►
Description
San José Federated City Employees' Retirement Board
View Agenda at https://sjrs.legistar.com/View.ashx?M=A&ID=757047&GUID=47D53A69-3496-4204-B2CF-F7B1ED79849C
A
B
B
C
D
E
Thank
You
mr.
chairman
members
of
the
board
I
wanted
to
in
staff
I
wanted
to
introduce
my
partner,
jenny.
Crangle
was
here
with
me
this
morning.
Yeah.
You
know
my
other
colleague
Jeffrey
Kerr,
who
has
worked
with
me
and
both
boards
here
for
the
last
several
years.
Jeff
got
an
offer.
He
can't
refuse
he's
going
to
become
chief
counsel
of
the
alameda
county
pension
fund,
which
is
a
37
act
system,
and
that
will
start
next
week.
E
So
Jeff
I
wanted
to
have
an
opportunity
to
introduce
Jenny
to
you,
and
Jenny
will
be
working
closely
with
me
as
we
go
forward
with
your
permission,
and
it
will
continue
to
provide
guidance
to
the
board
on
all
all
matters
fiduciary,
so
Jenny
good
morning,
the
hardest
thing.
It
was
to
explain
to
her
how
the
Mike's
are
always
on.
F
Just
a
quick
little
background,
I've
been
representing
public
retirement
systems
for
about
15
years.
I
was
in-house
at
CalPERS
for
a
number
of
years,
do
a
lot
of
tax
and
fiduciary
work
and
really
enjoy
this
work
very
passionate
about
it,
and
you
know
it's
important
work
that
we're
all
doing
together.
Thank.
A
You
and
welcome
okay
I'd
like
to
remind
all
speakers
to
speak
directly
into
the
microphone
and
also
presenters.
Clearly,
please
clearly
state
your
name
for
the
record
and
audio
recording
I'm
gonna
proceed
to
orders
of
the
day.
We
do
have
a
time
certain
at
10:30
item
4b
the
discussion
and
action
regarding
the
repayment
of
the
workers,
compensation
offset
for
Danny,
horny
and
then
I'd
also
like
to
when
we
get
to
item
4a.
A
G
A
G
A
A
Motion
by
vice-chair
Chandra,
second,
second,
by
trustee
Horowitz,
thank
you
and
all
in
favor
aye
all
opposed
that
one
carries
okay,
we're
gonna
proceed
next
to
the
consent
calendar.
The
consent
calendar
today
includes
the
approval
of
service
retirements
approval
of
deferred
vested
Heuvel
of
Board
minutes
approval,
return
of
contributions,
acceptance
of
communication,
information
reports,
approval
of
travel
conference
attendance
and
that's
it
so
are
there
any
any
items
to
be
pulled
from
the
consent?
Calendar.
I
A
H
H
We
have
received
some
good
comments
from
members
about
the
newsletter
and
we
will
actually
be
mailing
the
newsletter
quarterly
for
the
full
year,
but
in
the
next
few
letters
we're
going
to
be
including
a
little
note
to
allow
members
to
let
us
know
whether
they
wanted
to
either
receive
the
actual
newsletter
or
they
prefer
to
get
a
format
so
that
we
don't
have
to
you
know
if
they
prefer
to
get
it
by
email.
We
just
rather
do
that,
rather
than
to
having
to
mail
out
of
them.
H
So
the
goal
is
to
again
issue
then
for
the
rest
of
the
year.
Allow
members
to
let
us
know
whether
they
prefer
to
receive
their
actual
hard
copy
or
not,
and
then
in
2021,
then
just
mail
out
the
ones
that
people
are
expecting
to
receive
and
the
goal
is
to
have
a
every
quarter
with
the
theme.
So
the
next
quarter,
probably
going
to
be
theme,
is
going
to
be
actually
information
and
then
usually
in
the
summer
we
may
have
investments
related
in
the
spring.
It
was
I'm.
Sorry
in
the
fall.
H
H
I
H
So
we
haven't
decided
that
yet
we
may
decide
to
go
with
the
profile
for
everyone
in
their
office
as
we
go
and
trustees,
but
there
hasn't
been
decided.
I
think
it
will
be
depending
on
how
much
material
we
have
for
each
each
quarter.
But
it
is
one
of
the
thoughts
that
we
have
to
have
a
one-page,
but
the
profile
is.
A
G
A
A
C
Thank
You,
mr.
chairman,
so
you
may
recall
that
the
mayor
has
a
task
force
called
the
retirement
working
group
to
address
issues
surrounding
our
pension
obligations
and
at
the
December
meeting.
Originally
I
was
asked
to
present
on
fees
and
that
got
bumped
to
January,
and
now
it's
got
bumped
to
February,
and
so
we
will
be
making
the
same
presentation
but
in
February,
but
it
gives
me
a
chance
to
actually
make
this
presentation
before
your
board
prior
to
the
hello
meeting
and
Laura
will
join
me
in
making
that
presentation.
C
So
it's
my
expectation
that
trustee
Chandra
and
trustee
Sunseri
will
also
be
making
the
presentation
with
us
at
the
next
meeting.
So
this
there
are
two
attachments
here
and
I'm
not
going
to
go
over
both
attachments.
The
second
one
item
to
City
Council
free
presentation
was
actually
made
to
the
City
Council
back
in
October,
I
believe
and
that's
the
same
format
that
we
use
in
front
of
the
city
council
every
year
and
just
to
note
here
that
we
actually
produce
the
most
comprehensive
fee
report
out.
C
Do
there
are
fees
but
they're
much
smaller
than
active
managers,
so
Makita
did
a
phenomenal
job
of
going
back
for
over
ten
years,
actually
now
on
a
three-year
basis,
and
we
will
talk
about
those
numbers
in
a
little
bit.
If
you
go
back
three
years,
we
actually
have
tracked
all
managers,
so
you
have
the
complete
list
of
managers.
Current
active
managers
as
well
as
terminated
managers,
I'm
a
manager,
my
manager
basis.
We
can
actually
see
when
they've
added
value
or
not,
but
on
a
ten-year
basis.
C
We
don't
have
that
kind
of
data,
but
there
is
a
way
of
finding
out,
even
for
ten
years,
even
without
the
granular
manager
level,
data
to
see
whether
managers
have
added
value
or
not-
and
ultimately
does
this
really
make
a
difference
to
our
funding
ratio.
Right.
That's
really
the
point
here
because
we're
trying
to
improve
our
funding
ratio
so
I'm
going
to
pull
up
the
first
presentation
and.
C
Go
to
slide
three
and
after
this
Laura
will
make
the
remainder
of
the
presentation.
This
is
a
very
simple
slide,
but
it's
a
very
important
slide.
So,
let's
assume
we
are
given.
We
have
the
option
to
invest
$100
and
we
have
two
managers,
one
passive,
the
two
columns
on
the
left
and
one
active,
which
is
the
two
columns
on
the
right
and
let's
assume
that
the
manager
produces
a
10%
return.
C
C
Now,
let's
take
an
active
manager
who
actually
charges
a
1%
fee
manager
to
here
in
this
case
now,
if
the
manager
produces
11
in
return
and
therefore
the
hundred
goes
to
a
gross
to
111
dollars,
and
then
you
take
off
the
$1
you're
still
left
with
a
hundred
and
ten
dollars
at
the
end
of
the
year.
So
as
long
as
a
manager
produces
value
over
and
above
the
benchmark,
that's
equal
to
the
fees,
then
we
we've
been
compensated
for
the
fee
that
we
paid.
C
I
know
this
is
a
very
simple
chart,
but
I
just
wanted
to
put
it
out
there.
So
everyone
understands
so
fees
matter.
Only
if
our
active
managers
don't
pay
us
back
for
the
fees
that
we
pay
them,
otherwise
it
can
be
a
wash
or
they
could
have
added
value.
Over
and
above
the
fees
and
that's
the
question
that
we
are
trying
to
answer.
Looking
at
the
data
going
back
in
history,.
I
C
C
C
We
are
not
even
talking
about
risk
here.
There's
there's
also
many
positives
on
the
risk
side.
That's
right!
So
it's
not
just
hidden
fees.
You
should
also
take
into
account
risk
I
mean
not
even
talking
risk
here,
because
this
sound
reasons
to
have
active
managers
because
they
could
be
risk
controlled
right.
E
C
C
E
C
Great
question:
Harvey
thanks
for
that
question.
So
if
you
look
at
our
second
attachment,
which
we
present
it
to
the
City
Council,
we
show
both
the
what
we
call
the
base
fee
as
well
as
a
performance
fee.
So
Harvey
referred
to
performance
fees,
so
certain
managers
are
compensated
with
the
performance
fees
and
now
that's
the
norm
and
in
private
markets.
C
But
there
are
also
occasionally
public
equity
managers,
who
are
also
compensated
based
on
a
performance
fee
and
what
that
is
really
what
it
means
is:
there's
usually
a
hurdle,
and
in
the
case
of
a
public
manager
it
could
simply
be
a
benchmark
and
as
long
as
the
manager
beats
matches
the
benchmark,
all
they
get
is
the
base
fee.
But
when
the
manager
performs
better
than
a
benchmark,
then
they're
incentivized
to
do
better
and
then
there's
a
profit
sharing
element
which
is
a
performance
fee
and,
for
example,
a
standard
performance
fee.
C
We
call
this
in
the
business
of
two
and
twenty,
the
2%
base
fee
and
a
20%
incentive
fee
for
the
value-added.
Over
and
above
the
benchmark
and
in
my
opinion,
I
think
it's
good
practice
to
have
performance
fees,
because
then
the
managers
and
our
plan
are
aligned.
Our
interests
are
aligned
and,
in
fact,
even
with
our
public
managers
to
the
extent
possible.
When
we
talk
to
an
active
manager,
a
prospective
active
manager.
C
One
of
the
questions
that
I
have
for
them
is:
are
you
open
to
a
performance
fee
arrangement
and
where
they
can
lower
the
base,
be
an
offer?
A
performance
fee,
then
they're
incentivized
to
do
better
than
the
performance
fees.
So
when
we
actually
talk
about
fees,
we
actually
include
both
fees.
When
we
talk
to
the
council,
so
Laura
is
waiting
to
talk
about
all
the
work
that
she's
done
and
Makita
has
done
over
the
Christmas
break.
So
take
it
away.
Laura.
J
Active
managers
of
added
value
is
by
comparing
the
actual
returns
of
the
plans
to
an
investable
benchmark
portfolio,
and
this
benchmark
is
something
that
you
see
in
all
of
your
quarterly
performance
reports
and
it's
outlined
in
your
investment
policy
statement
as
well,
and
the
way
that
the
investable
benchmark
portfolio
is
calculated
is
by
taking
each
target
asset
class
and
a
passive
benchmark
for
that
asset
class.
So
for
US
equity,
I'm,
sorry
for
global
equity,
it
would
be
the
MSCI
all
country,
World,
Index,
investable
benchmark.
J
J
Even
though
we've
had
mostly
one
market
environment
for
a
long
time
now-
and
you
can
see
here-
that
the
Federated
City
Employees
Retirement
System
returned
5.4
percent
on
average
per
year
for
the
ten
years
and
in
September
30
of
2019,
that's
higher
than
the
investable
benchmark
portfolio,
which
is
made
up
of
passive
indexes
weighted
at
the
targets
that
have
been
adopted
by
the
board.
If
you
look
at
the
ten
years,
ended
12,
31
18,
which
encompasses
that
very
down
quarter
at
the
end
of
2018,
you
see
an
even
return
with
the
investable
benchmark
portfolio.
J
You
know.
One
thing
to
note
is
that
this
investable
benchmark
portfolio
is
calculated
using
target
allocations.
The
plans
not
always
invested
at
its
target
allocations
for
a
variety
of
reasons,
one
of
which
might
be
private
markets.
It's
very
difficult.
It
takes
a
long
period
of
time
to
invest
in
a
diversified
manager
manner
to
get
up
to
your
target
and
in
private
markets.
Just
a
copy
out
I
wanted
to
mention.
J
J
I
J
A
certain
asset
classes
like
like
private
markets,
where
there's
say
the
Cambridge
Associates
private
equity
benchmark,
but
we
might
invest
those
funds
that
are
waiting
to
be
invested
in
private
markets
in
the
Russell
3000
index,
for
example.
So
there's
some
some
minor
differences
for
the
investable
benchmark
beyond
just
your
actual
okay.
I
K
J
K
J
K
But
I
think
when
people
raise
questions
about
the
expense
ratio
and
expenses
they
are
thinking
about
whether
or
not
our
overall
performance
is
better
or
worse
than
something
that
could
be
done.
That's
much
simpler
and
less
costly,
so
I
think
that
would
be
a
very
relevant
comparison
point,
as
well
as
the
benchmark
portfolio
that
was
constructed
here.
F
Weigh
your
benchmark
methodology
that
you
guys
have
in
mind
I
think
because
the
traditional
I
think
maybe
I
should
say
traditional.
Perhaps
the
practice
is
to
take
the
data,
the
muscle
benchmark
data,
that's
available
and
try
to
create
a
rational
methodology
that
makes
sense.
So
what
they're
saying
is
that
they're,
using
existing
data
benchmark
they're,
not
setting
it
at
sixty
forty
but
they're,
adjusting
it
over
time
to
be
the
best
replication?
Any
other
series
of
benchmark
calculations
could
be
used
as
well,
but
we're
kind
of
using
common
practice,
but.
L
F
J
You
know
if
you're
talking
about
whether
or
not
the
asset
allocation
made
sense,
comparing
it
to
a
60/40
probably
makes
a
lot
of
sense
and
I
think
the
goal
of
this
presentation
was
to
determine
whether
or
not
active
managers
have
detracted
fees
and
so
I
think.
In
that
case,
it
makes
sense
to
look
at
the
benchmarks
that
these
managers
are
using.
G
G
Now
did
we
do
better
or
worse,
with
active
managers
within
that
our
choice
to
be
non
6040
has
a
lot
to
do
with
risk
and
that's
the
lofted,
so
I
actually
think
the
comparison
is
60/40.
Is
that
red
herring
right
either
we
choose
to
be
a
60/40
plan
and
take
on
all
the
risks
which
this
plan
was
on
like
to
do
before
I
got
here,
because
people
are
freaked
out
by
the
great
financial
crisis
and
destroyed
a
lot
of
potential
asset
front
and
fund
it's
our
funded
status.
That
has
nothing
to
do
with
these
discussions.
C
And
I
think
what
trustee
Horowitz
is
talking
about
is
really
comparing
if
I
can
sort
of
6014
versus
the
investable
benchmark
and
therefore
going
back
and
saying:
did
we
have
the
right
asset
allocation
or
not?
Did
we
need
such
a
complicated
asset
allocation
and
invest
in
private
markets?
Could
we
have
just
done
a
60/40,
but
this
exercise,
as
Laura
pointed
out,
is
merely
to
find
out
whether
our
active
managers
added
value
and
did
we
get
compensated
for
the
fees.
But
that
is
a
great
point
that
you
raised
about.
C
C
We
often
compare
ourselves
to
the
public
plan
universe
right
of
our
peers
and
we
say:
oh
we've,
you
know
we
want
to
performed
a
lot
of
our
public
plan
peers
and
why
is
that
and
that's
one
of
the
reasons
is
that
our
equity
beta
in
our
benchmarks
has
been
lower
than
our
public
plan.
In
fact,
we've
been
at
the
bottom
quartile
over
this
time
period
in
terms
of
anybody
exposure.
J
You
know
one
of
the
things
I
think
the
city
in
particular
and
retirement
working
group
that
this
presentation
will
go
to
is
concerned
with,
is
how
the
funded
ratio
and
their
contributions
might
change.
If
you
weren't
paying
active
management
fees,
and
so
we
looked
at
how
the
actual
funded
ratio
would
respond,
you
know
with
the
actual
portfolio
value
the
funded
ratio,
as
of
the
end
of
September
is
two-point-seven.
If
it
had
been
invested
at
the
investable
benchmark,
it
would
be
forty
nine
point.
J
Page
seven,
if
you
want
to
take
a
look-
and
you
know,
I-
think
the
active
versus
passive
discussion
is
really
important
and
and
some
folks
on
on
the
City,
Council
or
other
stakeholders
might
not
realize
how
much
the
plans
actually
have
in
passive
investments,
which
is
much
higher
than
peers.
If
you
take
a
look
at
the
Federated
plan,
as
at
the
end
of
last
year,
the
passive
percentage
was
over
half
of
the
plan
at
fifty-six
percent.
So
this
is
all
low
cost.
You
know
replicating
an
index
passive
exposure.
J
J
And
we
wanted
to
dig
into
the
actual
data
on
on
page
eight,
so
we
have
you
know
every
number
for
the
last
three
years
in
terms
of
managers
that
have
been
hired
and
been
terminated
and
exactly
how
much
value
is
added
after
subtracting
fees
over
each
managers,
benchmark,
of
course,
we're
again
we're.
Looking
at
one
point
in
time
here
we
wouldn't
expect
every
manager
at
one
single
end,
point
to
have
added
value.
J
If
we
want
to
get
access
in
the
plan
to
the
different
types
of
risks,
that
are
in
say,
high-yield
bonds,
emerging
market
debt,
private
markets
as
a
whole,
you
you
can't
get
that
exposure
through
just
investing
in
an
index.
We
we're
constantly
evaluating
new
products
that
come
out
that
attempt
to
do
that,
but
there
there
aren't
really
a
lot
of
great
options
for,
say:
emerging
market
debt
that
aren't
paying
huge
transaction
costs
and
taxes
and
different
country.
Isn't
that
sort
of
thing?
J
J
And
then
we
wanted
to
look
at
private
markets
as
well.
So
if
you
take
a
look
at
page
nine
we've
looked
at,
you
can
see
the
bottom
three
bolded
lines
here
are
for
the
federated
City
Employees
Retirement
System,
and
we
looked
at
private
equity,
private,
real
estate
and
hedge
funds,
net
of
fees
compared
them
all
to
public
markets
indexes
here
and
all
of
them
have
have
outperformed
over
the
three-year
time
period
and
there's
two
private
markets,
asset
classes
that
aren't
on
the
slide.
One
is
private
debt
and
the
other
is
real
assets.
J
As
you
know,
investing
in
private
assets
it
takes
a
while
to
to
to
reach
returns
in
partnerships
that
you
subscribe
to.
You
can
make
capital,
and
then
it's
called
over
time.
Its
invested,
usually
over,
say
a
three
to
five
year
period,
so
funds
that
are
brand-new
or
within
their
first
few
years,
don't
realize
returns
yet
so
the
returns
that
you've
experienced
in
real
assets
and
private
that
are
positive.
Those
are
just
young
programs,
and
so
it
doesn't
make
sense
to
to
judge
them
based
on
their
returns.
J
Yet
and
with
that
I
wanted
to
skip
ahead
a
bit.
I
won't
go
through
every
slide
to
slide
15,
which
is
in
the
appendix
and
I,
really
wanted
to
highlight
the
extreme
measures.
I
would
say
that
the
staff
and
the
advisors
go
to
too.
You
know
when
it
is
decided
that
makes
sense
to
implement
an
allocation
through
an
active
manager.
J
Fees
are
a
huge
focus
of
the
staff
and
the
advisors,
and
so
you
know
already-
and
you
can
see
here-
the
median
asset
class
fees
and
what
San
Jose
is
is
pain
also
beyond
even
getting
fees
that
are
lower
than
the
asset
class
fees.
The
staff
really
goes
to
great
lengths
to
negotiate
fees
whenever
an
active
manager
is
used.
K
J
Have
information
so
we
didn't?
Originally,
we
had
a
column
in
here
showing
what
each
manager
was
actually
charging,
not
what
the
asset
class
median
fee
was
and
for
confidentiality
reasons.
We
were
asked
to
remove
it
as
a
public
document,
because
the
managers,
don't
all
want
everyone
to
know
how
much
you're
paying
relative
to
their
other
clients.
C
E
C
I
think
size
does
play
a
matter.
I
wish
I
had
three
hundred
billion
in
assets,
but
even
you
know
between
three
and
six.
It
makes
a
difference
and
the
more
you
can
invest
the
lower
the
fees
are,
and
it
also
helps
that
sometimes
it
will
be
a
Makita
recommended
manager
and
Makeda
will
get
favorable
fees
because
it's
not
just
San
Jose,
but
there
are
other
pension
plans
that
are
also
in
the
same
strategy.
So
Makita
will
get
a
feed
break
because
you
know
the
aggregate
assets
invested.
J
Also
developed
a
reputation
for
the
staff
gain
very
few
sensitive
and
pushing
on
that.
You
know
we'll
get
calls
from
investment
investment
managers
that
are
interested
in
bidding
on
a
search
that
will
say.
Should
we
even
try,
because
we
know
that
we
can't
come
down
further,
it's
a
capacity
constraint
strategy.
You
know
we
know
it's
such
a
focus
of.
I
To
think
about,
I
think
this
is
a
very
informative
presentation
about
how
much
value
has
added
by
private
asset
or
alternative
asset.
That
only
shows
us
true
over
the
last
three
years
or
three
years.
Also,
we
have
added
value,
is
alternative
assets,
but
do
in
those
three
years.
If
we
take
all
the
portfolio
into
mind
or
the
passive
managed
assets
also
say
increased
value,
what's
a
what's
a
difference
of
increasing
value,
so
we
don't
really
emphasize
so
much
on
the
Eternity
of
assets.
I
mean
I,
do
see
a
value
in
return.
I
Events
that
private
equity
in
term
of
risk
controls,
probably
adding
more
eternity
for
us
to
earn
extra
additional
earnings,
but
we
I
don't
want
us
to
lose
sight
that
there
is
a
much
bigger
portion
of
the
portfolio,
re-mastered
name
passive
assets,
so
we
should
look
at
the
opportunity
cost
between
those
two
assets
to
see
our
alternative
assets,
adding
more
value
to
the
portfolio
than
the
passive
managed
assets.
That's
all
I
want
to
say.
C
So
we
will
be
making
this
presentation
to
the
City
Council
again.
My
message
to
the
City
Council
is
stop
looking
at
fees.
If
you
want
to
improve
our
funded
ratio,
there
are
there's,
as
bill
will
say,
there's
only
two
ways:
to
increase
our
funded
ratio.
Either
you
increase
your
car,
your
you
know,
contribution
to
it
or
you
increase
returns.
You
know
you're
not
going
to
increase
returns
by
focusing
on
fees
clearly
and
you
you
look
at
the
10-year
history,
and
our
funded
ratio
would
not
be
different
focus
on
asset
allocation.
B
J
Vary
widely,
so
the
most
recent
survey
by
the
National
Association
of
state
retirement
plans,
which
is
a
you
know,
a
body
that
gathers
a
lot
of
you,
know,
there's
a
lot
of
states
that
have
pension
plans
that
are
not
much
larger
than
than
San
Jose's
or
some
California
counties.
Believe
there
were
about
180
because
there's
a
you
know,
a
lot
of
states
that
you
know
say
City
of
Phoenix
will
have
a
place
of
fire
as
well
and
and
whatnot.
J
It
includes
other
public
plans
that
aren't
just
state
plans
and
so
I
think
there's
about
180
plans
and
the
percent
passage
passive
was
between
thirty
and
forty
percent,
which
has
come
up
a
huge
amount
over.
You
know
the
time
period
that
they've
been
doing
this
survey,
because
everyone
is
getting
the
same
pressures
that
you
all
are
to
move
more
capacity
and.
J
I
mean
it's
certainly
to
to
save
on
fees.
You
know,
I
think
meketa
investment
group
and
the
San
Jose
staff
have
similar
opinions
on
the
fact
that
you
shouldn't
be
paying
active
manager
fees
for
for
beta
for
what
you
can
get
in
the
market.
If
you're
going
to
pay
active
manager
fees,
you
want
to
do
it
in
an
asset
class
where
the
investment
manager
has
an
ability
to
really
add
value
in
excess
of
their
fees
and
and
there's
some
track
record
so
in
asset
class.
It
has
a
much
wider
dispersion
of
manager.
J
Returns
is
usually
a
less
efficient
asset
class
where
you
might
want
to
consider
going
active
and
ask
the
class
like
investment
grade
bonds.
Has
a
very
you
know,
tight
dispersion
of
return.
So
even
if
you
hired
the
best
manager
in
that
asset
class,
the
amount
that
they'll
add
/
fees
is
likely
to
be
low.
So
we
try
to
focus
on
going
active
in
asset
classes,
where
the
manager
might
have
an
opportunity
to
add
outside
value
or
control
risk,
which
was
another
another
point.
J
You
know
it
might
be
decided
that
it's
a
pretty
risky
asset
class
and
so
there's
certain
asset
classes
like
emerging
markets,
bonds,
where
the
index
has
a
huge
weight
in
some
three.
You
wouldn't
necessarily
want
a
huge
waiting
so
by
hiring
a
manager
that
can
be
more
diversified.
It
makes
more
sense
for
the
plan
and.
C
In
full
disclosure,
our
passive
assets
may
actually
come
down
a
little,
because
one
of
the
reasons
why
it's
also
high
is
because
we
have
a
pacing
plan
for
private
markets,
and
so
it
takes
when
you
make
an
allocation
to
private
assets
like
private
equity.
It
takes
a
while
to
actually
fully
deploy
those
assets.
So
every
year
we
actually
invest
a
certain
percent
of
the
allocation,
because
it's
hard
for
the
market
to
absorb
that,
and
we
also
want
vintage
year
diversification.
C
B
C
K
And
just
a
point
of
clarification
so
when
the
the
chart
showing
the
amount
of
passive
versus
active
I
presume,
that's
based
on
today's
allocation
and
over
the
past
ten
years,
which
we
were
looking
at
again
that
L
so
meandered
greatly
will
we
greatly
will
be
much
higher
and
active
over
the
over
the
course
of
the
ten
years?
That's
right!
Okay!
So
we've
have
we
looked
at
a
chart
of
what
our
history
is
active
versus
passive.
A
B
I
Think
I
wanna
make
a
comment.
You
know
to
see
how
your
seem
to
point
out,
like
a
doll
to
city
staff
and
members
of
the
plan
seem
to
pay
extremely
attention
to
fees.
I
want
to
make
a
point:
I'm
thinking,
everybody's
a
fee
conscious,
but
ultimately
we're
watching
for
the
bottom
line.
The
full
folio
has
not
been
performing
up.
You
know
at
the
level
where
the
members
have
exactly
expected
to
see.
That's
why
the
fee
becomes
a
huge
issue
and
then
hi
in
the
past
few
years.
I
If
he's
happy,
we
have
been
pretty
high
and
I
see
some
in
in
the
one
of
the
presentation
you
have.
The
scene,
you
have
a
show
that
visa
is
under
control
is
trending
downwards,
a
little
bit.
So
it's
a
it's
really
a
positive
sign,
but
you
put
a
fee
completely
on
the
side
saying
we
shouldn't
pay
attention
to
fee
at
all.
That's
just
not
going
to
stay
well
with
all
members.
I
think
you
know.
If,
of
course,
if
the
performance
of
the
portfolio
improves
of
the
time,
the
fee
will
be
attracting
less
attention.
You're.
C
Absolutely
you're,
absolutely
right,
trusty
son,
that,
had
we
been
in
the
top
quartile,
nobody
would
be
looking
at
fees
because
we're
in
the
bottom
quartile
people
are
looking
at
fees,
but
as
a
representative
of
your
beneficiaries,
I
hope
you'll
point
out
to
them
that
you
should
really
be
looking
at
funded
ratio
and
what
are
the
ways
of
improving
funded
ratio,
and
that
is
not
by
looking
at
fees.
That
is
by
focusing
your
attention
as
asset
allocation
and
so
as
a
CFA
and
assembly
with
investment
experience.
C
I
hope
that
you
will
also
take
this
message
to
your
beneficiaries
that
we
need
to
increase
our
funded
ratio.
Our
conversations
should
be
surrounding
asset
Alec.
We
should
be
focused
on
asset
allocation
right,
not
constantly
talking
about
fees,
because
every
time
I
go
in
front
of
the
council
I'm
talking
about
lease
right-
and
that
is
that's-
that's
draining
our
energy
and
we
are
focusing
on
the
wrong
thing
right
and
even
if
our
fees
have
been
high
over
the
last
ten
years,
clearly,
you
could
see
that
we've
done
better
than
the
investable
policy
benchmark.
C
Therefore,
what
we've
done
wrong?
I
mean
it's
Monday
morning:
quarterbacking
and
I
can
always
go
back
and
second-guess
what
prior
boards
and
staff
have
done,
that
our
equity
beta
was
low,
but
at
least
going
forward.
Let
us
have
more
informed
discussions
about
how
to
increase
our
funded
ratio
right
and
we
are
very
conscious
of
fees
as
you
guys
are,
and
you
can
and
as
Makita
pointed
out,
our
staff
are
very
conscious
of
fees
right
and
I
constantly
talk
to
them
about
what
are
we
being
a
managers?
Why
do
we
have
an
active
manager
here?
C
Could
we
do
this
passively
right,
so
I'm
not
saying
that
it
should
be
hidden
under
the
carpet?
That's
on
the
contrary,
we
have
the
most
comprehensive,
transparent
fee
report
out
there,
but
I'm
just
trying
to
say
we
should
reshape
the
debate.
Sort
of
we
should
take
it
into
the
direction
of
you
know
what
we've
done
wrong
and
again
I'm
second-guessing-
and
it's
easy
for
me
to
sit
here
and
say
this,
because
we
didn't
do
this
collectively,
but
in
hindsight
what
we
would.
The
plans
would
have
been
better
off.
C
B
C
J
F
The
conversation
that
the
working
group
the
other
week,
which
I
thought
was
really
helpful.
We
did
some
scenario,
analysis
and
say
you
know:
what
have
we
had
an
incremental
twenty
million
dollars
or
thirty
million?
And
it's
even
right.
You
were
there
Julie.
So
even
if
you
put
50
million
or
incremental
100.
F
Yeah,
sorry
so,
there's
a
retirement
working
group
with
a
representation
of
various
diverse
rep
stakeholders
and
having
a
discussion
around
the
plan,
its
unfunded
status,
to
a
degree
and
what?
What
what
area
should
we
really
focus
on
and
think
about
in
terms
of
priorities?
What
could
we
be
doing
differently
and
also
helps
to
inform
the
board
it
provided
additional
perspective?
So,
as
probably
just
said-
and
we
know,
our
role
is
to
really
focus
on
asset
allocation.
F
J
F
If
you
think
my
perspective,
somebody
just
dropped
a
big
bag
of
money
into
the
center
of
the
room.
That
amount
has
to
be
so
large
that
it
puts
the
conversation
around
the
management
fees
as
if
the
management
fees
are
immaterial,
which
I'm
not
saying
they
are,
but
it's
all
about
relative
size.
So
I
want
to
just
highlight
that
for
everyone's
as
a
reset
that
we
care
about
this
multi
billion
unfunded
liability.
C
E
C
A
potential
additional
revenue
source
for
the
city
of
ten
million,
and
so
the
Mayor
was
just
sort
of
hypothetically
or
20
million,
maybe
between
both
clients
between
the
blacks.
What
if
we
actually
turned
it
towards?
You
know
increased
contributions
to
the
pension
plans.
Would
it
make
a
difference
and
will.
J
C
M
A
Appreciate
you
doing
that
and
I
thought
was
a
great
preview,
because
the
questions
and
comments
and
clarifications
that
were
raised
by
trustees
here
today
may
be
relevant
and
I
appreciate.
Laura,
you
writing
notes
down.
I
saw
that
that's
that's
very
helpful!
Yeah!
Yes,
yes,
great!
That's
great!
Okay!
M
The
one
thing
that's
different
on
the
o
peb
side
is
the
employee.
Contributions
are,
are
fixed
at
seven
and
a
half
percent
of
pay,
so
there's
no
adjustment
to
those
contributions,
they're
just
sat,
and
so
we
calculate
a
total
contribution,
subtract
the
employee
contribution
and
that's
the
city
contribution.
M
Now
the
implicit
subsidy
portion,
which
is
the
portion
of
the
retiree
claims
that
is
above
the
premiums
charged
for
each
plan,
is
paid
by
the
city
as
a
part
of
their
active
health
premiums.
So
the
active
health
premiums
actually
become
somewhat
inflated
to
cover
the
costs
of
the
retiree
implicit
subsidy.
So
we
don't
font
pre
fund
that
portion,
but
it's
something
that's
tracked.
In
the
valuation
we
have
to
report
it
on
financial
statements
and
so
you'll
see
in
our
valuation
report.
M
These
are
charts
that
we
use
commonly
both
for
the
pension
and
the
OPA
plans.
The
left
side
shows
the
contributions
for
2020
and
2021.
The
purple
bar
is
the
member
contribution.
The
gold
bar
is
the
city's
contribution
and
then
that
light
blue
at
the
top
is
the
implicit
subsidy
amount
you
can
see
between
the
years.
Contributions
are
going
down
slightly
about
point
8
million
for
the
city.
The
decline
in
the
member
contribution
is
just
a
decline
in
payroll
for
those
still
eligible
for
the
benefit.
M
So
it's
it's
really
a
decline
in
the
number
of
people
who
are
still
active
employees
and
contributing
to
the
plan.
We
were
just
talking
about
the
the
size
and
relevance
so
before
I
go
too
much
further.
I
want
to
point
out
that
the
entire
contribution
here
for
the
city
for
this
plan
is
21
million
compared
to
for
the
federated
pension
plan.
The
city's
contribution
is
191
million.
So
this
is
a
much
smaller
plan,
much
smaller
piece
than
what
we're
looking
at
on
the
pension
plan.
M
B
B
M
M
B
M
M
The
on
the
right
hand,
side
we're
showing
the
the
liability
and
the
funding
levels,
so
the
blue
bars
represent
the
liability
for
members
who
are
currently
receiving
benefits
the
gold
for
those
who
are
no
longer
working
for
the
city
but
haven't
started
receiving
benefits.
So
that's
a
little
tiny
sliver
and
then
the
red
is
for
the
active
members
who
will
be
entitled
to
future
benefits
and
that
the
light
blue
again
is
that
implicit
subsidy
and
the
Green
Line
or
the
Diamonds
represents
the
level
of
assets
in
the
trust.
M
M
Again,
we
we
talk
of
it
just
sex
when
we
talk
about
focusing
on
the
funded
level,
but
I
want
to
also
focus
you
on
the
dollar
amount
of
the
unfunded
liability,
because
again
this
is
a
much
smaller
program.
So
the
fact
that
it's
only
50
percent
funded
has
a
lot
different
impact
than
the
fact
that
the
pension
plan
is
only
50
percent
funded.
The
pension
plan
being
50
percent
funded
is
with
the
stakeholder
working
group
and
all
of
those
53.
M
M
It
also
started
at
zero
percent
funded
not
too
long
ago,
and
so
the
city's
been
building
up
its
funding
and
it's
one
of
the
better
funded
retiree
medical
plants,
because
most
of
them
have
started
at
zero.
Many
of
them
have
not
even
come
above
zero
in
their
funding,
but
even
the
ones
that
have
funded
we're
in
a
reasonably
good
position
compared
to
others.
M
We
tried
to
go
through
this
in
the
assumptions
presentation
last
time.
It's
always
the
most
confusing
part
of
the
retiree
medical
piece,
but
healthcare
costs
generally
increase
with
age.
The
city's
plans
charge
one
premium,
regardless
of
whether
you're
an
active
employee
or
a
retiree
up
to
Medicare
eligibility
so
for
a
64
year
old,
for
example,
the
cost
of
providing
them
medical
care
is
much
higher
than
a
40
year
old
and
much
higher
than
the
average
for
this
city.
M
L
Okay,
so
on
the
on
the
next
page,
we
actually
get
into
some
of
the
numbers
and
the
top
part
of
the
chart
actually
compares
the
contribution,
amounts
on
a
dollar
amount
for
fiscal
2020
and
next
year
for
2021
and
as
bill
says.
Basically,
the
member
contribution
is
going
down
from
nine
point,
nine
to
nine
point
four,
and
that's
really
just
since
it
is
a
closed
plan.
People
have
retired,
they're,
no
longer
gonna
be
contributing,
and
so
that
number
is
gonna
continue
to
decrease.
L
The
city's
contribution
actually
again
is
projected
to
go
down
and
we'll
see
a
little
bit
of
the
details
and
it's
really
caused
by
two
things.
One
is
because
the
funding
percentage
keeps
going
up,
there's
less,
that
they
have
to
contribute
to
actually
buy
down
the
unfunded
liability,
and
then
we
actually
had
decreases,
particularly
in
the
Medicare
eligible
premiums.
So
the
actual
liability
came
down
over
what
it
was
expected
to
so
again
that
helps
lower
the
contribution,
so
that's
actually
dropping
from
just
shy
of
22
million
down
to
21
million.
L
The
other
thing
that's
part
of
this
plan
is
the
city
does
have
a
cap
so
that,
if
the
contribution
that
this
board
determines
is
greater
than
the
cap,
the
city
can
actually
say
I
don't
want
to
contribute
more
than
the
cap.
But
the
cap
is
14%
of
payroll
and,
as
you
can
see,
the
cap
is
significantly
higher
than
what
the
actual
determined
contribution
is,
so
that
the
contributions
would
actually
have
to
get
up
to
43
million
dollars
before
the
city
could
say.
We
don't
want
to
contribute
any
more
and.
B
L
Mean
the
city
will
probably
never
hit
the
cap
on
this
plan
and
then
the
last
one
just
shows
the
implicit
subsidy
and
that
did
increase
and
that
really
increased,
primarily
because
all
of
the
active
premiums
went
up
so
the
I'm
the
act
aside
for
the
pre
Medicare
population,
all
of
those
plans
actually
did
increase
in
costs,
so
that's
really
reflected
and
causing
that
increase
in
the
implicit
subsidy.
The
bottom
chart
actually
compares.
L
G
L
That
will
vary
it's
because
of
the
the
nature
of
the
way
the
calculation
is
done,
which
is
why
you
don't
find
it
because
it's
just
goes
to
the
accurate
premiums.
It's
also
heavily
impacted
by
changes
in
enrollment
between
the
plans
how
the
age
mix
is
varying
between
the
plans.
There's
a
lot
of
moving
pieces
with
it,
and
that
does
fluctuate
quite
a
bit
from
year
to
year,
which
is
another
reason
not
to
pre-fund
it,
because
you
already,
you
have
the
natural
source
of
funding
it,
which
is
every
single
year
through
the
act
of
premiums.
L
So
the
bottom
shows
the
actual
liabilities
compared
to
the
assets
so
that,
if
we
kind
of
focus,
we
can
see
that
the
actual
explicit
liability
actually
came
down
from
564
million
to
541
million,
while
the
implicit
went
up
from
86
to
91
assets
actually
went
up
from
277
to
294
million.
So
you
can
see
that
the
unfunded
liability
on
the
explicit,
which
is
really
what
we're
trying
to
fund,
went
from
286
million
down
to
246.
So
you
basically
added
over
5%
to
the
funded
ratio
for
this
one
year.
L
Then
the
next
slide
actually
shows
what
caused
the
change
in
the
unfunded
liability
between
the
implicit
and
explicit,
and
so,
if
we,
you
know,
go
through
the
explicit
it's
the
implicit
subsidies,
unfunded
liability,
since
it's
totally
unfunded,
went
up
by
four
and
a
half
million
part
of
that
is
the
fact
that
essentially
you're
not
making
any
contributions
to
fund
this,
and
so
the
kind
of
the
tread
water
is.
What
would
you
have
to
contribute
to
keep
your
same
funded
ratio
since
this
is
a
zero
and
the
additional
it's
going
to
just
be
there.
L
So
that
is
part
of
that
plant
experience
being
higher
than
expected
was
a
part
of
it,
and
then
we
did
actually
have
a
reduction
because
of
some
assumption.
Changes
related
to
the
trend
actually
went
down,
so
basically
that
reduced
it
for
what
it
would
have
been
to
get
to
the
4.3.
When
we
look
at
the
explicit
again
it
improved
by
40
million
dollars,
and
eight
million
of
it
is
because
you've
actually
were
in
a
situation
we're
trying
to
buy
down
the
unfunded.
L
So
this
the
contribution
is
higher
than
what
they
would
need
to
be
just
to
keep
the
unfunded
ratio.
The
same
investment
experience
didn't
meet
the
the
target
for
the
plan.
So
therefore
there
was
an
investment
loss
of
just
under
11
million,
but
again
the
plan
experience
which
is
really
driven
by
the
Medicare
premiums
actually
being
flat
or
in
probably
for
half
the
plan
actually
went
down
because
it's
negotiations
that
the
city
made
with
its
the
carriers
that
actually
provide
the
coverage.
L
L
So
that's
you
know
we're
really
on
track
to
have
that
completely
funded
in
a
relatively
short
period
of
time.
The
explicit
the
implicit
always
remains
until
everybody
is
Medicare
eligible,
so
that
plan
continues
to
go
a
little
bit
but
again
from
the
plans
point
of
view
in
18
years
it
will
actually
be
fully
funded.
B
L
C
C
L
You
can
take
the
Anthem
Blue
Cross
HMO,
what
works
it
works
just
like
that
same
kind
of
plan,
but
it's
an
anthem
plan,
so
you
have
access
to
all
of
their
providers
across
the
country.
So
an
individual
could
live
here,
part
of
the
year
or
live
in
Arizona
part
of
the
year
or
whatever
and
they're
kind
of
covered,
and
the
other
one
is
a
PPO,
which
is
one
of
the
reasons
that
segment
it's
called
more.
L
Do
you
tell
anybody
probably
cares
about,
is
actually
a
Medicare
PPO,
so
it
works
like
a
Medicare
Advantage
plan,
but
like
a
PPO
so
that
there's
in-network
and
out-of-network
doctors,
so
that
you
know
you
can
kind
of
have
more
choice,
so
basically
does
cover
everything,
but
because
Medicare
is
giving
those
plans
a
big
hunk
of
money.
To
do
this,
the
premiums
are
significantly
lower.
Okay,
we're.
L
B
L
Kaiser
high
deductible
plan,
and
so
if
you
pick
a
plan,
that's
if
you
pick
that
plan
when
you're
under
65
your
coverage
is
free.
You
pick
any
other
plan,
you
pay
the
difference.
That
amount
doesn't
change.
You
go
to
Medicare
the
Medicare
premiums
for
the
Kaiser
plan
and
the
Blue
Shield
HMO
were
actually
lower
than
that
amount,
and
so
basically
anybody
that
picks.
One
of
those
two
plans
has
free
coverage.
L
If
you
pick
the
PPO,
it
is
still
a
little
more
expensive
than
that
plan,
so
you
do
have
to
pay
a
little
bit
extra
to
have
playing
going
forward
and
then
so
basically
on
a
longer-term
basis,
because
we're
doing
long-term
projections
since
they're
all
using
similar
trends,
you're,
basically
sending
anybody
that
takes
one
of
the
two
HMO
plans
has
free
coverage
for
life.
Once
you
get
Medicare
eligibility
and
it's
covering
all
of
your
costs,
except
for
the
deduct
over
the
co-pays
that
you
have
to
pay
for
services
and.
B
L
And
so
what
this
chart
then
compares
is
the
actual
projection
of
the
contributions,
and
it
goes
back
to
what
they
were
starting
in
2011
and
then
going
forward.
The
purple
bars
at
the
bottom
or
what
the
employees
are
gonna
contribute
and,
as
you
can
see,
that's
an
around
nine
million
for
2021
and
continues
to
decrease
until
the
last
member
actually
retires.
A
M
M
So,
essentially,
the
pension
plan
past
offer
has
to
specify
the
assumptions
it
uses
to
convert
optional
forms
of
payment.
So
when
someone
retires
their
benefit
is
either
in
the
form
of
a
single
life
annuity
if
they're
not
married
or
a
50%
joint
and
survivor
annuity
if
they're
married,
but
they
have
the
option
to
select
different
forms
of
payment,
primarily
to
give
larger
benefits
to
their
beneficiary
upon
their
death.
M
Those
options
are
more
expensive.
They
cost
the
plan
more,
and
so
we
do
an
actuarial
equivalence
calculation
to
reduce
the
benefit
amount
so
that
it
has
approximately
the
same
value
today
at
the
time
they
retire,
regardless
of
which
form
they
take.
So,
for
example,
they
may
have
a
benefit
of
$1,000
a
month
as
a
single
life
annuity,
but
if
they
elect
the
joint
and
survivor
form,
we
might
reduce
that
to
something
like
$900
a
month,
so
that
it
has
the
same
overall
value.
M
M
The
combinations
vary
depending
on
whether
the
retiree
is
a
service,
retiree
or
disability
retiree,
whether
they're,
married
or
not
married
at
the
time
and
with
the
default
form
of
payment
is
and
then
the
big
multiplier
is
the
cola
provisions.
So
Tier
one
has
a
3%
Cola
tier
two
has
varying
colas
depending
on
how
much
service
they
have,
and
so,
when
you
multiply
all
those
together
plus
if
someone
gets
a
divorce
and
splits
their
benefit.
M
Often
the
the
benefit
is
converted
from
the
life
being
based
on
the
life
of
the
member
to
the
life
of
the
alternate
payee,
the
the
spouse,
and
so
that's
another
conversion
we
have
to
perform.
So
all
in
all,
for
this
plan
there
are
55
different
tables
that
get
loaded
into
the
pension
administration
system
to
handle
this
prior
to
measure
F.
This
plan
I.
M
M
M
B
B
F
M
G
H
G
G
M
M
M
But
it
also
said
you
know
it
pretty
much
specified
the
assumptions
we
have
to
use.
There's
one
thing
that
we
we
do
have
to
decide,
but
it
said
that
it
also
has
to
be
adopted
by
resolution
of
the
board.
And
so
that's
why
we're
bringing
this
forward
to
you,
because,
even
though
I'm
going
to
tell
you
what
all
the
assumptions
are
you
have
to
adopt
it
by
resolution
of
the
board.
M
So
and
the
other
piece
is,
we
use
generational
mortality,
so
the
mortality
assumption
effectively
changes
every
year
and
our
projection
scale
changes
every
year,
so
these
tables
will
have
to
be
updated.
Every
year
there
will
be
minor
adjustments
every
year,
based
on
the
Municipal
Code
and
what
we
used
in
the
valuation
we
will
use
6.75%
the
colas
will
be
based
on
the
plan.
M
We
could
match
that
I
think
we'd
recommend
what
we've
done
in
the
past
is
just
assume:
50
percent
male
and
50%
female.
That's
a
very
common
assumption
for
a
system.
A
general
system
like
this.
The
actual
data
is
relatively
close
to
that
and
the
differences
would
be
very
minor
and
it
just
it
keeps
it
simple.
So
then
effectively
we
have
the
same
mortality
table
for
members
and
for
beneficiaries.
M
E
A
E
See
from
the
language
of
the
Municipal
Code
requires
actually
a
board
resolution
of
what
we
can
do
today.
So
we
don't
have
to
revisit
this
at
another
meeting.
To
have
a
formal
resolution
is
a
motion
could
be
made
to
adopt
the
recommendations
of
the
actuary
and
direct
staff
to
prepare
a
resolution
for
execution
by
against
the
board
secretary.
Mr.
Pena,
don't
you
sign
resolutions?
E
A
D
A
H
H
H
I
also
want
to
wanted
to
let
you
know
we
spoke
about
it
briefly
in
the
presentation
by
Chiron,
which
is
one
of
the
reasons
there
was
a
decrease
in
cause,
the
change
in
open
enrollment
between
the
solar
and
the
anthem
HMO,
and
so
we
have
sunny
issues
at
times
with
retirees
we
receive
have
received.
Many
calls
from
retirees
I
think
once
they
made
a
transition
to
anthem
for
for
a
variety
of
reasons,
but
most
of
them,
maybe
they
didn't
read
everything
in
detail.
H
They
realized
that
the
doctors
they
have
inserted,
they
didn't
have
an
anthem,
and
there
are
other
reasons
behind
it.
So
we
have
received
a
number
of
calls
that
they
offer
to
see
if
they
get
a
chance
to
remake
the
decision,
and
of
course
they
can
do
that,
because
these
are
decisions
that
you
have.
You
actually
make
only
once
a
year,
do
you
open
enrollment?
Unless
you
have
what
is
known
as
a
qualifying
event,
so
absent
those
two?
H
H
A
H
A
H
A
H
A
Right
five
seed
discussion,
action
on
committee
assignments,
so
there's
an
item
in
the
packet
me
I'll,
kick
that
off
because
I
put
this
one
together,
you
know
I
kind
of
talk
you
through
the
logic
of
this
and
then
I
will
also
provide
an
opportunity
for
Vice
Chair
Chandra
to
address
this
investment
committee
specifically
and
then
we'll
open
up
for
questions,
discussions
and
and/or
motion.
So
in
the
document
that
you
see
there
in
front
of
you,
you
know
for
me
it
started
with
a
question
of
math
I.
Thank
goodness.
A
We
are
now
fully
staffed
on
the
board.
Thank
You
trustee
Jenny's
for
any
Asit
making
it
happen.
And
then,
with
the
committee
assignments
there
there
are
12
slots,
and
that
means
for
the
seven
board
members
everyone
serves,
except
for
a
couple.
People
serve
one
so
that
that's
the
way
laid
out
so
I
started
off
with
the
jpc
down
at
the
bottom
of
the
joint
personnel.
A
A
A
H
So
they
still
work
into
that
process
and
they
also
are
now
working
on
developing
the
performance,
metrics
they're,
going
to
use
for
that
performance,
evaluation
process
and
once
that's
all
completed,
then
they're
going
to
be
a
committee
that
they're
going
to
be
making
sure
that
the
performance
evaluation
policy
is
follow
every
year.
So
they're
going
to
be
the
committee
that
is
going
to
play
the
lead
on
the
annual
evaluations
for
the
CEO
and
the
CEO.
A
C
H
A
You
so
again,
I
start
with
the
jpc,
because
it
has
some
seat
specific
requirements
and
then
and
then,
when
I
went
back
up
to
the
investment
committee
with
vice-chair
Chandra
there,
and
so
we
have,
you
know
we
have
it
we're
quite
fortunate
in
that
we
do
have
other
seven
members,
I'm,
probably
the
one
who
does
not
have
investment,
experience,
knowledge
and
experience.
So
we
have
seven
very
qualified
board
members
that
could
potential
for
the
investment
committee.
A
You,
my
understanding
and
vice-chair
Chandra
can
speak
to
it
in
more
detail
after
I
go
through
this,
but
we,
you
know
we
got
some
things
coming
up
in
2020
and
you
know
we're
again
we're
very
fortunate.
We
have
a
couple
of
people
who
are
have
a
very
specific
skillset
relevant
to
the
work
plan
for
2020
on
the
vestments
committee.
So
so
we
have
a
couple
assignments
there.
A
A
A
A
G
I
actually
talked
to
roberto
about
whether
that
could
be
a
committee
of
four
and
unfortunately
that
invokes
a
quorum,
we're
not
as
police
and
fire.
We
do
a
lot
of
our
investment
committee
meetings.
The
format
is
we
meet
separately,
just
as
a
federated
investment
committee.
Then
we
meet
jointly
with
jpc,
because
we
share
one
CIO
and
one
staff
and
there's
a
lot
of
overlap
between
our
plans.
G
The
asset
allocation
varies
a
little
bit,
but
a
lot
of
the
manager
selection
is
the
same,
and
a
lot
of
the
issues
are
the
same
and
a
lot
of
the
great
speakers
you
have
come
to
make
us
smarter
in
our
roles
are
shared
so
that
those
are
done
jointly
and
then
the
police
and
fire
meet
afterward.
Well,
they
have
four
people
on
their
committee,
so
I
was
hoping
we
could
do
the
same
thing,
but
they're
a
board
of
nine,
so
they
don't
invoke
a
quorum
by
having
four
people
present.
G
We
do,
as
I
was
looking
at
our
work
plan
so
they're,
you
know,
we've
we've
benefited
from
having
a
plan.
Member
on
the
committee
in
the
past,
I
think,
there's
a
bunch
of
reasons.
Why
that's
a
good
thing
and
trustees
son
is
a
plan.
Member
who
also
has
a
keen
interest
in
investments
in
of
the
people
on
our
board
seem
like
the
most
obvious
choice.
G
We
also
have
mark
hello,
Keller
who's
new,
who
has
a
specific
skillset
that
could
be
valuable
to
us
right
now,
we're
in
the
process
of
working
with
cortex
on
redefining
the
relationship
between
the
board,
the
investment
committee
and
we've
delegated
a
lot
more
authority
to
the
staff
into
the
CEOs
office,
and
while
we
have
a
terrific
CIO
and
an
incredible
staff,
I
don't
believe
they
plan
on
serving
lifetime.
They're,
not
Supreme,
Court
justices.
G
So,
for
the
near
term,
we
had
a
discussion
j9
and
we
thought
this
would
be
a
great
way
to
leverage
his
skill
set
as
he's
coming
on
to
the
board
brand
new
as
well
I.
Think
he's
only
been
here
for
two
meetings.
So
that's
why
we
wanted
to
kind
of
fudge
it
and
add
another
body
create
a
little
more
horsepower
in
the
investment
committee
and
I
think
council,
Lederman
you're.
Okay,
with
that.
E
M
E
So
we
have
to
be
careful
that
our,
since
our
board
is
seven,
our
committees
can't
have
more
than
three.
We
can
name
alternates.
However,
the
role
of
the
alternate
obviously
is:
if
one
of
the
members
can't
make
a
meeting
that
person
can
take
the
place,
fill
the
fill
the
vacancy
for
that
meeting
during
the
committee
meetings.
E
They
must
be
agendized
and
published
and
noticed
and
and
they're
open
to
the
public,
and
so
an
alternate
in
that
situation
that
the
other
three
members
are
present.
The
alternate
may
participate
in
the
conversation,
just
as
any
member
of
the
public
may,
but
simply
cannot
vote.
If
the
other
three
committee
members
are
present.
G
E
L
E
A
E
I
Can
I
make
upcoming
I'm
very
disappointed
with
the
committee
Simon
if
you
know
I'm
a
signer,
this
alternative
committee,
that
means
I'm
in
three
committees
and
I,
have
to
prepare
for
all
committee
meetings.
That's
a
very
heavy
workload
just
to
be
MindView.
I
have
a
heavy
workload
on
my
desk
anyway,
I
manager,
a
two
billion
portfolio
for
the
city
and
have
a
17
workgroup
and
under
my
management,
that's
very
heavy
workload.
Serving
three
committees
is
almost
too
heavy.
It's
almost
impossible
for
me
and
I
talked
to
his
trusty
Chandra
a
couple
weeks
ago
and
I.
I
I
So
when
there
was
vacant
when
the
vacancy
occurred
when
bill
laughed-
and
then
he
put
trustee
or
on
to
the
committee
and
he's
reasoning
for
me-
is
that
he
thinks
there
should
be
of
that
she's
thought
there
should
be
a
balance
of
review
between
you
on
any
issue
between
the
external
members
and
the
internal
memory,
internal
member
being
members
and
new
retirees,
and
since
you
were,
he
was
still
on
the
committee.
He
said
I
would
not
be
picked.
I
said:
okay,
I,
agree,
that's
a
point!
I
You
know
we
don't
want
to
have
an
imbalance
of
view.
So
now,
when
there's,
when
current
is
that
they
can
see
it
became
available.
Namba
him
alternate.
So
that
means
I
cannot
cast
my
vote,
but
I
have
to
prepare
for
everything
and
you
have
more
know.
I
work
very
hard
on
this
board
and
I
read
every
single
thing,
and
that's
too
heavy
for
me
and
on
my
point,
is
to
be
serving
on.
I
The
investment
committee
is
true
to
have
to
get
an
insight
of
the
decision
making
on
the
investment
decision,
which
is
one
of
the
most
important
things
we
do
here.
I
think,
as
a
plan
member
beneficiaries,
we
should
we
should
know
we
should
understand
how
things
how
decisions
are
maintained.
Yeah
I,
do
agree.
There
might
be
a
some
plan,
a
target
for
the
investment
keeping
Committee
on
investments
in
mass
manager.
Selection
I,
want
to
make
sure
I
want
to
make
a
deport
aware
that
I'm
not
totally
agreeing
over
on
the
managers
in
action.
I
I
worked
on
the
investment
committees
before
I
have
worked
on
the
investment
managers.
Selection
before
I
have
evaluated
a
lot
of
me.
Master
managers
yeah,
maybe
I'm,
not
an
intern.
In
the
industry
insider.
You
know
me
managing
a
fixed
income
portfolio
obey
this
is
big
size.
2
billion
I'm
still
looked
at
Don.
The
PI
is
like
a
second
hair
like
a
bastard
child,
whatever
he
call
it,
you
know
it's
not
as
sexy
as
a
private
equity
investment,
but
I
do
present
a
different
mute,
bring
a
different
view
to
the
committee.
I
I
think
I
understand
the
city
like
finance,
pretty
well
I,
think
I
miss
any
decision
you
make.
I,
probably
will
bring
in
more
inside
view
to
see
how
that's
going
to
impact
to
the
city
becoming
and
then
to
the
plan
members.
It
is
our
money.
You
know
we
depend
on
that.
A
lot
of
us
for
most,
you
know
for
most
of
the
employee,
for
muscle
retirees
all
the
employee
of
the
city,
probably
that's
all
they
rely
on
for
their
retirement.
I
It's
very
critical
to
us
for
us
to
understand
how
the
decision
to
make
so
I
really
hope.
The
the
audible
remember
were
considered
putting
me
as
a
regular
member
on
the
Omni
Messman
can
be
committee.
He
said,
there's
an
alternate
if
he
insist
on
putting
me
as
odd
and
and
I
have
to
decline
that
role.
Sorry
I
can't
function
like
I
cannot
serve
three
committees.
That's
it
just
true
heavy
workload.
For
me.
K
A
That
last
on
that,
on
that
last
point
we
do
do
the
committee
assignments
every
year,
so
I
think
it
might
be
too
disruptive
to
do
more
than
once
a
year,
but
we
do
do
this
every
year.
So
this
isn't
a
one-time
thing
that
might
stay
in
place
for
two
three
years
I
mean
we
will
look
at
it
every
year
and
especially
with
regard
to
the
investment
committee.
A
My
understanding
is,
we
were
focusing
specific
skill
sets
on
that
committee
for
the
2020
work
plan,
so
there
are
in
that
sense
that
needed
short
term.
But,
yes,
we
will
be
looking
at
this
on
a
regular
basis.
Now
we're
totally
open
to
that
I'm.
Just
trying
to
meet
a
business
need
for
2020
on
that
particular
committee.
B
Trustees,
son
beyond
the
investment
committee,
given
that
her
background
is,
you
know
two
billion,
that's
significant
and
also
she
is
a
city
employee.
So
she
does
have
that
perspective,
which
I
think
is
beneficial
and
if
we
do
have
the
opening
I
think
it's
makes
sense,
maybe
I
totally
with
the
responsibility
she
has.
Should
ya
only
be
on
two
at
the
most,
if
she's
willing
to
do
that
so
I
support
that.
Thank
you.
G
E
K
Was
speaking
more
experientially
in
terms
of
what
your
current
roles
are
and
I
appreciate
that
we
have
a
work
plan
for
the
next
year,
but
there'll
be
a
work
plan
for
the
year
beyond
that?
That's
right
and
if
we're
going
to
incorporate
the
diversity
of
views
and
talents
that
are
on
on
the
board,
I
appreciate
the
openness
to
reviewing
this
annually,
but
I'm
just
wondering
if
we
shouldn't
have
a
more
formal
process
by
which
people
are
rotated
through.
It
sounds
like
trustee.
K
Sun
has
been
seeking
this
position
for
perhaps
a
number
of
years,
and
various
reasons
were
put
forward
for
delays
in
that
and
I
think
we
would
all
benefit
if
there
was
a
more
formal
protocol
by
which
people
are
rotated
through.
So
we
can
understand
and
maybe
dissipate
some
of
contentions
on
this
issue.
Interestingly,.
A
G
Think
the
plan
I
think
the
committee
benefits
from
having
a
plan
member.
So
don't
think
that
that
was,
you
know
heavily
weighted
in
the
overall
composition
of
this,
which
we're
discussing
and
is
obviously
can
be
changed
and
I.
Think
trustee
Sun
is
not,
did
you
say
bastard
child
I,
think
she's
I
think
she's
eminently
qualified
to
be
on
there.
I
guess
this
is
an
open
forum,
so
I'll
be
open
about
it.
G
Insiders
I
know
how
to
call
BS
on
people
in
my
asset
class,
because
I
know
when
I've
gone
out
and
raised
money.
I
know
where
all
the
skeletons
are
buried
and
I
know
where
people
you
know
high
things
or
packaged
things
and
promote
in
market,
and
you
get
that
from
pattern
matching
so
trustee
Keller
has
that
in
spades
in
a
way
that
is
very
relevant
to
a
work
plan
and
where
I
do
disagree
with
you
is
work.
Plans
aren't
used
as
an
excuse
to
create
the
committee
competent
compositions.
G
I
wouldn't
have
thought
of
this
last
year.
The
year
before
just
this
is
this
is
a
unique
moment
in
time.
We
are
literally
changing
the
way
we
operate
visa
via
the
CIOs
office.
So
I
just
want
that
understood
the
the
depth
of
thinking
that
went
behind
trying
to
match
a
skill
set
here.
Having
said
that,
I'm
completely
open
I
mean
if
we
want
to
try
and
seek
trustee.
Keller
is
not
here
and
I
haven't
had
a
chance
to
speak
with
him
if
he
might
be
interested
in
the
alternate
role.
G
My
questions
there
are:
how
much
can
you
participate
and
contribute
in
his
assessments
of
things?
He
may
not
have
a
formal
vote,
but
I
would
you
know
his
commentary
would
be
incredibly
valuable.
So
what
we're
trying
to
solve
for
a
specific
thing,
I
think
that's
being
lost
in
this
discussion
right
now.
It
doesn't
mean
that
it
has
to
be
the
driving
thing.
G
I
want
to
come
back
to
that
I
think
both
in
trustee
Keller
and
trustee
Sun
we'd
have
excellent
an
excellent
third
voting
member,
so
at
some
level,
I'm
ambivalent
to
it
I'm
definitely
ambivalent
to
it.
I
think
they'd
be
both
great
to
serve
with,
but
I
just
want
people
understand
what
what
the
specific
concern
is.
As
we
move
manager
selection
into
the
CIOs
office
and
we
happen
to
have
a
CIO,
probably
knows
more
about
investments
across
all
the
asset
classes.
A
F
F
We
will
and
we
shall,
with
respect
to
for
asset
level,
experiences
they're,
not
comparable
right,
two
billion
here
versus
a
Chilean
there.
It's
not
the
dollars,
it's
sort
of
the
type
of
project
and
cross
variance
that
matters.
So
those
those
are
sort
of
my
initial
reactions
and
finding
the
most
so
I
would
much.
My
choice
would
be
to
stay
on
the
committee's
as
we
go.
A
E
The
alternate
could
not
attend
that
closed
session
discussion.
I
just
want
to
make
that
clear
so
because
we
have
a
Brown
Act
provision
that
says,
if
you're
talking
about
engaging
or
disengaging
base
from
a
particular
investment.
That
is
a
discussion
that
would
you've
made
hold
in
closed
session
and
this
board,
and
this
investment
committee
has
held
closed
sessions
for
those
kind
of
discussions
and
I
would
encourage
you
to
continue
that
in
those
closed
sessions
the
alternate
could
not
participate.
B
E
M
K
Might
I
suggest
a
possible
change
that
might
satisfy
to
some
degree,
and
that
is
that
trustee
Kelleher
be
made
the
alternate
and
trustees
son
be
made
a
permanent
member.
Therefore,
you
can
still
rely
upon
his
attendance
and
insight
and
commentary,
but
that
the
voting
position
be
assigned
to
a
trustee
son.
G
A
K
A
A
M
G
K
A
A
H
G
H
K
H
A
H
A
F
H
A
So
I'll
just
go
right
down
from
top
to
bottom
on
the
investment
committee
I
have
chair
trusts,
Vice,
Chair,
Chandra
and
trustee,
or
and
trustee
Sun
trustee
Kelleher
would
be
the
alternate
on
the
Audit
Committee,
the
cheers
the
community
be
trusty
Kelliher.
Other
members
would
be
trusty,
son
and
trusty
Jennings
Governance
Committee,
the
chair
would
be
trusty
Horowitz.
Other
members
would
be
trusty
Kelleher
and
me
and
then
on
the
GPC.
A
H
A
A
D
Services
and
I'll
give
you
a
brief
introduction
as
to
the
case
mr.
Horning
was
working
for
the
city
of
San
Jose
and
was
on
workers
comp
for
two
different
injuries,
one
in
2011
and
one
in
2014.
He
was
paid
in
full
by
a
worker's
comp
settlement
on
March
1st
of
2017
and
that
carried
payments
through
April
of
2020
Danny
received
a
service-connected
disability
in
January
of
2017
that
was
retro
back
to
July
10th
of
2014.
What
this
means
is
that
mr.
Horning
was
receiving
workers,
compensation,
payments
and
service-connected
disability
retirements.
D
At
the
same
time,
muni
code
328
1040,
says
that
if
a
member
is
retired
for
a
service-connected
disability
and
receives
both
the
service-connected
disability,
retirement
allowance
and
workers
compensation
payments,
then
the
service-connected
disability
retirement
allowance
is
offset.
Mr.
Horning
received
a
hundred
and
three
thousand
six
sixty
seven
point:
seventy
in
workers
comp
payments
after
his
retirement
date
of
July
10th
2014.
He
received
other
payments
prior
but
prior
to
his
retirement.
We
do
not
deal
with
those.
D
So
after
the
limitations
of
the
offset,
which
is
the
total
contributions,
EE
and
er
/
er
contributions,
he
still
owes
seventy-six
thousand
for
23.84
in
principle,
and
there
is
accrued
interest
on
top
of
that.
Staff
is
requesting
that
repayment
of
principal
and
interest
begin
February
1st
of
2020
first
with
the
offsets
that
are
not
past
due,
which
is
February
through
April
and
then
starting
May,
1st
2020,
with
regular
monthly
payments
of
the
past
due
amount
plus
interest
and
those
would
are
the
same
amount.
Each
month,
1002
25.46
and
they've
run
through
February.
First
of
2026.
E
E
We
don't
have
a
discretion
to
do
the
offset
or
not
do
the
offset
in
this
situation.
The
code
specifically
says
that
if
the
disabilities,
the
workers
comp
payments
were
made
for
the
same
disability
as
the
disability
retirement
that
the
amount
shall
be
shall
mandatory
be
offset
against
the
retirement
benefit,
so
there's
not
a
double
payment
for
the
same
injury.
There's
no
dispute
here
from
the
facts
that
the
workers
comp
settlement
was
paid
for
the
same
injury
that
occurred
in
2011
that
led
to
this
board's
granting
of
the
disability
benefit.
E
So
the
only
issue
is
whether
or
not
the
board
wants
to
deviate
from
its
policy
of
collecting
3%
interest,
compounded
on
the
amounts
past
due,
and
that
is
something
that
would
be
within
your
discretion.
Although,
as
my
colleague
mr.
krinkle
would
tell
you,
the
Internal
Revenue
Service
requires
plans
to
recover
appropriate
interest
in
these
situations,
but
you
have
some
discretion
to
decide
whether
and
how
much
and
over
what
period
of
time
the
interest
should
be
collected,
staff
has
made
a
recommendation,
I
think
it's
fair
and
reasonable.
So
those
are
the
parameters.
K
E
E
D
E
B
F
M
A
And
then
mr.
Luna,
if
I,
could
impose
on
you
just
because
the
we've
already
used
a
couple
times
the
nomenclature
overpayment
under
payment
for
those
of
us
and
the
audience
that
may
be
listening
and
familiar
with
the
overpayment
under
payment
issue
we
dealt
with
just
last
year
was
a
year
before.
Could
you
distinguish
how
this
situation
this
case
is
different
from
what
we
did
on
the
other
overpayment
hundred
years
under
payment
issue,
ie
that
one
to
the
extent
there
was
overpayment,
we
I
believe
we
just
shifted
that
to
the
unfunded
liability.
E
No
well,
okay
for
the
information
of
the
board.
Both
this
board
and
the
police
and
fire
board
had
over
the
last
couple
of
years,
situations
where
there
were
systemic
errors
in
reporting
compensation
in
various
categories
for
city
employees,
that
the
city's
reporting
was
not
accurate
and
therefore
we
over
calculate
we
overpaid
benefits
to
certain
members,
took.
E
Time
to
discover
in
those
were
items
that
were
entirely
due
to
issues
in
reporting
errors
on
a
systemic
basis
across
the
board,
not
for
an
individual
member
of
the
system.
In
that
situation,
the
regulation
the
Internal
Revenue
regulations
talked
about
that
is
the
obligation
of
the
board
as
trusts
as
trustees
of
the
Trust
Fund
to
recoup
back
to
the
trust
fund,
the
amounts
that
were
wrongfully
paid
out
or
overpaid.
E
E
However,
it
can
also
be
recouped
from
the
plan
sponsor
by
the
board
or,
if
you
had
insurance,
for
example,
on
it.
If
you
had
third
party
insurance,
you
could
recover
from
third
party
insurance
for
errors
and
emissions,
or
something
like
that
in
that
instance,
because
the
error
was
attributable
to
reporting
errors
by
the
city
to
the
Department
of
retirement
services.
E
A
decision
was
made
to
recover
in
part
from
members
who
had
been
affected
by
it
and
in
part
from
the
city
itself,
and
ultimately,
the
part
that
was
going
to
be
contributed
by
the
city
was
decided
to
allow
the
city
to
do
that
over
the
period
of
amortize.
The
unfunded
liability,
because
that
became
an
element
of
the
unfunded
liability
and
an
opinion
of
the
city,
has
received
an
opinion
of
tax
Council
that
that
was
permissible
under
those
circumstances.
E
That's
a
long
way
of
saying
in
that
situation,
where
there
was
a
systemic
error
that
affected
many
members
through
no
fault
of
their
own,
that
their
board
had
some
discretion
as
to
how
to
fashion
the
remedy
of
recovering
the
money
back
into
the
system.
In
this
situation,
the
applicable
law
of
the
city's
municipal
code
gives
us
no
latitude
on
that.
It
says
it
shall
be
recovered
by
an
offset
to
the
members
Pension
Benefit,
the
workers
comp
benefits
that
were
paid
shall
be
offset
against
the
members
benefit.
E
There
is
an
issue,
of
course
as
to
whether
and
how
much
interest
you
wish
to
collect
whether
you
want
to
go
by
the
policy
that
the
Board
adopted
two
years
ago,
as
you
see
here
or
to
fashion
something
else,
but
that's
relative
to
the
previous
correction
of
errors
that
we
had
in
the
last
couple
of
years.
That's
where
this
is
slightly
different.
Thank.
A
You
for
explaining
that
so
the
the
principle
is
that
seams
be
cut
and
dry,
so
3%,
it's
it's
embedded
in
policy,
and
does
that
run
and
I'm
just
asking
for
myself
here,
but
does
that
if
we
were
to
do
something
different
from
the
policy?
That
of
course
goes
away
from
policy
and
does
also
venture
into
not
meeting
our
fiduciary
responsibility
by
not
collecting
that
amount
that
other
YP
otherwise
might
be
playing
assets.
E
I,
if
I
were
not
comfortable,
that
you
had
some
leeway
to
fashion
that
remedy
or
with
the
interest
itself
I
wouldn't
make
that
suggestion
to
you
I
think
you
can
I
think
the
the
full
amount
could
justifiably
be
recovered.
I
also
believe
that
you,
you
could
decide
you've
already,
but
just
peeking
through
the
passage
of
time,
have
already
pushed
this
off
substantially
and
and
to
a
great
extent.
That
was
that
the
request
of
the
member
yes.
A
C
E
Have
made
a
decision
in
August
on
this
and
started
the
interest
clock
running
there
so
you've
already,
you
know
granted
some
disposition
of
at
least
six
months
now,
we've
taken
advantage
of
that
period
of
time
to
refine
and
get
better
information
on
the
numbers
and
the
numbers
have
changed.
I
will
say
that
in
fairness,
the
numbers
have
changed,
because
we've
just
sharpened
the
pencil
of
trying
to
really
focus
on
which
payments
for
workers
comp
were
attributable,
for
which
period
of
time
that
overlapped
with
the
retirement
benefit.
E
E
One
method
that
we've
used
in
another
system
that
another
board
had
adopted
in
a
similar
situation
was
to
have
a
forgiveness
of
interest.
If
the
offsets
were
successful
through
the
neck.
A
couple
of
years
who
the
first
part
of
the
program
there
might
be
a
forgiveness
of
accrued
interest.
At
that
point,
and
beyond
so
there's,
there
is
some
leeway
here.
E
E
F
I've
only
had
an
attorney
for
the
last
four
months.
He
came
last
time
for
the
first
time
and
that's
when
you
guys
decided
to
extend
it
before
it
was
not
really
made.
It
was
just
they
didn't,
have
the
numbers
right.
We
were
disagreeing
but
I
never
asked
for
a
postponement.
I
think
the
interest
is
wrong
to
charge
me
for
a
mistake.
I
didn't
do
and
if
I
was
overpaid,
I
want
to
pay
it
back.
G
F
G
F
Think
I
can
do
that
thousand
twelve
hundred
a
month.
It
would
just
kill
me
I'd,
be
homeless.
So
if
I
can
extend
the
payment
and
if
one
more
thing
is
my
lawyer
says
that
if
you
went
with
the
doctor
dikmen's
report,
you
wouldn't
have
as
much
to
collect
because
he
said
something
different
than
the
other
doctor.
So
you
guys
choosing
which
doctor
to
take
the
report
from
is
a
big
difference
of
money.
He
couldn't
be
here
today.
F
D
B
D
There's
several
because
there's
three
payments
that
aren't
past
due
the
first
one
is
eight
hundred
eighty
five
dollars:
sixty
nine
cents,
the
second
one's
946.
Seventy
eight,
that's
February,
March
April
is
seven
hundred
eleven
and
twenty
two.
Then
it
rolls
into
the
repayment
of
the
past
due
which
is
twelve
twenty
five.
Let
me
find
so
I
can
give
you
the
pennies
yeah,
so
it's
basically
and
that
would
run
until
February
1st
of
2026.
D
D
B
E
K
K
B
A
E
Certainly,
the
board
could
decide
to
depart
from
its
standard.
You
know
policy,
we
have.
We
stayed
in
the
policy
that
exigent
circumstances
may
require
the
board
to
depart
from
the
policy.
The
policy
really
is
designed
for
more
systemic
errors,
and
so
there
there
is
some
leeway
in
the
policy
to
extend
the
period
of
time
or
shorten
the
period
of
time,
depending
on
the
circumstances.
E
F
E
F
E
D
F
B
Right
so
I
I
would
I,
don't
think
we
want
to
put
this
gentleman
on
the
street.
You
know,
assuming
that
what
we're
being
told
is
accurate
that
just
wouldn't
make
yeah
I,
don't
think
we're
doing
the
right
thing
for
the
person
and
overall
I
think
we
have
to
follow
what
we're
being
obligated
to
do,
and
he
does
need
to
repay
that
probably
should
be
some
interest.
I,
don't
know
if
3%
is
I
mean,
would
he
be
getting
3%
if
he
had
invested
it?
Probably
not.
B
F
Realistic
yeah
and
I'd
be
comfortable
with
a
longer
time
period.
Yes
and
I'm,
not
even
wild
about
the
interest,
since
it
was
not
the
responsibility
on
his,
he
had
no
control
or
interest
or
way
to
you
know
create
this
resulting
graduation.
So
the
error
or
systemic
error
or
obligation
is
borne
by
another
party.
G
B
G
Obviously,
I'm
getting
double
paid,
sometimes
or
more
than
I
should,
but
it's
not
always
and
I,
don't
think
we
have
time
to
go
back.
You
can
audit
it
to
that
degree,
but
I
take
the
gentleman
at
good
faith
and
I
would
and
by
the
way,
whether
we
waive
the
interest
at
all,
not
at
all
or
somewhere
in
between
it's
not
going
to
affect
that
I
think
the
moving.
A
G
D
Man
read
something
off
his
application
that
he
signed
mmm-hmm.
This
was
back
July
of
2014.
Federated
retirees
I
understand
that
if
I
receive
a
workers,
compensation
payment
due
to
a
service-connected
disability,
the
retirement
office
will
offset
the
retirement
check.
This
is
something
that
he
initialed.
G
G
F
F
H
Good
point:
you
absolutely
right
and
I'm
fairly
sure
that
over
the
last
seven
years
collectively,
we
have
made
more
than
3%
so
I
mean
the
plan,
so
asking
for
the
3%
will
be
more
than
reasonable
at
this
time,
just
to
put
the
plan
back
where
it
would
have
been.
Otherwise
you
are
correct.
The
employer.
M
H
A
K
In
view
of
that,
it
does
occur
to
me
that
3%
is
both
higher
than
the
CPI
has
been
over
the
past
years
and
likely
will
be
over
coming
year
is
certainly
more
than
the
average
person
would
have
earned
in
any
reasonable
investment
or
money
market
account.
So
3%
strikes
me
as
slightly
punitive.
Perhaps
the
interest
rate
should
be
something
closer
to
the
CPI
or
2%.
K
It
won't
make
a
huge
amount.
What
will
make
a
big
difference
is
extending
the
term
of
the
payments,
and
insofar
is
this-
was
not
the
fault
of
Mister
owning
at
all.
I
don't
see,
I
think
it
might
be
just
that
he
not
paid
3%
but
something
closer
to
2%,
even
though
yes,
the
the
the
plan
would
be
absorbing
that
difference
in
terms
of
what
we
might
have
earned
on
the
plan
assets.
So
I
would
propose
a
friendly
amendment
that
the
term
be
extras'
trait,
be
2%.
E
Notwithstanding
the
laudable
intentions
of
the
board
members,
the
fact
is
that
any
under
payment
of
unfunded
liability,
which
this
is
this
is
create
an
unfunded
liability.
A
cruise
in
the
plan
at
the
actuarial
rate
short
turn
sure
that
we've
been
setting
in
it.
So
the
interest
is
really
the
actuarial
rate
of
return
over
the
period
of
non-payment
and
that
will
that
will
have
to
be
reflected
in
the
financial
statements
and
I
mean
it's
not
going
to
show
up
yeah.
F
E
That's
the
actuary
would
tell
you
that
that
is
the
interest
rate
that
will
be
recorded
and
the
needle
will
move
on
the
unfunded
liability
slightly
at
that
rate,
not
at
a
two
or
three
percent
rate.
So
if
we
are
not
going
if
the
board
is
not
going
to
be
collecting
the
interest
from
the
member,
in
this
regards,
you
may
remain
silent
on
the
just
matter
in
the
motion,
because
it
will
already
be
reflected
in
the
books
at
the
actuarial
rate
of
return.
E
B
G
To
make
this
last
less
long,
my
motion
was
made
fully
aware
and
understanding
that
the
UIL
will
increase
and
that
my
determination,
it
is
so
de
minimis
and
negligible
that
we
are
not
breaching
any
duties
of
care
or
trust.
The
last
piece
you
said
makes
no
sense
to
me:
if
we're
charging,
it
then
he's
paying
it.
So
that's
all
the
2%
we're
adding
2%
to
the
principal
amount
Oh
to
the
member.
B
B
G
Because
we
all,
we
I,
believe
since
I
made
the
motion
and
trustee
Jenny
since
she's
seconded
will
soon
find
out.
If
our
fellow
trustees
agree,
we
believe
that
the
one
hundred
and
the
term
extension
is
much
more
valuable
to
mr.
Horning,
so
he
can
make
monthly
payments
that
within
his
budget
and
that
the
interest
is
tiny
and
is
you're,
not
gonna,
really
feel
it
or
see
it.
F
G
H
B
B
H
The
do
C
has
this
information
the
letter
and
you
can
you?
Can
you
bring
page
two
out
of
four
please
at
the
beginning,
you
see
there
are
what
the
boys
is
recommending
is
the
payment
in
the
bottom,
which
is
from
May
1st
2022
February
1st
2026
at
one
thousand
two
hundred
and
twenty
five
dollars,
forty
six
cents.
H
J
H
Don't
have
any
any
interest
due
and
then
there's
a
painful
front.
I'm
sure
I
mean.
Can
we
roll
them?
We
can
brought
that
into
it,
but
then
yeah.
But
then
you
start
making
the
payments
in
February
we'll
start
doing
it,
but
we
won't
wear
anything.
We
would
not
wait
until
May
for
the
payments
will
start
sooner,
but
then
we
have
to
add
those
three
amounts,
so
it
would
be
a
little
larger,
but
that's
all
it
will
still
be
hundred
and
forty
months,
you'll.
H
G
H
L
E
Interests
are
unique
and
I
would
say,
there's
no
precedent
here.
I
think
the
only
precedent
is
that
you've,
given
due
deliberation
to
the
facts
and
the
law
and
have
made
a
judgment
exercising
sound
discretion.
That's
that's
the
precedent
that
you've
said
on
the
specific
facts.
Each
member's
facts
are
going
to
be
different.
In
my
experience
with
San
Jose
I
haven't
seen
one
of
these
before
I.
E
Don't
know
if
staff
has
one
like
this
with
a
worker's
comp
offset
that
was
so
contested
and
confused
in
the
information
part
of
the
problem
is:
is
that
workers
comp
does
not?
Community
came
with
the
office
of
retirement
services
and
when
these
things
come
up,
so
it's
very
difficult
for
us
to
gets
the
same
problem
we
had
with
the
city's
payroll
in
finance
issues.
You
know
we
went,
we
went
through
I'm
going
to
editorialize
from
it.
E
If,
if,
if
we
are
mandatorily
required
to
offset
workers
comp
payments
for
the
same
period
that
we're
granting
to
disability
retirement,
we
need
the
information
from
the
city
and
we
need
to
have
a
pipeline
in
the
conversation
whereby
the
city
provides
that
data
in
a
timely
manner
to
us.
So
these
things
don't
hang
out
for
five
or
six
years.
So
that's
the
real
issue
here
is
that
we
need
to
tighten
up
the
communication,
because
our
fund
depends
upon
communication
that
we
get
from
the
various
city
departments
and
from
workers.
E
F
Catherine
the
benefits
manager
can
address
that
question,
and
certainly
there
has
been
a
channel
of
communication
with
our
third-party
vendor
inter
care,
which
is
the
workers
compensation,
bender,
that's
in
place
at
the
minute,
and
in
this
time
period
it
was
actually
the
city
of
San
Jose
that
was
taking
care
of
the
administration
of
workers
comp.
They
were
doing
it
themselves.
At
that
point,.
D
F
L
A
C
A
F
D
F
F
B
A
A
K
E
E
E
A
E
H
Chair
I,
really
counsel,
to
make
a
presentation
to
you,
bore
I.
Think
it's
always
helpful
to
remind
everyone
about
what
those
responsibilities
are
so
I,
don't
I
would
prefer
that
you
board
consider,
even
if
he
meets
with
the
trustees
individually,
that
we
either
on
the
annual
basis
or
every
two
years
have
this
presentation
I
think
it's
always
helpful
to
remind
everyone
what
those
responsibilities
are
I.
A
G
E
Certainly
do
that
as
well.
I
I,
just
I
will
say
because
I
I'm
very
impressed
and
what
you
just
went
through
is
a
perfect
example
of
good
fiduciary
practices.
You
had,
you
know,
you're,
not
a
guarantor
of
any
outcome,
but
you
you
are
guarantor
of
a
fair
and
open
process
in
an
educated
process.
You
had
the
material
in
front
of
you,
you
had
the
data
you
had
staff,
be
able
to
explain
a
council
explain
the
law.
We
made
a
good
record.
E
You
just
just
trained
yourselves
and,
and
so
of
course,
there's
more
that
I
would
that
I
would
give
you,
but
if
you
just
take
to
heart
the
process
that
you
went
through
and
the
judgment
that
you
exercised
with
the
data
in
front
of
you
and
made
a
good
record,
because
this
is
being
recorded
and
will
be
in
the
minutes.
That's
what
good
fiduciaries
doing
good
trustees
do
so
I
applaud
the
process
that
you've
been
through
this
morning.
Thank.
G
So
we
didn't
meet
in
December
next
to
no
agenda
didn't
make
sense
inefficient,
but
we
are
meeting
on
Tuesday
that's
coming
Tuesday,
so
that
is
for
trustee
or
and
trustee
Sun
to
put
on
their
calendars
and
we've
moved
the
meeting
time
to
noon.
If
I
remember
correctly
right:
okay,
because
there
is
no
joint,
the
federates
re,
the
police
and
fire
decided.
They
didn't
need
a
meeting
in
January,
so
we'll
just
be
meeting
alone
noon
over
at
ORS
on
North,
first
Street
and
it's
not
a
long
agenda.
We
wouldn't
be
a
long
meeting.
A
H
We
we
are
just
going
to
be
scheduling
a
meeting
for
next
week,
October
30th
and
those
of
you
who
indicated
that
are
available.
Please
make
sure
to
attend,
because
we
need
you
for
a
quota.
We
really
know
there
are
two
trustees,
one
from
Fred
and
one
for
police
that
are
not
available
very
good.
Thank
you
for
the
APC
next
week
on
the
30th
attend.
A
H
H
H
H
Assembly,
General
Assembly,
this
time
is
going
to
be
in
Las
Palmas.
We
saw
rancho
mirage
from
march
7th
to
the
10th.
I
strongly
suggest
you
consider
attending
that
one,
as
you
know,
I'm
a
member
director
with
the
bore
of
calipers,
and
we
take
a
lot
of
make
a
lot
of
effort
to
make
sure
that
it's
a
very
helpful
assembly,
so
I
would
recommend
if
you
had
the
time
to
attain
one
of
those
in
the
future
as
well.
Yes,
okay.