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Macon police, fire pension funds doing better, advisers say

Financial matters appear to be looking up for Macon’s retired police and firefighters, but the board overseeing their pensions is considering how to react more quickly to market changes.

On Thursday, board chairman Charles Jones welcomed new citizen-at-large representative Lynn Wood to his first meeting as the Fire and Police Employees Retirement System board’s fifth member.

“I’m very pleased that we have a citizen-at-large, and I wanted to make sure we had an opportunity to formally introduce him to his troubles,” Jones chuckled.

Financial advisers Don Eubanks and Lawrence Williford from Merrill Lynch said they believe that all economic indicators are improving except for the housing market, which some analysts think may not be as important as previously perceived.

“Generally, our strategists feel like we’re returning to a normal environment,” Williford said. Interest rates remain low, but the city’s pension investments are being shifted to areas that generally do well during economic recoveries, Eubanks said.

The big question -- left unaswered -- was whether to change the mechanism for shifting those investments. Board members discussed moving the $170 million fund from State Street Bank & Trust Co. to SunTrust Bank, but said they want much more information before deciding.

The city has two pension funds, Williford said. Both the fund for police and firefighters, and the fund for general employees, invest heavily in mutual funds. When pension managers want to move money to different investments, the general employee fund can accomplish that in a day, merely by contacting its bank, he said. But it took the police and fire pension fund two and a half weeks to do so recently, because the account at State Street is set up so that all the relevant mutual funds must be contacted individually, Williford said.

“The reason for leaving State Street is the process,” he said. SunTrust says it would be able to consolidate the account, making changes quick and simple, the advisers said.

Board members said they also want to know about each bank’s offer of transaction fees. Jones asked for an “apples to apples” comparison, including presentations from representatives of both firms.

Board member Charlie Bishop repeated his demand from the last meeting for a record of “all transactions,” especially city payments into the fund, delivered at each board meeting.

Chief Accountant Narender Bhardwaj said he sent that record in an e-mail to Jones. Jones asked that it be copied to all committee members, and Senior Assistant City Attorney Martha Welsh said she would make sure that happened.

Bishop also asked for the pension fund’s actuary to be summoned to the next board meeting. He especially wants to know whether the actuary is likely to rule the plan in compliance with state standards in his next biannual report, he said.

The last actuarial report said the city should pay $100,000 more per month into the fund, which City Council agreed to do recently, but Bishop also wants to hear rules and plans for making up the previous year and a half of undersized payments.

To contact writer Jim Gaines, call 744-4489.

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