-19-15
03-24-15
100
Freeport-McMoRan
Copper & Gold,
17.20
1,720.02
Inc.
03-19-15
03-24-15
200
Freeport-McMoRan
Copper & Gold,
17.20
3,440.04
Inc.
03-19-15
03-24-15
100
Freeport-McMoRan
Copper & Gold,
17.20
1,720.02
Inc.
03-19-15
03-24-15
100
Freeport-McMoRan
Copper & Gold,
17.20
1,720.02
Inc.
03-19-15
03-24-15
100
Freeport-McMoRan
Copper & Gold,
17.20
1,720.02
Inc.
03-19-15
03-24-15
100
Freeport-McMoRan
Copper & Gold,
17.20
1,720.02
Inc.
03-19-15
03-24-15
100
Freeport-McMoRan
Copper & Gold,
17.20
1,720.02
Inc.
03-19-15
03-24-15
100
Freeport-McMoRan
Copper & Gold,
17.20
1,720.02
Inc.
03-19-15
03-24-15
1,100
Freeport-McMoRan
Copper & Gold,
17.20
18,915.85
Inc.
05-07-15
05-12-15
250
Intel Corp.
32.32
8,080.37
05-07-15
05-12-15
750
Intel Corp.
32.32
24,241.09
05-07-15
05-12-15
450
Johnson & Johnson
99.86
44,938.97
03-19-15
03-24-15
5,650
Keycorp
14.41
81,406.62
05-08-15
05-13-15
635
McDonald's Corp.
98.51
62,554.99
04-08-15
04-13-15
150
Microsoft Corp.
41.35
6,201.93
04-08-15
04-13-15
2,675
Microsoft Corp.
41.35
110,601.00
03-19-15
03-24-15
1,750
Noble Corp.
13.53
23,685.79
04-08-15
04-13-15
50
Pfizer, Inc.
34.66
1,732.85
04-08-15
04-13-15
3,600
Pfizer, Inc.
34.66
124,765.24
03-19-15
03-24-15
2,000
Sector SPDR Fncl Select Shs
24.41
48,818.36
2
Garrison Financial
PURCHASE AND SALE
City of Fayetteville Police Pension and Relief Fund
Charles Schwab #2448-5630
From 01-01-15 To 06-30-15
Trade
Settle
Unit
Date
Date
Quantity Security
Price
Amount
03-19-15
03-24-15
1,775 Sector SPDR Friel Select Shs
24.41
43,324.52
03-19-15
03-24-15
1,700 Sector SPDR Utility Select Shs
44.91
76,343.50
03-19-15
03-24-15
2,300 Sector SPDR Utility Select Shs
44.91
103,288.25
03-19-15
03-24-15
3,000 iShares DJ Select Div
78.45
235,336.72
03-24-15
03-27-15
800 iShareslBOXX Inv Grade Corp Bond
121.86
97,490.72
03-24-15
03-27-15
46 iShares IBOXX Inv Grade Corp Bond
121.86
5,605.72
03-24-15
03-27-15
1,204 iShareslBOXX Inv Grade Corp Bond
121.86
146,723.52
05-08-15
05-13-15
1,250 iShareslBOXX Inv Grade Corp Bond
119.06
148,825.94
1,589,350.28
3
Garrison Financial
REALIZED GAINS AND LOSSES
City of Fayetteville Police Pension and Relief Fund
Charles Schwab #2448-5630
From 01-01-15 Through 06-30-15
Open
Close
Gain Or
Date
Date
Quantity
Security
04-16-14
03-19-15
100
Ensco Plc.
04-16-14
03-19-15
250
Ensco Plc.
04-16-14
03-19-15
300
Ensco Plc.
04-16-14
03-19-15
300
Ensco Plc.
04-16-14
03-19-15
800
Ensco Ple.
06-10-14
03-19-15
1,750
Noble Corp.
06-26-14
03-19-15
2,000
Alerian MLP
01-16-13
03-19-15
3,000
Alerian MLP
12-20-10
03-19-15
1,700
Sector SPUR Utility Select
36,190.60
Shs
12-20-10
03-19-15
2,300
Sector SPDR Utility Select
49,014.03
-2,437.58
Shs
05-19-14
03-19-15
5,650
Keycorp
02-10.14
03-19-15
2,000
Sector SPUR Foci Select Shs
02-10-14
03-19-15
1,775
Sector SPUR Foci Select Shs
05-12-14
03-19-15
100
Freeport-McMoRan Copper
48,818.36
5,179.13
& Gold, Inc.
05-12-14
03-19-15
200
Freeport-McMoRan Copper
3,487.70
1,720.02
& Gold, Inc.
05-12-14
03-19-15
100
Freeport-McMoRan Copper
-3,535.36
3,487.70
& Gold, Inc.
05-12-14
03-19-15
100
Freeport-McMoRan Copper
1,720.02
-1,767.68
& Gold, Inc.
05-12-14
03-19-15
100
Freeport-McMoRan Copper
3,487.70
& Gold, Inc.
05-12-14
03-19-15
100
Freeport-McMoRan Copper
1,720.02
-1,767.68
& Gold, Inc.
05-12-14
03-19-15
100
Freeport-McMoRan Copper
38,364.70
18,915.85
& Gold, Inc.
05-12-14
03-19-15
100
Freeport-McMoRan Copper
78,640.74
87,773.42
& Gold, Inc.
05-12-14
03-19-15
1,100
Freeport-McMoRan Copper
5,605.72
& Gold, Inc.
08-08-I1
03-19-15
3,000
iShares D1 Select Div
10-06-09
03-24-15
800
iShares IBOXX Inv Grade
-69.57
100, 543.80
Corp Bond
10-06-09
03-24-15
46
iShares IBOXX Inv Grade
1,732.85
-8,355.15
Corp Bond
10-06-09
03-24-15
1,204
iShares IBOXX Inv Grade
52,323.49
7,037.50
Corp Bond
06-26-14
04-08-15
150
Microsoft Corp.
11-05-13
04-08-15
2,675
Microsoft Corp.
06-26-14
04-08-15
50
Pfizer, Inc -
05-07-10
04-08-15
3,600
Pfizer, Inc.
06-26-14
05-07-15
250
Intel Corp.
06-22-06
05-07-15
750
Intel Corp.
06-26-14
05-07-15
200
Cisco Systems, Inc.
03-29-11
05-07-15
1,300
Cisco Systems, Inc.
04-15-I1
05-07-15
450
Johnson & Johnson
10-06-09
05-08-15
1,250
iShares IBOXX Inv Grade
Corp Bond
Gain Or
Loss
Cost
Amort. or
Basis
Accretion
Proceeds
Short Term
Long Term
5,034.33
2,061,55
-2,972.78
12,585.82
5,153,88
-7,431.94
15,102.98
6,184.66
-8,918.32
15,102.98
6,184.66
-8,918.32
40,274.61
16,491.60
-23,783.01
48,930.13
23,685.79
-25,244.34
36,190.60
32,676.02
-3,514.58
51,451.61
49,014.03
-2,437.58
58,043.02
76,343.50
18,300.48
78,528.80
103,288.25
24,759.45
75,839.95
81,406.62
5,566.67
43,639.23
48,818.36
5,179.13
38,729.82
43,324.52
4,594.70
3,487.70
1,720.02
-1,767.68
6,975.40
3,440.04
-3,535.36
3,487.70
1,720.02
-1,767.68
3,487.70
1,720.02
-1,767.68
3,487.70
1,720.02
-1,767.68
3,487.70
1,720.02
-1,767.68
3,487.70
1,720.02
-1,767.68
3,487.70
1,720.02
-1,767.68
38,364.70
18,915.85
-19,448.85
156,695.97
235,336.72
78,640.74
87,773.42
97,490.72
9,717.30
5,046.97
5,605.72
558.75
132,099.00
146,723.52
14,624.52
6,271.50
6,201.93
-69.57
100, 543.80
110,601.00
10, 057.20
10,088.00
1,732.85
-8,355.15
72,441.75
124,765.24
52,323.49
7,037.50
8,080.37
1,042.87
15,400.90
24,241.09
8,840.18
4,642.00
5,762.90
1,120.90
25,614.04
37,458.85
11,844.81
29,113.09
44,938.97
15,825.88
137,145.97
148,825.94
11,679.97
Garrison Financial
REALIZED GAINS AND LOSSES
City of Fayetteville Police Pension and Relief Fund
Charles Schwab #2448-5630
From 01-01-15 Through 06-30-15
Open Close
Date Date Quantity Security
12-31-14 05-08-15 635 McDonald's Corp.
TOTAL GAINS
TOTAL LOSSES
TOTAL REALIZED GAIN/LOSS 150,16251
NO CAPITAL GAINS DISTRIBUTIONS
Cost Amort. or
Basis Accretion Proceeds
60,065.98 62,554.99
1,439,187.77 0.00 1,589,350.28
H
Gain Or Loss
Short Term Long Term
2,489.01
10,219.45
-124,565.97
-114,34652
266,946.61
-2,437.58
264,509.03
Garrison Financial
PERFORMANCE SUMMARY
GROSS OF FEES
City of Fayetteville Police Pension and Relief Fund
Charles Schwab #2448-5630
June 30, 2015
PORTFOLIO COMPOSITION
CHANCE IN PORTFOLIO
Account
40% Fixed Income/60%
Equity Blended Index
Account Fixed Income
Barclays Capital Intermed
Govt/Credit
Account Equities
S&P 500
TIME WEICHTED RETURN
Annualized
Quarter
Market
Pct.
Inception
To Date
To Date
Months
Value
Assets
Yield
0.04
0.04
Cash & Equivalents
346,736.60
5.3
0.0
Portfolio Value on 12-31-14
7,023,870.27
Account Fixed
2,289,399.37
35.1
1.9
Accrued Interest
16,134.03
Income
-1.66
-1.25
-1.25
0.28
1.23
Account Equities
3,883,121.87
59.6
2.5
Net Additions/Withdrawals
-480,585.48
Account
0.00
0.0
-
Realized Gains
-48,890.72
Commodities
Unrealized Gains
-79,602.83
Income Received
85,434.68
Change in Accrued Interest
2,897.89
Portfolio Value on 06-30-15
6,500,225.92
Accrued Interest
19,031.92
Total
6,519,257.84
100.0
2.2
6,519,257.84
Account
40% Fixed Income/60%
Equity Blended Index
Account Fixed Income
Barclays Capital Intermed
Govt/Credit
Account Equities
S&P 500
TIME WEICHTED RETURN
Annualized
Quarter
Year
Last 12
Inception
To Date
To Date
Months
To Date
-0.09
-0.61
0.04
0.04
-0.08
1.15
5.20
5.20
-0.48
1.14
2.23
2.23
-0.62
0.82
1.69
1.69
0.10
-1.66
-1.25
-1.25
0.28
1.23
7.42
7.42
All "Account' returns refer to your portfolio. Benchmark indexes are also listed for reference. All returns are reported as
percentages.
This report is calculated using industry -standard accounting and performance calculation methodologies and is generated by our Axys
portfolio accounting software. Calculations are a time -weighted total return series based on monthly valuations, including all cash
and equivalents. All calculations are done based on trade date, employing the accrual method of accounting and include cash,
interest, dividends and realized and unrealized gains and losses. Performance is adjusted to accurately reflect portfolio deposits and
withdrawals. Results are presented after transaction costs but before management fees. Inception -to -date returns are annualized
numbers, except for accounts under management less than one year. Unsupervised assets are excluded in performance calculation.
At any given point in time an investment may be worth more or less than the original purchase price.
GARRISON
F I N A N C I A L
July 7, 2015
City of Fayetteville Police Pension and Relief Fund
Charles Schwab #2448-5630
113 West Mountain
Fayetteville, AR 72701
STATEMENT OF MANAGEMENT FEES
For The Period April 1 through June 30, 2015
Portfolio Value as of 03-31-15
6,736,027
Portfolio Value as of 04-30-15
6,685,525
Portfolio Value as of 05-31-15
6,632,855
Portfolio Value as of 06-30-15
6,519,258
Average of 4 Months
6,643,416
6,643,416 @ 0.5000% per annum 8,304
Quarterly Management Fee 8,304
TOTAL DUE AND PAYABLE 8,304
This statement is for informational purposes only. As you requested, the fee will be automatically
deducted from your account. Please be advised that it is the responsibility of the client to verify the
accuracy of each fee calculation. The custodian will not determine whether the fee is properly calculated.
c0 M
N (o
10) N
C06
O Cl) N
N Ln V
Cl) O)
M LO
V) V)
O 00
I� O
N 00 0
O ^ O1
N M O
Ln V
V) V)
O OM
0) L6
co O N
N N M
Ln -q
(9 V)
COO 00
r OD
r,-0)
r-
C) C6 od,
N I— Ln
LO V
LO
O
N
LL LL
00
U_
O
LL d
m
N
N
0
Oi O
N N
O)
V)
0
r
00 0
00 a N
(o C C)
w O
� N
O) C
� O
m
C
0) O_
V N
00 F Cl)
N a O
0 cN
l0
U_
CO O
VQ-
C,
Qo -0
m v
Iwo
M N
O 0O
V) N
a
w
Y
N LO
C O
.LO-. N
(D
U
C
(0
7
N
C
C
O
0
w
a
a)
U
N
>N
V) (» V)
� O O
(O V C
Ln O r
O M N
N
V) V) V)
I- O O
I- OO
Or O
`
V Ln O
M LU) N
r
V) V) V)
M 00
O O
N O
(O N
qT VLfi
(N
V) V) V)
O O O O
0 0 O o
ooioo
V 0N
(CO
O N V
N co 7 N N
V) 69 V) V�
O (N O O
coN0a
O O O O
LC)� N V
O O M Cl)
N V V (14
Z -'JZ -'SW- l
C
O c
:- O)
U E
O
N
CL
0 Q c
C� E
o m m
= a
a
m LL
O O O O
aaaa
V) (A)
V O
M 0
O 0
0)
co N
U') O
I—O
N _O
O) (O
N co
V) V)
00) O
O L6
0
O N
N
to V)
0 00
r-� o O
0) r m
co C
W 7 to
T:r:T-7
• •=
f s
collo
N N LLOO
Ln Ln M
(DLOro
L:r-:r-:
O) d a)
LL LL LL
c
m
E
3
a
z
d
a
C
l0
C
C
T
U)
C
a �
0) Ur
a)C
U c N
N (0 0
LL
LL N
O 0 E
E E
@aDa
N 0 T
C
O (p
E I-
o
O
n U( N
y a
O Co
C C 0)
2 (0 Z
N (D
-`oaa
o
)
_0 T
CO N
M 0 L
75 m cn
(D
LL
(0
L
c
Y
0
m
E
N
a
C
N
Ln
O
MIM
N M
V
O O
M
V
OD O)
O)
O 6
C'7
M
o O N
p
V
ClO
O
N
oM
N ((o �
OOD
V
V
M
M R
I
V) V)
Vi
63 V)
V)
69
N
f
O) o
Cl)O
O
(O
O O)
W
o o
O
N
o (o 0
O
V
OD O
Lci
V
Mm
I
N
N M LU
N
N
V) V)
V)
V) V)
V)
69
(n
M
O o
m
o
o (o
00
to o
LO
o
Ln C6
r-:
o
v
v
O
M
O
T
0
LV
o O
Q
N
( 0
0 Ln
I
M
0 0
N
O
O OD V
O
1
N N
N
N
N N 0
N
N
r
c0 M
N (o
10) N
C06
O Cl) N
N Ln V
Cl) O)
M LO
V) V)
O 00
I� O
N 00 0
O ^ O1
N M O
Ln V
V) V)
O OM
0) L6
co O N
N N M
Ln -q
(9 V)
COO 00
r OD
r,-0)
r-
C) C6 od,
N I— Ln
LO V
LO
O
N
LL LL
00
U_
O
LL d
m
N
N
0
Oi O
N N
O)
V)
0
r
00 0
00 a N
(o C C)
w O
� N
O) C
� O
m
C
0) O_
V N
00 F Cl)
N a O
0 cN
l0
U_
CO O
VQ-
C,
Qo -0
m v
Iwo
M N
O 0O
V) N
a
w
Y
N LO
C O
.LO-. N
(D
U
C
(0
7
N
C
C
O
0
w
a
a)
U
N
>N
V) (» V)
� O O
(O V C
Ln O r
O M N
N
V) V) V)
I- O O
I- OO
Or O
`
V Ln O
M LU) N
r
V) V) V)
M 00
O O
N O
(O N
qT VLfi
(N
V) V) V)
O O O O
0 0 O o
ooioo
V 0N
(CO
O N V
N co 7 N N
V) 69 V) V�
O (N O O
coN0a
O O O O
LC)� N V
O O M Cl)
N V V (14
Z -'JZ -'SW- l
C
O c
:- O)
U E
O
N
CL
0 Q c
C� E
o m m
= a
a
m LL
O O O O
aaaa
V) (A)
V O
M 0
O 0
0)
co N
U') O
I—O
N _O
O) (O
N co
V) V)
00) O
O L6
0
O N
N
to V)
0 00
r-� o O
0) r m
co C
W 7 to
T:r:T-7
• •=
f s
collo
N N LLOO
Ln Ln M
(DLOro
L:r-:r-:
O) d a)
LL LL LL
c
m
E
3
a
z
d
a
C
l0
C
C
T
U)
C
a �
0) Ur
a)C
U c N
N (0 0
LL
LL N
O 0 E
E E
@aDa
N 0 T
C
O (p
E I-
o
O
n U( N
y a
O Co
C C 0)
2 (0 Z
N (D
-`oaa
o
)
_0 T
CO N
M 0 L
75 m cn
(D
LL
(0
L
c
Y
0
m
E
N
a
C
N
Ln
O
MIM
M N 8 O 0�
N N N C.4 r
o to
Q • ..
10 J Q)
.n
M1 b ••
P r u o
C N O
n N W O
W N
O1 I
OI L w
C b z3
Yz 6 1
E I
o.
O0.
0
omm
Ln xmm
rl O + O
C N N ~
7 M1
I'ry f� N
acv
o rnx
N*
O L O
mo
O 0 ..
O O
U I
m �
c�
T
C
(may Lo G
L o W
A
410
� CD
O T
O m l0
O N Z
m yN
m N
M1
r
~ r1 N N
? O e
IV N v m
b
a
0
L
W O
O
O O
O H
O
MN
N
10 N
C) ow
M N m
� m
C .y
N l
IA O
°a
�a
N C
O ti
LN
m
O
O
10
m
I,() O
Cl -
M101
L rm
Q 01 "I
N O
N
N 1�1
l0
O
.r m
O
L c
14 O
UI O
Cc
I
M
O
I
(J
N `
HOD �
N
O • N
O 1 N
IOJM1
.•I
N O
C N
N � � �
y LL O
m N
1
a L -.
C O �
0115
Y E I
O
Do-
CIOwm
Z 1
C y m
N N 1
� M1
Y N
V L V
O N=
N
O L L O
Ji0
O O ..
IO O V
V 1
al H
v L
L7
� C
E W
L O W
00
L7OO
N m
O w
O , w
Ill
M1m w
m y
O N Z
m.+y
m N
L M1 rl
¢
Inw
T-4 y
O v
Nv7
n
CL
L
L
7
w
0
00
o .+
0
L m N
la y N
O 10
m
N N
10
W L
Ill L
N O
O.
»• of
N C
o •-
Ly
� m
W O
LL O
w
m
0
N O
N
m
al
r
NPi
O
.. m
m
c a
1a
M ao
L C
Y a
N G
� a
O: h
rico
W�
M4N
a
C> o 00 10
N N r4 r+
0 0
OLLo
o
1 D J M1
N O
C N
Ill LL O
m N
m I
X EI
1 E I
0 0
rn o
C
omm
x I
In m
0
N o I
N N
-+ r
+r N
Q L Q
O OI =
N •+
a L O
L
Lr)
T O
CL H al
Q 0 ..
O ID O Q
U I
N � F
Q s
a
c�
c
L a �-
� E m
� LOW
ao
O O O
N m
O T
O W l0
Ill .r Q
N O N =
LL m . (D
MN
M1
N r
C N
Q
n Q�
a
a
L
L
7
L1 W o
N oO
MN
N N
mw
> N Ill
w
Z rl
.r d
Ill L
N O
� O
U N C
O .)
Ori mN
N c
m
CL O
M1 O
TOl
'1
N O
N
.+ m
01 1O
� m
o�
om
L C
i+ 0
� 7 a
r ¢ h